Google's big AI-spending plans are boosting chip stocks like Nvidia
Alphabet's big spending plans surprised Wall Street. The news should soothe investors worried about last week's DeepSeek shakeup disrupting the AI narrative.
Alphabet's big spending plans surprised Wall Street. The news should soothe investors worried about last week's DeepSeek shakeup disrupting the AI narrative.
Semiconductors are the core infrastructure powering the Information Age. But they’re also susceptible to economic fluctuations as chip demand will ebb and flow with capital spending. Unfortunately, it’s unclear if we’re primed for another upswing as the industry’s 5.4% return has lagged the S&P 500 by 10.5 percentage points.
From commerce to culture, software is digitizing every aspect of our lives. This secular theme has materialized in superior earnings growth and stock price performance for most SaaS companies, and over the last six months, the industry’s 42.4% return has topped the S&P 500 by 26.5 percentage points.
Whether you see them or not, industrials businesses play a crucial part in our daily activities. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the industry’s six-month return of 13% has fallen short of the S&P 500’s 16.8% rise.
Retailers are adapting their business models as technology changes how people shop. Still, demand can be volatile as the industry is exposed to the ups and downs of consumer spending. This has stirred some uncertainty lately as retail stocks have lagged the market over the past six months, posting a return of 11.1% compared to 16.8% for the S&P 500.
By breaking down physical barriers, consumer internet businesses are reshaping how people shop, connect, learn, and play. These themes have enabled rapid growth for the industry, which has posted a 45.7% gain over the past six months compared to 16.8% for the S&P 500.
SAN FRANCISCO (Reuters) -Chip tech provider Arm Holdings said on Wednesday it will no longer meet the top end of its previous full-year guidance, but slightly topped Wall Street's current-quarter expectations. Since Arm went public in 2023, it has more than tripled its market value as investors bet it would see a significant share of the artificial intelligence boom that propelled Nvidia to become the world's most valuable company. But Arm does not typically enjoy growth spurts in boom times because it makes money more indirectly from AI than chip sellers, by steadily raising licensing fees for its technology and royalties for each chip other companies sell.
Consumer discretionary businesses are levered to the highs and lows of economic cycles. This volatility leads to big swings in stock prices that have worked in their favor recently - over the past six months, the industry has returned 20.1% and beat the S&P 500 by 3.2 percentage points.
Regarded as defensive investments, consumer staples stocks are generally safe bets in choppy markets. The flip side is that they frequently fall behind growth industries when times are good, and this was the reality over the past six months as the sector’s flat performance trailed the S&P 500’s 16.8% gain.
Uber's fourth-quarter operating profit rose 18% to $770 million but fell well short of the $1.2 billion forecast by analysts, hitting shares.