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S&P 500
7,473
(-0.37%)
Nasdaq
26,167
(-1.32%)
Dow
51,713
(+0.29%)
Bitcoin
64,440
(+0.62%)
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1. Futures Sink as Tech Stocks Hit |
Nasdaq futures fell around 2%, with S&P 500 futures dropping over 1%, as the fall in megacap tech stocks on Monday continues to weigh on investor sentiment. The spillover caused the South Korean Kospi index to fall 10% in Asia, which has heavy exposure to chip names including SK Hynix and Samsung. |
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“Many investors are sitting on large gains with their AI stocks, and any jitters could lead them to cut their position to lock in the gain”: Jian Shi Cortesi, a fund manager at Gam Investment Management, also pointed to the hawkish Federal Reserve meeting last week as another reason why stocks are sensitive. Higher interest rates typically are negative for the stock market due to higher debt financing costs.
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Global investor sentiment on edge: Concern over two high-profile departures from Alphabet (NASDAQ:GOOG) to rivals saw the stock close 5% lower, with SpaceX (NASDAQ:SPCX) ending Monday down 16% – for a third straight day of losses – after announcing it would turn to the bond market to raise capital.
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2. Qualcomm Chases Nvidia with Modular Deal
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Bloomberg reports Qualcomm (NASDAQ:QCOM) is in advanced talks to buy AI chip startup Modular, in a deal worth around $4 billion, as it tries to enhance its offering to compete better with Nvidia (NASDAQ:NVDA). |
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Modular’s unified infrastructure makes it an appealing purchase: Founded by two former Apple (NASDAQ:AAPL) and Alphabet engineers, Modular’s platform provides a bridge between software and underlying chip hardware.
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Qualcomm diversifies and goes after Nvidia’s software monopoly: Down about 5% in pre-market trading, Qualcomm continues to push away from traditional handset reliance, as well as targeting Nvidia’s dominance by its current software ecosystem which ties developers into using Nvidia hardware.
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3. Micron and IBM Announce AI Partnerships |
Micron (NASDAQ:MU) announced a new agreement with Anthropic, while IBM (NYSE:IBM) revealed an OpenAI partnership, as companies continue to seek closer ties with major AI players to leverage their abilities. |
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Micron’s deal includes a strategic investment in Anthropic’s latest funding round: Though the stock is down around 8% in early trade, the agreement is seen to be mutually beneficial as Micron continues to expand use of Claude models internally, with Anthropic getting more access to memory and storage products. With the continued shortage of memory and high demand, last week Fool contributing analyst Jon Quast said “it’s hard for me to call Micron overvalued when there's such a disparity” and “Micron can probably put up some really good numbers.”
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"The OpenAI Daybreak Cyber Partner Program expands our access to a broader set of advanced AI capabilities”: Mark Hughes, a global managing partner at IBM, pointed to benefits for end-user clients as it looks to integrate AI enterprise security products. The Hidden Gems recommendation rose around 3% ahead of the opening bell.
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4. Next Up: CCL, CBRS, and FDX Earnings |
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Carnival Corp (NYSE:CCL) posts earnings ahead of the market open, with a 6% rise in revenue versus last year expected thanks to higher passenger volume and enhanced ticket pricing. This builds on last quarter's impressive numbers.
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Cerebras (NASDAQ:CBRS) is set to publish its first set of results since the AI chip company went public back in April following the closing bell. Investors will be watching for signs it can convert its $24.6 billion order backlog into revenue.
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FedEx (NYSE:FDX) releases results after the market closes. The Stock Advisor rec by Team Rule Breakers is expected to show a modest 2.6% fall in earnings but an 8.8% rise in revenue, with guidance for the full year in focus after last quarter.
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5. Today’s Take: Where AI Will Actually Make Change |
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Fields ranging from robot-assisted surgery and automated defense manufacturing to logistics networks and precision agriculture are already capturing meaningful value from AI transformation. |
— RACHEL WARREN • TEAM HIDDEN GEMS |
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Banks and insurance companies will use it to better mitigate risk. Cybersecurity companies will partner with AI companies to protect our information, particularly as we make the leap into quantum computing in the coming years. |
— JASON MOSER • TEAM RULE BREAKERS |
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