CNBC Daily Open: Days of Declines Won’t Keep AI Trade Down

The longest consecutive decline of 8 days since 2011, the shares of leading AI companies like Nvidia, Broadcom, and Microsoft jumped with 5.8%, 2.6%, and 1.9% respectively on Monday. The market watchers are anticipating another historically long streak, the US government shutdown, to be snapped soon.

The US Senate has already voted in favor of a deal that asks to reopen the government. However, it still has to pass through the House, and then it will be signed into law by President Donald Trump. However, Trump has already given his approval for the deal.

Also Read: Trump Says China, Other Countries Can’t Have Nvidia’s top AI Chips

However, the worries about AI’s high valuation have still not gone away completely.

For instance, CoreWeave reported its third-quarter earnings on Monday. The company rents out Nvidia cards to AI-focused firms like Microsoft and Google. The revenue of the company has increased 134% year on year. However, the company has still reported a net loss and offered the very least guidance for this year as compared to what was expected.

Also Read: Apple’s New AI Chief Quits Weeks After Appointment

The case of high revenue and high losses also reminds one of OpenAI as an industry-leading startup that introduced the AI frenzy. However, there is surely going to be a stretch to equate the two companies, along with considerations of factors driving their finances.

According to Mark Haefele, CIO of USB’s global wealth management, “AI-related stocks should drive equity markets.” With the US government shutdown in sight to end, it appears to be the other obstacle surpassed for the market.