Key Takeaways
- Microsoft and Meta shares rallied on robust ad sales and core business, easing AI investment concerns.
- Tech giants Microsoft and Nvidia approach $4 trillion valuations, reflecting strong investor confidence in AI.
- US secures last-minute trade deals; China scrutinizes NVIDIA AI chips, Canada pact uncertain.
Deep Dives
Tech Earnings
- Meta surged due to robust ad revenue growth and strong core business performance, reassuring investors despite significant AI spending and high salaries for AI researchers.
- Microsoft, with a software-focused business model, also saw shares rally; its capital spending on AI is projected to increase less dramatically compared to Meta.
AI Valuations
- Microsoft's approach to a $4 trillion market capitalization signals strong investor confidence in its AI investments, even as returns are still in early stages.
- Nvidia is also nearing the $4 trillion mark and is considered the primary beneficiary of current AI spending due to its dominant chip sales.
Global Trade
- The U.S. secured last-minute trade deals with South Korea, Thailand, and Cambodia, preempting reciprocal tariffs, though President Trump cast doubt on a Canadian pact.
- China's cybersecurity regulator summoned Nvidia to address 'backdoor security risks' in its AI chips, following Nvidia's decision to resume H-20 chip sales in China.