What’s News in Markets: Nvidia Milestone, Mag 7, Chipotle Suffers

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Francesca Fontana (0:27)

Hey, listeners. It's Saturday, November 1st. I'm Francesca Fontana for the Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Happy day after Halloween to you all, if that's your thing. Halloween is, in fact, my thing. I love it. And I'm currently speaking to you dressed as Special Agent Dale Cooper of Twin Peaks fame. This isn't a video podcast, so I figured I should let you know. In any case, markets were on a run this week, as investors digested more earnings reports and as some big companies notched big new milestones. The biggest? Nvidia, the AI chip leader, became a $5 trillion company, but more on that in a second. Yes, looking back at the month, October was of all the one for the stock market, but it ended on a high note. For the week, all three indexes notched gains, and for the month of October, the Dow gained 2.5 percent, the S&P 500 added 2.3 percent, and the NASDAQ jumped 4.7 percent. That means the Dow and the S&P are both up for six straight months, and the NASDAQ is up for seven.

So back to Nvidia. Just how big has Nvidia gotten? Yes, we know it's now worth $5 trillion as of Wednesday, but I wanted to give some context and perspective on the scale of its meteoric rise in the AI boom. First of all, let's not forget that it hit its first trillion market value in June of 2023, so not that long ago. It notched the 2 trillion and 3 trillion milestones last year, and it was just in July of this year that it hit $4 trillion. I checked with Dow Jones Market Data and would you believe it took Nvidia just 78 days of trading to go from $4 to $5 trillion? And just how large is a $5 trillion chip maker compared to the rest of the industry? Buckle up because this list is a mouthful. As of Wednesday, Nvidia was larger than the following combined. Qualcomm, AMD, Arm Holdings, ASML, Broadcom, Intel, Lamb Research, Micron Technology and Taiwan Semiconductor. So how did Nvidia close out this week and this month for that matter? Well, after gaining 3% on Wednesday, the stock notched a weekly gain of 8.7% and it was up 8.5% for October.

Now, we're sticking with tech for a little longer because this week, we got five of the Magnificent Seven tech companies posting earnings. We're gonna be talking about four of them, Meta, Alphabet, Microsoft and Amazon. All right, quick hits. Meta, maker of Facebook, said it would aggressively raise AI spending, sending the stock down 11% on Thursday. Meanwhile, investors cheered Google Parent Alphabet's AI spending plans, which accompanied a jump in advertising and cloud computing revenue, and Alphabet shares added 2.4%. Microsoft, which not for nothing, hit a $4 trillion valuation this week, posted better than expected sales, boosted its, say it with me, AI spending, and took a $3.1 billion charge from its investment in OpenAI. Its shares fell 2.9%. Finally, Amazon posted a 13% revenue jump and strong cloud sales driven by AI. Amazon shares jumped nearly 10% on Friday. On the week, Meta was the biggest loser, notching a 12% decline, while Microsoft fell roughly 1%. Of the weekly winners, Alphabet gained 8.2% and Amazon rose 8.9%. Let's switch focus now to burritos. Apparently, fast casual diners are losing their appetite for Chipotle. The restaurant Chain on Wednesday warned of lower demand from younger and low-income consumers, which are key demographics for spots like Chipotle. Customers with household incomes below $100,000 make up some 40% of its sales. Why is demand from these groups down? According to CEO Scott Boatwright, their spending is getting weighed down by inflation, unemployment and slower wage growth. Chipotle shares sank 18% on Thursday and were down a whopping 23% for the week. And now you know What's News in Markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Zoe Kolkin with Deputy Editor Chris Sinsley. I'm Francesca Fontana. Have a great weekend and I'll see you next Saturday.

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