In a quiet morning for the stock market, the S&P 500 held steady on Tuesday, following a robust three-session winning streak. The index reached a record high the previous day, alongside the Nasdaq, buoyed by a surge in tech stocks largely driven by Nvidia’s gains following its significant announcement with OpenAI. Investors are now looking ahead to Costco’s forthcoming earnings report after the market closes on Thursday, while the eagerly awaited inflation gauge favored by the Federal Reserve is set to be released on Friday.
The spotlight remains on Nvidia, which recently made headlines with its $100 billion investment aimed at assisting OpenAI in constructing AI data centers. This monumental deal was the result of direct negotiations between Nvidia’s CEO Jensen Huang and OpenAI’s Sam Altman. According to Jim Cramer, Huang expressed that Altman was the first to grasp the potential of their platform, paving the way for a collaborative future aimed at enhancing machine reasoning capabilities.
Despite a record-high close on Monday, Nvidia’s shares dipped modestly in early trading on Tuesday. Evercore ISI has increased its price target for Nvidia from $214 to $225, maintaining an outperform rating. Analysts indicated that the Street’s earnings estimates for Nvidia may be too conservative, especially in light of the OpenAI partnership and other recent agreements.
The implications of the OpenAI deal extend beyond Nvidia, with other major companies positioned to benefit from the expanding reliance on energy to support the growing demand for computing power anticipated in the coming decade. Stocks such as GE Vernova and Eaton saw price increases on Monday as part of this trend.
In other market news, Jefferies downgraded Vistra from a buy to a hold, citing delays in the Comanche nuclear deal contrary to earlier expectations. This led analysts to seek a potential price pull-back for improved risk/reward ratios, resulting in a reduced price target for Vistra from $241 to $230.
In a positive development for offshore renewable energy, shares of Danish company Orsted surged after a U.S. judge ruled in favor of the firm, allowing it to resume construction on an offshore wind farm previously halted under the Trump administration.
Wells Fargo upgraded CoreWeave to a buy rating from hold, increasing the price target from $105 to $170 per share. The firm is expected to experience significant benefits from hyperscaler expenditure and Nvidia’s commitment to purchasing excess capacity through 2032, which Wells described as a “blank check” for the next six years.
Legal proceedings are also taking center stage as opening arguments in the FTC’s lawsuit against Amazon are set to commence. The lawsuit contends that Amazon has misled millions of customers into signing up for Prime while complicating their attempts to cancel subscriptions. Amazon has firmly denied any wrongdoing.
In technology news, analysts at Citi have signaled a potential growth trajectory for Meta Platforms’ smart glasses, suggesting they may reach a “tipping point” in the upcoming year following insights shared at last week’s Meta Connect event. Meta continues to be recognized as a top pick by Citi, holding a buy rating with a price target set at $915.
Additionally, U.S. lawmakers discussed a Boeing deal during their visit to Beijing, as announced by Democratic Rep. Adam Smith of Washington. The congressman highlighted Boeing’s significant manufacturing footprint in the state and the stock’s potential benefits from President Trump’s trade policies, prompting an investment in Boeing stock by our investment team earlier in the month.
This overview captures key market movements and significant developments impacting various sectors, providing investors with strategic insights as they navigate the evolving landscape.
