The AI Driven Melt-Up Continues at the Mobile World Congress
Plus, avoiding a government shutdown.
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* AI will be a dominant theme at Mobile World Congress 2024 this week
* Eyes will also be on Washington as we head to a government funding deadline this week
* This week brings the January core PCE Price Index and February Manufacturing PMIs
Last week was another strong week for the market, which was propelled higher by blowout quarterly results and guidance from recent Action Alerts PLUS holding NvidiaNVDA . Amid a lackluster economic calendar today, the artificial intelligence (AI) driven melt-up looks to continue as the Mobile World Congress 2024, one of the preeminent mobile industry conferences kicks off today.
Already, we've heard from Nvidia, Qualcomm QCOM , and others, but the event where "mobile technology transforms industry" includes keynotes from Dell Technologies DELL , Microsoft MSFT , Accenture ACN , China Mobile and Deutsche Telecom DTEGY will hint at what's to come in the near future. In many ways, we suspect it will replicate what we saw at CES 2024 - a wave of AI-related announcements that will be another step in moving the technology from hopium status to tangible solutions that will help drive productivity and other applications.
Already today, the following has been announced and it is favorable for our holdings:
ServiceNow NOW and Nvidia announced that they are broadening their relationship with the introduction of Now Assist for Telecommunications Service Management. This solution is built on the Now Platform and uses Nvidia AI to help boost agent productivity, speed time to resolution, and enhance customer experiences.
Qualcomm announced over 75 new large language models optimized for the Snapdragon platform. The company has also confirmed that some of these models will be powering generative AI capabilities across next-generation smartphones, PCs, IoT, XR devices, and software-defined vehicles.
Alphabet's GOOGL Google announced a new set of features for phones, cars, and wearables that uses the company's Gemini AI to craft messages, AI-generated captions for images, summarizing texts through AI for Android Auto, along with access to passes on Wear OS.
Government Shutdown?
As we catch other MWC announcements, we also be watching developments in Washington to see if Congress can once again avert a potential government shutdown later this week. Over the weekend, Speaker Mike Johnson unveiled his plan to avert a partial government shutdown this week, telling Republicans on a conference call that the House would vote on four separate appropriations bills and may need a stopgap funding bill to buy lawmakers more time.
Our thinking is that while this is getting a bit ridiculous, we are likely to see another late-in-the-game deal to avert that from happening, but like most things, we will update our thinking as fresh information becomes available.
The pace of quarterly earnings continues to abate, but still, there will be some insights on food inflation and corporate spending that investors will want to contemplate. We discussed the ones we'll be watching this week in Friday's Rundown.
Economic Data
The week's economic data brings fresh insights into inflation and the speed of the economy. Mixed with several Fed speakers sprinkled throughout the week, rate cut expectations could be pushed out further if the January core PCE price index mimics other January inflation figures, coming in above market expectations. Key areas of interest for us in Friday's February Manufacturing PMIs will be input and output costs, new orders, and employment as we get ready to receive February data for the CPI and PPI as well as the next Employment Report. In other words, the next set of must-watch data when it comes to the Fed and potential rate cuts.
Action Alerts PLUS is long NVDA, QCOM, MSFT, GOOGL.