The Nvidia headquarters in Santa Clara, California, U.S., on Tuesday, Nov. 19, 2024.
David Paul Morris | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Back to back gains for S&P and Nasdaq
U.S. stocks mostly rose on Monday, with the S&P 500 and Nasdaq Composite climbing two days in a row. Artificial intelligence darling Nvidia closed at a record high. The pan-European Stoxx 600 index advanced 0.95%, although it came off highs after U.S. President-elect Donald Trump dismissed a report that his tariffs may not be as severe as initially thought.
Foxconn shows AI is still hot
Foxconn, which trades as Hon Hai Precision Industry, said in a Sunday statement that the company’s fourth-quarter revenue, which grew 15% year over year, was the highest ever in the company’s history for that period. Foxconn’s numbers suggest that artificial intelligence is still hot, sending up stocks of Nvidia and other global semiconductor companies.
Partnership on charging network for EVs
Shares of Volkswagen and Xpeng rose on Monday after the two firms announced a memorandum of understanding in which they pledged to open their respective super-fast charging networks to each others’ customers. Volkswagen and Xpeng will also explore cooperation on co-branded super-fast charging stations, the companies said.
Trudeau steps down
Canada’s Prime Minister Justin Trudeau said at a news conference on Monday that he would step down from the helm of the ruling Liberal Party but will stay on as prime minister until a new leader is selected ahead of general elections due by late October. He added that the Canadian Parliament will be suspending its activity until March 24, when a confidence vote will be carried out.
[PRO] Quality stocks against rising rates
The 10-year Treasury yield has continued its climb to kick off 2025, which puts pressure on stocks. Morgan Stanley’s chief U.S. equity strategist, Michael Wilson, recommends that investors stick with quality stocks to manage any ensuing market tumult. Here’s a list of stocks that passed the screening done by Wilson’s team.
The bottom line
Semiconductor stocks jumped on Monday, lifted by buoyant news regarding the artificial intelligence sector.
Foxconn reported record fourth-quarter revenue that was partly powered by growth in its cloud and networking products, which includes AI servers like those designed by Nvidia.
The electronics manufacturer’s glowing earnings report follows Microsoft’s announcement Friday that it plans to invest $80 billion in fiscal 2025 to build data centers that can handle AI workloads.
Those reports suggest that companies are continuing to invest heavily in AI, and the peak hasn’t yet been crested.
Investors are also looking forward to Nvidia CEO Jensen Huang’s keynote address at the 2025 Consumer Electronics Show 2025, which will take place around 11 a.m. Singapore time.
Riding on the back of such tailwinds, Nvidia shares jumped 3.4% — their third straight day of gains — to close at a record $149.43. The company’s stock inched up further in extended trading, and is currently hovering above the $150 level.
More broadly, the VanEck Semiconductor ETF jumped more than 3%.
Those moves helped propel major averages forward. The tech-heavy Nasdaq Composite was the clear winner, climbing 1.24%, while the S&P 500 rose 0.55%.
However, the Dow Jones Industrial Average dipped 0.06%. The index shed earlier gains accrued when it was reported that Trump might soften his tariffs on imports, which would have benefited its constituent blue-chip companies such as those in the consumer discretionary sector.
Despite those upbeat reports and positive market movements on Monday, the year ahead continues to look rocky.
“The market is, I think, being pretty optimistic about tech right now, looking for earnings growth of 20% this year versus 12.8% for the market … but valuations do appear restrictive,” CFRA Research chief investment strategist Sam Stovall said.
The true test for AI, then, is whether companies can leverage it to boost revenue, rather than just sending the price of the sector’s picks and shovels higher.
— CNBC’s Ryan Browne, Jordan Novet, Pia Singh and Tanaya Macheel contributed to this report.