Nvidia earnings could be more important for the wider market than the chip maker itself.
There’s potential for Nvidia’s Wednesday report to take more wind out of the broad rally sparked by President-elect Donald Trump’s win at the polls. Disappointing guidance could bring back nerves about elevated
valuations, especially in the tech sector.
If there is a problem, it is likely to be that there is so much demand for Nvidia’s Blackwell chips it can’t ramp up supply fast enough, especially if reported issues
with overheating mean a redesign of the servers housing the processors is needed. Such worries have contributed to a small dip in the stock which means Nvidia has just lost its title to Apple as the world’s largest company by market value.
Supply issues can be fixed but there is the potential for at least one constrained quarter of Nvidia sales. In a market where short-term money is chasing a small number of artificial-intelligence stocks–just look at the
moves in troubled server maker Super Micro Computer or AI software favorite Palantir–that could easily set off a panic.
That’s not to say Nvidia itself would be in trouble. The company easily recovered from a dip following its previous earnings report, when guidance underwhelmed the market, and there’s always the possibility it could dismiss any supply problems and roar higher. But after Nvidia drove 20% of the S&P 500’s return over the past year, any disappointment will reverberate.
—Adam Clark
|
MEMBER MESSAGE: Mansion Global Boutique
|
Holiday Gift Guide 2025
|
|
|
Upgrade your gifting with Mansion Global Boutique's one-stop shop for chic and stylish presents.
SHOP NOW
|
|
|
Offering Tech Companies More Power for Their AI Ambitions
As the tech industry clamors for more power for their artificial
intelligence ambitions, Ohio-based utility American Electric Power and Bloom Energy have a deal to use fuel cells to power data centers. The partnership could offer the tech industry a way around the yearslong wait to connect to major electricity grids.
- AEP is the fifth-largest utility company by market value, and Bloom makes
the fuel cell-based power generating platform. The technology uses a chemical reaction to convert fuel to electricity. It means the companies can power a data center even when the transmission grid is too congested.
- In the Mid-Atlantic and Midwest power grid area where AEP is based, there is a five- to seven-year
backup for projects waiting to plug into the grid. Bloom’s cells can use several fuels. In this case, they’ll use natural gas. Eventually, Bloom expects to use carbon-free hydrogen as fuel in its cells.
- Bloom’s fuel cells can generate as much as 60 kilowatts of electricity each and can be stacked together almost like Legos. Four of the cells can power a Home Depot. AEP will purchase up to one gigawatt of Bloom’s fuel cells, but only has a contract for 100 megawatts now.
- Shares of Nvidia, which makes chips used in AI data centers, fell after The Information reported that servers connecting dozens of its Blackwell AI chips had overheating issues, and that Nvidia had revised its server rack designs several times. Nvidia told Barron’s the engineering iterations are normal and expected.
What’s Next: A full gigawatt is enough to power between 500,000 and one million homes if the power runs constantly. The largest AI data centers being planned today are already over 500 megawatts.
—Avi Salzmanand Janet H. Cho
Elon Musk’s Businesses Stand to Benefit Under Trump Policies
Tesla stock rose on Monday after Bloomberg reported that President-elect Donald Trump could create a federal framework for self-driving vehicles that would make it easier to get self-driving
licenses and let autonomous cars drive across state lines. Potential competitors to Tesla’s Cybercab robotaxi are Uber Technologies and Lyft.
- Wedbush analyst Dan Ives said Tesla CEO Elon Musk’s significant influence with Trump could be a major boost for Tesla’s autonomous driving vision.
Musk, a big supporter of Trump during the campaign and advisor during his transition, has bet Tesla’s future on self-driving and artificial intelligence.
- Tesla uses AI to train its cars to drive themselves, but its Full Self Driving mode still requires constant human supervision. Bernstein analyst Toni Sacconaghi said
regulation can’t advance or ensure that Tesla’s no-human-required technology will work, adding that consumers and states will reject the technology if it doesn’t work.
- Trump is widely expected to try to eliminate EV tax credits, which could discourage consumers from buying an EV over a traditional car or hybrid. Analysts think that Tesla would be the least affected EV maker because it has the global scale and cost structure to stay profitable without credits.
- Trump’s nominee to head the Federal Communications Commission is Brendan Carr, who wants to end the rules that shield internet platforms like Meta and Alphabet from liability for user-generated content. Musk owns the social media platform X, but Carr also favors rules that would expand Musk’s Starlink internet service.
What’s Next: Tesla didn’t respond to Barron’s request for comment about Trump’s potential priorities. Musk’s other project, a humanoid robot, is finally here in miniature form. Tesla started selling a seven-inch-tall robot action figure for $40. It comes with a charging stand and a mallet-like “CyberHammer.”
—Al Root, Bill Alpert,
and Janet H. Cho
Tesla Sells Toy Robots. Life-Size Versions Are Coming, Too.
Sometimes you have to start small. Electric vehicle
maker Tesla’s humanoid robot is finally here–but buyers will have to
