FTC Reportedly Opens Antitrust Probe Into Microsoft’s AI Deal With Inflection
5 Things to Know Before the Stock Market Opens
AI Frenzy Drives Chip Giant TSMC Above Record Close, ASML Gains
1. AI Star Nvidia Extends Gains Beyond $3T Milestone
Shares of Nvidia (NVDA) are extending their gains by about 2% in premarket trading after surpassing a market capitalization of more than $3 trillion on Wednesday. Nvidia, now the world's second-largest company by market value, trails only Microsoft (MSFT). Nvidia’s rapid growth is attributed to its dominance in AI semiconductors and a recent boost from unveiling its next-generation AI platform. The company will execute a 10-to-1 stock split after market close on Friday, with split-adjusted trading starting on Monday.
2. Lululemon Jumps on Improved Outlook, Boosted Buyback Program
Lululemon Athletica (LULU) shares are up 8% in premarket trading after the company raised its full-year profit guidance and expanded its stock buyback program by $1 billion. The activewear maker reported better-than-expected quarterly results and increased its EPS forecast for fiscal 2024 to $14.27-$14.47, up from $14-$14.20. The boosted buyback program, which follows a $296.9 million repurchase in the first quarter, reflects management’s confidence in the company’s strategy and future prospects.
3. AI Frenzy Drives Chip Giant TSMC Above Record Close, ASML Gains
The AI boom continues to elevate shares of major semiconductor companies. American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Company (TSM) rose 1.8% in premarket trading after closing at a record high on Wednesday. Shares of ASML Holding (ASML) also increased, buoyed by optimism that TSMC will receive ASML's advanced chipmaking machine this year. TSMC, the world’s largest contract chip manufacturer, plays a critical role in the production of chips for Nvidia and Apple, among others.
4. Discount Retailer Five Below Plunges on Outlook Cut as Inflation Bites
Five Below (FIVE) shares are down 16% in premarket trading after the retailer lowered its sales outlook for the year and reported disappointing first-quarter sales. The company cited the ongoing impact of inflation on consumer spending as a key factor. Five Below's revised fiscal 2024 net sales forecast now stands between $3.79 billion and $3.87 billion, down from the previous range of $3.97 billion to $4.07 billion. CEO Joel Anderson noted that consumers are being more cautious with their discretionary spending due to persistent inflation in essential categories like food, fuel, and rent.
5. FTC Reportedly Opens Antitrust Probe Into Microsoft’s AI Deal With Inflection
The Federal Trade Commission (FTC) is reportedly investigating whether Microsoft structured its deal with AI startup Inflection to sidestep an antitrust review. The probe focuses on Microsoft's hiring of Inflection AI’s co-founder and most of its employees, as well as a $650 million payment to the startup for a technology resale license. The FTC has issued subpoenas to both companies as part of the investigation. U.K. regulators are also examining the deal, alongside other acquisitions by Microsoft and Amazon (AMZN) in the AI space. Microsoft shares are slightly down by 0.3% in premarket trading.