← The Rundown
The Rundown
Cerebras Skyrockets in IPO Debut, Nvidia Gets U.S. Green Light to Sell H200 in China
00:10:36
Loading summary
Transcript1 lines
- [00:00]
A
Public.com presents the rundown, your daily market update in 10 minutes. My name is Zadod Mani and Today is Thursday, May 14th. In today's episode, we'll tell you why the US is allowing Nvidia to sell chips to China again and why China might not want them. We'll also give you an update on the Cerebras IPO and why Cisco is getting an AI related pop. Then stick around to the end of the show to find out which stock just dethroned Nvidia as the most traded name on Wall Street. We got a great show for you today. Let's go. Stocks were back to rallying on Wednesday with the s P climbing point six percent and the Nasdaq did even better, jumping 1.2%. Both indices closed at fresh record highs. Now here's what's interesting, though. Roughly two thirds of the stocks in the S P500 were actually down on Wednesday. The rally yesterday was almost entirely driven by chip stocks and a In fact, Nvidia hit record highs yesterday and became the first company in history to hit a $5.5 trillion market cap. You know, I feel like Nvidia has been flying under the radar a bit, relatively speaking. The stock has now gone up for six straight days in a row. It's up 20% on the year, which is incredible for a company of Nvidia size. But when you compare it to the likes of AMD, which is up more than 100%, or intel, which is up 250%, or SanDisk, which is up more than 500%, it's not as exciting. We're going to talk more about Nvidia in a bit. Now, the notable news from yesterday is that Kevin wars was officially confirmed to be the Fed Chair by the Senate. It was a 5445 vote, which is the closest confirmation vote ever for a Fed chair. But hey, he now officially has a job and he will take over as Fed chair on Friday. And I gotta say, Kevin Warsh is stepping into a pretty tough spot right now. Inflation is running hot right now due to rising energy prices and he might be forced to wait on cutting interest rates. And I wonder how that's going to go over with President Trump, who has criticized Jerome Powell for the last year for, for not cutting interest rates. So we'll see how Kevin Warsh handles it. The next Fed meeting is on June 16th. So, yeah, we're going to keep an eye on the Fed along with everything else happening in the market. So make sure you guys are subscribed to the podcast and tuning in every day. To stay in the loop, let's run through some headlines, starting with Nvidia and China. According to a report From Reuters, the U.S. commerce Department is allowing 10 Chinese companies to buy Nvidia's H200 chips. The H200 is one of Nvidia's most powerful chips, and the approved buyers include Alibaba, Tencent, ByteDance, and JD.com, which are some of Chinese biggest tech companies. And each company will be allowed to purchase up to 75,000 chips. Now, there's been so much back and forth and drama when it comes to Nvidia's chips and China. At first it was the US Government that was putting export restrictions on Nvidia's most powerful chips because they didn't want China to get their hands on it. But lately, it's been the Chinese government that's been the one restricting the import of Nvidia's chips. So despite the approval from the US Commerce Department, no H200 chips have actually been delivered to China legally. See, the Chinese government is trying to advance their own domestic chip makers and not become too reliant on the American chip makers. But remember, Nvidia CEO Jensen Huang is actually in Beijing right now, along with President Trump and a bunch of other CEOs. And who knows, maybe a deal gets done that allows Nvidia's chips to start coming into China again. In fact, President Xi told Trump and the CEOs that China's door to American businesses will only open wider. So the market seems to think a breakthrough could happen, maybe pretty soon. Nvidia stock is up around 4% today. But you know, even if Nvidia is allowed to sell back into the Chinese market, I don't think they'll capture the 95% market share they once had. Chinese chip maker Huawei is making progress on their chips. Not to mention other Chinese tech giants like Tencent and Alibaba are also working on their own AI chips. Overall, though, I think this is a bullish development for Nvidia. I saw a clip of Jensen walking out of a meeting and he was all smiles, saying that the meeting went very well. Sticking with AI chip makers, let's talk about Cerebras. This company is making its NASDAQ debut today under ticker symbol CBRS, and this is one of the hottest IPOs of the year so far. Cerebras priced their IPO at $185 a share, well above the 150 to 160 range it was targeting. The company sold 30 million shares, raising 5 point billion in the process, making it the biggest US tech IPO since Snowflake back in 2020. And just based on the IPO price, Cerebras is valued at around $40 billion. But look, based on the demand and the hype around this IPO, we're in for a big first day pop. This IPO was more than 20 times oversubscribed, meaning for every share available, there were 20 buyers lined up. Early indications suggest the stock could open at around $325. In fact, by the time you're listening to this, the stock might have already started trading. You know, we're going full deep dive on Cerebras in this weekend's deep dive episode. But in general, the company specializes in AI chips that are really good at running small AI models and also inference. So they're competing directly with chip giants like Nvidia and amd. On top of that, Cerebras is also pivoting its business towards cloud services. So what they're doing is filling out data centers with their own chips and then renting out that computing power. You know, that's a huge opportunity right now. But that puts Cerebras in direct competition with Core, Weave and Nebius, and also some of the biggest tech companies in the world like Google, Microsoft, Amazon, and Oracle. Now, what did catch my attention about this company is that 86% of their revenues last year came from just two customers, both of which are in the UAE. So there's a lot of concentration risk when it comes to Cerebras. But there's also a ton of hype and potential as well. So we'll see how the stock does in its debut and more importantly, how the stock performs once the IPO hype fades. Let me know in the comments of what you guys think about Cerebras and whether you plan to jump in on the ipo. Let's talk about some stocks making moves today. Cisco shares are soaring after the company reported better than expected earnings and gave a strong sales forecast, all thanks to AI. Revenues in Q1 grew 12 to $15.8 billion, and adjusted earnings per share came in at $1.06, which was ahead of the $1.04 expected. The bright spot in the business was their networking revenue, which jumped 25% to $8.8 billion. And that's really the key part here. It's really the only part of the business that's growing right now, mostly because of AI. See, up until last year, Cisco had been on the outside Looking in on the AI rally, but that's now starting to change. See, all these AI data centers that are being built right now need networking gear so all of the servers and chips inside those data centers can talk to each other. So Cisco is seeing a surge in demand for their networking equipment. The company said they have $5.3 billion in AI infrastructure orders so far this year and they raised their full year order target from 5 billion to 9 billion. So they're nearly doubling their AI forecast and they're also doubling down on being an AI business. Cisco is restructuring its workforce by cutting jobs in the slower parts of the business and shifting that money towards the AI part. Company plans to cut around 4,000 jobs, which is less than 5% of the workforce. And Cisco says this will lead to about a billion dollars in severance and other one time costs. Overall, though, investors are loving this AI pivot. Cisco stock is up around 15 this morning following the earnings. And if you zoom out, the stock has gone up 90% over the last 12 months. Now on the flip side, shares of Doximity are getting crushed this morning. Doximity is kind of like LinkedIn for doctors. Doctors go on there to get curated medical news and connect with other doctors to. Doximity also has a telehealth platform and they're also leaning into AI. So it's a company targeting medical professionals. But the business has been a bit bumpy lately. Revenues did grow 5% in Q1 to $145 million, which did beat estimates. But investors didn't seem to care because the outlook was terrible. Doximity's revenue forecast for the full year came in at 664 to $676 million. Analysts were expecting around $700 million. So that's a big gap. And it's raising questions about whether Doximity's growth is stalling. And growth concerns pop up. That's when investors freak out. Shares are down around 25 this morning at the time of this recording. And if you zoom out, this stock is on life support, no pun intended. It's down 55 year to date and down 70% over the last 12 months. Let's wrap the show with the fun fact. Micron has officially become the most heavily traded stock on the stock market, overtaking Nvidia. Over the last nine trading days, Micron's trading volume has topped Nvidia on stock, six of them. And on a five day average, about $47 billion worth of Micron stock has changed hands, compared to $34 billion for Nvidia I mean, this is pretty shocking, especially since over the last few years the most traded stocks have either been Nvidia or Tesla. So it's pretty wild to see Micron, a company that makes memory chips that most people probably hadn't heard of 12 months ago, come in and take the top spot. And not only that, Micron is now closing in on a trillion dollar market cap as well. So Micron is a great example of how the AI trade has from GPUs to memory. Remember, SanDisk was the best performing stock in the S&P 500 last year, and it's also the best performing stock in the S&P 500 this year as well, up more than 500% so far. But look, I just hope that Micron or Sandisk don't become the poster child for an AI memory bubble. I actually talked about Micron in my Deep Dive episode last weekend and I mentioned that memory has historically been a boom or bust industry. Clearly, right now we're going through one of the biggest booms ever, but we'll have to see how long that lasts. Well, all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. All that engagement really does help us out and it helps other people find the show. Also, don't forget, drop in your questions in the comment sections as well. We're gonna try to answer some questions on tomorrow's episode. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.