Ai.
On Tuesday, November 21, 2023, 03:01, Yahoo Finance <yahoo@newsletters.yahoo.net> wrote:
Web Version
Tuesday, Nov 21
What we're watching
- Nvidia shows its hand: The "Magnificent Seven" member will report quarterly results on Tuesday after the bell. The chipmaker, which has been central to the AI boom, should give investors a glimpse at how dollars are actually being spent in the space as 2024 approaches and provide a welcome turn away from the personnel drama now synonymous with AI.
- A final earnings feast before Thanksgiving: Best Buy, Lowes, and HP are joined by retailers including Dick's Sporting Goods, Burlington, Kohl's, Urban Outfitters, and frosted-tips staples Abercrombie & Fitch and American Eagle. Jack in the Box also reports.
- Fed minutes: The FOMC minutes from the Oct. 31 - Nov. 1 meeting come out a day ahead of the usual schedule to avoid the day-before-Thanksgiving lull on Wednesday. Investors will be leafing through the Halloween notes for something that might spook them — anything that upsets the recent dovish tone and data.
Follow all the action throughout the day on Yahoo Finance and on the Yahoo Finance app.
What we're reading
- Wall Street cheers Microsoft's 'coup' hiring Altman after OpenAI ouster, stock hits all-time high: After a weekend of drama, Microsoft now has two of the biggest names in AI working directly for its company.
- More Americans tapped their retirement savings early as their balances dipped, analysis shows: From July through September, 2.3% of workers withdrew funds from their accounts for hardship, up from 1.8% during the same time last year.
- Cruise CEO departure the latest headache for GM: General Motors' up-and-down 2023 rolls on with another big departure and setback.
Markets right now
Note: Data is as of the time of opening this email. To view real-time markets data click here.
Why you should care about the OpenAI drama
Today's Takeaway is by Julie Hyman, Anchor.
We've got quite a fun business story to discuss over our Thanksgiving turkeys this year.
Sam Altman was fired by the OpenAI board! He's starting another company! Wait, the OpenAI board wants him back! No, it doesn't! Microsoft is hiring him! OpenAI employees are revolting!
It's got everything — big personalities; big companies; dramatic, fast-moving developments; and a technology that's been both a buzzword and a driver of returns this year.
But the story also has real repercussions for investors and anyone who will be affected by artificial intelligence — that is, pretty much everyone.
First, let's take the implications for investors, particularly those who hold Microsoft shares. As my colleague Josh Schafer outlined, many analysts are cheering CEO Satya Nadella's move to bring Sam Altman fully into the fold after forging a relationship with him, both personal and financial. That's reflected in Monday's bounce in Microsoft shares, which initially fell on Friday on the news that Altman was departing OpenAI, in which Microsoft had invested.
This could potentially solidify what some see as Microsoft's lead in AI. Through its collaboration with OpenAI, it has incorporated ChatGPT into its Bing search engine and other products. Now, by directly hiring Altman and one of his co-founders, Greg Brockman, "Mr. Nadella may have pulled off his own coup, acquiring the most important part of OpenAI — its ambitious talent," wrote Macquarie analyst Frederick Havemeyer in a note to investors.
That could potentially leave some of Microsoft's competitors in AI — particularly the likes of Alphabet and Meta — on the back foot.
On the other hand, they too could hire some of the OpenAI workers. (As of this writing, more than two-thirds of OpenAI's employees had reportedly threatened to resign.) There's also the wrinkle that Microsoft owns 49% of OpenAI, which is now in disarray, though Semafor has reported that it hasn't yet wired the company its full investment.
So the stakes are high for Microsoft and its peers.
The much bigger question is what this means for the development of AI — a technology that this year has been touted as having the ability to change the way we work and live.
Reportedly, one of the points of contention between Altman and members of the board was how quickly to develop and commercialize new AI-based technologies while still not posing a threat to humanity. That threat has been flagged by everyone from one of the "godfathers of AI" to Elon Musk to Sam Altman himself, along with a who's who of AI luminaries.
Now that Altman is under the purview of a public company whose job is explicitly to make money for shareholders versus the nonprofit that controls OpenAI, whose "principal beneficiary is humanity, not OpenAI investors," will he be more likely to brush aside those potential threats? Or was the mission statement a fig leaf anyway?
Will this newsletter be written by our AI overlords a year or five years from now as a result of this pivotal decision by OpenAI to fire Sam Altman, setting off a chain of events that will lead him to prioritize profit over prudence and lead to humanity's downfall?
Probably not. But it still reminds us of a specter hovering over all of this AI hype — the power over this technology with the huge potential to shape our futures is concentrated in just a few hands.
Stocks on the move
Microsoft (MSFT): Shares rose about 2% Monday after CEO Satya Nadella announced Sam Altman, the recently ousted leader of OpenAI, a leading AI company and the maker of the popular chatbot ChatGPT, would be joining a new AI research team at the Redmond, Washington-based tech giant. The news sent shockwaves throughout Wall Street, with RBC Capital Markets analyst Rishi Jaluria telling Yahoo Finance Live on Monday, "This is a huge coup for Microsoft. ... This is probably the most eventful weekend I've ever seen in my decade-plus covering software."
Nvidia (NVDA): Shares rose more than 2% in afternoon trading as the AI darling prepares to report quarterly earnings on Tuesday. Investors will be focusing on several areas of the report, including fourth quarter guidance. Still, China restrictions and more competition in the space from chipmakers like AMD (AMD) could cause concerns.
Boeing (BA): Shares of the aircraft manufacturer rose roughly 5% following an upgrade from Deutsche Bank analyst Scott Deuschle to a Buy from Hold with a price target of $270 — that's about 26% higher than what the stock is currently trading at.
Bayer (BAYN.DE): Shares fell about 18% Monday afternoon after Bayer said it is halting a trial for asundexian, an experimental cardiovascular drug. The setback for the German drug giant dragged down shares of Bristol Myers Squibb (BMY) by 2%; the company has its own similar experimental drug known as milvexian.
— Alexandra Canal, Senior Reporter, with Hamza Shaban, Senior Reporter
Watch on Yahoo Finance Live
- Kelly Steckelberg, Zoom CFO, 9:30 a.m. ET
- Fran Horowitz, Abercrombie & Fitch CEO, 3:30 p.m. ET
Chart of the day
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Earnings and economic calendar
Tuesday
- Earnings: Abercrombie & Fitch (ANF), American Eagle (AEO), Best Buy (BBY), Burlington (BURL), Dick's Sporting Goods (DKS), Guess (GES), HP (HPQ), Jack in the Box (JACK), Kohl's (KSS), Lowe's (LOW), Nvidia (NVDA), Urban Outfitters (URBN)
- Economic news: Existing home sales, October (3.90 million expected, 3.96 million previously); Existing homes sales month-over-month, October (-1.5% expected, -2.0% previously); FOMC Meeting minutes
Wednesday
- Earnings: Deere & Co. (DE)
- Economic news: University of Michigan consumer sentiment, final reading, November (61.0 expected, 60.4 previously); Initial jobless claims, week ending Nov. 18 (225,000 expected, 231,000 previously), Durable goods orders, October (-3.2% expected, +4.6% previously); MBA Mortgage applications, week ending Nov. 17 (+2.8% previously)
Today's newsletter was edited by Ethan Wolff-Mann.
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