Shares of artificial intelligence (AI) darling NVIDIA (NVDA) are rising in premarket trading after its market cap surpassed $3 trillion on Wednesday, overtaking Apple (AAPL) to become the world’s second-largest company behind Microsoft (MSFT). Shares of sportswear maker Lululemon Athletica (LULU) are soaring after the company raised its share-buyback plans by $1 billion and improved its full-year outlook. American depositary receipts (ADRs) of chipmaker Taiwan Semiconductor Manufacturing Co. (TSM) hit a record closing high as the AI ​​boom spreads to the world’s largest contract chipmaker. Shares of discount retailer Five Below (FIVE) are plunging after the company lowered its sales outlook for this year. And the Federal Trade Commission (FTC) is investigating whether Microsoft structured one of its latest deals, with AI startup Inflection, to dodge antitrust investigations.
1. AI star Nvidia expands profits beyond $3 trillion milestone
Nvidia (NVDA) shares are up about 2% in premarket trading after its market cap surpassed $3 trillion on Wednesday, a level previously surpassed only by Microsoft (MSFT) and Apple (AAPL). Nvidia has now overtaken Apple in market cap to become the world’s second-largest company behind Microsoft. Apple reached the $3 trillion mark in record time; it took just 96 calendar days to reach that level from $2 trillion. Having consistently beaten lofty profit expectations, Nvidia has established itself as the clear leader in AI semiconductors, and on Sunday, CEO Jensen Huang unveiled its next-generation AI platform, which received further momentum. The company will implement a 10-for-1 stock split after the market closes on Friday, with split-adjusted trading beginning on Monday.
2. Lululemon surges on improved outlook and strengthened share buyback program
Shares of Lululemon Athletica (LULU) jumped 8% in premarket trading after the sportswear maker reported better-than-expected quarterly results, raised its full-year profit outlook and increased its share-buying program by $1 billion. The company now expects earnings per share (EPS) of $14.27 to $14.47 for fiscal 2024, compared with its previous guidance of $14 to $14.20. Additionally, the company repurchased $296.9 million of its own stock in the first quarter and has authorized an additional $1 billion for its share repurchase program, signaling management’s confidence in its strategy and execution going forward.
3. AI frenzy drives semiconductor giant TSMC to new record high, ASML also rises
Nvidia’s market capitalization exceeding $3 trillion has spurred interest in AI, driving other AI-related stocks higher. American depositary receipts (ADRs) of chipmaker Taiwan Semiconductor Manufacturing Co. (TSM), which hit an all-time high on Wednesday, rose another 1.8% in premarket trading. Shares of TSMC and ASML Holdings Inc. (ASML) surged on Wednesday after analysts reported they were optimistic that TSMC would install advanced semiconductor manufacturing equipment this year. Shares of ASML, which uses lithography technology to mass-produce semiconductor chips, rose 0.6%. TSMC is the world’s largest contract semiconductor manufacturer and makes semiconductors for Nvidia, Apple and others.
4. Discount retailer Five Below plummets as outlook is cut amid inflation fears
Shares of discount retailer Five Below (FIVE) fell 16% in premarket trading after the company cut its sales outlook for the year and reported first-quarter sales that CEO Joel Anderson called “disappointing” as inflation continues to hit consumer spending. Five Below reported first-quarter sales of $811.9 million, below analyst expectations, and said it now expects net sales of $3.79 billion to $3.87 billion for fiscal 2024, down from a previously announced range of $3.97 billion to $4.07 billion. “This quarter confirmed that consumers are feeling the effects of years of inflation in many key areas, including food, fuel and rent, and are therefore being more cautious with their discretionary spending,” Anderson said on a conference call with analysts. The Wall Street Journal report.
5. FTC reports it has launched antitrust investigation into Microsoft and Inflexion’s AI deal
The Federal Trade Commission (FTC) is reportedly investigating whether Microsoft struck a deal with AI startup Inflexion to avoid antitrust scrutiny. The Wall Street Journal The FTC is reportedly investigating Microsoft’s hiring of Inflection AI’s co-founders and nearly all of its employees, as well as its payment of roughly $650 million in licensing fees to the company to resell its technology. The FTC has reportedly sent subpoenas to both companies, asking whether the companies’ transactions evaded government scrutiny. The deal is already the subject of a probe by U.K. regulators, who are investigating whether Microsoft’s acquisition of Inflection employees and France’s Mistral, and Amazon’s (AMZN) acquisition of Anthropik could harm competition in the AI ​​market. Microsoft shares were down 0.3% in premarket trading.
