Latest news with #MichaelElias
Finextra
08-05-2025
- Business
- Finextra
NVIDIA Rallies Up and Alphabet Slides Down: Why?: By Serhii Bondarenko
NVIDIA Rallies Up and Alphabet Slides Down: Why? NVIDIA's stock closed at $117.06, marking a 3.10% gain for the day, according to market updates shared on X. This upward movement aligns with NVIDIA's resilience in a volatile 2025, despite a year-to-date decline of approximately 15%. Several factors contributed to the chipmaker's strong performance on May 7. First, NVIDIA continues to capitalize on robust demand for its AI-driven data center chips, particularly the Blackwell architecture. Recent reports indicate that major cloud providers like Amazon, Microsoft, and Alphabet are maintaining or increasing their capital expenditures (capex) for AI infrastructure, with Amazon projecting up to $105 billion and Alphabet reaffirming $75 billion for 2025. These commitments signal sustained demand for NVIDIA's GPUs, which remain the gold standard for AI applications. Investors appear reassured that concerns about a potential slowdown in AI spending—sparked earlier in the year by developments like DeepSeek's cost-efficient AI model—are overblown. Second, NVIDIA's strategic initiatives are bolstering investor confidence. The company's push into AI cloud services, potentially competing with hyperscalers like Amazon and Microsoft, has sparked intrigue. Analyst Michael Elias from TD Cowen highlighted NVIDIA's 'large leasing deal' with Digital Realty for data center capacity, suggesting the company could outpace peers in data center leasing in 2025. Additionally, NVIDIA's upcoming Computex 2025 keynote by CEO Jensen Huang, scheduled for May 19, is expected to unveil further AI advancements, adding to the bullish sentiment. Despite challenges like export restrictions to China and a $5.5 billion write-off for its H20 GPU, NVIDIA's forward-looking guidance remains strong. The company projects $43 billion in revenue for the first quarter of fiscal 2026, a 65% jump from the prior year, driven by Blackwell processor sales. With a forward price-to-earnings ratio of 25, NVIDIA's valuation appears attractive compared to its historical averages, making it a compelling buy for investors betting on AI's long-term growth. Alphabet's Slide: Regulatory and Competitive Pressures Weigh Heavy In stark contrast, Alphabet's stock plummeted, with GOOGL closing at $151.38, down 7.26% for the day. The sharp decline reflects a confluence of challenges that rattled investors on May 7. A key driver of Alphabet's downturn was negative sentiment tied to regulatory scrutiny. Reports surfaced that the U.S. Department of Justice was considering breaking up Google's search business, citing antitrust concerns over its dominance in online search and advertising. This news, though not officially confirmed, spooked investors, as a potential breakup could disrupt Alphabet's core revenue streams. The threat of regulatory action comes on the heels of ongoing lawsuits and investigations into Google's practices, amplifying uncertainty. Additionally, Alphabet faced competitive pressures in the AI race. While the company reaffirmed its $75 billion capex for 2025 to bolster AI capabilities, some investors worry that Google is lagging behind rivals like OpenAI and DeepSeek in generative AI innovation. Posts on X speculated that Alphabet might shift spending toward its proprietary TPUs (Tensor Processing Units) over NVIDIA's GPUs, potentially signaling a strategic pivot that could impact margins or AI performance. Moreover, DeepSeek's cost-efficient AI model, reportedly trained for a fraction of the cost of Google's models, raised questions about Alphabet's AI spending efficiency, further denting investor confidence. Alphabet's stock was also caught in broader market volatility. The Dow Jones Industrial Average fell over 1%, and the Nasdaq oscillated amid concerns over Federal Reserve Chairman Jerome Powell's comments on tariffs and inflation. As a member of the 'Magnificent Seven,' Alphabet's 8.21%-8.42% drop (across GOOG and GOOGL tickers) was among the steepest, reflecting its vulnerability to macro and company-specific headwinds. Market Context and Investor Sentiment The contrasting performances of NVIDIA and Alphabet on May 7 highlight the tech sector's uneven recovery in 2025. While NVIDIA benefits from its unchallenged leadership in AI hardware, Alphabet is grappling with regulatory risks and competitive pressures in a rapidly evolving AI landscape. Social media posts on X captured the market's mood, with traders noting NVIDIA's 'holding strong' and Alphabet's drop compressing broader indices like the Nasdaq (QQQ) and S&P 500 (SPY). Investors are also eyeing upcoming events that could further influence these stocks. NVIDIA's earnings report on May 28 is widely anticipated, with analysts predicting a potential beat driven by Blackwell chip sales and strong AI demand. For Alphabet, clarity on regulatory developments and AI strategy updates could dictate its near-term trajectory. Both companies remain integral to the AI revolution, but their paths are diverging as investors reassess growth prospects and risks. Financial Learning Models (FLMs) Tickeron, under the leadership of Sergey Savastiouk, CEO, has been pioneering the integration of AI into financial markets through its Financial Learning Models (FLMs). These models merge advanced technical analysis with artificial intelligence to enable traders to detect market patterns with greater precision. Among Tickeron's key offerings are user-friendly trading bots designed for beginners, high-liquidity stock robots for efficient trade execution, and real-time AI insights that promote transparency and control. Complementing these tools are the Tickeron AI Trading Bots and Double Agents—powerful features that help identify both bullish and bearish market signals, giving traders a dual perspective for balanced decision-making. By leveraging machine learning, Tickeron continues to enhance the capabilities of AI-powered trading, aligning with the broader trend of AI's expanding role in financial decision-making. Looking Ahead As of May 7, 2025, NVIDIA's upward momentum reflects its dominance in AI hardware and strategic agility, positioning it as a market darling despite earlier volatility. Alphabet, however, faces a tougher road, with regulatory clouds and AI competition casting shadows over its near-term outlook. While NVIDIA rides the AI wave, Alphabet must navigate choppy waters to regain investor trust. For investors, the takeaway is clear: NVIDIA's growth story remains intact, but Alphabet's challenges warrant caution. As the tech landscape evolves, May 7 serves as a reminder that even giants can move in opposite directions when innovation, policy, and market sentiment collide.
Mint
29-04-2025
- Business
- Mint
Microsoft and Amazon Capex in Focus Amid Potential AI Pullback
(Bloomberg) -- When the two biggest players in cloud computing report earnings this week, the amount the companies are spending will be just as interesting to investors as how much they are making. Ahead of results from Microsoft Corp. on Wednesday, and Inc. on Thursday, there have been reports suggesting that both companies may be cutting back on their spending on artificial intelligence infrastructure. That puts a spotlight on the capital expenditures announced in the latest earnings, which will offer insight into the outlook for AI demand and the broader consequences that might have for the economy. 'A slowdown in cloud computing or capex would scream economic caution and speak to recession fears in corporate America,' said Joe Tigay, portfolio manager of the Rational Equity Armor Fund. 'Any cutback in growth is hurtful to valuations, and would be damaging to the overall market. While multiples have come down a lot, we're not drastically cheap by any historical measure. If we are on a recessionary path, multiples will get a lot lower.' Both Microsoft and Amazon have declined this year, largely tracking the market lower as tariff risks have amplified concerns about economic growth. Amazon is more than 20% off a February peak, while Microsoft hasn't hit an all-time high since July. The four biggest spenders on AI infrastructure — Alphabet Inc. and Meta Platforms Inc., along with Microsoft and Amazon — are expected to spend more than $300 billion in their current fiscal years. The money plowed into AI-related investments had led to soaring stock gains in companies like Nvidia Corp., Super Micro Computer Inc., and Arista Networks Inc. Recently, though, Microsoft and Amazon have been at the center of a shift in expectations around industry spending. Bloomberg News reported that Microsoft has pulled back on data center projects around the world, with some of the pause coming abruptly. TD Cowen analyst Michael Elias last week wrote that channel checks 'indicate material MSFT equipment order cancellations' for data center supplies with a 'long-lead time.' Separately, Wells Fargo Securities wrote that Amazon's web services business is pausing some data center leases, although Kevin Miller, vice president of global data centers at Amazon Web Services, later wrote that there 'haven't been any recent fundamental changes in our expansion plans,' and that it continues to see 'strong demand for both Generative AI and foundational workloads on AWS.' Alibaba Group Holding Ltd. Chairman Joe Tsai had warned in March of a 'bubble' in data center construction. The emergence of the Chinese AI startup DeepSeek scrambled forecasts for future spending after the newcomer claimed performance that was comparable to U.S. models despite costing less and requiring fewer chips. Investors are also increasingly looking for the AI investments to translate to growth in a more pronounced fashion. Ned Davis Research closed its overweight recommendation on AI stocks last week, writing that the downturn in the group can continue, especially with the new risks created by the Trump administration's trade war. 'Higher policy uncertainty often leads to lower capex spending. We see no reason data center capex spending would be excluded,' wrote Pat Tschosik, the firm's chief thematic strategist. He added that 'AI spending is seen as discretionary and, just as companies pull back on capex in an economic downturn, they pull back on AI application development as well.' Alphabet Inc. reported capex of $17.2 billion last quarter, slightly more than had been expected. It plans to spend $75 billion on capex this year. The Google parent also posted better-than-expected operating profits for its Google Cloud business, even as sales slightly missed the analyst consensus. The company said there was more customer demand than company capacity for the cloud business, echoing comments made by all three cloud giants last quarter. Microsoft results are expected to show net earnings growth of 9.7% and revenue growth near 11%. Amazon's revenue is seen rising 8.2% with net earnings soaring almost 40%. Both are expected to grow consistently in the coming years, a key reason why Wall Street is nearly uniformly positive on them. For both names, more than 90% of the analysts tracked by Bloomberg recommend buying the shares. Jim Worden, chief investment officer of Wealth Consulting Group, is among those who retains a positive view on the pair. 'I don't think we'll see big reductions in capex, though there will likely be some discussion about being more efficient and how to best spend the money,' he said. 'Uncertainty is still really really high, but we've barely touched the surface for AI demand and use cases, so investors need to be patient and play the long game.' ServiceNow surged 22% last week, capping a record weekly gain, after the software company issued an outlook for sales growth that topped analysts' estimates, suggesting that software demand remains resilient even as the economy reels from the threat of tariffs. --With assistance from Subrat Patnaik. More stories like this are available on First Published: 29 Apr 2025, 03:44 PM IST
Yahoo
29-04-2025
- Business
- Yahoo
Microsoft and Amazon Capex in Focus Amid Potential AI Pullback
(Bloomberg) -- When the two biggest players in cloud computing report earnings this week, the amount the companies are spending will be just as interesting to investors as how much they are making. New York City Transit System Chips Away at Subway Fare Evasion NYC's Congestion Toll Raised $159 Million in the First Quarter Newsom Says California Is Now the World's Fourth-Biggest Economy The Last Thing US Transit Agencies Should Do Now At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History Ahead of results from Microsoft Corp. on Wednesday, and Inc. on Thursday, there have been reports suggesting that both companies may be cutting back on their spending on artificial intelligence infrastructure. That puts a spotlight on the capital expenditures announced in the latest earnings, which will offer insight into the outlook for AI demand and the broader consequences that might have for the economy. 'A slowdown in cloud computing or capex would scream economic caution and speak to recession fears in corporate America,' said Joe Tigay, portfolio manager of the Rational Equity Armor Fund. 'Any cutback in growth is hurtful to valuations, and would be damaging to the overall market. While multiples have come down a lot, we're not drastically cheap by any historical measure. If we are on a recessionary path, multiples will get a lot lower.' Both Microsoft and Amazon have declined this year, largely tracking the market lower as tariff risks have amplified concerns about economic growth. Amazon is more than 20% off a February peak, while Microsoft hasn't hit an all-time high since July. The four biggest spenders on AI infrastructure — Alphabet Inc. and Meta Platforms Inc., along with Microsoft and Amazon — are expected to spend more than $300 billion in their current fiscal years. The money plowed into AI-related investments had led to soaring stock gains in companies like Nvidia Corp., Super Micro Computer Inc., and Arista Networks Inc. Recently, though, Microsoft and Amazon have been at the center of a shift in expectations around industry spending. Bloomberg News reported that Microsoft has pulled back on data center projects around the world, with some of the pause coming abruptly. TD Cowen analyst Michael Elias last week wrote that channel checks 'indicate material MSFT equipment order cancellations' for data center supplies with a 'long-lead time.' Separately, Wells Fargo Securities wrote that Amazon's web services business is pausing some data center leases, although Kevin Miller, vice president of global data centers at Amazon Web Services, later wrote that there 'haven't been any recent fundamental changes in our expansion plans,' and that it continues to see 'strong demand for both Generative AI and foundational workloads on AWS.' Alibaba Group Holding Ltd. Chairman Joe Tsai had warned in March of a 'bubble' in data center construction. The emergence of the Chinese AI startup DeepSeek scrambled forecasts for future spending after the newcomer claimed performance that was comparable to U.S. models despite costing less and requiring fewer chips. Investors are also increasingly looking for the AI investments to translate to growth in a more pronounced fashion. Ned Davis Research closed its overweight recommendation on AI stocks last week, writing that the downturn in the group can continue, especially with the new risks created by the Trump administration's trade war. 'Higher policy uncertainty often leads to lower capex spending. We see no reason data center capex spending would be excluded,' wrote Pat Tschosik, the firm's chief thematic strategist. He added that 'AI spending is seen as discretionary and, just as companies pull back on capex in an economic downturn, they pull back on AI application development as well.' Alphabet Inc. reported capex of $17.2 billion last quarter, slightly more than had been expected. It plans to spend $75 billion on capex this year. The Google parent also posted better-than-expected operating profits for its Google Cloud business, even as sales slightly missed the analyst consensus. The company said there was more customer demand than company capacity for the cloud business, echoing comments made by all three cloud giants last quarter. Microsoft results are expected to show net earnings growth of 9.7% and revenue growth near 11%. Amazon's revenue is seen rising 8.2% with net earnings soaring almost 40%. Both are expected to grow consistently in the coming years, a key reason why Wall Street is nearly uniformly positive on them. For both names, more than 90% of the analysts tracked by Bloomberg recommend buying the shares. Jim Worden, chief investment officer of Wealth Consulting Group, is among those who retains a positive view on the pair. 'I don't think we'll see big reductions in capex, though there will likely be some discussion about being more efficient and how to best spend the money,' he said. 'Uncertainty is still really really high, but we've barely touched the surface for AI demand and use cases, so investors need to be patient and play the long game.' Tech Chart of the Day ServiceNow surged 22% last week, capping a record weekly gain, after the software company issued an outlook for sales growth that topped analysts' estimates, suggesting that software demand remains resilient even as the economy reels from the threat of tariffs. Top Tech Stories NXP Semiconductors NV announced a new chief executive officer as part of its quarterly earnings report and warned that the chipmaker was navigating 'a very uncertain environment' due to tariffs. Krafton Inc. posted a better-than-expected 47% jump in quarterly operating income, driven by the continued growth of its PUBG game franchise. Sony Group Corp. is considering spinning off its semiconductor unit, according to people familiar with the matter, marking the PlayStation maker's latest effort to streamline its business and focus on entertainment. Alibaba Group Holding Ltd. took the wraps off a new version of its flagship Qwen AI model, sustaining the breakneck pace of development that's characterized China's artificial intelligence sphere in the wake of DeepSeek. OpenAI now lets users shop for products within ChatGPT, the latest move by the artificial intelligence startup to expand the reach of its popular chatbot and challenge rivals like Google. Companies including Alphabet Inc. sold more than $18 billion of high-grade bonds on Monday, the most in one day since March, the latest sign that debt markets are stabilizing after the turmoil brought by tariff announcements early this month. Earnings Due Tuesday Premarket Spotify Corning Zebra Tech Commvault Systems Inc Postmarket Snap Frontier Fair Isaac Seagate First Solar Qorvo Littelfuse Freshworks Tenable Mirion Technologies Silicon Motion Benchmark Electronics Rogers E2open --With assistance from Subrat Patnaik. As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Healthy Sodas Like Poppi, Olipop Are Drawing PepsiCo's and Coca-Cola's Attention Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P. Sign in to access your portfolio
Globe and Mail
02-04-2025
- Business
- Globe and Mail
As Microsoft Cancels Its Data Center Leases, These 2 AI Stocks Could Be Winners
Stock market sentiment regarding artificial intelligence (AI) has soured significantly in the past few months. The DeepSeek spook damaged the argument that AI GPU and compute demand was going to not only stick around, but continue to grow exponentially. Then, analysts reported that Microsoft (MSFT) was canceling some of its data enter leases, sending AI stocks further into a downturn. The biggest losers were data center pure-plays and energy companies that were thought to benefit significantly from increased electricity demand. That said, it's not a good idea to be entirely bearish on all AI stocks since there is still demand for AI hardware, and cloud businesses are still growing. Amazon (AMZN) and Google's (GOOGL) cloud businesses are still growing, even if the pace has slowed. Microsoft's retreat from some leases could simply mean it's optimizing its footprint or redirecting resources to more efficient setups. In the meantime, others could take advantage of the void left by Microsoft. Here are two AI stocks that could be winners: AI Stock #1: Alphabet Alphabet (GOOGL) has seen its own share of volatility due to there being chatter about the company's cloud business slowing down and the search segment losing ground to AI competitors. The perception hit hard after DeepSeek's low-cost AI model spooked the market in January and the market still seems unsure whether or not Google's heavy investments in AI infrastructure will pay off against leaner rivals. TD Cowen analyst Michael Elias offers a compelling counterpoint. He notes that Microsoft's retreat from over 2 gigawatts of data center capacity in the U.S. and Europe over the past six months has opened doors for Alphabet. Elias's channel checks at Nvidia's (NVDA) GTC event and DCD Connect show that Google is stepping in to backfill capacity internationally. There is a 'global capacity shortfall' after an August 2024 pullback, the analyst says. Back then, Google shifted focus to squeezing more out of its existing data centers. Now, demand is surging again. Elias ties this ramp to Google's internal AI push, and I believe he's likely to be right since Google's search revenue is still growing and its own AI efforts are picking up steam. The company rolled out Gemini 2.5 Pro in March 2025 and its own AI search model. It still trades at less than 20 times earnings as of writing. The mean price target of $217.39 implies 38% upside potential from here. AI Stock #2: Meta Platforms Meta Platforms (META) has been among the strongest performers over the past two years, and the recent pullback has barely made a dent in its earlier gains. That's also why I am less bullish here than on GOOG due to its high valuation. Elias sees a silver lining amid Microsoft's lease pullback. He notes that Meta is backfilling capacity in the U.S. that Microsoft abandoned and has snapped up over 1 gigawatt of data center space in the past month alone. Elias ties this to a 'material year-over-year ramp' in Meta's data center demand due to Meta's Llama AI model. Regardless, I'm not as bullish on META right now. Part of that is due to valuations, but a big part of that is due to Meta's Llama AI model itself, which trails most other flagship AI models in performance. The company is still heavily reliant on its 'Family of Apps' for cash flow, which it is pouring into AI and VR investments. The current valuation, with sharse trading at nearly 23 times forward earnings, is too rosy due to the AI growth bump, so I believe you should be more careful. The mean price target of $746 implies 27% upside.
Yahoo
01-04-2025
- Business
- Yahoo
Is Microsoft planning to eliminate AI-related data center projects across Europe and US? Bloomberg report says so
When you buy through links on our articles, Future and its syndication partners may earn a commission. Microsoft has reportedly canceled data center leases amid shifting infrastructure priorities TD Cowen analysts suggest lease deferrals reflect oversupply vs demand Microsoft doesn't deny the report but says it's investing $80 billion in infrastructure We recently reported Microsoft had cancelled leases with at least two private data center operators in the US, totaling 'a couple hundred megawatts,' and how the company was also not converting 'so-called statements of qualifications into leases,' according to claims from TD Cowen analysts. Shortly after that news broke, Microsoft pulled out of a $12 billion deal with CoreWeave (the "WeWork of AI"), passing on buying more data center capacity from the AI hyperscaler. That option was snapped up by OpenAI, but as it counts Microsoft as its biggest backer, it was essentially paying CoreWeave with Microsoft money! Microsoft appears to be taking a more tactical approach to AI spending, a move that is echoed in a new Bloomberg report quoting TD Cowen analysts saying Microsoft has walked away from additional data center projects in the US and Europe. Bloomberg writes, 'Microsoft's retrenchment in the last six months included lease cancellations and deferrals, the TD Cowen analysts said in their latest research note. Alphabet Inc.'s Google had stepped in to grab some leases Microsoft abandoned in Europe, the analysts wrote, while Meta Platforms Inc. had scooped up some of the freed capacity in Europe.' Responding to the article, Microsoft pointed out that it was still on track to spend about $80 billion investing in growing infrastructure projects. 'Thanks to the significant investments we have made up to this point, we are well positioned to meet our current and increasing customer demand,' a Microsoft spokesperson said in a statement. 'While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions. This allows us to invest and allocate resources to growth areas for our future.' Bloomberg adds TD Cowen analysts Michael Elias, Cooper Belanger, and Gregory Williams said, 'We continue to believe the lease cancellations and deferrals of capacity points to data center oversupply relative to its current demand forecast.' Is Microsoft hesitating on AI? Tech giant has cancelled data center leases Microsoft is building wooden data centers in its latest push to cut emissions Investments, action plans, and the shifting AI landscape Sign in to access your portfolio
