Nvidia shares rise on AI boom

In this photo description, the Nvidia logo is displayed on the smartphone screen and in the background.

Raphael Henrique | SOPA Images | Lightrocket | Good pictures

This report is from today’s CNBC Daily Open, our new, international market newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. As you see? You can subscribe Here.

Nvidia rises, raises high expectations
Shares Nvidia rose by more than 7%, Over $1,000 for the first time, beat analysts’ expectations for its first-quarter earnings and sales in expanded trading. The chipmaker expects sales of $28 billion in the second quarter, compared with $26.6 billion. The company plans a 10-for-1 stock split.

Wall Street was gripped by inflation fears
The Dow Jones Industry average Down more than 200 points, marking its worst day so far this month as minutes from the Federal Reserve’s latest meeting fueled concerns about lingering inflation. The S&P 500 And this The Nasdaq Composite also lost. Treasury yields inched higher as Chances of a rate cut And pushed out. Oil prices fell Third day in a row Ahead of the OPEC meeting.

Central inflation is a concern
Federal Reserve Latest Minutes Fee fixing meeting The central bank is concerned about the “lack of progress” in bringing inflation closer to its 2% target. “Several participants indicated a willingness to tighten policy further, with risks to inflation making such action appropriate.” Central bank policy makers Benchmark debt ratio maintained Within the range of 5.25%-5.5%.

Dimon: America could see ‘hard landing’
JP Morgan ChaseCEO of Jamie Dimon said The US economy could see a “hard landing”. And the worst outcome could be “stagnation”. When asked by CNBC Shri Jekaraja Regarding the possibility of a hard landing, Dimon responded: “Could we actually see one? Of course, how can anyone who studies history say there isn’t a chance?”

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Asia-Pacific markets were mixed
of Hong Kong Hong Cheng As a data center operator incurred losses GDS Holdings recorded a net loss. Its shares fell 12%. Mainland China’s CSI 300 index fell 0.9%. of Japan Nikki 225 Up 1.1% Manufacturing activity expanded Services continued to grow in May for the first time in a year. of South Korea Cosby The central bank rose 0.3% after keeping interest rates at 3.5% as expected. of Australia S&P/ASX 200 It fell 0.4% as business activity grew at its slowest rate in three months.

[PRO] Under-the-radar AI plays
Hedge funds are loading According to Goldman Sachs, artificial intelligence has boomed on these lesser-known beneficiaries while reducing exposure to megacaps. The Wall Street investment bank surveyed the holdings of 707 hedge funds with total equity positions of $2.7 trillion at the start of the second quarter.

There were two major announcements after markets closed on Wednesday. Prime Minister Rishi Sunak of the United Kingdom, the world’s sixth largest economy with a GDP of about $3 trillion, It was called a general election, which had no market impact. The The pound was largely unchanged. The second came from a 31-year-old graphics chip company valued at $2.3 trillion. NvidiaIts provided The most anticipated earnings — and its shares hit record highs.

There were expectations that $200 billion in the company’s stock would swing one way or the other, depending on the company’s earnings results. In after-hours trading, the stock rose more than 7%. Shares of Nvidia are up 92% this year and 200% over the past 12 months. Nvidia is the foundation of the artificial intelligence revolution Google, Amazon, MetaAnd Microsoft It is estimated to cost $200 billion It buys its AI chips.

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“The next industrial revolution has begun,” CEO Jensen Huang said in a statement. “We’re ready for the next wave of our growth.”

Dan Niles is the founder of Niles Investment Management He compared Nvidia to Cisco In the 1990s. Cisco was an internet gear company. From 1994 to its peak in 2000, Cisco’s stock rose 4000%. Niles believes Nvidia will go through a similar cycle.

“We’re still very early in the development of artificial intelligence,” Niles told CNBC’s “Money Matters” on Monday. “I think over the next three to four years revenue will grow three to four times from where it is now, and I think the stock will be right there with it.”

“If you look at an AI build-out today, who’s actually driving it?” Niles said. “It’s the most profitable companies on the planet — it’s Microsoft, it’s Google, it’s Meta, and they run it.”

Importantly, Nvidia said it expects second-quarter sales to rise to $28 billion from an estimate of $26.6 billion. Even increased competitive opportunities from Advanced Micro Devices And Google is building its own custom chip, Piper Chandler analysts expect Nvidia must hold at least 75% of the AI ​​accelerator market.

Nvidia has done everything asked of it, and Wall Street needs to decide whether it’s time to pass milestones or consolidate.

— CNBC’s Kif Leswing, Jeff Cox, Kate Rooney, Hakyung Kim, Lisa Kailia Han, Yun Li and Rohan Goswami contributed to this report.

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