Artificial Intelligence

The Federal Reserve implemented a 25 basis point rate cut, but tempered expectations for further cuts. Alphabet, Meta, and Microsoft reported earnings surpassing estimates, with Alphabet’s revenue exceeding $100 billion for the first time. Notably, all three companies are significantly increasing capital expenditure (capex) for AI and data center infrastructure. Alphabet revised its 2025 capex forecast to $91-93 billion. Finally, a high-stakes meeting between President Trump and President Xi Jinping is anticipated, focusing on trade relations.

Wall Street’s AI fascination drives market gains, with Nvidia and Microsoft leading tech sector growth. Apple and Microsoft briefly hit $4 trillion market caps, reflecting AI confidence. Nvidia invests in Nokia’s AI infrastructure, while Microsoft’s stake in OpenAI positions it for future AI profits. OpenAI’s restructuring balances innovation with ethical concerns. Investors anticipate significant gains, viewing AI as a revolutionary technology. The Fed is expected to cut rates and debate future policy amid limited economic data.

AI stocks are surging, driving major indices to intraday highs. Nvidia and Microsoft led gains, pushing their market caps over $4 trillion. Investment in AI development intensifies, with Nvidia investing in Nokia and Microsoft holding a stake in OpenAI. The Fed is expected to cut interest rates, weighing economic conditions and future policy adjustments. Investors have high expectations for AI’s potential but analysts urge caution about current valuations.

Nvidia’s stock surged, making it the first company to surpass a $5 trillion market cap. This growth is fueled by its dominance in AI, with anticipated $500 billion in AI chip orders and plans to build supercomputers for the U.S. government. A $1 billion investment in Nokia aims to advance 6G technology. This AI-driven market rally, also boosting Apple and Microsoft, raises concerns about a potential bubble cautioned by the IMF and Bank of England and the criticality of Nvidia maintaining its technical lead.

Norway’s $2 trillion sovereign wealth fund reported a 5.8% return for Q3, driven by strong equity market performance and AI optimism. Norges Bank Investment Management (NBIM) cited strategic asset allocation and favorable conditions. Equity investments yielded 7.7%, while fixed income returned 1.4%. The Fund’s diversified portfolio includes equities, fixed income, real estate, and renewable energy. The fund remains committed to broad diversification, despite returns slightly below the benchmark.

Apple and Microsoft shares briefly surpassed the $4 trillion market capitalization on Tuesday. While Apple closed slightly below, Microsoft maintained the threshold, driven by its increased stake in OpenAI. Apple’s surge, a company first, coincides with strong iPhone 17 sales. Investors are optimistic, with Apple shares up 25% and Microsoft up 6% over three months. Both companies are scheduled to release earnings reports this week. Apple has also diversified its supply chain, mitigating trade policy risks.

Nvidia CEO Jensen Huang will deliver a keynote at GTC in Washington D.C., focusing on the company’s strategic direction in a complex geopolitical and technological climate. Originally planned for San Jose with potential presidential attendance, the conference now takes place amidst escalating US-China AI competition. Analysts anticipate insights into Nvidia’s response to evolving trade and technology regulations, particularly China’s restrictions on AI chip purchases, and how this will impact Nvidia’s market access and revenue.

Cathie Wood of Ark Invest highlights the potential of humanoid robots, fueled by advancements in AI, as a major investment opportunity. While challenges like cost and complexity remain, companies like Tesla are investing heavily, envisioning robots like Optimus revolutionizing industries from manufacturing to healthcare. Wood sees AI driving productivity gains, particularly with Palantir’s enterprise solutions and personalized AI assistants. Despite skepticism, the long-term convergence of AI, robotics, and advanced materials is expected to unlock significant value, justifying long-term investments despite potential short-term market corrections.

Amazon plans to reduce its corporate workforce by roughly 14,000 employees, driven by cost-cutting strategies and a focus on generative AI. This significant reduction, impacting various divisions, aims to create a leaner, faster-innovating organization. Amazon is reallocating resources towards AI development and cloud infrastructure, reflecting a company-wide shift towards AI-driven operations and a strategic adjustment to evolving market dynamics and heightened competition in the tech sector. This follows similar moves by other tech giants adapting to AI advancements.

Anticipation of a U.S.-China trade agreement is fueling market optimism, with major U.S. stock indexes reaching record highs. A deal could boost tech and agriculture sectors, potentially revising earnings guidance. However, trade tensions previously restricted growth, as Nvidia’s guidance shows. Beyond trade, possible Amazon layoffs, HSBC’s earnings, and Fed rate cut expectations are also impacting markets. Saudi Arabia is diversifying its economy, heavily investing in AI and data centers. President Trump indicated a trade deal with China is near.