Three ways investors are playing the AI trend — including one very contrarian view
(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) AI is dominating the Wall Street conversation Wednesday as trade war fears recede. Investors were discussing three ways to play AI amid two big earnings reports from major tech companies leading the trend. Nvidia after the bell Nvidia reports after the bell, the options market is implying a 7.5% move in either direction after earnings. Ross Mayfield of Baird is bullish on the report and expects it to give a boost to other parts of the 'AI trade', "It's massive for the market and it's massive for this narrative around AI even if materially not all that much changes" said Mayfield on CNBC's "Worldwide Exchange" . Sarah Kunst from Cleo Capital believes the report will be highly influenced by tariffs, "Tariffs are still causing a lot of uncertainty, what we are really going to be seeing in this quarterly earnings, how much did their customers say 'Wow if these tariffs come in hard this could add a ton of costs to our chips' and how much did they pre-buy," said Kunst. "If they pre-bought a lot we are going to see great numbers, if they decided to wait it out al ittle bit because they are concerned about their cash flows elsewhere we could see something lackluster. Salesforce also after bell Salesforce is also set to report after the bell. The software stock has a consensus overweight rating and a price target of $362 implying a roughly 30% increase over the next 12 months, according to analysts tracked by FactSet. Salesforce investor James Demmert of Main Street Research is equally as bullish. "We think the stock is cheap at 24 times earnings…and investors are frustrated with Capex spending, not just with Salesforce. They want to see AI come out the other side and we think this might be the quarter we see it," said Demmert. Small caps as a contrarian call Nancy Prial of Essex Investment Management sees a major opportunity in small-cap stocks. "The small cap segment is undervalued relative to large caps," said Prial on Worldwide Exchange. "What we are particularly exited about are two things: One, we are seeing an acceleration in earnings growth… in addition we think AI has the potential to boost the case broadly for smaller companies as it democratizes the way smaller companies can do business." The small-cap benchmark Russell 2000 is down 6% this year, badly underperforming the S & P 500 which is back into the green after a big rally in the last month. "When you can use technology to drive productivity you don't need to spend as much on people an that will level the playing field" for small caps, added Prial.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
18 minutes ago
- Yahoo
Sen. Ted Cruz proposes withholding broadband funding from states that regulate AI
The Brief Senator Ted Cruz proposed that states attempting to regulate AI should lose federal broadband funding. This proposal is an addition to a House-passed bill aiming for a 10-year ban on state AI regulation. Critics argue Cruz's plan is "undemocratic and cruel," forcing states to choose between broadband access and AI consumer protection. WASHINGTON - U.S. Senator Ted Cruz (R-Texas) proposed on Thursday an alternative punishment for planned legislation that would set a 10-year ban on state regulation of Artificial Intelligence model learning. Under Cruz's budget reconciliation proposal, an attempt to regulate AI would be prohibited from collecting federal funding provided by the Broadband Equity, Access, and Deployment (BEAD) program. The Proposal The U.S. House of Representatives passed their version of House Resolution 1, the "One Big Beautiful Bill Act," on May 22. In part, the budget bill would ban state regulation on AI for 10 years. As chairman of the Senate Committee on Commerce, Science, and Transportation, Cruz authored a budget reconciliation that he says is intended to "fulfill President Trump's agenda." In a summary of the proposal, he refers to state regulation as "strangling AI deployment," comparing it to EU precautions against tech development. Cruz's proposal adds $500 million to the BEAD program, which has already administered $42.45 billion to the states in order to expand high-speed internet access across the country. It also prevents states from receiving any of that funding if they attempt to regulate AI. Dig deeper Rep. Marjorie Taylor Greene (R-Georgia) has recently spoken out against HR 1, saying the anti-regulatory section alone will cost Congress her vote. Greene explained that she discovered the controversial provision, located on pages 278-279 of the bill, only after the House had already passed the legislation. Once the bill returns to the House following Senate deliberations, Greene says she will change sides based on the matter of AI. What they're saying Advocacy group Public Citizen released a commentary on Cruz's proposal, referring to it as a "display of corporate appeasement." In the article, J.B. Branch, a Big Tech accountability advocate, included the following statement: "This is a senatorial temper tantrum masquerading as policy. Americans have loudly rejected Senator Cruz's dangerous proposal to give tech giants a decade of immunity from state regulation. State legislatures, attorneys general, and citizens across all 50 states have demanded that Congress step away from overhauling consumer protections put in place in the absence of federal leadership. But instead of listening to the American people, Senate Republicans threw a fit and tied vital digital funding to corporate impunity. "With this move, Republicans are telling millions of Americans: 'You can have broadband but only if your state gives up the right to protect you from AI abuses.' It's undemocratic and cruel. Republicans would rather give Big Tech a 10-year hall pass to experiment on the American people unchecked, rather than give underserved rural and urban communities the ability to compete in the digital economy. Congress must reject this corporate giveaway and refocus their energy on representing the public interest." In her statements criticizing the anti-regulation portion of HR 1, Greene expressed concerns about developing rapidly evolving tech without checks and balances. "No one can predict what AI will be in one year, let alone 10," Greene said. "But I can tell you this: I'm pro-humanity, not pro-transhumanity. And I will be voting NO on any bill that strips states of their right to protect American jobs and families." What's next HR 1 is expected to continue undergoing changes in the Senate before returning to the House for another vote. Cruz's proposal has yet to be officially added to the legislation. The Source Information in this article comes from public U.S. Congress filings, Public Citizen, and previous FOX 4 coverage.
Yahoo
40 minutes ago
- Yahoo
AI could unleash ‘deep societal upheavals' that many elites are ignoring, Palantir CEO Alex Karp warns
Amid the debate about AI's impact on the workforce, Palantir CEO Alex Karp said the technology can have an overall additive effect, 'if we work very, very hard at it.' But he cautioned that if the industry doesn't make that happen, the result could be 'deep societal upheavals' that many elites are ignoring. There are already signs that AI is shrinking entry-level opportunities. One of the biggest beneficiaries of the AI revolution warned that the technology could also create massive fissures in society—unless the industry works hard to prevent them. Alex Karp, CEO of data-mining software company Palantir, was asked on CNBC on Thursday about AI's implications for employment. 'Those of us in tech cannot have a tin year to what is this going to mean for the average person,' he replied. That comes as AI increasingly gets incorporated into the daily tasks of workers, boosting their productivity and efficiency. At the same time, there are also signs that AI is shrinking opportunities for young workers in entry-level jobs that traditionally have been stepping stones for launching careers. Meanwhile, Palantir has been at the forefront of using AI at the enterprise level. The company is known for putting its AI-powered platforms to work in the defense and intelligence sectors, but it has also been expanding in the commercial space. Most recently, it partnered with TeleTracking, a provider of operations platforms for hospitals and health systems. On Thursday, Karp said the kind of AI that Palantir is doing can be 'net accretive to the workforce in America,' but only if 'we work very, very hard at it.' He pointed out that it just because it can happen, that doesn't mean it will happen. The industry has to make it so. 'We have to will it to be, because otherwise we're going to have deep societal upheavals that I think many in our elite are just really ignoring,' Karp said. The warning is especially notable coming from a leader in the AI field. But Karp has also urged the tech sector to take on bigger problems. In a recent Atlantic essay adapted from their book The Technological Republic, Karp and Nicholas Zamiska, Palantir's head of corporate affairs and legal counsel to the office of the CEO, blasted Silicon Valley for focusing on 'trivial yet solvable inconveniences' and abandoning a long history of working with the government to tackle more pressing national issues. Others in the AI field have also offered dire predictions about AI and the workforce lately. Last month, Anthropic CEO Dario Amodei says AI could wipe out roughly 50% of all entry-level white-collar jobs. In an interview with Axios, he said that displacement could cause unemployment to spike to between 10% and 20%. The latest jobs report on Friday put the rate at 4.2%. 'Most of them are unaware that this is about to happen,' Amodei said. 'It sounds crazy, and people just don't believe it… We, as the producers of this technology, have a duty and an obligation to be honest about what is coming.' And OpenAI CEO Sam Altman said this past week that AI agents are like interns, predicting that in the next year they can 'help us discover new knowledge, or can figure out solutions to business problems that are very non-trivial.' Meanwhile, Nvidia CEO Jensen Huang said at the Milken Institute's Global Conference last month that while workers may not lose their jobs to AI, they will lose them to 'someone who uses AI.' This story was originally featured on
Yahoo
an hour ago
- Yahoo
Why MongoDB Rallied This Week
MongoDB's first-quarter report and forward guidance impressed Wall Street. Management said the company had the most net customer adds in six years. MongoDB could be a delayed AI winner. 10 stocks we like better than MongoDB › Shares of database disruptor MongoDB (NASDAQ: MDB) rallied 17.7% this week through Friday as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence. MongoDB reported its fiscal first-quarter earnings on Wednesday, trouncing analyst estimates and showing some reacceleration from the prior quarter. MongoDB has said that it would become an artificial intelligence (AI) winner once the "experimentation" phase ended and companies began to build AI-powered software applications. It looks like that may be starting now. Coming into this week, MongoDB was still wallowing in a severe downturn, having been more than cut in half since its 2021 highs and also its early 2024 highs. Revenue had been decelerating amid economic uncertainty, and management said that while it expects to see growth from the AI revolution, that growth wouldn't happen until AI moved from the experimentation phase to the application phase. In the first quarter ending in April, MongoDB began to see some of those benefits. Revenue grew 22% to $549 million, fueled by consumption-based MongoDB Atlas growth of 26%. That overall revenue figure was well above expectations, as well as the prior guidance given by the company of $524 million to $529 million. Non-GAAP (adjusted) earnings per share of $1 nearly doubled, and trounced expectations by $0.34. Management also raised full-year revenue guidance from $2.26 billion to $2.27 billion at the midpoint, and adjusted earnings-per-share figures from $2.51 to $3.03 at the midpoint. On the conference call, MongoDB noted its net customer additions were the highest in over six years, especially self-serve customers. That's really impressive, and highlights AI developers turning to MongoDB as their go-to database to handle and organize the "messiness of the real world" within data connections. Software-as-a-service stocks are generally very expensive, but if MongoDB is in fact on the brink of an acceleration, it could be one of the best values in the space. After this week's surge, shares trade around 8 times this year's revenue guidance, which is expensive for a typical stock, but reasonable for a software stock. Of note, MongoDB also has a significant amount of cash on its balance sheet, at over $2.3 billion, good for 13% of its market cap, and no debt. In terms of AI software plays, MongoDB looks like a promising opportunity, as the stock is still down markedly from its all-time highs. Before you buy stock in MongoDB, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and MongoDB wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MongoDB. The Motley Fool has a disclosure policy. Why MongoDB Rallied This Week was originally published by The Motley Fool Sign in to access your portfolio
