We saw Alphabet hit 2023 highs yesterday!
This came off the back of a 🤝 partnership announcement between Google and Nvidia…
The partnership is intended to optimized Google’s advanced cloud computing capabilities for NVIDIA’s most advanced technology.
While headlines focused more on Nvidia, Google likely has a lot more to gain from such an arrangment…
The H100 chips are already the hottest commodity in the corporate tech world with every big tech company trying to get their hands on as many as they can.
In other words, Nvidia doesn’t need Google’s approval in order to sell their AI products at steeply elevated prices.
On the other hand, google is in a very different place in 2023…
One could argue that they are the most overlooked mega cap tech stock this year.
Wall street has paid a lot more attention to players like Microsoft and Meta with AI being the main focal point.
This is likely a big part of the reason why Alphabet is trading at yearly highs.
Meanwhile, competitors like Microsoft hit their peaks back in July…
It remains unclear how much Google will benefit from the partnership.
The integration may help their ☁️ cloud offering gain an edge to cloud offerings from AWS and others.
It may even help the company get more Nvidia AI chips in the long run…..who knows.
It’s important to keep in mind that this was not the only driver of bullish sentiment in yesterday’s market…
The SPY as a whole was up yesterday on new labor market data!
The JOLTS (Labor Department’s Job Openings and Labor Turnover Surveys) showed that only 2.3% of non-farm workers quit their jobs in July, the lowest since the beginning of 2021.
In addition, the hiring rate last month was the lowest recorded since mid-2020!
On the surface this may sound counter intuitive…
Don’t we want to see signs of a thriving economy?
Under normal conditions that would be true, but not in a situation of high inflation and a FED that’s looking for any reason to raise interest rates further.
The market wants to see slightly negative economic data.
This will show proof that we are headed for the “soft landing” 🛬 that Powell is looking for…
That’s all for now!
Until Next Time,
-Damian