This is the gist of today's Morning Briefing. sign up Get the following in your inbox every morning:
The broader stock market upswing is yet to come as investors continue to cash in on anything involving AI.
Elon Musk revealed earlier this week that Supermicro (SMCI) will provide hardware for the supercomputer his AI startup is building, triggering a surge in the company's stock price.
Dell's stock price also rose after the company's CEO announced that the company would partner with AI giant Nvidia to build an “AI factory” for Musk's xAI.
While the surge in both stocks was short-lived, their performance this year and the reaction to Musk's one-liner post are a reminder that what he says matters to many and anything related to AI moves the markets.
So far this year, SMCI is up more than 200%, and shares of Dell, a harbinger of the PC 1.0 world, have nearly doubled.
Profiting from Wall Street's enthusiasm for AI technology doesn't require a contrived plan or a sideways approach. The unstoppable rise in 2024 will be driven by the profitability of the Magnificent Seven, which includes Nvidia, Tesla and the platform giants.
Citi analysts, who raised their year-end target for the S&P 500 to 5,600 earlier this week, attributed more than two-thirds of the stock market's gains so far to the “Magnificent Seven.”
And adding Elon to the mix certainly doesn't hurt.
There's a clear Musk angle in the Supermicro news, and part of this multi-CEO dynamic is that his businesses span different industries and are interconnected. But because Tesla is Musk's only public company, most investors only have indirect exposure to his other ventures. If you can't invest in xAI, why not buy some of its suppliers?
A similar dynamic is at work in the world of AI.
The rise of AI isn't just limited to hardware makers. Musk and other quick-fix tech stock investors are doing the same with Nvidia. It's not just the big tech platforms churning out apps and productivity software that are cashing in on the AI craze. There's an entire ecosystem.
Powering the computer systems that train and run AI systems requires vast amounts of energy. Utility companies are jumping on the AI wave.
Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Meta (META) are expected to spend a combined $200 billion this year on cloud and AI investments, including building and operating data centers. Consulting firm McKinsey estimates that U.S. data center electricity demand is expected to more than double by 2030, due in part to AI.
Getting in early is a good thing, but the AI craze proves that just getting in in the first place is enough.
Hamza Shaaban is a reporter covering markets and economics for Yahoo Finance. Follow Hamza on Twitter. translation:.
For the latest technology news impacting the stock market, click here
Read the latest financial and business news from Yahoo Finance
