ASML, a key developer of semiconductor manufacturing equipment, reported a 61% sequential drop in bookings for the first quarter, causing a downturn in semiconductor stocks. The company's CEO expects a stronger second half of 2024 as the industry recovers from the downturn, and anticipates increased orders from companies building foundries in the U.S. and government subsidies for chip factories to boost sales.
Intel's CEO Patrick Gelsinger makes bold claims for the new chip at the Intel Ocotillo Campus in Chandler, Arizona, while CNBC's Investing Club discusses bad calls on Wells Fargo and Freeport-McMoRan in their Homestretch update.
Super Micro Computer (SMCI) has experienced a surge in demand for its AI server and storage systems, leading to a remarkable 182% increase in its stock price. However, the company is now facing a semiconductor shortage, a challenge prevalent in the AI industry. Despite this hurdle, SMCI anticipates significant revenue growth, with expectations to double to $14.5 billion by June, reflecting the rapid expansion of the data center market.
Arm Holdings' stock has surged over 70% in the last five days after beating Wall Street's earnings estimates and attributing its better-than-expected revenue forecast to artificial intelligence. However, some analysts are cautious about the company's actual exposure to AI and its potential benefits. The surge in Arm's stock reflects the ongoing investor hype surrounding AI plays, reminiscent of the playbook seen with Nvidia last May, where companies attribute revenue beats to disruptive technology. This highlights the market's willingness to pay up for AI promise, despite some skepticism about the actual impact on earnings growth.
Microsoft's upcoming earnings report is highly anticipated as the company's AI initiatives, including OpenAI and Copilot technology, are expected to impact its financial performance. Analysts are optimistic about the potential for AI to drive revenue growth, particularly in the Azure cloud-computing business and software products. However, there are concerns about the impact of AI investments on gross margins. The report is expected to shed light on Microsoft's performance in key segments such as productivity and business processes, More Personal Computing, and Intelligent Cloud, with a focus on Azure's revenue growth. The outcome of Microsoft's earnings could have broader implications for the entire software sector.
Tech companies have initiated a wave of job cuts in 2024, with 46 companies laying off approximately 7,500 employees in the first two weeks of the year. Notable layoffs include Google, Amazon, Discord, and Apple. Additionally, finance companies like Citigroup and BlackRock are also planning significant workforce reductions. Despite the layoffs, experts suggest that these job cuts are different from previous years, reflecting healthy companies adjusting their priorities rather than sweeping cost-cutting measures. The overall hiring across the US economy remains strong, with the unemployment rate declining to 3.7% in December.
Nvidia's stock surged to a record high after announcing expanded partnerships in the healthcare sector and ahead of its new chip unveiling at the CES conference. The company's market capitalization has reached $1.28 trillion, making it one of only five U.S. companies with a 13-digit market cap. The stock's rally was fueled by partnerships with Amgen Inc. and Recursion Pharmaceuticals Inc., as well as the anticipation of launching new graphics-processing units at CES.
