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Luke Kawa

The “most bullish thing” UBS heard Nvidia say

Nvidia’s robust rally following its earnings report and management’s conference call is proof enough that investors are picking up what Jensen Huang and co. are putting down.

But what exactly is engendering enhanced optimism about the state of an AI boom that is already well in bloom?

Well, here’s UBS Securities analyst Timothy Arcuri, who has a “buy” rating and $175 price target on the shares, on what stuck out the most to him:

“The most bullish thing we heard on this call was that, ‘on average, hyperscalers are each deploying nearly 1000 NVL72 racks, or 72,000 Blackwell GPUs per week’ and are ‘on track to further ramp output this quarter.’ When queried, management again affirmed that this is 1k racks PER week PER hyperscaler. This is much higher than almost all estimates regarding rack shipments and implies a run rate of at least 10k/month — a number that seems too high to use, but makes the point that racks are really taking off.”

In other words, the newest racks (which required some tweaks earlier in the year to solve overheating issues) are now flying off the shelves and into data centers at a rapid pace.

Arcuri’s observation related to these remarks from CFO Colette Kress on the conference call:

“The introduction of GB200 NVL was a fundamental architectural change to enable data-center-scale workloads and to achieve the lowest cost per inference token. While these systems are complex to build, we have seen a significant improvement in manufacturing yields, and rack shipments are moving to strong rates to end customers. GB200 NVL racks are now generally available for model builders, enterprises, and sovereign customers to develop and deploy AI.

On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks or 72,000 Blackwell GPUs per week and are on track to further ramp output this quarter. Microsoft, for example, has already deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands of GB200s with OpenAI as one of its key customers.”

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Intel Logo In front of Building

Intel slumps after Q1 guidance disappoints

The bad outlook offset strong Q4 results.

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Luke Kawa

Plug Power jumps amid surge in call activity as CEO Andy Marsh hosts AMA

Plug Power surged on Thursday, jumping nearly 17% amid elevated call activity as outgoing CEO Andy Marsh hosted an “ask me anything” on the r/PlugPowerStock subreddit.

As many as 192,581 call options changed hands, more than 4x the 20-day average — call options with a strike price of $4 that expire in mid-June were the most active contract.

Marsh’s appearance was aimed at building support for the board’s recommendations that its investors vote in favor of three proposals at a special meeting of shareholders slated for next week. These proposals include: allowing votes to be decided by a majority of voters rather than a majority of shareholders, enabling an increase in the company’s share count, and a third measure to delay this special meeting in the event that there aren’t enough votes for either of those two proposals to pass.

During the session, Marsh made the following points:

  • Management really doesn’t want to have to do a reverse stock split, but would feel forced to do so if the second proposal fails to pass. Per a recent filing from Plug, “Without additional authorized shares, the Company will not be able to: meet its contractual obligations to increase authorized shares of common stock by February 28, 2026; raise capital necessary for operations and growth; and execute on its business plans and strategy.”

  • Plug plans to lean even more into opportunities to offer power to AI data center customers, with Marsh writing that incoming CEO Jose Luis Crespo will offer more details on this in a follow-up AMA scheduled for March.

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Megacap tech helped drive gains.

Chicago Bulls Dennis Rodman (91) and Michael Jordan (23) in action, rebounding vs Charlotte Hornets
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Jon Keegan

Meta shares rally as Jefferies says it’s a bargain relative to Mag 7 peers

Shares of Meta rallied over 5% on Thursday, as Jefferies analyst Brent Thill doubled down on his “buy” rating for the company, calling the stock a relative bargain compared to its Magnificent 7 peers. The analyst set a price target of $910, well above the $645 where the stock is trading today.

News out of the World Economic Forum this week that Meta’s first models from its revamped AI teams are “very good” aligns with Thill’s argument that the company is well positioned to get back in the AI race with the “all-star model,” which is expected to be released in the first half of the year.

Recent cuts to Meta’s Reality Labs also signal that the company is focusing its spending where it matters. The Jefferies note added that the recent monetization of Threads via ads will help boost revenue.

Next week, Meta reports its fourth-quarter earnings, and Thill expects that even if the company raises its 2026 capital expenditure outlook, investors won’t be spooked, as the company has been clear that spending may continue to be high.

Recent cuts to Meta’s Reality Labs also signal that the company is focusing its spending where it matters. The Jefferies note added that the recent monetization of Threads via ads will help boost revenue.

Next week, Meta reports its fourth-quarter earnings, and Thill expects that even if the company raises its 2026 capital expenditure outlook, investors won’t be spooked, as the company has been clear that spending may continue to be high.

markets
Matt Phillips

Arista Networks rips higher amid jump in call buying

Arista Networks, a maker of switches and other networking equipment used in AI data centers, was on track for its best day of the new year on Thursday as options traders went bullish on the stock.

As of around 11 a.m. ET, there was nearly twice as much call buying in Arista than its 10-day moving average for a full day of activity. Buying call options to make leveraged bets on price increases has been a favorite trading tactic of retail traders in recent years.

Otherwise, there weren’t clear headlines tied to today’s outsized move, but the stock has been getting attention lately: in a note published earlier this month, Goldman Sachs analysts spotlighted Arista as a top tactical trade for earnings season, saying the shares — which they rate a “buy” — could rise 20% over the next year.

“ANET is well positioned amidst ongoing data center spending growth, where its position as a best of breed provider of networking equipment should advantage the company, particularly as data center networks become increasingly complex,” Goldman analysts wrote in the January 8 report.

And recent reports also say Microsoft — which accounted for 20% of Arista’s revenue in 2024, according to Goldman Sachs — is planning a massive expansion of its Wisconsin data center project.

Arista stock did get a lift following the release of solid US economic numbers at 8:30 a.m. that seemed fairly specific to Arista itself. (There was no similar bounce from competitors like Cisco or Hewlett-Packard.)

Microsoft receives preliminary approval for $13.3B data center expansion in Mount Pleasant - Milwaukee Business Journal

Microsoft receives preliminary approval for $13.3B data center expansion in Mount Pleasant - Milwaukee Business Journal

Otherwise, there weren’t clear headlines tied to today’s outsized move, but the stock has been getting attention lately: in a note published earlier this month, Goldman Sachs analysts spotlighted Arista as a top tactical trade for earnings season, saying the shares — which they rate a “buy” — could rise 20% over the next year.

“ANET is well positioned amidst ongoing data center spending growth, where its position as a best of breed provider of networking equipment should advantage the company, particularly as data center networks become increasingly complex,” Goldman analysts wrote in the January 8 report.

And recent reports also say Microsoft — which accounted for 20% of Arista’s revenue in 2024, according to Goldman Sachs — is planning a massive expansion of its Wisconsin data center project.

Arista stock did get a lift following the release of solid US economic numbers at 8:30 a.m. that seemed fairly specific to Arista itself. (There was no similar bounce from competitors like Cisco or Hewlett-Packard.)

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