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Business Insider
12 hours ago
- Business
- Business Insider
Sector Spotlight: Nvidia results highlight notable week for semiconductors
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Confident Investing Starts Here: EARNINGS RECAP: Nvidia shares rose above $141 per share, up 5%, after reporting first quarter warnings on Wednesday. The company's Q1 beat was followed by inline Q2 guidance. Jensen Huang, founder and CEO of Nvidia, said: 'Our breakthrough Blackwell NVL72 AI supercomputer – a 'thinking machine' designed for reasoning- is now in full-scale production across system makers and cloud service providers. Global demand for NVIDIA's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure – just like electricity and the internet – and NVIDIA stands at the center of this profound transformation.' Summit Insights upgraded Nvidia to Buy from Hold after its Q1 results and guidance. The risk of double-ordering on its Hopper generation AI GPU and the risk of China export controls are now priced into the stock, the analyst told investors. Summit also believes that the data center capex spending for the training market will remain robust and benefit Nvidia AI GP and data center networking businesses, the firm added. SECTOR NEWS: A jury determined following a trial in the U.S. District Court for the Western District of Texas that Intel's (INTC) 2012 licensing pact with Finjan covered VLSI's patents because the entities are affiliated under the control of asset management firm Fortress Investment, Bloomberg's Lauren Castle reported. The development sets up a potential escape for Intel from the more than $3B in patent-infringement verdicts against the company in the long-running dispute, the author noted. Nvidia (NVDA) disclosed in its quarterly filing that its CEO Jen-Hsun Huang adopted a trading arrangement to sell 6M of the company's shares between March 20 and December 31, 2025. Nvidia is also facing new accusations from U.S. lawmakers arguing the company is too close to China, criticism which may signal new challenges for the company, Olivia Beavers and Amrith Ramkumar of The Wall Street Journal wrote. Senator Jim Banks and Senator Elizabeth Warren recently wrote in a letter to CEO Jensen Huang that plans for an Nvidia facility in Shanghai risk giving China access to cutting edge technology. In an interview on CNBC's Mad Money, Jensen Huang said Nvidia's market share in China was 95% four years ago, but is now only 50%. He said it's critically important that AI is built out on an American technology stack, not Chinese. 'We want to be the preferred technology stack,' he noted. He plans to keep the dialogue going with the Trump Administration. He sees robotics as the next growth opportunity. 'We are an infrastructure company, not just a chips company,' he added. In a conference call following the company's Q1 results, Nvidia said it will consult the U.S. government if it develops new China chips and is considering options for China chips. The company added it has no new product for China data centers ready now and that limits are quite stringent on China chips. Nvidia contended that export rules will help foreign rivals and that it expects a meaningful decrease in China data center revenue. On Tuesday, Liam Mo and Fanny Potkin of Reuters reported that Nvidia is planning to launch a new AI chipset for China at a much lower price than its recently restricted H20 model and plans to begin mass production as early as June. The graphics processing unit, GPU, will be part of Nvidia's Blackwell-architecture AI processors and is expected to cost between $6,500-$8,000. Nvidia's suppliers, including Foxconn, Inventec, Dell (DELL) and Wistron, have made a series of breakthroughs that have allowed them to accelerate production of its flagship AI data center 'racks' and start shipments of the highly anticipated 'Blackwell' AI servers, according to Financial Times' Eleanor Olcott and Michael Acton, citing several people familiar with the matter. TSMC (TSM) executive Kevin Zhang said the company is still weighing whether it plans to use ASML 's (ASML) high numerical aperture, or NA, machines for its future process nodes, Reuters' Nathan Vifflin wrote. 'A14, the enhancement I talk about, is very substantial without using High-NA. So our technology team continues to find a way to extend the life of current (Low-NA EUV machines) by harvesting the scaling benefit,' Zhang said at a press briefing. 'As long as they continue to find a way, obviously we don't have to use it,' he added. The report noted that Intel has planned to use the high-NA machine in its future manufacturing process. A Swedish business consortium and Nvidia unveiled plans to build new AI infrastructure with Nvidia accelerated computing, networking and software in Sweden to transform and prepare the country's industries for the age of AI. Swedish industry giants AstraZeneca (AZN), Ericsson (ERIC), Saab (SAABF), SEB, in partnership with Wallenberg Investments, will build the system that will be operated by a joint company to offer secure, sovereign compute access to the industry partners. The intention is that the first phase of the deployment will be two Nvidia DGX SuperPODs featuring Nvidia's latest generation Grace Blackwell GB300 systems, making it the largest enterprise AI supercomputer in Sweden once operational. It will be used to run compute-heavy AI workloads to speed up processes such as training of domain specific AI models and large-scale inference, including reasoning AI. Oracle (ORCL) will spend around $40B on Nvidia's high-performance computer chips to power OpenAI's new giant U.S. data center, according to Financial Times. Oracle will purchase around 400,000 of Nvidia's GB200 chips, its latest 'superchip' for training and running AI systems, and lease the computing power to OpenAI, according to FT's Tabby Kinder and George Hammond, citing several people familiar with the matter. ANALYST COMMENTARY: Citi analyst Atif Malik raised the firm's price target on Nvidia to $180 from $150 and keeps a Buy rating on the shares. The company reported April quarter results in-line and issued a July quarter sales outlook $1B above Citi's expectations, 'clearing the final hurdle of the China H20 ban transition quarter,' the analyst tells investors in a research note. Moreover, Blackwell sales of $24B topped Citi's $20B expectations and management maintained mid 70's gross margins target on improving Blackwell profitability with no major tariff impact, the firm contends. Citi believes that with margins expanding, Nvidia shares should 'break its range bound trend' since mid-last year and will likely make a fresh 52 week high. Needham keeps a Buy rating and $54 price target on Semtech (SMTC) after its 'solid' Q1 results driven by data center related infrastructure shipments and LoRa-enabled solutions. Demand for data center related products remains robust as the company reported a record quarter, while the momentum in Data Center is expected to carry through the second half of FY26, driven by continued strength in FiberEdge and non-NVIDIA CopperEdge and LPO ramps, the analyst tells investors in a research note. Redburn Atlantic analyst Mike Harrison initiated coverage of Broadcom (AVGO) with a Buy rating and $301 price target. The company is arguably the 'pre-eminent' application-specific integrated circuits co-partner with a strong pipeline of future customers, the analyst tells investors in a research note. Further, the firm believes the company's networking products are prevalent through the different types of networking within artificial intelligence data centers, from the compute fabric to the back-end network, as well as the interconnects that permeate throughout. The consensus is not giving Broadcom sufficient credit for the strength of its ASICs pipeline, contended Redburn. Stifel noted that Nvidia recently published a blog post providing details on its new 800V high voltage DC power architecture for next-gen AI data centers and specifically named Infineon (IFNNY), Monolithic Power (MPWR), Navitas Semiconductor (NVTS), Rohm, STMicroelectronics (STM) and Texas Instruments (TXN) as power IC/solutions supplier partners. While three of the semiconductor companies mentioned have issued press releases in conjunction with Nvidia – namely Infineon, Navitas and TI – the firm noted there were few details beyond what was discussed in Nvidia's blog post. However, it expects all of the companies called out by Nvidia to benefit from the accelerating increase in power requirements for AI data centers that are expected to require megawatt-scale racks by 2027.
CNBC
13 hours ago
- Business
- CNBC
Lightning Round: QXO will go higher, says Jim Cramer
'Mad Money' host Jim Cramer weighs in on stocks including: QXO, Gentex, Energy Transfer, and Trade Desk.
CNBC
14 hours ago
- Business
- CNBC
Sometimes you have to take a breath and ask why things seem so momentous, says Jim Cramer
'Mad Money' host Jim Cramer talks market moving moments he is looking ahead to next week.
Globe and Mail
a day ago
- Business
- Globe and Mail
Is Disney Stock a Buy After Record Box Office Weekend? Jim Cramer Thinks So.
Jim Cramer, famed television personality and host of the popular CNBC show 'Mad Money,' has come out in favor of Disney (DIS). Cramer believes the entertainment giant, after a rough patch, is poised for a rebound thanks to the unexpected success of Lilo & Stitch, the live-action remake of the beloved 2002 animated classic. The movie made a spectacular Memorial Day weekend with a $183 million domestic box-office haul, and Disney reported on May 27 that it had earned $361.3 million worldwide to date, leading to Disney becoming the first studio to crossed $2 billion in collections at the global box office in 2025. However, amid all the excitement, DIS stock is still flat on a YTD basis, with a market cap of $200.5 billion. So, is Cramer's optimism around the 'House of the Mouse' justified or should investors make a beeline for the stock? Let's find out. Disney Posts Solid Q2 Results Since CEO Bob Iger's return to the helm, Disney's operations have stabilized, with revenue and earnings experiencing compound annual growth rates (CAGRs) of 7.1% and 43.8%, respectively. The strong showing continued in the most recent quarter as well with Disney reporting a beat on both revenue and earnings. Revenue grew by 6.8% from the previous year to $23.6 billion, and the company moved into profitability in Q2 2025 with EPS of $1.81 compared to a loss of $0.01 per share in the year-ago period. All the key revenue segments of the company clocked growth, with the Entertainment, Sports, and Experiences segments growing by 9%, 5% and 6% on a year-over-year basis to $10.7 billion, $4.5 billion and $8.9 billion, respectively. Moreover, Disney+ saw its total paid subscribers rise to 126 million from 124.6 million in the prior year with an improvement in monthly revenue per paid subscriber to $7.77 from $7.55 in the same period. Disney's cash flow from operations for the quarter stood at $9.9 billion (vs $5.8 billion in Q2 2024), with free cash flow rising to $5.6 billion from $3.3 billion in the prior year. Analysts project forward revenue and earnings growth rates of 3.99% and 61.75% for Disney, which are ahead of the sector medians of 3.18% and 11.13%, respectively. Core Drivers The primary reason Disney has become a focus of investor enthusiasm is its ambitious blueprint to expand across physical entertainment destinations and interactive digital experiences. A major component of this strategy is the company's decision to establish its next flagship theme park on Yas Island in Abu Dhabi. This forthcoming resort will become Disney's seventh such complex and, according to Josh D'Amaro, who leads Disney Experiences, it is poised to be the most advanced and interactive project the company has ever developed. While no opening date has been disclosed, the announcement alone marks a significant step in Disney's global growth efforts. Alongside international expansion, substantial updates are also planned for Disney's domestic parks. In Anaheim, the Avengers-themed zone will see considerable growth, while a new Avatar-based experience is set to be introduced at California Adventure. In Florida, Magic Kingdom will unveil an entire area focused on classic Disney villains, and Animal Kingdom will debut a new Indiana Jones narrative. Additions are also coming to other corners of the Walt Disney World Resort, including a Monsters, Inc.-inspired space at Hollywood Studios and a new extension in Frontierland featuring characters and themes from the Cars franchise. Simultaneously, Disney is investing heavily in gaming and digital realms. Through a $1.5 billion equity stake in Epic Games, the company has laid the groundwork for an entirely new entertainment universe inspired by Fortnite. This initiative will incorporate beloved Disney franchises such as Star Wars and Marvel, with Epic's Unreal Engine serving as the backbone for game development and immersive storytelling. Beyond content creation, the company is actively restructuring its streaming and media business to drive efficiency and monetization. One major move involves integrating its three streaming services — Disney+, Hulu, and ESPN+ — into a singular platform that emphasizes user customization and value-oriented bundling. Disney also intends to bring ESPN directly to consumers via a new standalone product in the coming months. In parallel, the company is finalizing a transaction that will see Hulu + Live TV combine with fuboTV in a multibillion-dollar deal, resulting in Disney holding a 70% stake in the newly merged streaming service. Taken together, these moves reflect a broader strategic vision — one that merges Disney's strengths in storytelling, technology, and global brand loyalty. With physical expansion complementing innovation in digital engagement and content distribution, Disney is setting the stage not only for continued financial growth but for deeper consumer interaction with its franchises. For shareholders, the convergence of theme park development, gaming ventures, and streaming integration paints a compelling picture of a company aligning its core assets to meet evolving consumer demands and unlock long-term value. Analyst Opinions on DIS Stock Overall, analysts have attributed a rating of 'Strong Buy' for Disney stock with a mean target price of $125.73, which denotes an upside potential of about 12% from current levels. Out of 29 analysts covering the stock, 21 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and six have a 'Hold' rating.
Business Insider
a day ago
- Business
- Business Insider
Gap CEO: Our strategy is working, we are gaining market share
In an interview on CNBC's Mad Money, Richard Dickson said, 'we remain optimistic, yet realistic about the future.' Gap (GAP) has already mitigated over half of the potential impact of tariffs, he noted, and they will be weighted towards the second half of the year. Gap has diversified its supply chain, and China is less than 3% of the company's sourcing. It's seeing 'clearer sings' of brand progress with Banana Republic. 'Collectively, we have a strong portfolio of brands that matter,' he added. Confident Investing Starts Here:
