Morning Update: Overwhelming Demand for Jumbo-Sized Chips
| Tuesday's Market Insights || --- || S&P 5005,984 (-0.29%) || Nasdaq19,281 (-0.09%) || Dow43,911 (-0.86%) || Bitcoin88,713 (+0.78%) |
1. SoftBank's Advanced Tech Partnership
Nvidia (NVDA 1.37%) and SoftBank have announced a strategic partnership for an AI supercomputer in Japan by 2025. This makes SoftBank's telecoms unit the first client for Nvidia's upcoming Blackwell chips. * "Joining forces to build Japan's AI powerhouse": CEO Jensen Huang announced the plans at the Nvidia AI Summit Japan, with generative AI as one of the new computer's primary objectives.* Early results: Despite speculations that Blackwell chips may not be available until next year, Huang anticipates billions of dollars' worth of investment in Q4 this year.
2. OPEC Oil Price Concerns
Oil experts foresee a downward trend for crude oil prices in 2025, with a potential drop to $40 or even lower, if OPEC+ completely eliminates its current production cuts.
- "Fear surrounding 2025's oil prices has been intense since the Arab Spring": Tom Kloza of OPIS suggests we might see prices as low as $30 or $40 per barrel if OPEC fails to stabilize production.
- Gradual adjustments: Most analysts expect OPEC to slowly reduce its production limits, rather than making drastic changes to the market.
S&P 5005,984 (-0.29%)
3. Tuesday's Top Gainer
Shopify (SHOP -2.40%) saw a 21% increase in stock price on Tuesday, after consistently surpassing Q3 revenue and earnings per share (EPS) projections. * Consistent success: Excluding Shopify's divested logistics unit, revenue has achieved double-digit growth for the past six consecutive quarters. Free cash flow for Q3 increased by 53%.* Fourth consecutive quarter of profitability: Fool analyst Yasser El-Shimy emphasized how "Gross Merchandise Volume's continuous growth is due to an increase in merchant sales over time and new Shopify subscriptions."
Nasdaq19,281 (-0.09%)
4. Approaching Inflation Report
Today's October Consumer Price Index (CPI) forecast suggests a rise in inflation, estimating a 2.6% year-over-year increase and a 0.2% month-over-month jump. Core CPI, excluding food and gas, is predicted to reach 3.3% year-over-year. * Resilient core inflation: Rising costs for essentials like housing and medical care make core CPI resistant to the Federal Reserve's efforts to combat inflation.* "The last hurdle to reach inflation's target will be the steepest": Jay Bryson at Wells Fargo (WFC 0.13%) believes that the target of 2% has not yet been achieved.
Dow43,911 (-0.86%)
5. Flourishing Mediterranean Cuisine
Cava (CAVA -0.13%) is expected to rise over 16% during Wednesday's trading after posting a 56% Q3 EPS surpass in yesterday's after-market results. * Continuous over-achievement: Earnings have significantly surpassed expectations in every quarter since IPO in June 2023, causing the stock to surge 238% within such a short period.* "A fundamental aspect of Cava's multifaceted growth strategy": Cava debuted its upgraded loyalty program just a month ago; Fool analyst Kirsten Guerra highlighted how "the new program aims to enhance Cava's data and drive higher sales per customer through increased visit frequency and larger average spend."
Bitcoin88,713 (+0.78%)
6. amusing contemplations
Which two stocks could potentially surpass Nvidia by 2025, and why? Share your thoughts with loved ones, or join our community to discover what other Fooley are thinking!
- SoftBank and their telecoms unit's investment in Nvidia's AI supercomputer could potentially lead to significant advancements in technology. With the anticipated billion-dollar investment in Q4 this year, other tech companies might be inspired to match or surpass Nvidia's growth.
- Another contender could be Shopify, given its consistent success in surpassing revenue and earnings projections. With its focus on merchant sales and new subscriptions, Shopify could potentially challenge Nvidia's dominance in the technology sector.
