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⬆️ Getting a Boost from Nvidia’s Growing Needs
Plus, Nvidia has gotten the attention of US regulators...
Hi All - Happy Friday.
We are going to continue offering polls this week to gather your thoughts on “The Midday Trade” and help us make a decision on how to move forward with it.
This is the final day to give us your feedback on the “Midday Trade,” and any input is greatly appreciated!
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Moving on, here’s what you missed this morning:
🟥 | Market Snapshot: The market sell-off intensified this morning, with each of the three major indexes losing more than 2%. This comes as jobs market data released this week fueled fears of a recession.
💼 | In focus: This morning, the Labor Department reported that nonfarm payrolls increased by 114,000 jobs in July, significantly below the 185,000 estimates and a dramatic decline from the 179,000 jobs added in June.
🤕 | Noteworthy: Japan’s Nikkei 225 plunged 6% in its last trading session, its biggest daily drop since March of 2020. The Japanese benchmark is now at its lowest level since January, extending a global stock rout resulting from the release of weak US economic data.
⬆️ | The Midday Trade: Getting a Boost from Nvidia’s Growing Needs. Scroll down for more.
Plus, today’s partner can help you maximize the value of your Amazon Prime membership by uncovering 10 lesser-known benefits.
TOGETHER WITH THE BRAD’S DEALS
Maximize the value of your Amazon Prime membership by uncovering 10 lesser-known benefits that can transform your shopping, streaming, and saving experience.
STREET STATS
MORNING MOVERS
AMZN: Amazon’s stock took a dive this morning after its Q2 revenue missed estimates, and the ecommerce giant issued a disappointing sales outlook (IBD)
INTC: Shares of Intel plummeted after its Q2 results missed estimates on both top and bottom lines, and it announced plans to slash 15K jobs (YF)
SNAP: Snapchat’s parent company saw its shares tumble after issuing disappointing guidance for the third quarter due to ad competition (Reuters)
NET: IT company Cloudflare saw its stock jump after it surpassed Q2 earnings and revenue estimates and raised its full-year outlook (YF)
AAPL: Apple reported that iPhone, iPad, and services revenue all beat analyst expectations, and saw its stock rise as a result (CNBC)
TOP CALLS
Floor & Decor: Wedbush Reiterates Outperform on Floor & Decor Hldgs, Maintains $110 Price Target (Trade It)
Bandwidth: Barclays Maintains Overweight on Bandwidth, Lowers Price Target to $25 (Trade It)
Regeneron Pharmaceuticals: Truist Securities Reiterates Buy on Regeneron Pharmaceuticals, Raises Price Target to $1200 (Trade It)
Corsair Gaming: Barclays Maintains Overweight on Corsair Gaming, Lowers Price Target to $14 (Trade It)
iRhythm Technologies: Truist Securities Reiterates Buy on iRhythm Technologies, Lowers Price Target to $117 (Trade It)
Wayfair: Wedbush Maintains Outperform on Wayfair, Lowers Price Target to $60 (Trade It)
THE MIDDAY TRADE
Benefitting From Nvidia’s Needs
According to Morgan Stanley (MS), Nvidia’s (NVDA) data center GPU server rack systems are going to result in a $4.8 billion market by 2027. These systems come with a price tag of $82,460 per rack for Nvidia’s GB200 server.
These liquid cooling systems help alleviate power shortages and help save Nvidia between 10% and 15% in expenses. They do so by improving thermal design power, among other things.
Morgan Stanley has pinpointed two stocks that it believes stand to benefit from this market.
Delta
Taiwanese company Delta (2308) is one of those companies and Morgan Stanley’s top pick. The firm believes that its cooling will bring in around $280 million in revenue next year.
Morgan Stanley analysts are bullish on its integrated solutions for power and cooling purposes. They believe that Delta is better suited to hyper scalers and data centers from a design standpoint than its competitors. Additionally, it is making an effort to lower the cost of ownership while remaining compliant with efficiency requirements.
The firm has given it a price target of $14.90, which comes in at around 26% upside.
AVC
AVC (3017) is the second stock that Morgan Stanley expects to benefit from Nvidia’s increased demand. The bank believes it will be able to offer a number of air and liquid cooling products to the AI giant.
It has been chosen to be a major supplier of GB200 cold plates for Nvidia, and it is expected to make its first shipments in Q3. Morgan Stanley expects it to control around 30% of shipments by 2025. The bank’s $830 price target represents a massive 35% upside.
As AI, and Nvidia’s dominance in the space, grows, so too do its needs. Someone needs to fill that gap, and Morgan Stanley thinks these companies will rise to the occasion.
TOGETHER WITH THE BRAD’S DEALS
Maximize the value of your Amazon Prime membership by uncovering 10 lesser-known benefits that can transform your shopping, streaming, and saving experience.
SURVEY THE STREET
Nvidia’s been center stage for awhile now, but it’s now receiving the bad kind of attention from regulators.
The US Department of Justice has launched two separate antitrust probes into Nvidia.
The first probe is into Nvidia’s acquisition of Run:ai. The second examines whether Nvidia has abused its dominance in the AI chip industry to discourage competition.
Considering Nvidia controls an estimated 70% to 95% of the market for AI chips, it was only a matter of time until regulators turned their sights on the tech giant.
Will these regulatory probes into Nvidia hurt its stock in the long run? |
Plus, Yesterday’s Poll + Results:
🟩🟩🟩🟩🟩🟩 Uber and BYD
🟨🟨🟨🟨⬜️⬜️ Tesla
What did you think of today's edition? |
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