Remy Blaire is joined by Matt Orton, Chief Market Strategist at Raymond James Investment Management, to discuss the evolving landscape of the AI trade and broader market dynamics.
The conversation begins with a focus on NVIDIA, which recently reported impressive third-quarter earnings, achieving record data center revenue exceeding $51 billion. Despite this success, NVIDIA’s stock has seen a 7% decline over the past month. Remy and Matt explore the reasons behind this fluctuation, particularly in light of Alphabet’s recent advancements in AI, including its custom tensor processing units (TPUs) that are emerging as serious competitors to NVIDIA’s GPUs. Matt emphasizes the strong demand for artificial intelligence and suggests that the market can accommodate multiple winners, especially with increased competition from companies like Alphabet.
As they broaden the discussion, Remy highlights the significant year-to-date gains in major U.S. stock averages, largely driven by the AI trade. Matt shares his perspective on international markets, identifying Japan and India as compelling investment opportunities. He notes that Japan’s focus on AI and robotics positions it well for growth, while India, despite its recent underperformance, boasts strong GDP growth and a growing middle class that could enhance market strength in the future.
The segment also addresses concerns about market breadth, with Matt expressing that weak breadth among mega-cap stocks poses a risk to the overall market. However, he points out a positive rotation into sectors like healthcare, which could indicate a more sustainable recovery. The discussion shifts to the upcoming Federal Reserve meeting, where they analyze the implications of potential rate cuts and the importance of monitoring job growth and inflation data.