Investors await Nvidia results amid AI bubble fears • FRANCE 24 English

Investors await Nvidia results amid AI bubble fears • FRANCE 24 English

It’s time for an update on the business news now with Charles Peligan. Hi Charles. Hi Caris. You’re starting with a check on the stock markets. Equities around the world this week have been dealt a blow over concerns that major tech stocks uh might be overvalued. Let’s see how European markets have opened this Wednesday. But we’re seeing what’s called a soft open as those doubts keep lingering and with Wall Street extending its losses at the close on Tuesday night. Quick mentioned that the UK saw its annual inflation slow down to 3.6%. 6% in October, this one week, ahead of a much anticipated budget. And there’s one stock in particular that’s keeping everyone’s attention, and that’s Nvidia. The US chip maker is the world’s most valuable company with a $4.4 trillion market cap, but it has seen its shares fall in value recently, closing the Tuesday session 2.8% lower. This coming ahead of its third quarter earnings report expected later this Wednesday. Nvidia is the avatar of the AI boom, making and selling the powerful GPU processors that have enabled large language model AIs to be built and trained. Strong results could go a long way towards reassuring global investors that the huge rally in tech stocks this year still has legs. Many though have been warning for months that the world is staring down an AI bubble that could be about to pop. Brian Quinn has more. A global route in tech shares deepens as investors grow increasingly worried that an AI boom could turn out to be an AI bubble. The comparison with the dot bubble is is the most obvious one. It’s the and it’s the one that’s made most often because it also relates to enthusiasm around tech. The launch of OpenAI’s Chat GPT in 2022 kicked off a huge rally in tech shares. Since then, the so-called Magnificent 7 of Apple, Meta, Alphabet, Nvidia, Amazon, Microsoft, and Tesla have grown to account for more than a third of the value of the S&P 500 stock index. 75% of returns, 80% of earnings growth, and 90% of capital expenditure growth. But that growth is so far speculative. Despite committing to roughly $1.4 4 trillion in infrastructure spending. Open AAI is set to earn just 13 billion this year and doesn’t expect to turn a profit until 2029 at the earliest. Meanwhile, many of its deals are circular, such as Nvidia investing 100 billion into OpenAI so that OpenAI can afford to buy more Nvidia chips. Debt is also a major concern. In the last two months alone, Amazon, Alphabet, Meta, and Oracle have borrowed a collective 81 billion dollars to build out AI data centers. Should the AI boom turn out to be a bubble, the effect of a pop could have major consequences for the US and the global economies. AI capital expenditures made up more than 23 of US GDP growth for the first half of the year. And Charles, let’s also look at how the Asian markets are doing this Wednesday. Mhm. They mostly fell during the session, tracking the declines we saw on Wall Street. The Nikkay closing the session in the red once again, not just on the AI bubble concerns, but also because of a diplomatic standoff with China that has uh economic implications. Japanese media reporting this Wednesday that China has suspended imports of Japanese seafood. This after Japanese Prime Minister Saya Takayichi suggested earlier this month that Tokyo could intervene militarily in any attack on Taiwan. This has led to a strong reaction from Beijing who last week advised its citizens not to travel to Japan and for those studying there to be careful. State media also reporting that the release of two Japanese movies has also been post postponed because of those comments. Uh the seafood ban was reportedly put in place by China to monitor treated waste water that’s being released from the now defunct Fukushima nuclear power plant. An earlier ban had already been in place since 2023 when Fukushima started releasing those waste waters, but had recently been lifted. Uh, China’s foreign affairs ministry did not confirm the reports, but did say there was no market for Japanese seafood in China because of the anger of Chinese nationals. Uh, China represents an important market for Japan’s famous seafood sector. At one point before the Fukushima wastewater controversy, it represented as many as 22.5% of all exports. that num that number as you can see there dwindled in 2023 to 15.7% the industry sought to expand in other markets like the US and Hong Kong but all in all total exports have fallen as a result uh the seafood sector as a whole is quite a small part of the Japanese Japanese economy but it holds obviously important national symbolic value all right and let’s end with an important ruling in the United States for tech giant Meta a US district judge has found that the parent company of Facebook did not violate antitrust laws when it acquired Instagram and WhatsApp more more than a decade ago. The case had been brought by the Federal Trade Commission back in 2020, arguing that the company funded by Mark Zuckerberg secured a monopoly on social media by buying two of its rivals. Judge Boseberg explained his decision by pointing to a constantly changing social media landscape in which Meta might have previously held a dominant position, but is now faced with steeper competition. One study, as you can see there, tracking user habits with social media platforms, though still shows the very strong position Meta finds itself in on the on the top of the top six platforms in terms of use. Four of them are owned by the Menllo Park, California firm with Facebook on top with more than 56% of people saying they use it at least once a month. It’s unclear at this point whether the FTC will appeal the decision. All right, Charles Pelgrren, thank you very much for that business update.

European markets stabilised on Wednesday morning after losses sustained over concerns that AI stocks might be overvalued. Investors are eagerly awaiting the latest results from US chipmaker and AI bellwether Nvidia later in the day. Also in this edition: Japanese media are reporting that China has suspended imports of seafood from Japan amid a diplomatic spat. Plus a US judge rules that Meta does not have a monopoly.
##Nvidia ##AI ##bubble

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