🤖 Nvidia Proves Why Its The King of AI

MARKET UPDATE

Good Morning Investor! Shares of Chinese electric vehicle maker VinFast Auto (VFS) traded down over 18% after US regulators opened an investigation into a fatal crash back in April, involving one of VinFast’s VF8 SUVs, which lost control before crashing into a tree. Meanwhile, shares of solar energy companies First Solar (FSLR) and Enphase Energy (ENPH) rallied 15% and 8% respectively, after analysts posted upgraded price targets.

TODAY’S BIG HEADLINES

• Nvidia Proves Why Its The King of AI

• AI & Cloud Computing is Sending Industrials Into a Frenzy

• The Meal Deal Wars Have Begun

SEMICONDUCTORS

Nvidia Proves Why Its The King of AI🤖

The Chip Feeding Frenzy: On Wednesday night, the world's leading AI chip maker Nvidia (NVDA) served up some delicious quarterly earnings, along with a 10-for-1 stock split dessert, sending investors into a sugar rush as shares soared 7% in after-hours trading. It seems Nvidia's sweet success was contagious, with fellow chipmakers Super Micro Computer (SMCI) and Taiwan Semiconductor (TSM) both experiencing significant pre-market rallies. Talk about a chip-tastic party!

Numbers That'll Make Your Head Spin: The chipmaker once again left analysts scratching their heads, shattering expectations with a beat on both the top and bottom line, delivering its most profitable and highest sales quarter ever. Buckle up, folks, because these numbers are dizzying:

• Revenue came in at a mind-boggling $26 billion, up a whopping 268% YoY, leaving those analyst consensus estimates of $24.59 billion in the dust.

• Profits rolled in at a staggering $6.12 per share, up a jaw-dropping 628% YoY, effectively kicking those $5.60 expectations to the curb with a swift roundhouse kick.

Gazing into the Crystal Chip: Not content with just blowing past expectations, Nvidia also provided updated forecasts that left analysts' heads spinning like a top. The company projects a whopping $28 billion in sales for the current quarter, proving that their crystal ball is as powerful as their chips.

More Bang for Your Buck: In a move that's sure to leave shareholders grinning from ear to ear, management finally announced the much-anticipated stock split. This 10-to-1 stock split, set to take place on June 7th, will effectively transform today's $950 per share price tag into a mere $95 per share. As a shareholder, all this means is that the total number of shares you own will multiply by a factor of ten, giving you more chips to cash in on Nvidia's success.

Wall Street Whispers: Nvidia is undoubtedly one of the most crucial players in the AI adoption craze, boasting a near-monopoly over the AI data centre market (roughly 90% market share) thanks to their powerful new Blackwell chips, which leave all competitors' products in the dust in terms of performance. Sectors including the big tech titans, industrials building out the infrastructure, and even energy providers are all relying on Nvidia to adequately ramp up its production capacity to meet both today and tomorrow's AI demand. It seems like Wall Street can't stop whispering sweet nothings about this chipmaker.

INDUSTRIALS

AI & Cloud Computing is Sending Industrials Into a Frenzy🏗️

Power Players: Who would’ve thought? Utility stocks are the new rockstars, strutting their stuff on the Wall Street stage. They’ve been out-dancing the S&P 500 over the past three months. And three of the five best performers in the index year-to-date are utilities. The top chart-busters? None other than Vistra (VST), Constellation Energy (CEG) and NRG Energy (NRG), flexing their muscles with gains of 143%, 84%, and 63% year-to-date. Take that, tech stocks!

Unshakeable Wallflowers: Now, utility stocks may not be the life of the party, but they’re the ones you want to take home to mom. They’re stable, reliable, and can weather a storm. They’re the tortoise to the hare of Consumer Staples like Coca Cola (KO) or Waste Management (WM). Energy is a service which is typically unaffected from the headwinds brought on by geopolitical tensions, increasing interest rates or inflationary pressures. Why? Because energy is like the Wi-Fi password - we can’t live without it. Unless we all decide to go full Bear Grylls and live off the grid, utilities are here to stay.

The AI Appetite: So, what’s fueling this utility stock rave? It’s AI, my friends. As we’ve previously spilled the beans on Tickergeek, AI GPUs are the energy guzzlers, gulping down ten times the juice of a traditional data centre CPU. Wells Fargo predicts a 20% surge in US electricity demand by 2030, and the aforementioned AI data training centers alone are likely to add 323 terawatt hours of demand. Fun fact: a single terawatt of electricity could power 70,000 homes for a year. That’s a lot of Netflix!

The Big Spenders: If you’re looking for a crystal ball into the future of this industry, keep an eye on the big spenders like Amazon (AMZN), Meta (META), Alphabet (GOOG) and Microsoft (MSFT). Investing in utilities based on the AI adoption trend is like betting on the guy selling shovels during a gold rush. It’s an age old strategy.

CONSUMER DISCRETIONARIES

The Meal Deal Wars Have Begun🍔

Bargain Bonanza: Hold onto your fries, folks! Cheap eats are back on the menu, thanks to the culinary clash of the century. As of Wednesday morning, two fast-food titans are duking it out in the ring, slashing prices left and right to win the hearts, minds, and stomachs of their beloved customers.

The Golden Arches Gambit: The first punch was thrown by none other than the burger behemoth, McDonald’s (MCD). They’ve cooked up a $5 meal deal to soothe the wallets of inflation-battered customers. Starting June 25th, for a whole month, you can bag a McChicken or a McDouble, small fries, a small drink, and a four-count McNugget meal. Talk about a heavyweight combo!

Meal Deal Wars: But wait, there’s more! Wendy’s (WEN) has entered the ring, swinging a $3 breakfast bundle. In response to McDonald’s’ move, they’re serving up a choice of bacon, egg, and cheese English muffin or a sausage, egg, and cheese English muffin, complete with a side of seasoned potatoes. The catch? You’ll need to tap into your tech-savvy side and order this deal online or through the Wendy’s app. This announcement sent their stock up 1% in pre-market trading. Ding ding ding, we have a fight!

The Inevitable Showdown: Looking back, this fast-food face-off was bound to happen. With giants like McDonald’s and Starbucks (SBUX) experiencing a slump this year, losing market share and showing little growth, it was high time for a change in strategy. The main culprit? Sky-high prices after aggressive price hikes. Shareholders will be happy to see McDonald’s being the first movers in attempting to entice cash-strapped consumers to come back to the golden arches for their meals.

MORE NEWS

Additional market-moving events🌎

Sigh of Relief: British biopharmaceutical company GSK have said that its experimental drug reduced asthma attacks with only two doses a year. (Quartz)

Footing the Bill: Governments and companies are now expected to have to spend 19% more (roughtly $34 trillion in total), on the clean energy transition in order to meet the “net-zero” ambitions by 2050. (Bloomberg)

Healthy Alternatives: Food conglomerate Netsle, have announced a new food brand created specifically for Wegovy and Ozempic users. The product lineup includes 12 items, including specialized pastas and pizzas. (QZ)

The Death of Work From Home: Barclays and various other banks have warned some of their staff to prepare for 5 days a week in the office under new FINRA U.S. brokerage regulations. (Fortune)

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