Vested Shorts: NVIDIA’s impressive guidance, China-US trade tension, Google Ads and AI

by Parth Parikh
June 1, 2023
2 min read
Vested Shorts: NVIDIA’s impressive guidance, China-US trade tension, Google Ads and AI

In today’s edition:

  • China bans Micron Technology amid trade tensions
  • Market cap of stablecoins
  • NVIDIA anticipates a sales surge
  • Google revolutionizes advertising with new AI tools

Market Snapshot

Wednesday saw a fall in stocks for the first time in four days due to concerns over the debt-ceiling deadline and an unexpectedly strong jobs report.

News Summaries

China has escalated trade tensions by banning infrastructure firms from purchasing chips from Micron Technology in response to constraints imposed on its chip-making sector by the US and its allies. Micron, which generated roughly $3 billion in revenue in 2022 from China, could face a substantial impact. However, this move is unlikely to disrupt China’s industry due to the availability of alternative suppliers. That said, the broader concern lies in the possibility that China will extend the ban to other US chip manufacturers, such as Qualcomm and Intel. The magnitude of escalation in this trade war hinges on China’s decision to impose restrictions on these key chip providers, as their products are critical for Chinese smartphones and harder to substitute.

The market cap of stablecoins has hit its lowest point since September 2021, due to a substantial decline in trading volumes on Centralized Exchanges (CEXs) by over 40% in May 2023. This downturn stems from two main issues. 

  • Firstly, the steady performance of cryptocurrencies like Bitcoin and Ethereum failed to break notable price barriers, leading to a drop in stablecoin pair trading volumes. 
  • Secondly, major stablecoins are facing challenges, including the halt of Binance USD (BUSD) issuance by Paxos and the collapse of Silicon Valley Bank. Circle’s US Dollar Coin (USDC) also lost its peg, adding to the market’s concerns.

NVIDIA reported an impressive upcoming quarter guidance. The growth projection is primarily due to surging demand for chips deployed in training sophisticated AI systems, including ChatGPT. The firm estimates that its sales will exceed $11 billion in the coming quarter, an increase of over 50% compared to what analysts had projected. This promising announcement triggered a notable hike in NVIDIA’s stock price, which soared 27%, pushing the company’s market capitalization to an all-time high of $960 billion.

Google is revolutionizing ads with AI. On Tuesday, the company announced several new AI tools during the annual Google Marketing Live event. The presentation highlighted three ways in which AI can empower businesses:

  • Customer Connection: The new generative AI-powered search engine will adapt to the users’ queries and create new ads based on context. 
  • Creative: A new conversational chatbot will help advertisers generate customized campaigns and also recommend headlines, keywords, images, etc.
  • Confidence: Google will give advertisers better insight into their campaigns while also protecting the privacy of its users.


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