The 500 Rises To Record High

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Rob Black (0:12)

All time high for the S&P 500 and for the NASDAQ this morning. S&P 500 trading up 90 basis points. It's getting a little bit stronger in the first hour of trading. The Dow Jones Industrial Average up three quarters of 1%. Same story, getting stronger as the morning goes on. Momentum is happening. NASDAQ up 90 basis points, getting a little bit stronger as the day goes on. And the Russell 2000 is getting weaker. Basically break even for the moment, but it started in the green, it's moved to the red. 10-year treasury sits at 5.27%. Yields are dropping slightly. I'm not sure I'd get excited by that, but we'll take it. Oil is down about 2%, 87 Let's just call it $88 barrel. Nvidia, Apple and Microsoft on some levels are keeping the market afloat as they've had such a strong move recently, and it is a S&P 500 market weighted index that is doing the big heavy lifting. Thus, the Magnificent 7 are helping in those names in particular. This morning Google signs a 20-year nuclear deal with Constellation Energy to power AI buildout. That's how long you have to start thinking about some of this. Citi sees AMD stock jumping 25% on demand for the Metamuse and that AI agent product that's not out yet, and it hasn't officially been shown. It's been teased. Seagate and Western Digital, all their stocks are slipping again as Toshiba's AI storage push is rattling that sector of potentially seeing the price peaks hitting already. I don't think that needs a little too soon for that, but I do not own any Seagate or Western Digital. I'm not a hard drive investor, too much of a commodity for me, but I get it. I certainly get the need for storage. Starbucks is going to be releasing a new Barista Cup, which it's silly to say it out loud, but let's say it out loud.

Wall Street is all about product, and I'm not a coffee drinker. I'm not a coffee snob. I'll have a cup of coffee twice a year, three times a year with dinner if it's a really nice dinner, but usually not. Maybe if I'm driving super early in the morning, but very rarely. Starbucks has done a really good job of getting a product out there that is ancillary to the store. It's not that important. It's not coffee. It's a reason to come in the store to get coffee and to show that you're cool for having a bare restock cup, which is pretty cute and adorable, but I don't live in the world of cute and adorable, but that's again the world I live in is product. I see it for what it is, pretty smart stuff. Cyber security stocks are hitting new all time highs. This is AI agent spark, the biggest risk of today conversation.

That's for sure.

Everything is lining up nicely for the stock market today. Oil has gone lower by 2% roughly. There's a semiconductor stock kicking off, an investor day showing you that it's AI chips and networking gear could raise its long-term financial target substantially. So there's an AI catalyst, there's the oil catalyst, there's the yields actually going down catalyst. So for Marvell Technology, saying they're raising their long-term financial target substantially. Since they're selling it at the hyperscaler world and semiconductor world, that sector is getting a boost, or those sectors are getting a boost today. Maybe I need a cup of coffee. I'm tripping over my words. Marvel's strongest message in their conference today is that connectivity is becoming a larger constraint on AI performance, creating opportunities across competing architectures and extending its growth beyond individual accelerator programs. The near-term upgrade carries particular weight because the established optics and switching franchises are driving it, while the 2031 framework layers emerging scale up products onto existing customer relationships. Nevertheless, this is reaching the longer-term targets, ultimately will require sustained hyperscaler investment, timely production ramps and substantial manufacturing capacity, leaving the outlook sensitive to deployment delays and spending changes. This is a pretty bullish piece of research I'm reading.

The next essential piece is the financial model that they talked about today. Revenue growth must translate now into operating leverage and cash generation, with product mix, development spending, and capacity commitments determining how much incremental sales ultimately reach earnings.

Marvell is not the only name in play today up 7%. Advanced Micro Devices scored a massive price boost at Citi, upping the target from $575 to $800. It's 27% upside. That's an amazing investment return. It may not feel amazing to some of the returns you've gotten recently, but that's a lot of upside. Citi is basically saying that the rise of personal agents like MetasMuse and Startup Instinct cause analysts to hike their 2030 targets for the size of the CPU market, with AMD as the primary beneficiary. They see Intel as the secondary beneficiary. Intel is more of a CPU slash kind of new foundry business. AMD is more of a CPU slash GPU business. It's interesting. Nvidia continues to look like the heavyweight champion of the AI trade. The stock hit an all-time high yesterday and this morning. Strong results from its AI server partner, Foxconn. Stock is extending those gains today. Constellation Energy is up about 13%. I talked about how Google agreed to an 890 megawatts of nuclear power from the company under a 20-year agreement. That's a big deal because it connects two of the biggest investment themes in the market, which is AI and I want to say electrification. Should I say that or should I say electricity? AI data centers consume enormous amounts of power. Technology companies, building them, are starting to realize that having enough electricity may be just as important as having enough semiconductors. What a weird teeter totter to try to balance your chief technology officer. Nuclear power is suddenly getting that second life as a strategic asset as Constellation is becoming one of the clearest ways investors can play that trend.