Wall Street Brunch: Tech Events Stealing The Show From Economy And Earnings

Summary:

• Nvidia’s AI Summit and Tesla’s robotaxi event highlight future tech, while Q3 earnings and retail inflation figures are key economic focuses this week.
• Nvidia and AMD to showcase AI advancements; Tesla’s event may reveal a Cybercab prototype, with high investor expectations and potential surprises.
• September CPI data expected to show modest inflation changes.
• Earnings season kicks off with major banks reporting Friday.

Listen below or on the go on Apple Podcasts and Spotify

Nvidia’s three-day summit is one of three AI events. (0:17) Moonshots at the robotaxi event? (1:49) Eyes on consumer inflation after jobs report changes rate-expectation landscape. (2:58)

The following is an abridged transcript:

Will investors be more focused on the future or the recent past this week?

Nvidia’s (NASDAQ:NVDA) AI Summit and Tesla’s (NASDAQ:TSLA) robotaxi event will have plenty for those betting on future tech. But third-quarter earnings season is also kicking off and Wall Street isn’t going to sleep on the latest retail inflation figures.

The Nvidia Summit runs from Monday to Wednesday in Washington and the chipmaker says the focus will be on AI to drive breakthroughs in healthcare, cybersecurity, manufacturing and more, with sessions on generative AI, remote sensing, cybersecurity, robotics and industrial digitalization.

Bob Pette, Nvidia vice president of enterprise platforms, speaks Tuesday morning on how the company’s computing platform enables advancements in sensor processing, autonomous systems and digital twins.

CEO Jensen Huang said this past week that demand for Nvidia’s new Blackwell GPUs is “insane.”

Looking to the stock, SA analyst Cash Flow Venue calls it one of their favorite growth picks in the modern economy, saying: “You have to judge the tree by the fruit it provides, and let me assure you – NVIDIA provides outstanding EBITDA margins translating into its cash flow generating potential.”

That’s not all on the AI front, though. Advanced Micro Devices (AMD) will hold its Advancing AI 2024 event on Thursday to showcase the next-generation AMD Instinct accelerators and 5th Gen AMD EPYC server processors. The company said it will also discuss networking and AI PC updates and highlighting its AI solutions ecosystem. And Hewlett Packard Enterprise (HPE) will also host its AI Day event on Thursday.

If that wasn’t enough for Thursday, Tesla will host its high-profile robotaxi event with the title “We, Robot” at Warner Bros. Studios in Burbank, California.

The event was originally scheduled for August 8 before Elon Musk said the company needed more time to make an important design change and to prepare to show off a few other things. The highlight of the event is likely to be the reveal of a Cybercab prototype, which is anticipated to be a two-door sedan with a front that is relatively similar to the Model 3

Influential Morgan Stanley Adam Jonas warned that the event could fail to live up to the high expectations of investors. Jonas said that other than demonstrating FSD v12.5 and offering rides in a Gen 1 Cybercab, hist team is not sure what else could be in store.

Jonas said questions that could be addressed include whether investors will see data comparing the safety of Tesla’s AV vehicle technology compared to human driving, and what are the specific critical enabling technologies to drive further improvement in FSD/cybercab autonomy. As far as moonshots, Jonas advised previously that Musk could introduce an electric plane concept, electric boat vision or a demonstration of an Optimus robot flipping burgers at a Tesla Diner

Looking to the economy, the September consumer price index arrives (of course premarket Thursday)

Headline CPI is expected to have risen by 0.2% and core CPI is seen edging up 0.1%.

Wells Fargo economists say: “Inflation drivers are poised to swap in September, with a pickup in auto prices primed to lift goods inflation and shelter inflation likely to fall back from the pop in August.”

“We look for the 12-month change in headline CPI to remain around 2.0-2.5% over the next year, which should translate into the PCE deflator hovering right around the Fed’s 2% target.”

Following the strong September jobs report on Friday, the odds have dramatically shifted on the size of Fed rate cuts. Fed funds futures now have quarter-point cut in November as a near certainty. As recently as last week odds of a 50 basis point cut were topping 70%. Traders are now pricing in just two 25 basis point cuts to see out the year, down for 100 basis points of cuts priced in right after Chairman Jay Powell’s press conference.

Eric Merlis, co-head of global markets at Citizens says: “It looks like we may be coming in for a soft landing after all.”

“While geopolitical events could still throw a monkey wrench into things, (Friday’s) jobs numbers should ease concerns about the labor market (and) should give the Fed more flexibility as it looks to continue lowering rates and it should help counter arguments that the Fed acted too late.”

Earnings season starts in earnest on Friday with the big banks. JPMorgan Chase (JPM), Wells Fargo (WFC) BlackRock (BLK) and Bank of New York Mellon (BK) issue results.

Also on the earnings calendar, PepsiCo (PEP) and Accolade (ACCD) report on Tuesday.

On Wednesday, AZZ (AZZ), Applied Digital (APLD) and Helen of Troy (HELE) weigh in.

Delta Air Lines (DAL) and Domino’s Pizza (DPZ) report on Thursday.

Fastenal (FAST) joins the banks on Friday.

In the news this weekend, Rivian Automotive (RIVN) has sought a federal loan to support the construction of a new electric vehicle plant in Georgia after a strategic shift forced the company to pause the project amid a cash crunch.

The plant is expected to be operational by Q3 2027, with full production anticipated to begin in 2028, Bloomberg News reported.

“Financially supporting the project will help Rivian bring 400,000 electric vehicles (EVs) to market and into greater use, thereby reducing overall national emissions of air pollutants and human-caused GHGs,” the DoE said.

The loan amount wasn’t disclosed and the DoE said it has yet to decide whether to grant the loan.

And Wynn Resorts (WYNN) received the first commercial gaming operator’s license issued by the United Arab Emirates as part of an ongoing multibillion-dollar project.

Wynn is building a luxury resort at Wynn Al Marjan Island in Ras Al Khaimah at a cost of $3.9 billion. That’s part of a joint venture between WYNN affiliates Marjan and RAK Hospitality Holding.

Spanning almost 62 hectares on an island extending into the Arabian Gulf, Wynn Al Marjan is set to become the first integrated gaming resort in the Middle East and North Africa. Once open in 2027, the resort is expected to have 1,542 rooms and suites, including 22 private villas.

For income investors, Micron (MU) goes ex-dividend on Monday, with a payout date of October 23.

Dollar General (DG) goes ex-dividend on Tuesday, paying out on October 22.

Heavyweight income names AT&T (T) and General Mills (GIS) go ex-dividend on Thursday. Both pay out on November 1.

And in the Wall Street Research Corner, Goldman Sachs boosted its 12-month target for the S&P 500 (SP500) to 6,300 to 6,000 and upgraded its 2025 view on earnings expansion.

A 6,300 target is 9.5% away from the close at 5,751.07 on Friday.

Goldman lifted its 2025 S&P 500 per-share earnings forecast to $268, representing +11% year/year growth. It previously projected 6% growth to $256. Strategist David Kostin also introduced a 2026 EPS forecast of $288 (+7%).

Kostin says: “The primary driver of the upward revision to our 2025 EPS estimate is greater margin expansion. We expect sales will grow by 5%, roughly in line with nominal GDP growth (vs. 4% previously).”

Goldman’s Portfolio Strategy Research desk now expects 78 basis points of net margin expansion in 2025, compared with 24 bp previously as the “macro backdrop remains conducive to modest margin expansion, with prices charged outpacing input cost growth.”

---

---