SpaceX AI Revenue Soars Ninefold... Semiconductor and Utility Stocks Rally on Nvidia Chip Expansion Plans
Easing Concerns Over AI Return on Investment (ROI); MSCI Korea Up 1.88%, Foreign Net Buying Streak in Focus
Key Market Trends
① SpaceX AI Revenue Soars 9-Fold... Easing Concerns Over ROI
U.S. equities opened higher, spearheaded by technology shares, following robust earnings from SpaceX.
Revenue rose 161% year-over-year to $14.6 billion, with operating profit reaching $2.8 billion and net income hitting $4.4 billion, marking a return to the black.
Revenue from the SI (Systems Integration) business, its AI division, surged from $810 million to $7.56 billion.
Total capital expenditures (CapEx) stood at $19.59 billion—comparable to the previous year—while AI-specific CapEx contracted to $16.44 billion from $16.9 billion a year earlier.
With AI revenues surging while investment levels remained flat, concerns regarding AI return on investment (ROI)—which had recently weighed on the market—have begun to ease.
Truist noted that the results demonstrate a relatively short payback period for AI investments.
Supermicro also raised its preliminary first-quarter revenue guidance from $15.0 billion to around $19.0 billion, while upgrading its gross margin outlook from 10.6% to 12.0%-12.25%.
AI infrastructure and server-related equities, including CoreWeave, Nebius, Dell, and HP, advanced in tandem.
② Musk Vows to "Expand Nvidia Chip Purchases"... Semiconductor and Utility Stocks Advance
Inflows into semiconductor equities picked up after Elon Musk announced plans to step up purchases of Nvidia chips to scale up AI infrastructure.
Nvidia, Micron Technology, and SanDisk all posted gains.
Emphasizing the necessity of robust power and cooling infrastructure to operate over 200,000 GB300 units monthly, Musk's comments also drove rallies in nuclear and power-related stocks such as Oklo and NuScale.
Coming on the heels of strong earnings from SpaceX and Supermicro, tangible plans to ramp up AI semiconductor procurement helped alleviate recent anxiety over slowing AI infrastructure demand.
After the closing bell, Tesla reported revenue of $28.0 billion and earnings per share (EPS) of $48, topping market estimates, while Meta posted revenue of $64.6 billion, beating the consensus of $63.4 billion.
Lam Research similarly delivered earnings that slightly exceeded market expectations.
③ Crude Oil Slips to $97; Markets Remain Highly Sensitive to Middle East Headlines
International benchmark crude oil prices settled 0.68% lower at $97.15 per barrel following a volatile trading session.
Prices initially climbed amid stalled peace negotiations and reports concerning the Strait of Hormuz, but reversed course after Russia announced preparations to resume peace talks.
Following the market close, reports emerged regarding preparations to evacuate embassy personnel in the Gulf region, pushing crude prices back upward.
Equities continue to show heightened sensitivity not only to AI-related news, but also to oil price fluctuations driven by geopolitical developments in the Middle East.
Goldman Sachs projected that while AI apprehensions and Middle Eastern geopolitics could inject near-term volatility, supportive earnings seasons and year-end supply-demand dynamics should foster a favorable environment for equities through the end of the year.
Market Analyst's Perspective
Market movements have grown relatively straightforward of late. News regarding AI investment and profitability, alongside international crude prices and interest rates, are dictating index trajectories and foreign capital flows. Directional momentum is increasingly dictated by the day's headlines rather than broader trends.
Foreign investors recorded net purchases in three out of the last four trading sessions. The shift from a one-sided selling phase to a volatile period marked by alternating net buying and selling is a positive development. It is now crucial to monitor whether foreign net buying will morph into a sustained streak.
The expiration of SK hynix’s share buyback program is also a critical juncture for supply and demand dynamics. Should a new shareholder return policy be unveiled during next week’s conference call, the hiatus in share buybacks could be limited to roughly a week. Despite yesterday's rebound, SK hynix shares remain trading approximately 55% below their cyclical peak.
Rebounds following steep pullbacks often incorporate substantial short-term buying, meaning profit-taking and the digestion of overhead supply are likely to recur. While remaining mindful of market volatility, investors should continue to selectively target equities that have experienced excessive valuation corrections relative to their fundamentals. Ongoing scrutiny is warranted for sectors that experienced strong momentum around October before undergoing consolidation, as well as stock groups poised for earnings recovery in the second half and into next year.
Today's Checkpoints
AI Infrastructure: Whether related equities can sustain their post-earnings rebounds following SpaceX and Supermicro
Semiconductors: Musk’s comments on expanded Nvidia chip procurement and domestic semiconductor supply-demand dynamics
Foreign Investors: Whether net buying over 3 of the last 4 sessions will translate into a continuous buying streak
SK hynix: Supply-demand dynamics following the conclusion of the share buyback program and next week’s conference call
Middle East: Geopolitical tensions resurfacing after-hours following WTI crude's settlement at $97.15
Key Indicators
Dollar Index: 101.71 (+0.01%)
Crude Oil (WTI): $97.15 (-0.68%)
Volatility Index (VIX): 16.68 (-3.64%)
U.S. 10-Year Treasury Yield: 5.11%
MSCI Korea Index: +1.88%
Night Futures: -0.53%
Source: Market Analyst's Stock Story (t.me/shmstory)
YouTube: Market Analyst TV www.youtube.com/@blueoak1004
This article has been reorganized from a Telegram post by "Market Analyst's Stock Story" with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell, nor can it serve as a basis for investment decisions. Under no circumstances may the contents of this post be used as legal evidence.
