Bumpy Week for Nvidia, Tesla, Billion Dollar Space Bet | Bloomberg Technology

Key Concepts:

• AI Trade: Refers to investments and market activity related to artificial intelligence technologies and companies.
• Autonomous Driving: The capability of a vehicle to drive itself without human intervention.
• NVIDIA GTC: NVIDIA's GPU Technology Conference, an event where the company announces new products and technologies.
• Blackwell & Rubin: NVIDIA's next-generation GPU architectures.
• Gross Margins: The percentage of revenue that exceeds the cost of goods sold.
• MAG Seven: The seven largest tech companies by market capitalization: Meta, Apple, Google, Amazon, Microsoft, NVIDIA, and Tesla.
• GenAI: Generative Artificial Intelligence.
• High-Bandwidth Memory (HBM): A type of memory used in GPUs and other high-performance computing applications.
• Death Cross: A technical chart pattern indicating a potential stock market crash.
• Next Generation Air Dominance (NGAD): A U.S. Air Force program to develop a sixth-generation fighter jet.
• FTC: Federal Trade Commission.

1. Market Overview and Tesla's Stock Performance

• The NASDAQ 100 is ending the week on a down note, with 75% of its components trading lower.
• If the index closes lower, it will mark five consecutive weeks of declines, the longest losing streak since May 2022.
• European markets are also experiencing a downturn, particularly in travel and leisure stocks due to the Heathrow Airport closure.
• Tesla's shares are down 3.5% over the last five days.
• Elon Musk reassured employees to hold onto their stock, citing Cathie Wood as an example of someone who believes in the company's future.
• Craig Trudell notes that Musk's all-hands meeting was unusual and aimed to reassure both employees and the markets.
• Musk reiterated the idea of autonomous driving for Tesla, a promise he has been making since 2016.
• Trudell expresses skepticism about Tesla achieving full autonomy with the current hardware set.
• Tesla shares are up 2% today but still down for the week.

2. NVIDIA's Performance and Future Prospects

• NVIDIA's stock is down 4% today and on pace to end the week down more than 4.5%.
• Jensen Huang's speech at the GTC failed to inject optimism into the AI trade.
• Mandeep Singh suggests that while NVIDIA presented a comprehensive product roadmap, the demand side remains a question.
• There is concern about competition from hyperscalers developing their own ASICs.
• Customers are evaluating whether the performance gains of Blackwell justify the increased expenses.
• The key determinant for NVIDIA's stock performance is the gross margin in the second half of the year, especially with the packaging of two GPU chips in the Blackwell series.
• NVIDIA's gross margins have been trending down from 75% to closer to 70%.

3. Market Correction and Economic Outlook

• Nancy Curtin believes the current market correction is not the beginning of a bear market because she doesn't foresee a recession.
• She acknowledges that markets will be volatile until the tariff situation is clarified on April 2.
• Curtin points to strong hard data (jobs, personal incomes, household balance sheets) as evidence against a recession.
• She highlights significant investment commitments from NVIDIA, Apple, and TSMC, totaling close to $1.4 trillion over the next four years.
• Curtin's firm is underweight on the MAG Seven, preferring to invest in spending beneficiaries like digital infrastructure, power, and energy.
• She believes GenAI is in its early innings and that the profitability and productivity enhancements across the global economy are not yet priced in.

4. Micron's Margin Miss and Memory Market

• Micron's shares are falling after the company said margins would miss analyst estimates this quarter.
• Peter Farragut explains that Micron's stock had a fantastic run, leading to a pause in outperformance.
• He believes memory is going to outperform the AI world, with memory margins expected to expand with increased demand.
• Farragut notes that Micron's management may be intentionally underpromising on margins to avoid setting expectations too high.
• Micron is currently in the lead position for hybrid memory, with Samsung running a bit behind.
• He is cautious about PC and smartphone demand, believing that AI will not trigger a hardware refresh cycle immediately.
• Farragut expects the data center business to drive Micron's growth.
• He notes that China is joining the AI race, but there is nothing really in DeepSeek, Tencent, or whatever.

5. Boeing Wins Fighter Jet Contract

• Boeing won a contract to design and build the next generation of U.S. fighter jets, beating out Lockheed Martin.
• The contract is part of the Next Generation Air Dominance (NGAD) program to develop a replacement for the F-22 Raptor.
• The Air Force plans to spend $20 billion on R&D through 2029.
• Shares of Lockheed Martin are down, while shares of Boeing are up.
• President Trump announced that the new fighter jet, referred to as the F-47, will fly with drones and is more advanced than any other nation's aircraft.
• Tyler Kendall reports that the Air Force allocated $20 billion for the research and development of this effort.
• The goal is to have the new fighter jet operational by 2030.

6. Space Station Startup

• A billionaire who made his fortune in cryptocurrency is investing in a startup aiming to build the world's first commercial space station.
• The startup has hinted that there might be a Middle Eastern investor, but it is a big swing and could be lights out for the company if it doesn't happen.

7. Apple's AI Executive Shakeup

• Apple is shaking up its executive ranks to get its AI efforts back on track, aiming to rescue Siri.
• The company took control of Syria and took away from the executive who had been overseeing this ambitious upgrade and moved it under the person who brought us the vision of growth.
• Dana reports that the move was in the works even before recent reports of delays and internal criticism.

8. FTC Leadership Changes

• President Trump fired two Democratic members of the FTC.
• William Kovacic discusses the implications of these firings and the potential shift in regulatory approach towards Big Tech and mergers.
• He expects the FTC and DOJ to continue moving forward in cases against Google, Apple, Meta, and Amazon.

9. Market Wrap-Up

• Ryan summarizes the week's market performance, noting the fifth straight weekly drop for the NASDAQ 100 and the broad-based weakness in the MAG Seven.
• He suggests that valuations have come off and that some investors may start buying the dip.

Synthesis/Conclusion:

The broadcast covers a range of technology and market-related topics, including the performance of major tech companies like Tesla and NVIDIA, the economic outlook, and significant developments in the defense and space industries. Key themes include the challenges and opportunities in the AI sector, the impact of government policies on the market, and the ongoing competition between major players in various industries. The overall tone is cautious, with analysts and experts highlighting both the potential for growth and the risks associated with current market conditions and geopolitical uncertainties.