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Market Moves Yesterday
S&P 500 @ 5,487.03 ( ⬆️ 0.25%)
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Hey Scoopers,
Happy Thursday! We have an exciting newsletter for you today:
👉 The rise and rise of Nvidia
👉 Berkshire raises exposure to Occidental Petroleum
👉 Solar is the fastest-growing energy source
So, let’s go 🚀
Market Wrap 📉
On Tuesday, the S&P 500 index rose to a fresh record as AI darling Nvidia topped Microsoft as the most valuable public company.
The chip manufacturer jumped 3.5% after it breezed past Apple in value earlier this month. Nvidia has now surged 174% since the start of 2024 as enthusiasm for AI shows no signs of dwindling.
Other semiconductor stocks such as Qualcomm, Taiwan Semiconductor, and Micron also rose in sympathy as the sector caught a bid from falling Treasury yields on the heels of weaker-than-expected retail sales data that spurred hopes of a slowing economy and interest rate cuts.
Trending Stocks 🔥
Rocket Lab USA- Shares of the space company spiked 13% after it signed a 10-year launch deal with Japanese earth observation company Synspective.
e.l.f Beauty - Shares of the beauty company rose over 9% after Canaccord Genuity said the stock is positioned for solid growth and increased its price target from $214 to $250.
NextEra Energy - The utility giant slid over 2% after it announced plans to sell $2 billion worth of equity units at $50 each.
Nvidia Is on Top of the World
In the land of Wall Street, where the shadows lie: One chip to rule them all, one chip to find them, one chip to bring them all, and in the darkness bind them.
Optimism surrounding the AI megatrend has lifted Nvidia’s market cap to $3.34 trillion, higher than Microsoft's current value of $3.32 trillion. Nvidia is up 210% in the last year and 9x since the end of 2022.
Prior to the AI boom, Nvidia was popular in the gaming community for its graphics chips.
Today, the chipmaker accounts for 80% of the market chips used in data centers, a business that continues to see increased demand as Microsoft, Alphabet, Amazon, Meta, and others race to build AI models and run large workloads.
In its most recent quarter, Nvidia’s data center business rose 427% year over year to $22.6 billion, accounting for 86% of total sales.
The rally has lifted the net worth of Nvidia co-founder and CEO Jensen Huang to $117 billion.
Berkshire is Bullish on Occidental Petroleum
Warren Buffett’s Berkshire Hathaway has scooped up shares of Occidental Petroleum in each of the last nine trading sessions, increasing its stake in the oil and gas producer to almost 29%.
Source: CNBC
These purchases have meant Berkshire owns 255 million shares of Occidental Petroleum indicating a stake of 28.8%. Occidental is now Berkshire’s sixth-biggest holding.
Warren Buffett first took advantage of the stock market volatility in 2022 to acquire a 14% stake in the energy giant.
While Occidental Petroleum stock more than doubled in 2022, it fell 5% in 2023 and is flat year-to-date. Valued at $54 billion by market cap, Occidental Petroleum also pays shareholders a dividend yield of 1.5%.
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Solar is Leading the Energy Transition
The solar energy boom in the U.S. has outpaced the growth of other electricity sources in recent years. However, solar still accounts for just 4% of the nation’s power mix, much lower than natural gas, which accounts for 43%.
Big tech firms such as Microsoft and Amazon are seeking clean energy to power data centers, the backbone of the Internet and AI applications. This is driving demand for solar energy higher amid falling prices of solar modules and batteries.
Solar is forecast to make up 58% of new electricity generation installed in the U.S.. In fact, a record 36 gigawatts of solar is scheduled to be added to the grid in 2024, an increase of 100% year over year. Battery storage capacity is also forecast to double to 14.3 gigawatts.
Comparatively, just 2.5 gigawatts of natural gas are expected to be installed in the U.S., which is 4% of total planned power additions, the lowest number in 25 years.
Headlines You Can't Miss!
Elon Musk aims to woo back advertisers
China keeps lending rates unchanged
U.S. mortgage demand flattens despite lower interest rates
BoE to hold interest rates despite cooling inflation
The SEC closes investigation into Ethereum
Chart of The Day
The soft drink market in the U.S. is growing rapidly and is forecast to reach $388 billion in annual sales by 2025.
The above chart shows us the change in the market share for soft drinks in the U.S. Coke remains the best-selling soft drink globally, making it one of the most valuable brands globally.
In the last 28 years, Coke has maintained a market share between 17% and 20%, while Pepsi has seen its share decline from 15% to 8.3%.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.