The market is betting on what? On the eve of the "key conference," US bond yields skyrocketed! On the eve of the "key earnings report," Nvidia and Tesla surged!
The global central bank annual meeting is about to be held, with expectations of a hawkish stance from the Federal Reserve, causing US bond yields to surge to a 16-year high; second-quarter earnings reports are expected to be optimistic, and NVIDIA's stock price has had its best day since May.
The week started with a bang as the annual Jackson Hole Global Central Bank Symposium is about to begin, and US Treasury yields surged to a 16-year high. Meanwhile, ahead of NVIDIA's release of the "most important earnings report in the AI industry," it led the rebound in tech stocks, and Tesla's stock price soared.
The annual Jackson Hole Global Central Bank Symposium is set to take place this Thursday, with the market eagerly awaiting Federal Reserve Chairman Powell's speech on Friday. On Monday, the 10-year US Treasury yield skyrocketed to its highest level since 2007.
The market expects Powell to hint at signs of a rebound in recent inflation and the need for further measures to curb it.
Investment firm Stifel stated in a report:
"The market widely expects the Federal Reserve to raise interest rates at least once before the end of the year. Powell may emphasize the need to maintain a sufficiently restrictive level for a period of time, as the upward risks to inflation remain 'significant.'"
In overnight trading, NVIDIA's stock price opened high and continued to rise, closing up by approximately 8.5%. This marks the largest daily gain since May 25, erasing all the losses from earlier this month and reaching a new closing high since July 19, approaching the closing historical high set on July 18.
On the news front, the UK plans to invest £100 million to purchase thousands of AI chips and is in advanced negotiations with NVIDIA. Chip design company Arm has submitted an IPO application to the United States. HSBC reiterated its buy rating on NVIDIA and raised the target price to $780, which represents an 80% upside potential from last Friday's closing price. The bank is optimistic about the trend of increasing demand for AI GPUs.
NVIDIA will release its second-quarter earnings report after the US stock market closes on Wednesday, August 23. Wallstreetcn pointed out over the weekend that NVIDIA's second-quarter earnings report will be the biggest test for this wave of AI frenzy. Currently, analysts have extremely high expectations for NVIDIA's earnings report, but if NVIDIA fails to meet its targets, it could severely hinder the AI boom and impact tech giants from Microsoft, Google, Meta, to its old rival AMD.
Prior to the release of the earnings report, NVIDIA's stock price surged, reflecting the market's optimism about its second-quarter performance. Investors believe that artificial intelligence will drive growth in the data center business, and some expect NVIDIA's performance to improve significantly.
UBS traders pointed out:
"NVIDIA's recent stock price rise is driven by revenue growth in the data center segment, as the company's (second-quarter) earnings report released on Wednesday showed impressive performance."
On that day, Tesla's stock price rose 7.3% as investors bought shares of this electric vehicle manufacturer following positive comments from Wall Street.
Brokerage firm Baird included Tesla in its "Best Ideas" list and listed several positive factors, including the launch of the electric pickup truck Cybertruck, widespread adoption of autonomous driving software, and continued growth in the energy business. These factors may alleviate investors' concerns about recent price reductions leading to a decline in profit margins.