By Barbara Colmeyer
US Trading Day Important Information
Kneel to Wall Street, your king.
After forecasting record earnings buoyed by a “killer AI app,” Nvidia rallied the Nasdaq market for a strong Thursday trading. In fact, thanks to its chipmakers and a few other generals (Microsoft, Apple, Alphabet, etc.), the technology seems unstoppable.
Elsewhere, Fitch’s warnings over debt problems ahead of the long weekend seem to have rattled the Dow.
But our call today is to highlight the positives with valuable insights on technology investment among AI enthusiasts from two seasoned investors.
GP Bullhound Global Technology Fund partner and portfolio manager Jenny Hardy Inge Heidorn is wary of companies with strong reputations in parts of the technology space that could make earnings vulnerable. I advise you to choose
“But looking just beyond volatility, the tech industry has the advantage of being driven by a number of long-term secular themes that will continue to play out even in the face of macroeconomic downturns,” Hardy said. He told MarketWatch in a follow-up comment to an interview with the two men last week. . GP Bullhound invests in the world’s leading technology companies and manages over $1 billion in assets.
“We are striving to make sure we are working in those areas that are more resilient. AI is a perfect example of that. Microsoft, Amazon, and Google all risk falling behind in the AI race. No. They all risk falling behind in the AI race.” Continued spending will further increase profits for the semiconductor companies used in these servers,” said an investor from 2011. Hardy, who works in the industry, said.
“Our Thoughts on Investing” [AI] It’s in the infrastructure of building blocks, picks and shovels, and for us it’s really a semiconductor company involved in training and inference servers,” she said.
Nvidia (NVDA), Advanced Micro Devices (AMD), Taiwan Semiconductor (2330.TW), Infineon, Cisco (CSCO), NXP (NXPI), Microsoft (MSFT), ServiceNow (NOW), Palo Alto (PANW) are all participating doing. their portfolio. They are also beneficiaries of AI, with companies such as KLA (KLAC), Lam Research (LRCX), ASML (ASML.AE), Applied Materials (AMAT), and the tailwinds of increasing localization of supply chains. We also like the semiconductor capital equipment industry.
As Hardy points out, “A lot of the big tech has given us a lot of certainty about AI, and a lot of certainty about how much we’re going to spend on AI.”
Enter your Nvidia results. This is “proof that the AI spending race is on… Nvidia’s conference call featured an impressive roster of companies (AT&T, Amgen, ServiceNow) deploying AI with Nvidia. The message was , the widespread adoption of this technology is truly the new normal.” said there is.
Haydon, who has traded tech stocks since 1994 and also runs a hedge fund with Hardy, said there are two big tech trends right now. It is “full-scale AI and power semiconductors driven by electric vehicles and green energy projects.”
But GP Bullhound has avoided EV makers like Tesla (TSLA) and sees a lot of competition, especially from China. “Ultimately you’ll need semiconductors, but it’s critically important that semiconductors can maintain pricing power that car companies can’t because of their competitiveness,” he said.
Is there anything on the tech duo’s nerves? It added that it is looking at secondary effects.
“One example is the enterprise software business, which has high exposure to financial services. Given the recent problems in this area, it is likely that spending will be reprioritized from the introduction of new software.” said he.
In the short term, Haydon said, investors should watch out for May sales and mentions of AI from Taiwan through TSMC, mobile chip group MediaTek and Apple (AAPL) supplier Foxconn. He said that could help with the outlook for the second half of the year. “Taiwan’s key numbers will give us an idea of how much stock is available,” he said. would,’ he said.
READ: JPMorgan Says That’s How Much Other Companies Will Make From AI This Year
market
Nasdaq 100 futures were up 1.8% and S&P 500 futures were up 0.6%, but the Dow Jones Industrial Average fell on fears of the debt ceiling. The 10-year Treasury yield climbed 4 basis points to 3.75%.
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Buzz
Fitch has put its US credit rating on ‘Ratings Watch Negative’ due to DC’s ‘brinkmanship’ as the debt ceiling deadline approaches. House Speaker Kevin McCarthy told investors he shouldn’t have to worry because a deal is certain to be reached.
Best Buy BB shares are up 6% on better results, while Burlington Stores (BURL) is down on weak profit and sales growth. Dollar Tree (DLTR) and Ralph Lauren (RL) are yet to come, but Ulta, Costco (COST) and Autodesk (ADSK) will follow after the close.
Nvidia was up 25% in the premarket, heading toward an extraordinary $1 trillion valuation, after saying late Wednesday that earnings would top a record 30%.
Opinion: Nvidia CFO Says ‘AI’s Inflection Point Is Here’
But AI startup UiPath (PATH) is down 8% after a weak second-quarter sales outlook, while software group Snowflake (SNOW) is down 14% on lower forecasts. Cloud platform group Nutanix (NTNX) has rallied on improved outlook. .
Elf Beauty (ELF) rose 12% on the strength of its cosmetics group, while Guess (GES) rose 5% on narrower losses and higher sales. American Eagle (AEO) fell on expectations of lower sales. Red Robin Gourmet Burgers (RRGB) rose 5% on the positive outlook for the restaurant chain.
First-quarter GDP revisions will be released at 8:30 am, while weekly unemployment claims and pending home sales will be released at 10:00 am. Richmond Fed President Tom Birkin will speak at 9:50 a.m., followed by Boston Fed President Susan Collins.
Presidential Candidate Florida Governor Ron DeSantis and Elon Musk’s Discussion on Twitter Space Hit by Glitch
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Ticker Security name NVDA Nvidia TSLA Tesla GME GameStop BUD Anheuser-Busch InBev AMD Advanced Micro Devices PLTR Palantir Technologies AAPL Apple AMZN Amazon.com NIO Nio AI C3.ai
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-Barbara Colmeyer
This content was created by MarketWatch operated by Dow Jones & Company. MarketWatch is published independently of The Dow Jones Newswire and The Wall Street Journal.
(Closed) Dow Jones Correspondence
05/25/23 0731ET
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