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Nvidia's tide is no longer lifting other boats

The chipmaker is pulling away from its peers and industry.

6/10/24 12:25PM

The AI boom is narrowing.

More and more, Nvidia stands alone in driving this particular theme within the stock market.

The chip designer’s operating results show that spending on AI clearly isn’t slowing down. But lately, investors seem to be treating this more and more as a winner-takes-all situation than one in which a rising tide lifts all boats. The post earnings report rally that pushed the stock into the $3 trillion market cap club has seemingly not produced many positive spillovers for other companies.

The different ways to slice and dice it:

The 21-day correlation between the daily percent change in Nvidia and its 10 closest peers (per Bloomberg’s filter) has collapsed to virtually zero – that is, there’s no longer any connection there.

The correlation between the daily change in Nvidia and the broader iShares Semiconductor ETF (SOXX) is much stronger (42%) than for the aforementioned smaller handful of its peers. But even so, this relationship has weakened to the 5th percentile relative to its history (going back to August 2001). That’s particularly striking given that Nvidia’s weight in this ETF has increased from less than 0.1% to more than 11% over this period.

And remember when utilities were an AI play thanks to the heightened demand for energy from data centers? Yeah, that was a fun month. As Bloomberg’s Joe Weisenthal notes, utilities rallied 15% from around the time the stock market bottomed in mid-April. More recently the sector ended last week as the worst performing S&P 500 sector for three straight sessions.

Nvidia’s no longer driving the performance of its peers, its industry group, or associated bank-shots in different sectors. The good news for investors, from an index level perspective, is that the stock continues to power higher — and there’s no way that Nvidia will stop driving Nvidia’s performance.

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The guidance was strong, too.

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Tasha Matsumoto

S&P 500 climbs to new all-time high ahead of Big Tech earnings

Meta, Microsoft, and Tesla will report after the bell tomorrow.

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Satellite stocks surge on “sovereign space” plans

Planet Labs is on pace to notch its second 10% gain of the month early Tuesday afternoon, adding to its astronomical run of more than 500% over the last 12 months.

Wedbush Securities tech analyst Dan Ives hiked his price target for the stock to $30 from $28 after hosting a series of meetings with the company and investors in California. Ives wrote:

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

That commentary is consistent with recent news reports that the German military is planning to build what the Financial Times calls the “the equivalent of Elon Musk’s internet service for the German armed forces.”

A separate report in The Wall Street Journal on Monday said, “Spending on space-related projects is expected to rise in many countries, giving companies new opportunities to sell their wares and services.”

Behind this push, in part, is the fact that the roughly 80-year-old NATO alliance is is under unprecedented strain due to, among other things, US President Donald Trump’s fixation on somehow acquiring the Danish territory of Greenland.

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Governments’ New Must-Have: Their Own Satellites

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Matt Phillips7h

Corning-Meta deal reignites optical connections trade

Corning’s $6 billion deal with Meta to provide fiber-optic cable connections for its AI data centers is reigniting an AI-related trade that’s been stalled out over the last month.

Fellow opto-electrical makers of plugs, cables, and various doodads needed to connect data center servers — such as Amphenol, Coherent, and Lumentum — are also soaring Tuesday.

Such stocks ripped in the second half of 2025 before the rally sputtered out in the first half of December. But the amount of money Meta plans to shower on Corning has clearly cheered up competitors — and investors — in the space today.

Corning soars after striking deal to sell up to $6 billion in optical infrastructure to Meta

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Richtech Robotics soars after announcing partnership with Microsoft to use AI to improve its robots

Shares Richtech Robotics are surging in premarket trading after the company announced “a hands-on collaboration with Microsoft through the Microsoft AI Co-Innovation Labs to jointly develop and deploy agentic artificial intelligence capabilities in real-world robotic systems.”

Per the press release, the two companies worked together to imbue Richtech’s flagship ADAM robot with “additional layers of context awareness” to “support smoother workflows and more responsive customer interactions in retail environments.”

Apropos of nothing, here’s an ADAM robot serving Nvidia CEO Jensen Huang a margarita:

Richtech was one of many robotics and vaguely robotics companies that caught a massive bid in early December after Politico reported that the Commerce Department was poised to go “all in” to support the industry. To date, there's been no evidence of such a plan, but that hasn’t stopped robotics stocks from having a phenomenal start to 2026. The Themes Humanoid Robotics ETF, which counts Richtech as one of its members, gained nearly 50% year-to-date through Thursday’s close, though it has since come off the boil.