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🗞️ Nvidia 🤝 ARM
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Market Performance
S&P 500: 6,672.41 ⬇️ 0.92%
Nasdaq: 22,708.07 ⬇️ 0.84%
Dow Jones: 46,590.04 ⬇️ 1.18%
Arm and Nvidia Forge Strategic AI Partnership
Arm (ARM) announced on Monday that its Neoverse CPUs will integrate with Nvidia's (NVDA) NVLink Fusion technology, marking a significant shift in AI infrastructure.
This partnership enables hyperscalers like Microsoft, Amazon, and Google, which are developing custom Arm-based chips, to seamlessly pair them with Nvidia's dominant GPUs without being locked into Nvidia's own CPU offerings.
The move is strategic given the history between these companies. Nvidia's attempted $40 billion acquisition of Arm collapsed in 2022 due to regulatory hurdles; however, the two companies continue to collaborate as the AI boom reshapes data center architecture.
Meanwhile, SoftBank, Arm's majority owner, recently liquidated its entire Nvidia stake and is now backing the OpenAI Stargate project, which will utilize both Arm and Nvidia technologies.
With Arm Neoverse already deployed in over one billion cores and projected to capture 50% market share among top hyperscalers in 2025, this partnership positions both companies at the center of AI infrastructure evolution.
Nvidia stock has a Ziggma score of 100 and ranks highly in terms of profitability growth and financial health.
However, the chip stock, which has increased by 1,100% over the last three years, may not offer significant upside potential.
Our Takeaway
This collaboration signals a maturing AI ecosystem where interoperability takes precedence over exclusivity.
As power efficiency becomes the critical bottleneck in AI computing, Arm's low-power architecture, combined with Nvidia's GPU dominance, creates a formidable platform.
For investors, this reinforces Nvidia's strategy of expanding its addressable market through partnerships rather than vertical integration, while validating Arm's positioning as the CPU architecture of choice for next-generation AI data centers.
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Market Overview 📈
Tech stocks dragged major indices lower on Monday as investors positioned themselves ahead of Nvidia's highly anticipated earnings report on Wednesday and September's jobs data.
The AI chipmaker's stock declined nearly 2% amid concerns about stretched valuations and questions surrounding return on investment for massive AI infrastructure spending.
Blue Owl Capital tumbled nearly 6% on concerns about its substantial exposure to AI data center lending.
Federal Reserve officials sent mixed signals on monetary policy.
Governor Christopher Waller endorsed a December rate cut to support the weakening labor market, stating that restrictive policy is weighing on lower- and middle-income consumers.
However, Vice Chair Philip Jefferson advocated for a more cautious approach, suggesting that the Fed should "proceed slowly" toward neutral rates, despite acknowledging that current policy remains "somewhat restrictive."
The market's expectations for a December rate cut have cooled dramatically, with Fed funds futures now pricing in just a 45% probability—down from over 90% a month ago.
Adding to the uncertainty, National Economic Council Director Kevin Hassett suggested that AI-driven productivity gains could be creating a "quiet time" in the labor market, as companies delay hiring.
Thursday's September jobs report will provide crucial clarity following the data blackout during the government shutdown.
Stock Moves Deciphered 📈
🚀Alphabet (GOOGL)
Alphabet surged over 3% to new all-time highs after Warren Buffett's Berkshire Hathaway revealed a $4.3 billion stake in the Google parent, making it Berkshire's 10th largest equity holding.
The move surprised many, given Buffett's historical skepticism of tech, although he has long viewed Apple as a consumer company rather than a pure tech company.
The vote of confidence from Berkshire comes as Alphabet continues demonstrating strong AI capabilities across its product portfolio.
⬇️ Hewlett Packard Enterprise (HPE)
HPE shares plunged 7% following a Morgan Stanley downgrade to "Equal Weight" from "Overweight."
Analysts cited escalating risks from soaring DRAM and NAND memory chip prices, which are expected to significantly compress gross margins.
The company also announced the strategic sale of a 10% stake in H3C Technologies, its China-based networking joint venture, which added to investor concerns about its growth prospects.
🛫 Expedia (EXPE)
Expedia shares collapsed nearly 8% following Google's announcement of new AI-integrated travel planning tools embedded directly in search results.
The development represents a significant competitive threat to Expedia's core online booking business, as Google's vast search traffic and AI capabilities could disintermediate traditional online travel agencies.
The sell-off occurred despite several investment banks having recently raised their price targets on the stock.
Headlines You Can't Miss 👀
🏭 New York Fed manufacturing index surged to 18.7 in November, jumping 8 points from October to reach its highest level in a year, with new orders climbing over 12 points.
📡 Sinclair Broadcasting disclosed an 8% stake in E.W. Scripps, pushing for a merger that could generate $300 million in synergies; Scripps shares rocketed over 40% on the news.
🎮 Quantum Computing shares jumped 21% premarket after the company issued a strategic roadmap toward scalable quantum and photonic manufacturing capabilities.
💊 Jazz Pharmaceuticals and Zymeworks surged 21% and 35% respectively, after reporting positive Phase 3 trial results for their cancer drug Ziihera.
⚡ Lithium stocks rallied broadly after Ganfeng Lithium's chairman forecast 30% demand growth in 2026; Albemarle climbed 4% while Sigma Lithium soared 26%.
🏥 RBC initiated coverage on Axon Enterprise with an “outperform” rating and a $860 price target, citing the company's seamless user experience and its sticky subscription-based software model, which drives 55% upside potential.
📊 Rosenblatt raised Micron Technology's price target to $300, reiterating its buy rating as AI accelerator production drives increased demand for high-bandwidth memory and DRAM technology.
🏢 Gibraltar Industries shares slumped over 12% after announcing a $1.34 billion acquisition of rival OmniMax International, with the deal expected to close in the first half of 2026.
Trending Stocks 📊
🍔 Brinker International (EAT)
The Chili's parent company jumped 7%, for its largest single-day advance since April.
The rally comes as the stock rebounds from an 18% decline between its October 29 earnings report and November 6.
Short interest represents 12% of Brinker's float, suggesting some of Monday's gains may reflect short covering.
The company continues to benefit from Chili's successful menu innovation and value positioning, which is resonating with consumers in a challenging restaurant environment.
🚗 Xpeng (XPEV)
The Chinese electric vehicle maker dropped over 10% after reporting mixed third-quarter results and disappointing fourth-quarter guidance.
While Xpeng's adjusted loss narrowed beyond analyst expectations, revenue came in merely in line with forecasts.
Moreover, the company's Q4 revenue guidance fell below consensus estimates, signaling continued challenges in China's increasingly competitive EV market.
💻 HP Inc. (HPQ)
HP stock tumbled nearly 7% after Morgan Stanley downgraded it to "Underweight," echoing concerns about rising memory costs impacting the PC hardware sector.
Analysts expressed skepticism about HP's ability to either absorb these increased input costs or successfully pass them through to customers without damaging demand, as PC market growth remains sluggish outside AI-enabled devices.
What’s Next?
Key market and macro news 👇
📈 Nvidia reports Q3 earnings Wednesday after the bell—the most anticipated earnings event of the season as investors seek clarity on AI demand and ROI.
🏪 Major retailers report this week: Target and Lowe's on Wednesday, Walmart on Thursday—offering insights into consumer spending strength heading into holidays.
📊 The September jobs report drops Thursday, the first labor market data since the government shutdown, potentially influencing Fed rate cut expectations.
🔒 Palo Alto Networks and Intuit report on Wednesday, providing a read on enterprise cybersecurity spending and small business software demand.
🏠 Home Depot reports today morning, serving as an early indicator for housing market health and consumer home improvement spending trends.
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