markets

5/29/25

Nvidia’s strong results, outlook propel AI supply chain higher

Many stocks are getting a lift today after a federal court blocked many of President Trump’s trade measures, including reciprocal tariffs. But Nvidia’s revenue beat and broadly sunny Q2 outlook are giving an extra bump to stocks across the AI supply chain.

“I think it is fairly clear now that AI is going through an exponential growth, and reasoning AI really busted through,” Nvidia CEO Jensen Huang said on the conference call following earnings.

AI server maker Super Micro Computer is up about 3%.
Corning, whose cables help connect servers, is sitting on a 2% advance.
CoreWeave, which rents out cloud access to Nvidia chips for AI training and inference, is about 3% higher.
Vistra, a utility company that’s been making aggressive inroads into data center power provision, is also trading about 2% to the upside.
Other chipmakers Broadcom, Advanced Micro Devices, and Micron are also outperforming in the premarket.

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C3.AI meme

The company with the world’s most enviable stock ticker isn’t cashing in on AI

When your ticker is “AI,” people expect you to be riding the wave better than anyone else — that hasn’t happened for C3.ai.

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Claire Yubin Oh

25m

Broadcom rallies on report that OpenAI is the new key customer that’s boosting its 2026 revenue outlook "significantly"

Broadcom shares were as much as ~9% higher in early trading on Friday after the Financial Times reported that OpenAI is set to produce its first AI chips in partnership with Broadcom — seemingly confirming the ChatGPT trailblazer as the customer that Broadcom’s CEO Hock Tan had alluded to on yesterday’s earnings call.

After a modest Q2 earnings beat, shares of Broadcom were doing little of note in postmarket trading until CEO Hock Tan revealed the addition of a new big buyer that has recently added over $10 billion of orders for its AI business. He added that the outlook for 2026 AI revenues would "improve significantly" based on this hefty demand, which quickly sent shares up 3%. The semiconductor giant did not disclose the name of this customer, but people familiar with the matter contacted by the FT confirmed OpenAI as the new client.

Per the FT, production of the new specialized chips will start next year, and will be used by OpenAI internally, supporting its growing demand for the computing power to run its models and reducing the company’s reliance on the hotly sought-after inventory of Nvidia.

Whilst the two companies' initial collaboration has been hinted at before, specific details have previously been unclear.

Per the FT, production of the new specialized chips will start next year, and will be used by OpenAI internally, supporting its growing demand for the computing power to run its models and reducing the company’s reliance on the hotly sought-after inventory of Nvidia.

Whilst the two companies' initial collaboration has been hinted at before, specific details have previously been unclear.

Nia Warfield, Luke Kawa

S&P 500 posts fresh closing high as cyclicals shine

The first record close of the month for the benchmark US stock index.

Bull horns

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14h

Lululemon sinks after slashing full-year guidance as tariffs, sales weigh on margins

Lululemon shares sank 13% in after-hours trading Thursday after the yoga-wear retailer massively slashed its full-year outlook.

Adjusted earnings per share came in at $3.10 for the second quarter, versus Wall Street’s forecast of $2.86. Revenue landed at $2.5 billion, compared with analyst estimates of $2.54 billion.

The real problem: Lululemon heavily cut its full-year guidance, and is now projecting earnings of $12.77 to $12.97 per share, a steep drop from its prior forecast of $14.58 to $14.78, and well shy of Wall Street’s $14.40 estimate.

The retailer faced more margin pressure during the quarter, citing higher markdowns, tariffs, and other costs, though some of that was partially offset by higher pricing and lower product costs.

Lulu shares were down 45% year-to-date before the report.

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15h

Broadcom rallies after CEO says 2026 AI revenue outlook will “improve significantly” as the chip designer adds a new major customer

Broadcom is booming. The chip designer posted a small top and bottom line beat in its fiscal Q3, and the details and its guidance are even more encouraging.

Revenues: $15.95 billion (estimate $15.84 billion)

Adjusted diluted earnings per share: $1.69 (estimate $1.67)

Shares initially whipsawed in reaction to these numbers, but then rallied strongly after CEO Hock Tan said the outlook was for AI revenues to improve “significantly” in fiscal 2026 during the conference call with analysts thanks to the addition of a new big buyer.

“Last quarter, one of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs, and in fact, have secured over $10 billion of orders,” he said. “And reflecting this, we now expect the outlook for fiscal 2026 AI revenue to improve significantly from what we had indicated last quarter.”

Unlike Nvidia, whose data center business came in slightly shy of estimates in its most recent quarter, Broadcom’s AI sales managed to come in ahead of expectations, with $5.2 billion in revenues versus the anticipated $5.1 billion.

For the current quarter, management expects sales of $17.4 billion and adjusted EBITDA of approximately $11.67 billion. That compares to the Street’s view of $17.05 billion and adjusted EBITDA of $11.3 billion.

And again, its AI business is besting the sell side’s view, with an outlook for $6.2 billion in AI semiconductor revenues versus an expected $5.84 billion.

Shares were up more than 30% year to date heading into this report, slightly trailing Advanced Micro Devices but ahead of industry leader Nvidia.

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