Latest news with #OpeningBid
Business Insider
5 days ago
- Business
- Business Insider
‘Today's AI Frenzy Is Worse than 1999's Dot-Com Bubble,' Says Economist
A top economist from Wall Street is warning that AI stock prices may be becoming too high, much like during the dot-com bubble in the late 1990s. Torsten Sløk, chief economist at Apollo Global Management (APO), said on Yahoo Finance's Opening Bid that while AI will likely transform many industries, that doesn't mean investors should buy tech stocks at any price. In a recent note, Sløk shared data showing that the price-to-earnings ratios of the 10 largest companies in the S&P 500—many of which are AI leaders, such as Nvidia (NVDA) and Meta (META) —have now surpassed the extreme levels seen in 1999. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Sløk explained that this is creating a risky situation where a large part of the market depends on just a few tech giants. He noted that the 10 largest companies now make up almost 40% of the entire S&P 500 (SPY) index. This means that if someone buys the index, thinking they're investing in 500 companies, they're actually heavily exposed to just a few names, especially those tied to AI. Sløk added that the current stock prices of these mega-cap tech companies may not be sustainable since too much of the recent market rally is being driven by excitement and momentum rather than solid fundamentals. Interestingly, analysts at BTIG have similar worries, as they describe the market's sentiment as 'frothy.' Indeed, they pointed to the BUZZ NextGen AI Sentiment Index, which tracks popular AI stocks among retail investors. That index has jumped 45% over the past 16 weeks and is now 29% above its 200-day average. It is worth noting that these levels have not been seen since early 2021, right before speculative tech stocks began to fall. Because of this, BTIG suggested that investors think about shifting to safer areas like utilities or even Chinese tech stocks. Which AI Stock Is the Better Buy? Turning to Wall Street, out of the two stocks mentioned above, analysts think that NVDA stock has more room to run than META, but just barely. In fact, both stocks have almost 6% upside potential from current levels.
Yahoo
6 days ago
- Business
- Yahoo
The loophole that makes a third term possible for Trump
Is it possible — or legal — for President Trump to serve a third term? And if so, how would markets (^GSPC, ^IXIC, ^DJI) react? Yahoo Finance Senior Reporters Ines Ferré and Allie Canal join Opening Bid to weigh in on Carlyle co-founder and co-chairman David Rubenstein's legal breakdown. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here.
Yahoo
6 days ago
- Business
- Yahoo
TSMC and Nvidia are latest bullish reads on AI demand: Opening Bid top takeaways
Fed attack aftershocks. Markets have stabilized a bit on Thursday after a Trump-fueled tizzy on Wednesday. According to multiple reports, President Trump had sounded out lawmakers on whether he should fire Federal Reserve Chair Jerome Powell. The US dollar immediately tanked, and the closely watched 10-year Treasury yield rose. Stocks took a hit. Trump later walked back the reports in a press conference. But Trump's repeated attacks on Powell and the Fed have investors on edge after a record-setting run for stocks. "I think he has done a very good job," Carlyle Group (CG) co–founder David Rubenstein told me. Rubenstein hired Powell in the late 1990s as a partner at his private equity firm, where Powell stayed for eight years. Here is everything we touched on during Yahoo Finance's Opening Bid on Thursday. Tune in live daily to Opening Bid at 9:30 a.m. ET. Another bullish read on tech Those looking for a bearish read on AI demand won't find it in Taiwan Semiconductor's (TSM) earnings release today. Taiwan Semiconductor, which manufactures chips for top players such as Nvidia (NVDA) and Apple (AAPL), now sees full sales growing 30% year over year. Previously, it modeled for sales growth in the mid-20% range. The company maintained a bullish tone around consumer demand for smartphones. The company is on track to spend $40 billion in capital expenditures this year to support strong AI chip demand. "Overall, we view this update from the industry's largest customer as encouraging/reassuring when applied toward next year's revenue spending outlook," Stifel analyst Brian Chin said. This comes hot on the heels of Nvidia CEO Jensen Huang's visit to China this week, during which he called out a strong order pipeline for the AI chips the company will soon be allowed to export back into the market. PepsiCo serves up a bubbly bottom line After a surprisingly lackluster first quarter in which it issued a rare outlook warning, PepsiCo (PEP) came back today with better news (off lowered expectations, to be fair). The maker of Pepsi soda and Frito-Lay snacks served up a $0.09 earnings beat and a $400 million revenue beat for its second quarter. Importantly, the company maintained its 2025 outlook for low-single-digit percentage revenue growth. EPS growth is still expected to be unchanged year over year. But it's clear the company continues to battle price-sensitive shoppers and higher costs of doing business. The PepsiCo North America food business saw volumes fall 1% and operating profits drop by 13%. The North America beverage business clocked a 2% volume decline, while operating profits were unchanged versus the prior year. "I'm not sure the consumer is changed. The consumer continues to be — especially middle and lower income — continues to be extremely challenged," PepsiCo chair and CEO Ramon Laguarta told me by phone. Starbucks stock gets put on ice A bearish call on Starbucks (SBUX) by Jefferies has caffeinated the bears. Analyst Andy Barish slapped the stock with an Underperform rating and a $76 price target. The new target assumes an 18% downside from current price levels. Starbucks is set to report its earnings on July 29. "We think the stock has surpassed reasonable expectations for improving fundamentals," Barish said. Barish is concerned about weak consumer spending data and higher future costs as CEO Brian Niccol invests in his turnaround plan. Key to that plan are remodeling Starbucks stores and extra hours and pay for store workers. Before this downgrade, Starbucks shares had gained 23% in the past year. Barish isn't alone in his concerns about Starbucks stock — according to Yahoo Finance data, 55% of the analysts that cover the stock rate it a Hold or Sell. Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
7 days ago
- Business
- Business Insider
Reebok's founder says moving production from Asia is hard when no one wants to sit at a sewing machine
It's hard to move apparel manufacturing West because no one wants to sit in front of a sewing machine for hours, Reebok's founder said. Joe Foster, a 90-year-old Reebok veteran who cofounded the footwear and clothing brand in 1958 in the UK, spoke on a Yahoo Finance's Opening Bid podcast interview, released Monday. When asked how tough it was for companies like Nike, Adidas, and Reebok to move production out of Asia, Foster said that's "virtually impossible" to accomplish on a short timeline. "If you want millions, as we wanted, millions of products, you've got to go somewhere where you've got a lot of people who are quite willing to sit on a machine, women on the sewing machines, men on the production line, and that doesn't happen overnight," Foster said. "In the UK, we can't get people to do that. They won't do it, they've moved on to whatever different things, and I think the States are exactly the same," he added. He said that to move manufacturing West, a faster method of making shoes with robots and automation is needed. But automation for complicated sneakers, which he said have more than a hundred pieces, was difficult. The industry had not progressed to that stage, and the apparel and footwear business was "going to be in the Far East for a long time," he said. Reebok's manufacturing is concentrated in Asia, particularly in countries like Vietnam and China. The private company has been headed by CEO Todd Krinsky since 2022. It is owned by the NYC-based Authentic Brands Group, which also owns other apparel brands such as Champion, Billabong, Van Heusen, and Ted Baker. Retailers have been grappling with the effects of Trump's tariffs, which have targeted Asian countries heavily involved in apparel manufacturing. Goods entering the US from Vietnam and China are now hit with a 20% and 30% levy, respectively. In a June earnings call, Nike announced it would raise prices for US customers because it anticipated a $1 billion cost increase from tariffs. Other companies have announced that they will move manufacturing to the US to mitigate the impact of the tariffs. In April, French luxury giant LVMH said it was considering increasing the capacity of its production facilities in the US.
Yahoo
15-07-2025
- Business
- Yahoo
What to expect from TSMC earnings & large-cap tech
Investors are eyeing Big Tech earnings as Taiwan Semiconductor Manufacturing Company (TSM) reports its second quarter results on Thursday, July 17. New York Life Investments economist and portfolio strategist Lauren Goodwin, Yahoo Finance Senior Reporter Allie Canal, and Yahoo Finance Senior Reporter Brooke DiPalma join Opening Bid host Brian Sozzi to discuss TSMC's upcoming earnings print, what it has to do with Nvidia (NVDA), and what it could mean for large-cap tech earnings this cycle. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here. I'm locked in on TSM for two reasons. One is the Nvidia H20 news, which could be good news for TSM as it manufactures Nvidia chips at its giant plants known as foundries. And two, TSM will report earnings on Thursday. By all indications, TSM stands to impress investors by lifting its full-year revenue outlook owing to strong AI chip demand. The wild card here is how bullish TSM will sound for 2026 given trade uncertainty and the AI CapEx cycle continuing to mature. TSM has no margin for error when it comes to guidance or quarterly execution. Jumping onto the Yahoo Finance platform, you can see TSM stock is priced for growth with above market valuation multiples across the board. Still with me, Lauren Goodwin, New York Life Investments economist and portfolio strategist and Yahoo Finance senior reporters, Brooke Di Palma and Ali Canal. Lauren, I'm back to you on this one. What is your view on on the valuations for large cap tech here into earnings? Well, large cap tech valuations are certainly high, but that doesn't mean that they can't move higher. And with the trade and regulatory backdrop for these technologies improving here in the short term, I anticipate, in agreement with Ali and Brooks' reporting so far, that this is mostly good news for the market, and that these as these technology companies move higher, market breadth sort of moves along with it. The challenges that I mentioned earlier for these companies related to just the uncertainty around trade, but also with respect to TSMC, uncertainty around the specific provisions or capabilities that will be able to move forward from their partner Nvidia. There's a lot of uncertainty there. And so I anticipate that the quality of earnings from these companies will continue to be strong, but their ability to to move their valuations to move higher and higher completely unfettered certainly likely to be challenged here in the next couple of quarters. Well Lauren, they will uh you know, TSMC will be a good test here I imagine. If they come out here and and raise their revenue outlook like I am hearing that could happen and the stock trades off, that could really set the tone for large cap earning season. Yeah, that's absolutely right. And you know, overall I anticipate that large cap earnings, though lower than in Q1, are likely to look a lot better for Q2 than many investors anticipated. And that's in large part because of the pause of policy changes related to tariffs in particular that we've seen over the course of this quarter. As we move into Q3 and Q4, the cost challenges that I anticipate businesses will be facing in in larger order and the decision that those companies will have to make with respect to passing those costs onto consumers or taking hits to margin. We're really going to be seeing a different story play out over the second half of the year. Uh Ali, you know as we focus on this Nvidia news, TSMC looks to have a potentially good quarter on its hands coming up. Look at Intel. I'm not even in this discussion. Even AMD, which is a strong player in this market is not even seen on the same wavelength as Nvidia at this point. Right, and TSMC has really been able to ride this Nvidia wave pretty hard and like you were saying expectations certainly elevated heading into this latest earnings report. But TSMC also is vulnerable, right? We've been talking about the risks of trade US-China relations. They also have their customers concentrated in just a few of those names, right? Nvidia, Apple. So what happens to Nvidia and these big hyperscalers directly impact this manufacturer. So it's one of those chicken or egg situations where you want to make sure that demand is solid. You want to make sure that that these companies are still chugging along here and this news that we got this morning of these H20 approvals from the White House is going to be a boon to this company in particular. But again, those uncertainties, those risks ahead, I'm very curious to hear more commentary on that on the earnings call along with more commentary on what we saw today, right? With those chip approvals now supposedly heading to Trump's desk. He's going to have to signal and sign off on this ultimately, but he has said that he wants to do that. So it all just stems from the Nvidia wave here. Brook, last word to you on our stock of the day. Yeah, absolutely. What I think this really means is this solidifies Trump administration's intention to really win over this AI arms race. What I'm reading from multiple sources out this morning is that Nvidia getting the okay to put out those H20 chips really doubles down on the idea that the Trump administration is very serious about winning the AI arms race. We now know that Trump is set to speak next week at an event around the AI arms race. And when it particularly comes to the stock of the day TSMC, we also know based upon a report from the Wall Street Journal is that they have increased investment in their US expansion and delayed their second Japanese plant. And so this all really leads to the notion that the Trump administration is doubling down on not only getting on Jensen Wong's good side here, but also ensuring that the United States stays ahead of perhaps not only China but also Chinese competitor Huawei. Sign in to access your portfolio
