Despite recent concerns about AI spending, Amazon and Microsoft stocks have seen about a 20% drop from their peak. However, both companies are considered attractive investments due to their robust cloud computing divisions. Amazon holds a substantial backlog of cloud work, while Microsoft's Azure cloud division continues to expand rapidly. As key providers of data centers for AI technology, their cloud services are expected to generate significant long-term profits, making their current stock prices reasonable.
Nvidia, a dominant force in AI chips, reported a massive quarterly profit of $43 billion, contributing to an annual profit of $120 billion. The company commands approximately 90 percent of the market for semiconductors essential to AI projects. Nvidia's first-quarter revenue is projected to hit $78 billion, surpassing Wall Street estimates, driven by a 71 percent increase in AI data center chip sales last quarter. This strong outlook has helped calm broader market anxieties about AI investments, though overall market caution persists.
However, Nvidia faces challenges in China, where it has yet to generate sales from its U.S.-approved AI chips. The company also warns that Chinese AI firms are rapidly improving and could emerge as significant global competitors, often offering more cost-effective solutions. Adding to these geopolitical tensions, Chinese AI firm DeepSeek has opted not to share its upcoming AI model with U.S. chipmakers like Nvidia, potentially benefiting local hardware manufacturers such as Huawei. There are also concerns DeepSeek might have used Nvidia's advanced Blackwell chip in China, possibly violating U.S. export regulations.
Meanwhile, the Trump administration is reportedly threatening AI company Anthropic, potentially designating it a "supply chain risk." This could prevent government contractors from using Anthropic's Claude models, severely impacting its business, especially after the company refused to develop AI for mass surveillance. In other market news, Morgan Stanley identifies "Most Defensible Stocks" for long-term opportunities amid AI-driven shifts, while Super Micro Computer's stock recently fell 6% due to broader AI hardware market concerns and profit margin worries. Separately, Escargot, a startup using AI for greeting cards, secured $2.75 million in seed funding.
Key Takeaways
- Amazon and Microsoft stocks dropped about 20% but are considered attractive long-term investments due to strong cloud backlogs and growth in AWS and Azure.
- Nvidia reported a $43 billion quarterly profit and $120 billion annual profit, holding approximately 90% of the AI semiconductor market.
- Nvidia's Q1 revenue forecast is $78 billion, exceeding expectations, with AI data center chip sales up 71% last quarter.
- Nvidia has not yet made sales from its U.S.-approved AI chips in China and warns of growing competition from lower-cost Chinese AI firms.
- Chinese AI firm DeepSeek will not share its new AI model with U.S. chipmakers like Nvidia, potentially aiding Chinese hardware companies such as Huawei.
- The Trump administration is reportedly threatening Anthropic with a "supply chain risk" designation after the company refused to develop AI for mass surveillance.
- Morgan Stanley identified "Most Defensible Stocks" as long-term investment opportunities following recent AI-driven market shifts.
- Super Micro Computer's stock fell 6% amid broader AI hardware market downturn and concerns over profit margins.
- Escargot, an AI-powered greeting card startup, raised $2.75 million in seed funding.
Amazon and Microsoft stocks are smart buys despite AI spending fears
Amazon and Microsoft stocks have dropped about 20% from their highest points due to worries about AI spending. However, Amazon has a backlog of cloud computing work that will take years to complete, and Microsoft's cloud division is growing quickly. Both companies are major providers of data centers for AI technology. Despite short-term cash flow concerns, their cloud services like AWS and Azure are expected to drive significant long-term profits. Both stocks are now trading at reasonable prices, making them attractive investments.
Amazon and Microsoft stocks are smart buys despite AI spending fears
Amazon and Microsoft stocks have dropped about 20% from their highest points due to worries about AI spending. However, Amazon has a backlog of cloud computing work that will take years to complete, and Microsoft's cloud division is growing quickly. Both companies are major providers of data centers for AI technology. Despite short-term cash flow concerns, their cloud services like AWS and Azure are expected to drive significant long-term profits. Both stocks are now trading at reasonable prices, making them attractive investments.
Amazon and Microsoft stocks are smart buys despite AI spending fears
Amazon and Microsoft stocks have dropped about 20% from their highest points due to worries about AI spending. However, Amazon has a backlog of cloud computing work that will take years to complete, and Microsoft's cloud division is growing quickly. Both companies are major providers of data centers for AI technology. Despite short-term cash flow concerns, their cloud services like AWS and Azure are expected to drive significant long-term profits. Both stocks are now trading at reasonable prices, making them attractive investments.
Morgan Stanley reveals top stocks to buy during AI market shifts
Morgan Stanley suggests that the recent AI-driven stock market sell-off has created new long-term investment opportunities. The bank has identified a list of 'Most Defensible Stocks' that are well-positioned to handle AI disruption risks. These include companies in sectors like banking, business services, consumer finance, insurance, internet, payments and fintech, REITs, and software. Morgan Stanley believes these companies have strong fundamentals and pricing power related to AI adoption, making them resilient in the current market.
Morgan Stanley reveals top stocks to buy during AI market shifts
Morgan Stanley suggests that the recent AI-driven stock market sell-off has created new long-term investment opportunities. The bank has identified a list of 'Most Defensible Stocks' that are well-positioned to handle AI disruption risks. These include companies in sectors like banking, business services, consumer finance, insurance, internet, payments and fintech, REITs, and software. Morgan Stanley believes these companies have strong fundamentals and pricing power related to AI adoption, making them resilient in the current market.
Nvidia's China AI chip sales stall amid competition fears
Nvidia has not yet made any money from selling its U.S.-approved AI chips in China, despite eased restrictions. The company faces scrutiny from both the U.S. and China regarding chip sales amid a tech race. Nvidia also warned that Chinese AI companies are improving and could become major competitors globally. These Chinese firms, often offering lower-cost technology, have gained traction through recent IPOs. Nvidia urges the U.S. to support American technology use worldwide.
Nvidia forecast calms AI trade but markets remain cautious
Global stocks are near record highs after Nvidia's positive forecast eased concerns about AI spending. However, the US tech market remains volatile, and futures are cautious. Nvidia's outlook suggests that major tech companies will continue investing in AI. This indicates that the AI hype is evolving into a test of execution, with investors now seeking proof of sustained performance. Global economic signals, including potential policy shifts in Japan and uncertainty in oil and currencies, are also influencing market sentiment.
Trump administration threatens AI giant Anthropic
The Trump administration is reportedly threatening AI company Anthropic with severe consequences, potentially designating it a 'supply chain risk.' This action could prevent government contractors from using Anthropic's AI models, like Claude, which would significantly harm its business momentum and potential IPO. Anthropic has refused to use its AI for mass surveillance tools, leading to this conflict. The administration may invoke the Defense Production Act to compel Anthropic's cooperation. This move is seen as an attempt to make an example of the company and pressure others in the AI industry.
Nvidia's AI chip sales drive massive profit surge
Nvidia reported a quarterly profit of $43 billion, with its annual profit reaching $120 billion, driven by strong sales of AI chips. The company holds about 90 percent of the market for semiconductors used in AI projects. Nvidia is set to benefit significantly from major tech companies' plans to invest heavily in AI data centers. Despite recent stock price stability, demand for Nvidia's chips continues to grow rapidly. Sales of its AI data center chips increased by 71 percent in the last quarter, surpassing expectations.
Nvidia AI chip demand remains strong, boosting sales forecast
Nvidia expects its first-quarter revenue to exceed Wall Street's predictions, indicating continued high demand for its artificial intelligence chips. The company forecasts sales of $78 billion, significantly higher than the estimated $72.60 billion. Nvidia's graphics processing units (GPUs) are crucial for developing and running AI models, and its stock has surged over 200% in the past year. Despite concerns about the sustainability of AI investments, Nvidia's forecast suggests robust demand for its high-performance chips.
Escargot raises $2.8M for AI greeting cards
Escargot, a startup aiming to revitalize greeting cards for younger generations, has raised $2.75 million in seed funding. The company uses AI to allow users to edit physical cards and sends reminders for special occasions through its app and website. The greeting card market is substantial, and Escargot sees a significant opportunity with Gen Z and millennials. While not primarily an AI company, Escargot leverages AI to enhance user experience and facilitate connections. The funding will be used to expand its product offerings.
Chinese AI model withheld from Nvidia amid tech tensions
Chinese AI firm DeepSeek has decided not to share its upcoming AI model with U.S. chipmakers like Nvidia. This move could benefit Chinese hardware manufacturers, such as Huawei, by allowing them to optimize their chips for the new model first. While DeepSeek's model is mainly for benchmarking, this decision highlights growing tensions in the AI hardware sector. There are also concerns that DeepSeek may have used Nvidia's advanced Blackwell chip in China, potentially violating U.S. export rules.
Super Micro Computer stock drops amid AI hardware concerns
Super Micro Computer's stock fell 6% due to a broader market downturn in AI-related hardware and ongoing concerns about its profit margins. Investors are focusing on profitability and execution risks, especially after a strong recent quarter. The company's low gross margins compared to previous periods are a point of worry. This stock movement may also be influenced by sharp price changes in other major AI companies, affecting the entire AI hardware sector.
Sources
- Are These 2 AI Stocks No-Brainer Buys This Month?
- Are These 2 AI Stocks No-Brainer Buys This Month?
- Are These 2 AI Stocks No-Brainer Buys This Month?
- Here's Morgan Stanley's stock-picking playbook for the AI scare trade
- Stocks to buy as the AI scare rips through markets: Morgan Stanley
- Nvidia still hasn't sold its U.S.-approved China AI chips — and it’s worried local AI rivals could take over
- Nvidia Calmed The AI Trade, But Markets Still Look Jumpier
- The Trump Administration Is Trying to Make an Example of the AI Giant Anthropic
- Nvidia’s Quarterly Profit Hits $43 Billion on Strong A.I. Chip Sales
- Nvidia forecasts upbeat quarterly sales as AI boosts chip demand
- Read the pitch Escargot used to raise $2.8M for AI greeting cards
- DeepSeek withholds upcoming AI model from US chipmakers, including Nvidia: report
- Super Micro Computer falls 6% as AI-hardware sentiment weakens and margin concerns linger
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