NEWS
Analyst Note Knocks Down Tech

Analysts at TD Cowen are back and raising additional warnings about Microsoft’s AI investments and the sustainability of the industry’s breakneck growth rate. Plus, Trump implemented new tariffs that sent automobile stocks tumbling. Defensive market sectors led as investors look to protect their books into quarter end. 👀 

Today's issue covers the latest concerns surrounding Microsoft and Nvidia, Trump’s tariffs tanking the auto sector, and other pops and drops. 📰

Here’s the S&P 500 heatmap. 5 of 11 sectors closed green, with consumer staples (+1.55%) leading and technology (-2.23%) lagging.

And here are the closing prices: 

STOCKS
Pessimism Around The Pace Of AI Investment 🤔 

TD Cowen is back in the news after the company’s analysts noted that their channel checks at Nvidia’s (NVDA) GTC event and DCD Connect indicate aggregate data center demand has risen YoY, but not at the same pace as expected. 📉 

More specifically, it flagged “more pervasive lease cancellations and deferrals by Microsoft than initially thought.”

Its report suggests that Microsoft has walked away from new data center projects in the U.S. and Europe that would have amounted to a capacity of about 2 gigawatts of electricity. The analysts attributed the pullback to an oversupply of the clusters of computers that power artificial intelligence. ⚠️ 

The same analyst team rattled investors with a note back in February with similar concerns, which led Microsoft to comment that it was not changing its capital expenditure budget, but could potentially reallocate portions of it.

Today’s news hit most of the tech sector pretty hard, including digital infrastructure stocks like Vertiv Corp., energy infrastructure stocks like Oklo, and quantum computing stocks like IONQ.

Adding insult to injury, Nvidia shares fell on a Financial Times report that suggested China’s environmental regulations could impact the chipmaker’s AI sales in the country.

Overall, it was a tough day for the market between this tech news and the new automobile tariffs. Bears pushed the major indexes back below their 200-day moving average, and Nvidia lost hundreds of billions in market cap. 🐻 

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