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Stocks got off to a strong start Monday ahead of a big week for the market, with reports of a grand artificial intelligence partnership coming out of Silicon Valley.
The iPhone may soon receive a Google AI makeover.
NurPhoto (from Getty Images)
important facts
Shares of Google’s parent company Alphabet plunged 7% after Bloomberg reported that the search engine giant and Apple are in talks to bring Google’s Gemini-generated artificial intelligence service to Apple’s iPhones. Rose. This could be a big win for Alphabet, which some believe has so far lagged behind rival Microsoft. In the generative AI space.
Alphabet’s rise added about $120 billion to the company’s market capitalization, and major stock indexes showed notable gains, with the benchmark S&P 500 index and the tech-heavy Nasdaq index up 1% and 1.5%, respectively.
Much of Monday’s gains were concentrated in big tech companies, with Apple’s stock rising 2% and investors weighing Nvidia CEO Jensen Huang’s keynote at AI Leaders’ afternoon conference. Shares of AI semiconductor chip designer Nvidia rose 4% as it awaited the speech and electric car maker Tesla’s keynote address. Shares rose 2% after the company raised prices on some cars.
Each of the so-called “Magnificent Seven” stocks rose on Monday, bringing their combined market capitalization to about $350 billion, according to YCharts data.
Monday’s meeting comes ahead of the Federal Reserve’s meetings on Tuesday and Wednesday, which will reveal the central bank’s latest thinking on interest rate cuts, but Wall Street said it will be slow as higher-than-expected interest rates hit businesses. It is a meeting that has the potential to spoil the good atmosphere of the city. “Earning power”.
important quotes
Wedbush analysts led by Dan Ives said in a note to clients on Monday that bringing Gemini to the iPhone would be a “huge win” for Google because “this obviously comes with significant licensing fees.” I wrote that it would be.
what we don’t know
The amount Apple pays Alphabet to license the Gemini software on its smartphones. Bank of America analyst Wamsi Mohan said Apple believes such a deal would have “very significant” costs, and the report suggests that Apple’s internally generated AI services could be used by Gemini and others. He pointed out that this may indicate that he is not in the same position as ChatGPT, the top Gemini. A competitor built by Microsoft-backed OpenAI.
Main background
Perhaps the most comparable deal is actually the one in which Apple received an $18 billion annual windfall from Alphabet to make Google the iPhone’s default search engine. Both Alphabet and Apple have suffered from a lack of market excitement about their AI products over the past two years, with Alphabet’s stock suffering a 5% drop just three weeks ago on Gemini worries and Apple’s has significantly underperformed the broader market over the past year. 6 months.
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