Nvidia powers AI funding as OpenAI seeks investment

Key Takeaways

• Together AI is seeking $1 billion in funding at a $7.5 billion valuation to support its Nvidia chip server rental services for AI developers.
• Robinhood Ventures I has raised $315.4 million and plans to invest in OpenAI and other pre-IPO AI labs.
• Fluor's engineering and construction services are in high demand for data centers and nuclear power projects, driven by AI's computing needs.
• Rubrik received a 'Strong Buy' rating from Wedbush due to increasing enterprise IT budgets for AI and strong demand for its data security solutions.
• Morningstar lowered Oracle's economic moat rating to 'narrow' due to uncertainties regarding AI's disruptive impact, despite OCI's potential benefits.
• Lumentum and Coherent, two leading AI companies, are strong candidates for inclusion in the S&P 500 index.
• Some investors are shifting towards 'HALO' stocks (heavy assets, low obsolescence) like ExxonMobil and Walmart, expressing caution about certain AI investments.
• The healthcare sector hopes AI can improve efficiency and manage costs in response to Medicaid cuts by the Centers for Medicare & Medicaid Services (CMS).
• The Middle East faces a critical water supply vulnerability, exemplified by risks to the Jubail desalinization plant, which could have severe consequences.

Fluor stock benefits from AI and nuclear energy boom

Fluor is seeing increased demand for its engineering and construction services due to the growth in data centers and nuclear power. The company has worked on data center projects in India and Europe and is seeking deals in North America. Fluor was also an early investor in NuScale Power, a company developing small modular nuclear reactors. This positions Fluor to benefit from the increasing need for computing power driven by AI and the resurgence of nuclear energy for reliable power.

Fluor stock gains from AI and nuclear power growth

Fluor's engineering and construction services are in high demand due to increased investment in data centers and nuclear power. The company has experience building data centers in India and Europe and is pursuing projects in North America. Fluor also invested early in NuScale Power, a developer of small modular nuclear reactors. These factors position Fluor to capitalize on the growing need for computing power from AI and the renewed interest in nuclear energy.

Together AI seeks $1 billion funding at $7.5 billion valuation

Together AI, a cloud provider that rents Nvidia chip servers to AI developers, is in talks to raise about $1 billion. The company is seeking a valuation of $7.5 billion before the investment. This funding round, expected soon, would be one of the largest for an AI infrastructure startup this year. Together AI's rapid growth is driven by the high demand for Nvidia's AI chips, which are crucial for training large language models.

Wedbush names Rubrik a top AI stock amid strong demand

Analysts at Wedbush have given Rubrik a 'Strong Buy' rating, noting that enterprise IT budgets are increasing, with significant allocations for AI. Despite longer sales cycles due to more testing, analysts report no lost deals for Rubrik, indicating strong demand. Rubrik provides data security and cyber-resilience solutions, and its platform is seeing steady demand. The company reported strong revenue growth and a turnaround in profitability in its recent fiscal third quarter.

Oracle's moat rating lowered due to AI uncertainties

Morningstar has lowered its economic moat rating for Oracle to 'narrow' due to reduced certainty surrounding AI's impact. While Oracle's database and enterprise software are deeply integrated, AI's disruption potential is a concern. Oracle Cloud Infrastructure (OCI) is expected to benefit from generative AI, but supply chain issues and financing delays pose risks to its data center expansion. Morningstar also lowered its fair value estimate for Oracle's stock.

Middle East faces water crisis, not just oil concerns

The Middle East's critical vulnerability is its water supply, not oil, according to Javier Blas of Bloomberg Opinion. Recent attacks on the Jubail desalinization plant in Saudi Arabia highlight this risk, as it supplies most of Riyadh's drinking water. If the plant is compromised, the capital city could face evacuation within a week. The ongoing conflict could also lead to oil prices spiking beyond $200 a barrel, causing severe supply issues.

Robinhood Ventures eyes AI investments including OpenAI

Robinhood's public venture fund, Robinhood Ventures I, has raised $315.4 million. The fund is looking to invest in OpenAI and other AI labs. Access to pre-IPO startups is a key feature of the fund. Currently, Robinhood Ventures I does not have an investment in a foundational AI model. This move signals Robinhood's interest in the growing AI sector.

Investors favor 'HALO' stocks over AI amid market shift

Investors are shifting away from some AI stocks and into those considered 'AI-proof,' a trend dubbed the 'HALO' trade. HALO stands for 'heavy assets, low obsolescence,' referring to companies with physical assets that are less likely to be disrupted by AI. Major oil companies like ExxonMobil, Walmart, and McDonald's are examples of HALO stocks that have seen gains. This shift reflects concerns about AI's impact on businesses and the potential for AI investments to not meet expectations.

AI stocks Lumentum and Coherent may join S&P 500

S&P Dow Jones Indices is expected to announce changes to the S&P 500 index soon. Two leading artificial-intelligence companies, Lumentum and Coherent, are strong candidates for inclusion. Both companies have market capitalizations well above the threshold required for entry into the benchmark index. This potential inclusion highlights the growing influence of AI companies in the stock market.

Medicaid cuts may spur AI investment in healthcare

The Centers for Medicare & Medicaid Services (CMS) is implementing cuts to Medicaid. Industry stakeholders are hoping that technology, particularly artificial intelligence (AI), can help the healthcare system operate more efficiently with reduced funding. This strategy aims to encourage investment in AI solutions to improve services and manage costs within the Medicaid program.

Sources

• Artificial Intelligence (AI) and Nuclear Energy Could Make This Engineering and Construction Stock a Big Winner
• Artificial Intelligence (AI) and Nuclear Energy Could Make This Engineering and Construction Stock a Big Winner
• Nvidia Cloud Ally Together AI in Talks to Raise at $7.5 Billion Valuation
• 1 ‘Strong Buy’ AI Stock That Wedbush Loves Now: ‘No Lost Deals’ Amid ‘Disruption’
• Oracle: We Lower Moat Rating to Narrow on Reduced Certainty Around AI
• The Middle East Has a Big Weak Spot—And It’s Not Oil
• Robinhood's public venture fund eyes AI stakes
• Investors Are Piling Into the 'HALO' Trade. Here's What That Means and What They're Buying
• S&P 500 changes are due out soon. These AI stocks could join the index.
• CMS wants Medicaid cuts to spark AI investment