Markets should open the week on a bullish uptrend again. Last week, the U.S. PCE of 2.2% in August indicated weak inflation. This strengthens the chances of the Federal Reserve making another rate cut in 2024.
The software and hardware aspects of artificial intelligence are at odds with each other. Stock market valuations continued to buy into firms like Broadcom (AVGO), Micron Technology (MU), and Nvidia (NVDA) last week.
Micron erased last month’s sell-off from $110 to $90 when it posted quarterly results. The firm posted revenue jumping by 93.3% Y/Y to $7.75 billion. It expects to post Q1 EPS of $1.66 - $1.82. The memory business is growing because of the strong demand for HBM, high-capacity DIMMs, LP, and data center SSD.
The front-end or software size of AI is not as bright. OpenAI expects to lose $5 billion this year on revenue of $3.7 billion. CNBC confirmed that revenue topped $300 million last month, up by 1700% Y/Y. The firm needs to raise more funds that would value the firm at over $150 billion. OpenAI does not have a shortage of funders, since the latest round is oversubscribed.
In the aerospace sector, Boeing (BA) failed to appease its workers late last Friday. Wage talks broke off. Over 32,000 workers walked off the job on Sept. 13, 2024.
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