U.S. stocks closed: The Dow fell 330 points, Nvidia dived at the end of the session, and its market value evaporated by $106.4 billion overnight

National Business Daily

2024-05-31 07:07Published on the official account of Sichuan Daily Economic News

Edited by: Du Yu

On May 30, local time, the three major U.S. stock indexes collectively closed down, with the Dow falling 330.06 points, or 0.86%; The Nasdaq fell 1.08%; The S&P 500 fell 0.6%.

Most of the popular technology stocks fell, with Microsoft falling more than 3%, Google falling more than 2%, and Tesla rising more than 1%. The semiconductor and software application sectors were among the top decliners, with Micron Technology falling more than 4% and Kangte Technology falling nearly 3%. The shipping and thermal coal sectors rose, with Stigas shipping rising more than 3%, and Yixing shipping and Kirby shipping rising more than 1%. HP rose more than 17%, the largest one-day increase in the last 11 years. SAFTSE fell nearly 20%, and the company's Q2 revenue growth guidance fell to single digits for the first time.

Popular Chinese concept stocks rose, and the Nasdaq China Golden Dragon Index rose 1.37%. Weilai rose more than 9%, Bilibili, Xiaopeng Motors rose more than 5%, Weibo rose more than 4%, JD.com rose more than 3%, Li Auto, Tencent Music rose more than 2%, iQiyi, NetEase rose more than 1%, Full Bang, Vipshop, Alibaba, Pinduoduo, Baidu rose slightly. Futu Holdings fell more than 2%.

The "Challenger Alliance" is assembled, the Middle East business is rumored to be bearish, and Nvidia is "diving" at the end of the market

At the end of the U.S. stock market on May 30, AI leader Nvidia saw a wave of rapid "diving". On the news side, in an announcement released on Thursday, Microsoft, Google, Meta, Intel, AMD, Cisco, Broadcom, and Hewlett Packard Enterprise announced that they would collectively promote a large-scale AI system communication standard for data centers called Ultra Accelerator Link (UALink).

（图片来源：businesswire）

The purpose of this specification is to set the specifications for the connection of different AI accelerators, of course, to facilitate the mixing of different AI chips in the same data center. According to the announcement, the relevant specifications will be made available to participating companies in the third quarter of this year.

It's worth noting that Nvidia isn't one of them.

Considering that Nvidia occupies nearly 8% of the entire AI chip market, there is no doubt that it will stick to NVLink, which it claims to be the "world's fastest high-performance computing protocol", so it makes sense that these tech giants "don't play with NVIDIA".

Of course, it is not easy to say what kind of climate this so-called "alliance" can become, after all, the "leading big brother" Microsoft, Google and Meta are now all big customers waiting in line for Nvidia to provide graphics cards, and it is unlikely that a protocol will be made to exclude Nvidia's graphics cards.

Nvidia released its 10-Q later on Wednesday, which is a more complete quarterly report. The company disclosed that in the first quarterly reporting period, there were "two indirect customers each accounting for 10% or more of the company's total revenue". UBS analyst Timothy Arcuri bluntly said that Microsoft is one of these two big customers. Timothy said that according to previous estimates, in Nvidia's last fiscal year, Microsoft alone probably contributed nearly 19% of revenue.

Along with Form 10-Q, there is also a Form 144, which is a document that directors, supervisors, senior executives, or shareholders holding a large number of shares of a listed company are required to disclose in advance before reducing their shareholdings.

The disclosure of the intention to reduce holdings this time is Nvidia director and well-known Silicon Valley investor Mark Stevens. He has served as a director of NVIDIA since 2008. The announcement disclosed that he plans to sell 435,000 shares of Nvidia stock, corresponding to a market value of nearly $500 million.

(Image source: SEC)

According to other sources, in recent days, the U.S. Department of Commerce has "slowed down" in issuing export licenses for computing chips in Middle Eastern countries to technology giants such as Nvidia and AMD. A person familiar with the matter said that some applications to sell chips to customers in the United Arab Emirates, Saudi Arabia and Qatar have been delayed or not responded to in the past few weeks.

It is reported that earlier this month, Thea Kendler, assistant secretary of the U.S. Department of Commerce for export management, visited Saudi Arabia, the United Arab Emirates, Qatar and Kuwait to discuss semiconductor export licenses. In October last year, the U.S. Department of Commerce included most of the Middle East in the scope of chip export restrictions, and companies such as Nvidia, AMD, and Intel need to obtain special permits to export cutting-edge chips to the region.

As of the close, Nvidia reported $1,105, down 3.77%, with the latest market value of 2.7 trillion yuan, and its market value evaporated by $106.4 billion (about 769.2 billion yuan) overnight.

Dell Technologies' fiscal first quarter total revenue was higher than expected, but adjusted operating profit fell short of expectations

After the U.S. stock market on Thursday, May 30, Dell Technologies, a 40-year-old leader in personal computer and server manufacturing, released its financial results for the first quarter of fiscal year 2025.

Quarterly revenue rose 6% year-over-year to $22.2 billion, above the consensus of $21.6 billion and above the upper end of the company's official guidance of $21 billion to $22 billion. According to some analysts, this is Dell's first year-on-year revenue growth since 2022.

Adjusted earnings per share were $1.27, down 3% year-over-year, but above the consensus of $1.23 and the company's official guidance of $1.15. However, there are analysts who hope for an EPS of $1.29. GAAP earnings per share increased 67% year-over-year to $1.32.

Meanwhile, quarterly operating profit was $920 million and non-GAAP operating profit was $1.47 billion, down 14% and 8%, respectively, year-over-year, and the latter missed expectations of $1.48 billion. Cash flow from operating activities was $1.0 billion. Returned $1.1 billion to shareholders through share repurchases and dividends, ending the quarter with cash and investments totaling $7.3 billion.

Dell said on the earnings call:

Revenue for the fiscal second quarter is expected to be $23.5 billion to $24.5 billion, higher than analysts' expectations of $23.17 billion.

The FY2025 revenue forecast was raised to $93.5 billion to $97.5 billion, the midpoint of the range of $95.5 billion equals an 8% year-over-year increase, higher than analysts' expectations of $94.62 billion, and the previous full-year revenue guidance of 5% year-over-year to $93 billion.

Adjusted EPS for fiscal 2025 is expected to be $7.65 (+/- 25 cents) versus analysts' expectations of $7.70.

Customer Solutions Group revenue growth is expected to be at the lower end of the 0% to 10% range for FY2025, with guidance unchanged. The Infrastructure Solutions Group is expected to grow its full-year revenue by more than 20%, higher than the previous expectation of around 15%.

At the close, Dell Technologies was at $169.98, down 5.15%. It is worth noting that as of press time, Dell Technologies' U.S. stocks "dived" 18.58% after hours.

Some analysts pointed out that although Dell's AI server backlog orders grew rapidly in the quarter, it can be seen from the double-digit plunge in the after-hours stock price that the $3.8 billion backlog of orders failed to impress investors who have high hopes for the company's AI technology.

Amazon takes a critical step! The FAA allows its delivery drones to fly beyond visual range

On Thursday, local time, the American technology giant Amazon announced that federal regulators have given Amazon a key license - Flight Over Visual Horizon (BVLOS), allowing it to expand its drone delivery business.

According to Amazon's official website, the Federal Aviation Administration (FAA) has approved the over-the-horizon flight of Amazon Prime Air delivery drones, removing an obstacle that prevents its drones from flying longer distances.

However, there are still a lot of restrictions on Amazon's drone delivery business at the moment. An FAA spokesperson said the approval applies to college towns in Texas, where Amazon launched its drone delivery service in late 2022.

Amazon said it plans to immediately expand its area in college town, Texas, where drone services are available, and will begin incorporating such freight services into its same-day delivery network this year. The company also said the regulatory approval also "laid the groundwork" for it to expand its operations to more parts of the country.

In fact, Amazon has been seeking this permission for years, and the company said it received regulatory approval after developing a strategy to ensure that its drones can detect and avoid obstacles in the air. To that end, Amazon has spent years developing, testing, and improving airborne detection and evasion systems.

In addition, the company said it submitted additional engineering information to the FAA and conducted a flight demonstration in front of federal inspectors. These demonstrations take place in front of real airplanes, helicopters, and hot air balloons to show how drones can safely move away from them.

For more than a decade, the company has been looking to deliver online orders via drones. In a 2013 television interview, Amazon founder Jeff Bezos said drones would fly into consumers' homes within five years. However, due to regulatory setbacks, the company's business development was significantly delayed.

At the close, Amazon was trading at $179.32, down 1.48%, with a market capitalization of $1.9 trillion.

The Fed's "three-in-command": interest rates are in a good position, and inflation is still too high

On Thursday (May 30), local time, New York Fed President Williams said that inflation in the United States is still too high, but monetary policy is restrictive enough, and inflation will continue to decline in the second half of the year, but he did not say a word on when the Fed will start cutting interest rates.

As president of the New York Fed, Williams is also vice chairman of the Federal Open Market Committee (FOMC) and has permanent voting rights on monetary policy, so he is regarded as the Fed's "No. 3 man".

Speaking at the Economic Club of New York on Thursday, Williams said inflation was still too high and the data since the beginning of the year was disappointing. In recent times, Fed officials have generally claimed in public that this year's inflation data has been mostly higher than expected, indicating a lack of further progress towards the 2% inflation target.

In July last year, the Fed raised its target for the federal funds rate to 5.25%-5.5%, the highest level in more than 23 years. However, the Fed has been taking a wait-and-see approach for almost a year, keeping interest rates unchanged.

Earlier this year, the market was expecting the Fed to cut interest rates aggressively this year, but a number of higher-than-expected inflation reports shattered investors' illusions, and the current market pricing suggests that the Fed may only cut rates once this year, most likely in November. Policymakers will hold their next interest rate meeting on June 11-12.

Williams said that the current monetary policy is in good shape and restrictive enough to help the Fed achieve its goal of reducing inflation. Williams gave a negative answer to the question of whether further rate hikes are possible in the future, saying: "I don't think that's a possible scenario. ”

While dismissing the possibility of continuing to raise interest rates, Williams declined to say when to cut rates, stressing that it depends on upcoming economic data.

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