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AI Gold Rush. Weekly recap and what to watch in the week ahead

27 May 2023

Nvidia sparks rally in artificial intelligence stocks

Many stock investors have been talking about Nvidia’s spectacular share price rally this week. 

The company’s upbeat sales guidance lifted AI-themed stocks, chipmakers, and US tech stocks. 

If you’re into thematic investing, another popular theme that investors have been looking at is the ASEAN growth story.

From 30th May, retail investors in Singapore can get exposure to three Thai blue chip stocks through Singapore Depository Receipts on the SGX.

Join us at a free seminar on 29th May to find out more about Singapore Depository Receipts!  

Weekly Stock Market Update 27 May
Source: Bloomberg. Price as of 26 May

🚀 Nvidia spurs AI frenzy

What happened? 

Nvidia (NVDA) reported a very strong set of earnings and said it expects a “giant record year”.

What does this mean?

Nvidia has seen a surge in demand for its flagship H100 Artificial Intelligence (AI) chip, which is much faster in AI training compared to its predecessor. 

AI models such as ChatGPT require thousands of chips working together, and the competition between companies such as Google and Microsoft for AI dominance has lifted sales of Nvidia’s chips.

Why should I care? 

AI-related stocks and chipmakers soared with positive sentiment towards the sector. Marvell Technology shares also rallied after the chipmaker projected that its AI revenue would double this with the “tremendous” potential of AI. 

Read more analysis about Nvidia after its share price rally.

🚗 WHAT'S MOVING

  • Grab (GRAB) co-founder Tan Hooi Ling will be stepping down from her operational roles by year-end. She heads the company’s tech and corporate strategy teams currently. 
  • Xpeng (XPEV) reported disappointing earnings and forecast a 36-39% decline in car deliveries in the second quarter. The company’s electric vehicle (EV) sales have been impacted by weak consumer demand in China as well as price cuts by other EV makers. 
  • Singtel reported a net profit of S$2.23 billion in its fiscal year ending March, a 14% increase compared to the previous year. A final dividend of 5.3 cents was declared, bringing the total dividend for the fiscal year to 14.9 cents. 
  • Mapletree Industrial Trust announced the proposed acquisition of a 98% stake in a newly built data centre in Osaka for JPY51.2 billion (S$500 million). Separately, the company announced a private placement at an issue price of S$2.212 per new unit, raising gross proceeds of S$204.8 million.
  • Manulife US REIT has entered into a letter of intent on the proposed sale of Phipps Tower in Atlanta to its sponsor. Separately, it announced that the exclusivity period with Mirae Asset Global Investments on a potential transaction has lapsed, and it is considering proposals from other prospective partners in relation to a strategic transaction.

Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

T-bill yield rebounds to 3.85%. What's driving the increase?

The Singapore 6-month T-bill’s cut-off yield reached 3.85% in the latest auction, above the yield of 3.78% in the previous auction.

Singapore T-bill auction 25 May 2023.jpg

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

Source: Bloomberg, SGX 

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🍭 THAT’S INTERESTING

Cathie Wood’s flagship Ark Innovation ETF (ARKK) exited its Nvidia position in early January, before the chipmaker’s spectacular rally. The stock’s market value has risen by about US$560 billion since ARKK sold its holdings. In February, Cathie Wood said that its valuation was “very high” when the stock traded for US$234 a share. The stock closed at US$389 on 26 May, bringing Nvidia close to entering the “trillion dollar” club. 

Source: Bloomberg

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