As this earnings season winds down, investors will likely be laser-focused this week on two major events: NVIDIA’s long-awaited GPU Tech Conference and the Federal Reserve’s Open Market Committee (FOMC) meeting.
Each events have the potential to maneuver the markets. Let’s take a have a look at why they’re so vital.
AI Woodstock
NVIDIA’s GPU Tech Conference, more commonly generally known as GTC, is scheduled for March 18-21 on the San Jose Convention Center. The event, described by some as “AI Woodstock,” is about to kick off with a keynote speech by NVIDIA (NASDAQ:NVDA) founder and CEO Jensen Huang at 1 p.m. Pacific on Monday.
This 12 months’s event is especially significant for 2 reasons. First, it hasn’t been held live and in-person since 2019 as a consequence of COVID. Second, artificial intelligence has just about taken over the world since then — or a minimum of, the markets.
NVIDIA is the poster child for AI, as its leadership in manufacturing chips that power more complex AI tasks has driven its massive earnings over the past five years.
Consider this fact. In 2019, when the last in-person GTC was held, NVIDIA had a market cap of about $109 billion and was the 81st-largest company on this planet by market cap. Five years later, NVIDIA has a market cap of $2.1 trillion and is the third-largest company on this planet.
Thus, so much has actually modified.
“Generative AI has moved to center stage as governments, industries and organizations in every single place look to harness its transformative capabilities,” Huang said. “GTC has turn into the world’s most vital AI conference because the complete ecosystem is there to share knowledge and advance the state-of-the-art.”
As mentioned, Huang is about to deliver the keynote on Monday in a speech billed as a “transformative moment in AI.” He is anticipated to introduce the following generation of AI chips, the B100, and talk concerning the rapid growth of Gen AI and what to anticipate going forward. Experts from OpenAI, Microsoft, Google, Meta Platforms, SAP Labs, Boston Dynamics and others are slated to talk throughout the conference. Some 16,000 persons are expected to attend — 4 times greater than were there in 2019.
Wall Street analysts are anticipating that the main focus and a spotlight on NVIDIA and AI will fuel the stock price, which is already up 87% this 12 months to $901 per share. Prior to the conference, several analysts raised their price targets, including Bank of America, which boosted it to $1,100 per share from $925. Truist hiked its goal to $1,117 from $911, and HSBC increased its goal to $1,050 from $880.
Nevertheless, the influence of this event could actually transcend NVIDIA stock, because it has the potential to maneuver others within the AI space and beyond, because the technology has transcended semiconductors.
What is going to the Fed do?
The opposite big event this week is the Federal Reserve’s FOMC meeting on Tuesday and Wednesday. Because it traditionally does, the Fed is as a consequence of make a call on rates of interest at the top of the meeting on Wednesday afternoon.
Most analysts imagine that the Fed will hold the federal funds rate where it has been since July 2023, at a variety of 5.25% to five.5%. Nevertheless, Fed officials have indicated that rates have probably peaked and are more likely to come down this 12 months as inflation moves closer to the goal range of two% without significantly impacting employment or the economy. In other words, the “soft landing” that Fed officials have been targeting is coming into view.
Most probably, rates will remain unchanged because the Fed will probably need to see one other month of progress toward its goals. Even when the federal funds rate doesn’t change, investors will likely be listening closely for more clues as to the timing of when rates will start to come back down.
The markets are inclined to overreact to what the Fed says, so if this week’s commentary is in any respect viewed as positive, it ought to be catalyst for many stocks. However, any statement or commentary that’s viewed as lower than bullish could temporarily send stocks lower.
All in all, this ought to be a really interesting week for the stock markets.