Microsoft CEO Satya Nadella participates in an interview at the company’s headquarters in Redmond, Washington, on March 15, 2023.
Chona Kasinger | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Altman joins Microsoft
Sam Altman, who was ousted as CEO of OpenAI on Friday, is joining Microsoft to lead a new artificial intelligence team. Greg Brockman, former OpenAI president— and potentially many other employees of the AI startup — will also join Microsoft. Investors cheered the move, pushing Microsoft shares to a record high. Microsoft CEO Satya Nadella, meanwhile, said OpenAI’s governance structure needs to change.
Tech excitement
U.S. markets traded higher Monday, led by excitement over technology stocks. Microsoft and Nvidia hit all-time highs, while U.S. Treasury yields dipped on the back of a strong auction. Asia-Pacific markets mostly rose Tuesday. Hong Kong’s Hang Seng Index rose around 1%. Chinese property shares surged after a report said Chinese regulators were drafting a list of developers eligible for financing.
New high for Nvidia
Nvidia shares popped 2.25% to close at an all-time high of $504.09, ahead of the chipmaker’s earnings report today. That gives Nvidia a market capitalization of $1.2 trillion, more than Meta or Tesla. Investors have good cause for cheer: Revenue for the company’s fiscal fourth quarter is estimated to grow 200%, according to LSEG estimates.
Stronger foundation needed
Despite stimulus measures introduced by the Chinese government in recent months, China’s property market needs “more supports,” according to analysts. “Credit risk related to developers” remains the most important issue, according to a Macquarie report. But some developers are emerging from their trough. Real estate company Sunac said Tuesday it’s met restructuring conditions, sending its shares up around 20%.
[PRO] Cash is not king
High interest rates and Treasury yields have fueled a boom in cash deposits and money market funds. But that’s a “missed opportunity,” said Andy Budden, investment director of equities at financial services firm Capital Group. Instead, investors should “have a bit of courage” — especially because now’s a “good time” to play the market,
The bottom line
All the turmoil at OpenAI over the weekend turned out pretty well — for Sam Altman and Microsoft, at least. Altman’s got a role at Microsoft heading its new artificial intelligence lab. The appointment sent Microsoft shares to a new high.
Wedbush Securities tech analyst Dan Ives, in a note published Monday, had strong words regarding the drama over the weekend. The OpenAI board “was at the kids poker table and thought they won until Nadella and Microsoft took this all over in a World Series of Poker move for the ages with the Valley and Wall Street watching with white knuckles Sunday night/Monday early am,” Ives wrote.
“We view Microsoft now even in a STRONGER position from an AI perspective with Altman and Brockman at MSFT running AI,” he added.
To be sure, these are early days in the OpenAI-Sam Altman saga. The situation is still volatile, but for now, it seems the scales are firmly tipped to one side.
Meanwhile, at another corner of the technology industry, anticipation over Nvidia’s earnings report later today pushed the chipmaker’s shares up to a record high. If history repeats itself, then Nvidia might smash even its out-of-this-world forecast. But with so much good news already baked into the company’s share price, it’s hard to see the stock rising more substantially in the near-term.
Regardless, markets had a positive start to the week. The S&P 500 climbed 0.74%, the Dow Jones Industrial Average added 0.58% and the Nasdaq Composite rose 1.13%. Both the S&P and the Nasdaq enjoyed their fifth consecutive day of gains.
Investors will also be keeping an eye on minutes of the Federal Reserve’s most recent meeting due later today. Given the Fed’s preference of telegraphing its intentions so starkly, the likelihood of anything unexpected in the minutes is slim. That’s a good thing — we’ve had enough excitement across the past few days.
— CNBC’s Sophie Kiderlin contributed to this report.