Intelligence-related chip announcements at the Computex trade show in Taipei has spurred a rally in related semiconductor shares, as the battle heats up for AI chips targeted at both data centers and PCs. There already have been announcements at Computex from Nvidia, Advanced Micro Devices, Qualcomm, and Arm Holdings, with Intel’s keynote still to come. As per usual when it comes to AI chips, Nvidia has received the most attention. Earlier this year, Nvidia unveiled plans for a new generation of GPUs called the Blackwell B200, which will succeed the current top-of-the line Hopper H100. In Taipei, Nvidia unveiled plans for three future generations of GPUs—the Blackwell Ultra in 2025, a new chip called Rubin in 2026, which includes a new CPU called Vera, and a Rubin Ultra chip in 2027. All of the major PC manufacturers, including Dell Technologies, HP, and Lenovo, plan to ratchet up sales of AI PCs in the second half of 2024 and beyond. In particular, the company has embraced Microsoft’s new CoPilot+ PC standard; the first Snapdragon-powered CoPilot+ PCs will reach the market later this month from most major PC manufacturers. Nvidia rose 4.9% to close at $1,150 a share after analysts at Bank of America raised their price target to $1,500. Arm stock has soared 5.5%, and shares of Qualcomm are 0.9% higher. AMD stock is down 2%, with their news apparently dulled by the unveiling of several new generations of chips from Nvidia. Taiwan Semiconductor American depositary receipts are 1.2% higher while Intel shed 1.8%. Advanced Micro Devices stock declined by 2%.

On Monday, the Swiss stock market was unable to follow the widely bullish trend on neighbouring stock exchanges in Europe and closed little changed. The firmer CHF had a dampening effect in Zurich. It rose against both the euro and the dollar, which is unfavourable for the Swiss export industry. The SMI gained 0.1 per cent to 12,007 points with turnover significantly lower than on Friday and back to normal. Among the 20 SMI stocks, there were 13 losers and seven gainers. A total of 22.97 million shares were traded (Friday: 78.06 million). Among the individual stocks, index heavyweight Nestle led the way with a gain of 0.9 per cent, followed by ABB (+0.8%). The comparatively volatile technology stock Logitech was at the bottom with a loss of 2.3 per cent. Swiss Re fell by 1 per cent. All other SMI stocks saw price movements of no more than 0.7 per cent.

The European stock markets closed slightly higher on Monday, a few days ahead of a much-anticipated meeting of the European Central Bank (ECB). The Stoxx Europe 600 index gained 0.3% to 519.9 points. In Paris, the CAC 40 and the SBF 120 each climbed 0.1%. The DAX 40 in Frankfurt advanced by 0.6%, while the FTSE 100 gave up 0.2% in London. The troubled digital services group Atos (down 18.3% at €1.37) announced on Monday that it had received two revised proposals for its financial restructuring and was working to secure ‘maximum support’ for one of them by 5 June. The Zantac litigation could result in British group GSK (-9.5% in London) paying compensation of 3 billion dollars, according to Citi, while a US court on Friday authorised the continuation of more than 70,000 legal actions linked to this product, which patients accuse of having contributed to their cancer. Sanofi (+0.4% in Paris), which stopped selling Zantac in 2019, recently settled 4,000 cases for $100 million, the financial intermediary adds. Technology and defence group Thales (+0.5%) announced it had finalised the divestment of its Ground Transportation Systems (GTS) rail signalling business to Hitachi Rail, a subsidiary of Japanese conglomerate Hitachi. Moody's has lowered its outlook for the ‘A1’ credit rating of the Société Générale banking group (-1.6%) from ‘stable’ to ‘negative’.

The S&P 500 eked out a gain Monday, opening June on a subdued note. The broad index rose 0.1% after a late rally pushed the index into the green. The Nasdaq Composite added 0.6%, snapping a three-session losing streak. The Dow Jones Industrial Average fell 115 points, or 0.3%. The choppy performance came after widespread gains in May, when all three major indexes rose by at least 2.3%. Trading has been more volatile in recent days, and fresh data released Monday pointed to a slowing U.S. economy: The Institute for Supply Management said its manufacturing index contracted more sharply in May than economists had forecast. Despite investors’ broadly cautious sentiment on Monday, meme-stock mania returned to the market. GameStop surged 21% after a Reddit account linked to meme-stock folk hero Keith Gill posted a screenshot showing a $116 million position in the stock. AMC Entertainment closed 11% higher. Nvidia rose 4.9% to close at $1,150 a share after analysts at Bank of America raised their price target to $1,500. Tesla (-1%) launched a recall of 125,000 electric vehicles on Monday due to a problem with the hazard lights lighting up and the warning signal sounding when the seatbelt is not fastened, which does not meet the requirements of the US road safety regulator. GameStop soared 21% after a Reddit account inactive since 2021 and purportedly belonging to investor Keith Gill posted photos showing he owned nearly 181.4 million shares and options in the video game distributor. Known as Roaring Kitty on social network X, Keith Gill was behind the 2021 GameStop share frenzy on social media. Film production company Skydance Media's revised offer to buy National Amusements and merge it with Paramount Global (+7.5%) gives the US audiovisual conglomerate's non-voting shareholders the chance to receive a premium, people close to the matter told the Wall Street Journal. Waste Management (-4.5%), one of the biggest players in the US waste sector, is close to reaching an agreement to acquire Stericycle (+10.3%), which specialises in medical waste management, for around 7 billion dollars including debt, sources close to the matter told the Wall Street Journal.

Stocks in Asia mostly fell on Tuesday. In Tokyo, the Nikkei index fell by 0.1 per cent. Meanwhile, on the Hong Kong stock exchange, the Hang Seng Index rose slightly by 0.2 per cent, while the Shanghai Composite on the Chinese mainland was flat. In South Korea, the Kospi lost 0.4 per cent. Headline inflation in South Korea slowed to a ten-month low but still remained above the central bank's target of 2.0 per cent, reinforcing the view that the central bank is unlikely to be in a hurry towards easing its monetary policy. Shares in oil companies in the region have been hit by the recent fall in oil prices. Inpex, for example, dropped 3.9 per cent in Tokyo. In Hong Kong, Petrochina shed 1.7 per cent and CNOOC 1.9 per cent.

Rates on U.S. government debt fell further on Monday after construction- and manufacturing-related data came in below economists’ estimates. The benchmark 10-year Treasury yield edged lower to settle at 4.409%, its third straight session of declines. The 2-year Treasury note yield declined by 6 basis points to 4.825%.

Logitech price target: Goldman Sachs upgrades to CHF 97 (87) - Buy
Price target Swiss Re: UBS raises to CHF 101 (91) - Sell
Price target Novartis: Vontobel upgrades to CHF 110 (109) - Buy

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