Morning Brew: Microsoft Dominates AI Chip Purchases, General Mills Lowers Guidance

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7 days ago
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S&P 500 futures are up 20 points, Nasdaq 100 futures are up 63 points, and Dow Jones Industrial Average futures are up 150 points. The futures suggest a higher start for the market, but there's limited excitement as investors focus on today's FOMC decision at 2:00 ET and Fed Chair Powell's press conference at 2:30 ET.

Most market participants expect the Federal Reserve to reduce the fed funds rate by 25 basis points to a range of 4.25%-4.50%. The main uncertainty is how the Summary of Economic Projections (SEP), which outlines the Fed's policy path, will look.

This decision would be the third rate cut by the FOMC this year, aligning with expectations for rate cuts in 2024 from the December 2023 SEP. The last SEP in September projected a full percentage point rate reduction by 2025.

The yield on the 10-year Treasury is up three basis points to 4.41%, while the 2-year yield has increased by two basis points to 4.26%.

In specific stock developments:

Today's News

Microsoft (MSFT, Financial) has significantly outpaced its competitors in acquiring AI chips from Nvidia (NVDA, Financial), according to estimates from tech consultancy Omdia. The tech giant purchased 485,000 of Nvidia's Hopper chips this year, surpassing other major buyers like Meta (META, Financial), Amazon (AMZN, Financial), and Google (GOOGL, Financial). This move positions Microsoft as a leading player in the AI computing space, with a substantial investment in server infrastructure.

General Mills (GIS, Financial) shares dropped over 4% in pre-market trading after the company revised its fiscal 2025 revenue and profit guidance downward. The Minneapolis-based consumer foods company attributed the revision to an increase in promotional investments. Despite this, General Mills reported a 1% year-over-year increase in its FQ2 2025 organic net sales.

Oklo (OKLO, Financial) saw a rise in its stock price following the announcement of a non-binding master power agreement with Switch to deploy 12 gigawatts of its Aurora powerhouse projects by 2044. This agreement sets a collaborative framework, with expectations for binding agreements as projects reach milestones. The partnership marks a significant step for Oklo in expanding its nuclear technology footprint.

Honeywell International (HON, Financial) is under pressure from activist investor Elliott Investment Management to consider breaking up its conglomerate. Analysts at Jefferies value Honeywell's Aerospace Technologies unit at $145 a share, highlighting its potential as a standalone entity. The company is currently exploring strategic alternatives and plans to update investors during its next earnings report.

Micron Technology (MU, Financial) is in the spotlight as it prepares to release its FQ1 2025 earnings report. Analysts anticipate a robust performance with an expected revenue surge of 84% year-over-year, driven by high demand for memory chips. Wall Street projects earnings of $1.77 per share on $8.70 billion in revenue.

Affirm Holdings (AFRM, Financial) announced an expansion of its partnership with Adyen (ADYEY) to enhance payment options for Canadian merchants. This collaboration aims to broaden Affirm's reach in the fintech space by supporting Adyen's end-to-end payment solutions for platform businesses.

Nokia (NOK, Financial) secured a $45 million federal grant to advance open wireless communication networks. This funding will bolster Nokia's R&D efforts in Illinois and Texas, focusing on Open RAN technologies, which are pivotal for the future of telecommunications infrastructure.

Lennar (LEN) plans to distribute 80% of Millrose Properties' outstanding shares to its existing shareholders as part of a strategic move to focus on land purchases and development. The company will explore various methods to divest the remaining 20% of Millrose, potentially enhancing its operational focus and capital allocation.

Solid Power (SLDP) has extended its joint development agreement with Ford Motor (F) until 2025. This partnership focuses on developing solid-state batteries for automotive applications, a key area for innovation in the electric vehicle market. The extension reflects ongoing commitment and progress in battery technology development.

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Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.