Monday, December 4, 2023

CNBC Daily Open: Record highs for Microsoft and Nvidia

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Microsoft CEO Satya Nadella listens to an audience member’s question during the company’s annual shareholder meeting in Bellevue, Washington, Nov. 30, 2016.

Stephen Brashear | Getty Images News | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Altman joins Microsoft
Sam Altman, who was ousted as CEO of OpenAI on Friday, is
joining Microsoft to lead a new artificial intelligence team. Greg Brockman, former OpenAI president and board chair — and potentially many OpenAI employees — will join Microsoft alongside Altman. One researcher said the move’s a case of “damage control.” But investors begged to differ, pushing Microsoft shares to a record high.

Tech excitement
U.S. markets traded higher Monday, led by excitement over technology stocks. Microsoft and Nvidia hit all-time highs, while U.S. Treasury yields dipped on the back of a strong auction. Europe’s Stoxx 600 index edged up 0.1%. Bayer plunged around 18% after the German pharmaceutical firm said it’s stopped trials for a new anti-clotting drug.

New high for Nvidia
Nvidia shares popped 2.25% to close at an all-time high of $504.09, ahead of the chipmaker’s earnings report today. That gives Nvidia a market capitalization of $1.2 trillion, more than Meta or Tesla. Investors have good cause for cheer: Revenue for the company’s fiscal fourth quarter is estimated to grow 200%, according to LSEG estimates.

‘Anarcho capitalist’
Argentina’s Javier Milei is slated to be the country’s president, garnering 56% of the votes. Milei’s known as a far-right political outsider and has described himself as an “anarcho capitalist.” Among his proposed policies are: dollarizing Argentina’s economy, abolishing the central bank and privatizing the pension system.

[PRO] ‘Golden Age of Fraud’
Jim Chanos, the legendary short seller who bet against Enron before it went bankrupt in 2001, recently converted his hedge funds to a family office. But Chanos said in a final message to investors this is a ‘Golden Age of Fraud’ that still presents plenty of short opportunities.

The bottom line

All the turmoil at OpenAI over the weekend turned out pretty well — for Sam Altman and Microsoft, at least. Altman’s got a role at Microsoft heading its new artificial intelligence lab. The appointment sent Microsoft shares to a new high.

Wedbush Securities tech analyst Dan Ives, in a note published Monday, had strong words regarding the drama over the weekend. The OpenAI board “was at the kids poker table and thought they won until Nadella and Microsoft took this all over in a World Series of Poker move for the ages with the Valley and Wall Street watching with white knuckles Sunday night/Monday early am,” Ives wrote.

“We view Microsoft now even in a STRONGER position from an AI perspective with Altman and Brockman at MSFT running AI,” he added.

To be sure, these are early days in the OpenAI-Sam Altman saga. The situation is still volatile, but for now, it seems the scales are firmly tipped to one side.

Meanwhile, at another corner of the technology industry, anticipation over Nvidia’s earnings report later today pushed the chipmaker’s shares up to a record high. If history repeats itself, then Nvidia might smash even its out-of-this-world forecast. But with so much good news already baked into the company’s share price, it’s hard to see the stock rising more substantially in the near-term.

Regardless, markets had a positive start to the week. The S&P 500 climbed 0.74%, the Dow Jones Industrial Average added 0.58% and the Nasdaq Composite rose 1.13%. Both the S&P and the Nasdaq enjoyed their fifth consecutive day of gains.

Investors will also be keeping an eye on minutes of the Federal Reserve’s most recent meeting due later today. Given the Fed’s preference of telegraphing its intentions so starkly, the likelihood of anything unexpected in the minutes is slim. That’s a good thing — we’ve had enough excitement across the past few days.

— CNBC’s Sophie Kiderlin contributed to this report.

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