Chip Stocks Fall on Nvidia Earnings Jitters; Will Bitcoin's Short-Squeeze Rebound Last?

This suggests that bond issuance to secure cash can proceed smoothly, raising expectations that the Federal Reserve will not need to be asked for Treasury support. As a result, concerns about the Treasury's funding that once unsettled the market appear to have eased considerably.

He argued that this approach cannot fundamentally solve the funding needs of the government and technology companies. He also warned that it could erode confidence among China and Japan, the major buyers of U.S. Treasuries, and so have a negative impact on the international bond market.

The Trump administration announced a second round of sanctions aimed at isolating Iran's economy, saying it would target those who help Iran's economic activity. In particular, when the Treasury Secretary said that 'China is not an exception,' confusion grew in the market. This could lead to the possibility of sanctions on Chinese banks and restrictions on dealings with Iran, and it is seen as a new source of tension in U.S.-China relations.

Bitcoin rose 22% last week, its largest three-day gain since 2023. The explosive rebound is attributed to more than $1.6 billion in new inflows into spot bitcoin exchange-traded funds (ETFs), along with a short squeeze. Analysts say it could mean more than a short-term relief rally, and experts assess that a strong trend is continuing in which prices do not collapse after the short squeeze.

Even so, financial regulators are set to make concrete regulatory moves starting in September. Agencies including the Financial Services Commission have signaled that they will create their own rules and regulations to tightly regulate the cryptocurrency market regardless of whether the legislation passes.

In the first half of 2024, bitcoin worth $4.2 billion was recorded as sold, a heavy selling wave, but that pressure is now largely considered to have been resolved. Investor sentiment fell to its lowest level since 2022 before showing signs of a turnaround recently. This means the exit of bearish investors is wrapping up, creating conditions for new buying to come in, and it is expected to have a positive effect on bitcoin prices going forward.

Bitcoin posted an unusual rise of 22% over the past week. Given that bitcoin has risen more than 20% only twice in the past ten years, this move is interpreted as very exceptional. It is being read as a signal of such strong upside potential that investors should pause and again ask how much further bitcoin can climb.

Nvidia's quarterly results carry significant weight for the broader market because they sit at the core of the artificial intelligence (AI) market. With data-center construction and power supply emerging as key constraints on AI growth, Nvidia's results will serve as a benchmark for evaluating the performance not only of cloud companies but of every company tied to AI infrastructure. This earnings report is therefore expected to have wide-ranging effects on data-center construction, power suppliers, and AI-related financial firms' initial public offerings (IPOs).

Nvidia has grown sharply, helped by a surge in memory supply driven by the AI expansion of big-tech companies such as Micron. In particular, excluding Alphabet's and Amazon's one-time investment gains, Nvidia is expected to contribute more to S&P 500 companies' earnings than at any time in the past. Nvidia's share of corporate profits was 3.4% in 2024, and that share is forecast to expand to 7.2% if Amazon's and Alphabet's one-time gains are excluded.

In particular, the launch strategy for the next-generation Rubin platform and how much market interest it draws will be key indicators. Ultimately, the core focus of this earnings report is whether such large investments are converting into actual return on investment (ROI). This will be an important gauge of the long-term health of the entire AI ecosystem, not just Nvidia.

Truist raised its price target for CoreWeave from $155 to $165, offering an optimistic growth outlook. Although GPU (graphics processing unit) costs are rising, CoreWeave is seen as securing profitability that more than offsets them through its strong pricing power. In fact, CoreWeave's long-term contract contribution margin is expected to rise from 24% to 33%, suggesting that high pricing power will drive the defense and growth of the company's profitability.

Wells Fargo raised its target price for Marvell Technology from $240 to $310, arguing there is 31% upside from the current share price. This positive outlook stems from a surge in demand for artificial intelligence (AI) data-center infrastructure. Marvell Technology is securing a competitive edge in networking and optical communications technology, and it aims for revenue growth of 15% to 20% over the long term.

Earnings per share (EPS) for the same period are forecast at 92 cents, up 38% year on year. These positive earnings estimates are attributed to large project wins such as its custom chip development contract with Google, and they are expected to have a positive effect on the stock's future momentum.

Dell is expected not only to post results above forecasts but also to raise its 2027 outlook. In particular, analysts say growth in its artificial intelligence (AI) server business will be a key factor driving Dell's share price higher.

Despite the bullish outlook, Dell faces several potential risks. Concerns about a possible slowdown in information technology (IT) spending and intensifying competition from other suppliers could threaten its growth. Its debt balance is also cited as a risk factor, since it may limit financial flexibility. The possibility remains that these factors could weigh on Dell's future results and share price.

Six stocks were commonly favored in the portfolio: Boeing, Capital One, Mastercard, SPACE, Thermo Fisher Scientific, and Visa. The data also confirmed that the trend of increasing allocations to financial stocks continues.

This means the favored stocks have already entered a premium range, signaling a greater valuation burden. Accordingly, some argue that accumulating them calls for a cautious approach that takes these valuations into account.