Western Digital Corporation (NASDAQ:WDC) is one of the best performing S&P 500 stocks in 2025. On December 17, Morgan Stanley raised the firm’s price target on Western Digital to $228 from $188 with an Overweight rating on the shares. The firm advised investors to maintain an Overweight position in IT Hardware companies that benefit from cloud capital expenditures and product cycles. Conversely, the firm remains increasingly cautious on manufacturers with high memory exposure due to the margin pressures as ...

Market Overview - Pre-market trading has declined, reflecting a cautious sentiment towards AI infrastructure spending and a lack of economic data, particularly during what was expected to be Jobs Week [1] - The market has seen a downward trend over the past five days, moving away from all-time highs reached in late October [1] Employment Data - Non-farm payroll numbers from the U.S. Bureau of Labor Statistics (BLS) are unavailable due to a government shutdown, with estimates suggesting a loss of 60,000 jobs last month [2] - The unemployment rate is expected to rise to 4.5%, while hourly wages are anticipated to remain steady at a year-over-year increase of 0.3% [2] - ADP reported an addition of 42,000 new jobs, which is better than BLS estimates but still indicates a weak labor market [3] - The Challenger Job Cuts report indicated 153,000 job cuts, highlighting ongoing challenges in employment [3] Interest Rate Expectations - There is a tentative expectation for a 25 basis-point interest rate cut in approximately 4.5 weeks, although market indexes may have already priced in this cut [4] - The "neutral rate" of inflation is uncertain but is believed to be higher than the optimal 2% [4] Earnings Reports - Wendy's (WEN) reported Q3 earnings of $0.24 per share, exceeding expectations by 20%, leading to a 9% increase in shares [5] - Six Flags Entertainment (FUN) posted earnings of $3.28 per share, surpassing the consensus estimate by 46.4%, although shares are down 2% in early trading [5] - Fluor (FLR) reported Q3 earnings of $0.68 per share, beating expectations by 54.55%, with shares up 4.6% in pre-market trading [6] - Constellation Energy (CEG) reported earnings of $3.04 per share, falling short of the anticipated $3.13, resulting in a 6.3% decline in shares [7] - Canopy Growth (CGC) shares increased by 12% despite reporting a loss of $0.01 per share, an improvement from the expected loss of $0.10 [8] Consumer Sentiment and Credit - The University of Michigan Consumer Sentiment report for November is expected to show a slight decrease to 53.0 from 53.6, remaining above the neutral threshold of 50 [9] - Consumer credit for September is projected to total $10.0 billion [9]

Joining us now is Melius Researchers head of energy and power research James West. James, thank you very much for joining us. >> Thanks for having me, Ryan.>> Well, do you think we first off, can we make that kind of power. >> So, I think we're going to be seeing fencing starts here on power generation. I mean, we didn't have power growth in this country for 20 years, and now we're having this dramatic surge in growth.And power is the table stakes, as I mentioned in the note, uh to AI. If you don't have ele ...

Summary of Key Points from the Conference Call Company and Industry Involved - **Company**: Google (Alphabet Inc.) - **Industry**: Cloud Computing, Hardware & Networking Core Insights and Arguments - **Capex Growth**: Google reported a significant increase in capital expenditures (capex) for Q2 2025, with a rise of **+70% year-over-year** to **$22.4 billion**, exceeding the consensus estimate of approximately **$18 billion** [1] - **Full-Year Outlook**: The company raised its full-year capex outlook for 2025 to **$85 billion**, up from a previous estimate of **$75 billion**, indicating a year-over-year growth of **60%+** [1] - **Investment Focus**: The majority of the capex is directed towards technical infrastructure, with **two-thirds** allocated to servers and the remaining to datacenters and networking equipment [1] - **Future Projections**: Management hinted at further increases in capex for 2026, driven by strong customer demand and growth opportunities [1] Additional Important Information - **Implications for Other Hyperscalers**: Google's capex results are expected to set a precedent for other U.S. hyperscalers, suggesting a similar trend in spending appetite when they report their earnings [1] - **Supplier Impact**: Companies with exposure to AI infrastructure spending, such as Celestica, Flex, Arista, and others, are anticipated to benefit from this increased capex [1] - **Historical Capex Trends**: The report includes a historical overview of Google's quarterly capex, showing fluctuations and significant increases in recent quarters, particularly in Q2 2025 [2] This summary encapsulates the critical financial insights and future expectations regarding Google's capital expenditures and their implications for the broader cloud computing and hardware industry.

Core Viewpoint - Nvidia has been a significant beneficiary of the generative AI boom, with its stock price increasing dramatically since the launch of ChatGPT in November 2022, peaking at $149.43 per share by January 2025 [1] Group 1: Stock Performance and Historical Context - Nvidia's stock has experienced a 35% decline recently due to trade tensions and concerns over AI infrastructure spending sustainability [2] - Historically, Nvidia shares have rebounded after similar declines, averaging a 305% return in the two years following drawdowns exceeding 35% [4] - Over the past decade, Nvidia's stock price increased by 17,400%, despite facing three significant drawdowns of over 35% [3][4] Group 2: Market Position and Demand - Nvidia holds a dominant market position with approximately 98% market share in data center GPUs and over 85% in AI accelerators [6] - Concerns have arisen regarding competition from DeepSeek, a Chinese AI startup, which may impact demand for Nvidia's GPUs [7] - Despite potential competition, analysts expect overall demand for Nvidia GPUs to increase as AI becomes more accessible and costs decrease [9] Group 3: Future Growth Opportunities - Nvidia is well-positioned to benefit from various applications beyond generative AI, including autonomous vehicles and robotics, which will drive demand for its products [9][10] - The AI accelerator market is projected to grow at an annual rate of 29%, suggesting durable revenue growth for Nvidia [13] - Wall Street anticipates Nvidia's earnings to grow at 38% annually through fiscal 2027, indicating that the current valuation of 32 times earnings is attractive [14] Group 4: Competitive Landscape - While Nvidia may face increased competition from ASICs developed by Broadcom and Marvell, the threat is not as significant as perceived [11] - Nvidia's GPUs are supported by a comprehensive suite of software development tools, which provides a competitive edge over ASICs that require companies to develop applications from scratch [12] - Despite potential market share loss, Nvidia's GPUs are expected to account for over 80% of AI accelerator sales by 2030 [13] Group 5: Investment Outlook - Nvidia shares are currently down 35% from their peak, but the company has a history of rebounding from larger losses [15] - The long-term growth potential and current valuation suggest that Nvidia stock is a worthwhile investment for patient investors [15]