🎙️ AI Woodstock

🔔 Ding, ding, ding — a brass bell marks the start and end of each trading day at the New York Stock Exchange. It’s not just for show — stock market officials say the bells celebrate the market’s resilience through the highs and lows, panic and euphoria, and ever-shifting tides of economic fortune.

“That bell is an important market,” the NYSE’s historian said. “It’s tradition. it’s very deeply rooted in our culture, and I think the culture of America.”

And for now, things look pretty great: Last week, stocks, gold, and bitcoin hit record highs.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Apple and Google expected to team up on AI

• Nvidia’s most-awaited conference kicks off

This, and more, in just 5 minutes to read.

Chart of the Day

In The News

📱 Apple in Talks to License Google’s Gemini for iPhone AI

Two of the big guys might team up on AI. 

Bloomberg reports that Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone, a blockbuster agreement with enormous ramifications for the fast-growing AI field. 

• Per Bloomberg, bigwigs at Apple and Google are in “active negotiations” to allow Apple the capability to license Google’s AI models, powering new features on iPhone software this year.
  

• Apple previously met with OpenAI and has considered integrating its AI models into the iPhone software, too, and CEO Tim Cook has promised a big AI announcement this year.
  

• The news on Monday sent shares of Alphabet (market cap ~$1.84 trillion) and Apple (~$2.7 trillion) higher. 

A pretty big deal: If the deal happens, it would build upon the duo’s partnership. Google pays Apple billions of dollars annually to make its search engine the default option in the Safari web browser on Apple devices. 

Why it matters:

This could be a really big win for both parties. 

Google’s benefit: Apple would likely pay Google a lot of money annually for Gemini. Plus, Gemini would almost instantly gain distribution on roughly 1.4 billion devices worldwide. 

Apple’s benefit: Apple can capitalize on “a unique opportunity to lead in personalizing AI, and leveraging Gemini would accelerate that timeline. In the race to win in AI, first-mover advantage is everything,” per tech analyst Gene Munster.

Here come the regulators: Of course, the deal isn’t finalized and will certainly draw much more antitrust scrutiny of both companies. 

• The current Google-Apple deal is already under the close eye of the U.S. Department of Justice, which has said the companies are operating as a single entity to dominate the search market on mobile devices.
  

• The tech giants have responded, saying Google’s search quality is the best in the world and that users can easily switch providers on Apple devices. 

Bottom line: Could this be the new feature that Cook said will “break new ground” in the AI gold rush?

Read more

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🤖 AI Woodstock Kicks Off

The most important stock in markets is hosting the year's most important conference. That’s right, Nvidia’s annual conference on artificial intelligence — which Bank of America analysts frankly called “AI Woodstock” — commenced today.

Normally, conferences are a boring affair, a chance to travel, burn through per diem, and congregate awkwardly with others doing the same. But this is different.

• “Nvidia GTC” has quickly become a leading global conference on AI, as Nvidia leads the world in designing the chips that underpin the ongoing AI revolution. It’s unsurprising, then, that others looking to learn from the best are flocking directly to the source.

Still much to prove: While its earnings have been correspondingly impressive, Nvidia’s stock has risen at a blistering pace, up over 1,900% in the past five years.

For its CEO, Jensen Huang, the conference is an opportunity to deliver a keynote speech, which he will do Monday evening, outlining new products and a vision for where the company is headed — not only to employees but to investors, who seek validation that Nvidia can continue its success and AI dominance.

• As Bloomberg put it, “This year’s appearance carries more weight after Nvidia’s 2024 gains alone added $1 trillion in market value for the company, catapulting it into a position as the top-performing stock in the S&P 500 Index.”

Why it matters:

Ahead of the conference, Nvidia’s stock has traded choppily, reflecting traders’ unease. Last week, its shares snapped the worst-two-day drop in five months, with volatility surging since February.

• Yet, Wall Street’s analysts remain overwhelmingly bullish on the stock — 60 say the stock is a “buy,” seven rate it a “hold,” and zero recommend selling it.

Dreaming of riches: Now one of the three largest S&P 500 stocks, Nvidia’s heightened volatility threatens to ripple across the stock market. With that size and importance comes more than just traditional stock valuations; investors are trading on dreams — hopes that Nvidia will deliver all the returns and more promised by an AI golden age.

• One tech strategist told Bloomberg, “There’s so much speculation and so much over-exuberance on this name that it doesn’t really trade on valuation anymore. It’s belief in the dream, so to speak, and the dream is happening.”
  

• Nvidia’s GTC Conference and Jensen Huang’s speech are opportunities to further mesmerize Wall Street and dazzle tech aficionados.

How did the dream hold up? At the time of publishing, Huang’s two-hour keynote is just kicking off, but check Nvidia’s stock for yourself. After-hours and pre-market trading will provide initial gauges for investors’ responses.

Read more

More Headlines

📲 How Instagram is beating TikTok

🛰️ SpaceX is reportedly building a satellite spy network for the U.S.

🏡 How new rules on realtor commissions will change buying and selling homes

👏 Global child deaths reach record low, per new United Nations report

🎓 The worst-paying college degrees, five years after graduation

⚖️ Prosecutors want Sam Bankman-Fried to serve up to 50 years in prison

🏀 How bracketologists are using artificial intelligence this March Madness

Quick Poll

On Friday, we asked: Do you expect to buy a new house in the next two years?

— A reader who doesn’t plan to move wrote, “I think they are generally still overpriced. I think holding the amount a house would cost in BTC is (almost) guaranteed to do much better.” Another wrote, “Just bought my first home at the end of 2023!”

— On team maybe: “We are on track to have our house paid off in a year, so anything is possible after that.”

— A reader who plans to buy relatively soon: “A growing family has placed me in the group of ‘looking to buy’ in the next two years. However, mortgage rates and house prices need to settle a bit more before I pull the pin.”

— Added another: “No, just buy a house in a third-world country, much cheaper than selling your soul to the bank.”

Recommended Reading: The Average Joe

How Someone Lazy Like Me (That Can’t Math), Learned To Invest

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See you next time!

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