HI Market View Commentary 06-02-2025
Let’s talk about the TACO Trade:
What does it stand for?= Trump Always Chickens Out
What did it just do to our markets?= Drop anywhere from 3-10% and then rebound back
Some people got out, went to bonds, lost money to the downside, lost money by NOT being in to the upside and then lost money on the bonds
There will be time when he gets pissed off and Tariffs are not coming off !!!!
The process of talking with China is currently against their culture?becasue the underlings do all the work and the presidents finish the minor details and sign
| Sunday, Jun 01 |
| Good morning! And happy June. Here’s what our Executive Editor, Brian Sozzi, is thinking about right now. |
| What Wall Street might be missing on Nvidia Decoding a public company’s earnings report in the 24 hours after its release can be maddening. Here’s why. A company that beats on sales and earnings estimates could see its stock pounded after one slip of the tongue from a CEO or CFO on the earnings call (which you can now listen in on with Yahoo Finance). Look at the 20% plunge Gap’s (GAP) stock took on Friday after the company reported across-the-board beats but issued a tariff warning many should have seen coming. Gap CEO Richard Dickson made a compelling case on the state of the business on Yahoo Finance. A company that misses on sales and earnings estimates could see its stock price skyrocket as analysts and investors reason “bad news” like this was “priced into the stock” months ago. What was not priced in? The positive hype about future growth on the earnings call. Maddening. I have generally been on the side of the fence that says companies don’t deserve passes for missed numbers or bad quarters that weren’t properly guided. The numbers are the numbers. You assess them, crunch them, ponder them further, repeat this process 75 more times, and make a decision on the stock. It’s not rocket science. To that end, I don’t believe AI chip darling Nvidia (NVDA) fully deserves the free pass it got this week for a confusing quarter that was un-Nvidia-like. It reported adjusted earnings per share of $0.81, compared to estimates of $0.93, though the company posted a second (adjusted) EPS figure of $0.96 after excluding “H20 charge and related tax impact.” In other words, the $0.96 figure represents what Nvidia would’ve made had its China business not gone poof courtesy of Trump’s chip export control — a reality that does not exist. Nvidia has earned a legion of fans on Wall Street through years of strong execution and fundamentals. Analysts have been quick to “exclude” the fall of its once-lucrative China business. Every single research note after the results was chock-full of “let’s blow more smoke for the Nvidia bulls.” Price targets were hiked. All the Nvidia positives were bolded in the PDF docs. Sure, CEO Jensen Huang made a point to mention on the earnings call that demand for the company’s AI chips remains strong. Profit margins will likely trend back to historically normal levels later this year, CFO Colette Kress said. But in my view, the earnings still fell far short of a consensus figure — and one that investors have little visibility into this round. The uncertainty of the China impact led analysts to estimate figures that included and didn’t include the H20 loss. What made up the final consensus estimate? It’s anybody’s guess. And how do you ignore a giant chunk of Nvidia’s sales in China simply vanishing? How do you completely wipe that out of your forecast model and think earnings power will still be the same? That loss will put pressure on all other areas of the operation to accelerate in the near term, medium term, and long term. |
| I dig what Jensen said about the potential for robotics. I’m just not sure it’s going to drastically drive Nvidia’s business in the next eight quarters like the China business would have. Am I off the mark here? Should one only look at the many positives of Nvidia all the time? I am curious. Get at me on X @BrianSozzi. I always enjoy hearing new perspectives. I want to conclude by saying I don’t hate Nvidia. It’s more of a challenge to you to always question the “consensus” view on a stock. |
| Morning Brief is written and edited by Ethan Wolff-Mann. Follow all the action throughout the day on Yahoo Finance and on the Yahoo Finance app. |
OK I also subscribe to the Morning Brief and your email gave me some food for thought. I’m not sure who Brian Sozzi is other than the self proclaimed executive editor. Then I did some research and he’s pretty important to Yahoo Finance. But he screwed up and maybe doesn’t like NVDA as a whole or maybe he’s lost money on a short positions? Why am I saying all this? The consensus estimates for NVDA were in the $0.73-$0.76 range for most reports I saw. The high side was $0.80 just before earnings and they beat with an $0.81 Consensus went higher over the week but Brian said $0.93 estimate which should have been a $0.73 estimate. For an editor he blew it and then when you research even more it seems like he is covering his tracks. This typo might cost him his credibility. From the internet:
For NVDA’s April 2025 earnings call, the consensus estimate for earnings per share (EPS) was $0.80, and the consensus revenue estimate was $43.28 billion. A FactSet-compiled Wall Street forecast included revenue growth of 66% to $43.3 billion and earnings per share growth of 40% to $0.73. Yahoo Finance analysts on average expected a quarterly revenue of $43.28 billion, which was 66% higher year-over-year, and adjusted net income of $21.13 billion, or $0.86 per share, up from $15.24 billion, or $0.61 per share, a year earlier Investopedia.
So here is the question?= Will they continue to make more and be more profitable in the future with all the crap going on? IF you can say yes then you move forward investing with the company.
Facts = Revenue of 44.1 billion up 12% quarter over quarter and up 69% year over year. Very hard to argue with those numbers
More important = FREE CASH FLOW which makes building and continuing to operate a business cheaper especially in the uncertainty of the US Economy. 60.853 billion revenue ending 2024 up from 24 billion the year earlier and then another 19.894 Net income and free cash flow for the quarter over 15 billion.
https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2026
So IF you work the numbers NVDA looks like it has at least 3 to 5 years of hyper growth still before the law of large numbers attacks this stock. Don’t forget their cash cow of Data center growth was up 10% q/q and 73% y/y which is just unheard of even with losing China as a buyer.
Now everyone can spin the numbers any way they want to. For me it is simple. Growth q/q and y/y in sales, revenue, net income and cash on hand. When a company hits on all 4 it is a sure thing for me to invest in. This is why the mag7 have been so much growth in the S&P 500 while the other 493 stocks have been mostly stagnant over the last three years. More importantly who do you want to invest in when the tightening of money, less foreign investors and with tariffs in place? Cash cows that can avoid these major business constraints would be my bet. I hope this give you some insight to what Keve and I spend our days doing!! I wish we just had days off LOL !!!
Earnings
MU 06/25 AMC
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 30-May-25 13:09 ET | Archive
Some real potential for a pickup in spending
Column Summary:
*Consumers saved more and spent less in April, likely due to economic uncertainty and tariff concerns.
*Personal income and real disposable income, though, rose robustly in April.
*There is pent-up spending potential in the higher savings rate and healthy increase in real disposable personal income.
The markets got the reciprocal tariff pause that refreshes in the month of April, and today they got a Personal Income and Spending Report for April that held some refreshing potential.
The latter is decisively true on the income side, as personal income increased a robust 0.8% month-over-month, while real disposable personal income jumped 0.7%. That is the fuel for spending activity that promises to keep the economy on a growth track.
Some Hard News
Not long ago, there were ruminations that the economy was destined to slip into a recession. Those ruminations came rushing into the market narrative when the reciprocal tariffs were announced on April 2, yet they rushed back out to a large extent when the 90-day pause on global reciprocal tariffs was announced on April 9, excluding China, and then again in mid-May when China was ultimately brought into the reciprocal tariff pause fold.
The recession concerns were stoked by reports of a collapse in consumer sentiment, yet that soft survey data was never truly corroborated by the hard economic data. The Personal Income and Spending Report is a piece of “hard data,” and it was not hard to see in it that the consumer has the capability to keep spending.
The report, though, also captured the reality that consumers moderated their spending in April amid the heightened stock market volatility and the on-again-off-again tariff approach.
To wit: real disposable personal income increased 0.7%, yet real personal spending increased only 0.1%, with spending on goods declining 0.2%; meanwhile, the personal savings rate, as a percentage of disposable personal income, jumped to 4.9% from 4.3%.
What this suggests is that consumers made a push to save more and spend less. This is a natural response in an environment riddled with uncertainty, talk of potential job losses, and chatter about a possible recession.
Those issues were mitigated to a decent extent by the tariff pauses and a burgeoning belief that the impact of the tariffs won’t be as bad as initially feared. Time will tell, but the writing is also on the wall of the Personal Income and Spending Report that there is pent-up spending potential that will be good for the economy if it is unleashed.
Briefing.com Analyst Insight
Here again the personal savings rate is a focal point. It is the highest it has been since May 2024, but the gain in real disposable personal income is the real source of excitement. It accelerated to 2.9% year-over-year from 2.1% in March.
Source: FactSet
The year-over-year gain in real disposable personal income in January was just 1.3%. There is room for further improvement, which may come to fruition if the reconciliation bill gets passed by Congress, but for now the trajectory is on the right path and bodes well for continued spending growth.
Not only are most people still gainfully employed, they are earning more in real terms. That is the key for discretionary spending activity, along with the confidence one has in their job security.
It is understandable why there was a moderation in spending in April, but with stock prices soaring from their April 7 low, tariff fears ebbing, and layoff activity still modest, as seen in the initial jobless claims readings, there is ample reason to think the U.S. consumer will remain a mainstay of support for the U.S. economy and that the economy will continue on a growth track in the second quarter.
—Patrick J. O’Hare, Briefing.com
Where will our markets end this week?
Lower
DJIA – Bullish
SPX – Bullish
COMP – Bullish
Where Will the SPX end June 2025?
06-02-2025 -2.0%
Earnings:
Mon: CPB,
Tues: DG
Wed: DLTR, GCO, PVH
Thur: DOCU, MTN, AVGO
Fri:
Econ Reports:
Mon: Construction Spending, ISM Manufacturing
Tue Factory Orders
Wed: MBA, ADP Employment, ISM Services, Beige Book
Thur: Initial Claims, Continuing Claims, Productivity, Trade Balance, Unit Labor Costs,
Fri: Average Workweek, Non-Farm Payroll, Private Payroll, Hourly Earnings, Unemployment Rate, Consumer Credit
How am I looking to trade?
Mostly letting things run as we have since companies’ earnings
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
META did move another $23 and still has over $70 to get back to highs
Yes for the 700ish leap calls that we took off short calls and possibly already dollar cost Averaged
Goldman Sachs Says These 2 ‘Magnificent Seven’ Stocks Offer the Most Upside in the Group
Michael MarcusMay 25, 2025, 07:58 PM
The stock market seesaw is in full swing, with last week’s downturn ending a streak of winning sessions. The rapid oscillations can be hard to track – but Goldman Sachs strategist David Kostin is on the case, searching for upside in a challenging macro environment.
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Specifically, Kostin is recommending the ‘Magnificent 7’ stocks as a place to find relative bargains. That may seem odd, since these mega-cap names aren’t exactly cheap – but Kostin points out that the tech leaders have dropped to a relative low compared to the rest of the S&P 500 and are now trading at their most attractive levels in the past six years.
Around the Web
At the same time, Kostin notes that the Mag 7 stocks have outpaced the S&P in earnings growth this year. In Q1, the group posted a collective 28% year-over-year increase in earnings, compared to just 9% for the broader index.
Against this backdrop, the stock analysts at Goldman Sachs are highlighting two Mag 7 stocks in particular as offering the best upside potential in the group. To see whether this bullish stance is echoed more broadly, we turned to the TipRanks database to check how the rest of Wall Street views these names. Here are the details.
Alphabet (GOOGL)
The first Magnificent 7 stock we’ll look at is Alphabet, the parent company of both Google and YouTube – and, through them, the undisputed leader in online search. Alphabet has long used this dominance to build and sustain its position in digital advertising, which remains its most lucrative business. By capturing vast amounts of data on user behavior, search patterns, and online preferences, Alphabet has developed an unmatched ability to deliver precisely targeted ads.
In addition to its advertising business, Alphabet is also a key player in the fields of cloud computing and AI. The company’s Google Cloud platform is one of the three largest subscription cloud services, alongside AWS and Microsoft’s Azure.
Alphabet is also staking out a strong position in AI. The company’s database, already alluded to, is a tremendous resource for training AI models, and Alphabet uses the technology to enhance its Google search engine and its ad placement capabilities. In addition, Alphabet is moving into generative AI with Google’s Gemini model. Combining these paths, Google’s ‘AI Mode,’ a new option on the search engine, makes use of Gemini 2.5 to provide AI-generated enhancements to the search results.
We should note that Alphabet, and particularly its Google subsidiary, is facing a serious headwind in the form of a Department of Justice antitrust lawsuit. In April of this year, the DOJ secured a favorable ruling in the U.S. District Court for the Eastern District of Virginia, which found that Google had illegally monopolized key segments of the digital advertising technology stack – including its ad exchange and publisher ad server. The court concluded that Google used its dominant position to stifle competition. Alphabet has announced plans to appeal the decision.
Also in April, not long after the DOJ ruling, Alphabet released its 1Q25 financial results. At the top line, Alphabet’s total revenue came to $90.23 billion, up 12% year-over-year and beating the forecast by $1.08 billion. The revenue total included $77.3 billion from Google Services (Google search and other; Google subscriptions, platforms, and devices; and YouTube ads), along with $12.3 billion from Google Cloud (Google Cloud; AI infrastructure; generative AI solutions). Google Cloud led the way in year-over-year gains, at 28%; Google Services was up 10%.
Alphabet’s bottom-line earnings came to $2.81 per share, up 92 cents per share year-over-year, or 49%, and 80 cents ahead of expectations.
Goldman analyst Eric Sheridan believes that the increasing combination of digital advertising and AI will drive Alphabet’s growth going forward.
“Digital advertising is, in our view, one of the few subsectors within our coverage where AI is seeing early adoption and monetization. Against this backdrop (and taking into account Google’s incremental product announcements at Marketing Live), we continue to see Alphabet as well positioned to capitalize on the theme of AI longer-term given its leading AI capabilities, infrastructure advantage and benefits of scale with respect to both users and advertisers to deploy new AI tools & services over the medium term. While investor debates remain around medium-/long-term computing shifts, financial implications of the rise of AI/ML, competitive dynamics and regulatory developments, we remain constructive on the mix of Alphabet’s businesses and their operating profile in the coming years,” Sheridan opined.
To this end, Sheridan puts a Buy rating on GOOGL, and his $220 price target implies a one-year upside potential of ~31%. (To watch Sheridan’s track record, click here)
The broader Street is also firmly on board. Alphabet boasts a Strong Buy consensus, based on 37 analyst ratings that break down to 28 Buys and 9 Holds. Currently trading at $168.47, the stock has an average price target of $197.69, leaving room for a ~17% gain in the coming year. (See GOOGL stock forecast)
Apple (AAPL)
Next up is Apple, one of the world’s most recognizable brand names. Over the decades, the company has evolved far beyond its origins in personal computing to offer a diverse lineup of iPhones, iPads, Macs, and wearable devices—supported by a robust and growing services segment. It’s no surprise that Apple became the first publicly traded company on Wall Street to surpass a $1 trillion market capitalization.
But even a giant like Apple isn’t immune to geopolitical pressures. In recent months, the company has found itself caught in the crosshairs of President Trump’s shifting tariff policies. With major exposure to Chinese markets and a global supply chain spanning multiple countries, Apple remains particularly vulnerable to disruptions in international trade. That vulnerability was underscored at the end of last week, when President Trump announced plans to impose a 25% tariff on iPhones not manufactured in the US.
Keeping that in the background, we can look at the fiscal 2Q25 results that Apple released earlier this month. The company has arranged its fiscal calendar so that Q1, covering the holiday shopping season, shows the strongest results. Fiscal Q2 typically shows a drop-off in both revenues and earnings, and we saw that in this report. While down from Q1, Apple’s $95.4 billion Q2 total revenue was up 6% year-over-year and beat expectations by $840 million. The company’s bottom-line EPS in the quarter, $1.65, was up 12 cents per share from the year-ago period, and was 3 cents above the forecast.
The drill-downs behind the revenue totals are instructive. Apple faced slowing sales in China during the March quarter, and the $16 billion in sales there was $830 million less than had been expected. We should note that the drop in Chinese sales came before Trump’s tariff announcements, and is more reflective of increased competition from China’s domestic smartphone market, especially Huawei, the country’s leading tech company. Looking ahead, Apple is predicting a likely $900 million hit during Q3 from tariff impacts.
On a more positive note, Apple’s Services segment grew 12% year-over-year and reached an all-time high for quarterly revenue in fiscal 2Q25, of $26.6 billion. Under the company’s Product sales, the iPad and Mac lines stood out, with year-over-year gains of 15% and 7% respectively. While iPhone sales grew only 2% year-over-year, Apple management reported that it did not see evidence of customers bringing product sales forward to avoid potential tariffs.
That last factor marks the starting point for Michael Ng’s review of Apple stock. The Goldman Sachs analyst goes on to outline why Apple remains a sound investment.
“AAPL reported that they did not see any obvious evidence of a pull forward in demand in the March quarter related to tariffs & that channel inventory at the beginning and the end of the quarter was at similar levels, implying that AAPL was not selling into the channel to get ahead of tariffs. We are encouraged that iPhone upgraders grew double digits % year over year – reflecting the all time high iPhone active installed base – with iPhone as the top selling model in the US, urban China, UK, Germany, Australia, and Japan… We reduce our F2025/26/27 EPS by 3% on average to $7.16/$7.80/$8.80 on lower gross margins, but are encouraged by continued strong demand signals across Apple products and services,” Ng noted.
Ng backs his bullish outlook on AAPL shares with a Buy rating and a $253 price target, projecting a 30% upside over the next 12 months. (To watch Ng’s track record, click here)
Looking at the broader Street sentiment, Apple has attracted 29 recent analyst ratings, breaking down into 17 Buys, 8 Holds, and 4 Sells. This mix lands the stock a Moderate Buy consensus. With shares currently trading at $195.27 and the average price target sitting at $228.22, analysts are eyeing a potential ~17% upside over the next 12 months. (See AAPL stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
“We’ve Always Been on the Offensive”: Disney Stock (NYSE:DIS) Slips Despite Plans to Fight Epic Universe
Steve AndersonJun 02, 2025, 11:32 AM
Disney stock slips as it has no real plan to address the opening of Comcast’s Epic Universe, and also faces a new lawsuit from a big guy who hit a waterslide far too hard.
Entertainment giant Disney DIS -0.65% ▼ puts a lot into its parks. That is actually where a lot of Disney’s fortunes got their start, after all. And with the rise of competing movies and parks like Comcast’s CMCSA -1.06% ▼ Epic Universe, Disney is not taking all this competition lightly. In fact, it recently offered up something of a battle plan to effectively take on the new parks. Investors proved skeptical, though, and sent shares slipping in Monday afternoon’s trading.
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One of the biggest features of that new plan is an international expansion. Disney is poised to open a new park in Abu Dhabi, reports note, and that will be a huge deal, cracking open a major market and opening up a field that has been previously underrepresented. Disney representatives pointed out that Abu Dhabi is, roughly, a four-hour plane ride from about one-third of the world’s population, which makes it an excellent potential venue for new customers.
But perhaps the oddest part of the plan is that there really is no plan at all. Disney has a long-range plan, noted representatives, and is not based on what the competition does. “If we just go back five or 10 years and you think about what’s happened at Walt Disney World, we’ve always been on the offensive. You’ll never find us in a defensive position.”
Big Guy Hits Waterslide. Hard.
But with Disney’s impressive power in rides comes a certain amount of risk. Reports noted a 334 pound man recently decided to tackle a waterslide at a Disney park: the Downhill Double Dipper. The man, Eugene Strickland, subsequently suffered “catastrophic injuries” after the ride, and is suing Disney for $50,000 in damages.
The suit will likely be tough for Strickland to win, though, as reports noted that he was 30 pounds over the ride’s weight limit when he went down the slide in question. Reports note that Strickland “…became momentarily airborne” on the slide, and thus fell onto the slide’s hard plastic surface hard enough to cause injury. The lawsuit points to the waterslide’s design as well as its “exhilarating speeds” as problems, but then, that would kind of be the point, would it not? Reports also note it was unclear whether or not Strickland was warned at some point about the weight limit.
Is Disney Stock a Buy or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 14 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 9.99% rally in its share price over the past year, the average DIS price target of $123.56 per share implies 9.71% upside potential.
The U.S.′ AI love affair with the UAE isn’t just about access — it’s about dominance
Published Wed, May 28 20252:16 AM EDTUpdated Wed, May 28 202511:24 AM EDT
- The U.S. currently makes the world’s most advanced semiconductor chips, while the UAE has the abundant cheap energy to power enormous AI data centers.
- The two countries’ AI alliance has already seen hundreds of billions of dollars in investment between firms like Nvidia, Microsoft, OpenAI, and the UAE’s G42, Mubadala and MGX.
- The partnership has huge implications for the global AI race, national security, geopolitical power, and competition with China.
UAE President Sheikh Mohamed bin Zayed Al Nahyan (R) welcomes his US counterpart Donald Trump upon arrival at the presidential terminal in Abu Dhabi on May 15, 2025.
Giuseppe Cacace | Afp | Getty Images
DUBAI, United Arab Emirates — Deep in the oil-rich deserts of the Middle East, the United Arab Emirates is on a mission to establish supremacy in the field of artificial intelligence.
Seven thousand miles across the planet, the United States, led by President Donald Trump, wants American firms to dominate the global AI race.
While their goals may be separated by continents, their ambitions are strikingly aligned.
The U.S. currently makes the world’s most advanced semiconductor chips, while the UAE and neighboring Gulf countries have the abundant, cheap energy needed to power enormous AI data centers. The two countries have been allies for half a century, and Abu Dhabi embraced Trump during the U.S. president’s visit this month with unprecedented fanfare and investment pledges, many of which focused on tech and AI.
In the eyes of many investors, financial leaders, and political powers players from Silicon Valley and Washington to Abu Dhabi and Dubai, the two countries’ ever-strengthening AI alliance — to which hundreds of billions of dollars have already been committed — is a match made in heaven.
“Energy‑rich Gulf nations join the roster of trusted partners just as U.S. data‑center grids hit their physical limits,” Myron Xie, an analyst at SemiAnalysis, told CNBC.
At the same time, “the UAE gains access to advanced compute and talent, helping it pursue its own sovereign AI goals,” Xie said. “The Middle East, flush with cheap energy and capital, is poised to become the next regional AI hub.”
OpenAI announces Stargate UAE, in partnership with Nvidia, Oracle, SoftBank, Cisco, G24
In the UAE, the developments are part of a long-term strategy by the Gulf sheikhdom to position itself as a global leader in AI. This, the country’s leadership holds, will enhance its geopolitical influence, diversify its economy beyond crude oil dependency, and assert itself as a technological powerhouse.
The goal for Washington is clear: to ensure American companies lead the global AI race with China and spread American tech around the world.
Trump’s Middle East visit in mid-May — which featured stops in Riyadh, Doha, and Abu Dhabi — saw the announcement of over $200 billion in commercial deals between the U.S. and the UAE. This brought the total of investment agreements in the Gulf region, including those from Saudi Arabia and Qatar, to over $2 trillion.
As part of the Abu Dhabi deals, OpenAI, Oracle, Nvidia and Cisco Systems announced that they will help build Stargate UAE AI campus launching in 2026. The Stargate Project is a $500 billion private sector AI-focused investment vehicle, announced by OpenAI in January in partnership with Abu Dhabi investment firm MGX and Japan’s SoftBank.
The companies said an initial 200-megawatt AI cluster should launch in Abu Dhabi next year. And the AI campus deal means the UAE gets access to many of Nvidia’s latest chips, American technology and software.
It’s the kind of agreement that would have faced restrictions under the previous U.S. administration, but Trump has looked to change the way is approaching tech export restrictions.
His administration plans to rescind a Biden era “AI diffusion rule,” which imposed strict export controls on advanced AI chips even to U.S.-friendly nations. that doing away with these limits could open the door for the sensitive American technology to end up in the hands of rivals like China — a topic of ongoing debate among U.S. lawmakers and security professionals.
‘Compute, not crude’
Once known primarily as a partnership centered around oil exports and weapons purchases, the pillars of the U.S.-Gulf relationship are changing, says Mohammed Soliman, senior fellow at the Middle East Institute in Washington DC.
“Compute, not crude, is going to be the central pillar of the U.S.-Gulf relationship,” Soliman said. “Moving forward, it’s no longer going to be only about energy policy; it is going to be about compute and how we and the Gulf are building an AI ecosystem that’s able to service third markets, emerging markets.”
Compute, in the context of AI, refers to the computational resources, like hardware and processing power, needed to train and run AI models.
“And this is a huge inflection point for the relationship [compared to] where we were a few years ago,” Soliman said, speaking on a Middle East Institute podcast recorded on May 19. “Moving forward, the relationship is going to be much more impactful on technical questions around AI, data centers, and chips than ever before.”
U.S. leading the Gulf in AI race: Arab Gulf States Institute
Notably, the UAE has bet fully on a U.S.-led AI future — a particularly salient point within the context of U.S.-China competition.
Emirati AI company G42, which has major partnerships with OpenAI, Nvidia and Microsoft, to name a few, has fully divested from Chinese companies — including an estimated $100 million stake in TikTok owner ByteDance — to avert U.S. Commerce Department sanctions and retain access to Nvidia chips and other U.S. technology that powers AI applications.
“So far right now, we are racing to have the best large language model and ultimately to have AGI (artificial general intelligence),” said Baghdad Gherras, a UAE-based venture partner at Antler, which invests in early-stage AI ventures.
AGI generally refers to artificial intelligence that is smarter than humans, though definitions vary.
“For the UAE, if they want to be a leader in the AI race, the first thing that they have to secure is compute. If you don’t have compute, you won’t have a seat in terms of AI leadership,” Gherras told CNBC.
He added that the UAE “decided to re-shift the geo-economic focus from China to the U.S., because they understood that Nvidia makes by far the best chips for AI, but also the entire semiconductor supply chain is mostly in Taiwan.”
Still, Gherras noted, China “is catching up really fast, crazy fast.”
‘Tremendous level of influence’
The UAE’s development of its own large language model (LLM), Falcon AI, represents a major step for the region in AI development — but it also provides the foundation for the country’s geopolitical and economic ambitions to dominate the AI market within the next decade.
Such a position would also enhance the Emirates’ diplomatic leverage, allowing it to play a more influential role in global tech governance and policy discussions.
OpenAI CFO on UAE partnership: It’s ‘OpenAI for countries’
“If those ambitions become reality, you might see the Gulf acting as a region that offers compute as a service for the rest of emerging markets,” the Middle East Institute’s Soliman said.
“Think about the Gulf as a place that houses large language models in Swahili, in Hindi, in these languages, and they are able to offer housing data, training data, inference for all these economies, because they have the infrastructure,” he added. “So they become their AI leader for the emerging markets.”
“And this is a tremendous, tremendous level of influence, tremendous level of development,” Soliman emphasized. “Where they used to serve as energy producers, to become a back-end for AI applications — this is really, really massive.”
U.S. pushes American AI
Part of the U.S.’s push in the UAE and the broader region comes down to a desire for American technology to establish supremacy globally and push back the advances of China.
On the one hand, U.S. export curbs have restricted access for companies like Nvidia to sell advanced technology to China. It has also stopped China access some technology to advance its own development in areas like semiconductors and AI.
At the same time, Washington is opening up new markets, like the Middle East, to its biggest tech companies.
“The move has a political angle, as it bolsters the U.S. compute supply chains while constraining China. It grants the U.S. an edge in the AI arms race, positioning the country for continued leadership,” David Meier, economist at Julius Baer, said in note earlier this month.
Silicon Valley uses China competition as excuse to push for lighter regulation
Beijing and Chinese companies have been trying to access new markets to push their technology across the globe, especially in areas like AI. But the U.S. has been working to entrench itself first and strike partnerships with governments to do so.
“The race is on to diffuse U.S.-based AI into every part of the world,” Daniel Newman, CEO of Futurum Group, told CNBC on Tuesday.
American companies have taken up the call. OpenAI, which struck a deal with the UAE last week to build AI infrastructure and roll out ChatGPT nationwide, has positioned itself as a countermeasure to China and as the business able to deliver U.S. artificial intelligence to countries around the world.
In February, OpenAI’s chief global affairs officer Chris Lehane told CNBC that the company sees a world in which there are two major AI models — one led by China’s Communist Party and a U.S.-led “small ‘d’ democratic” AI.
“If you’re a country and you’re looking to build your own AI ecosystem, your own AI hub, you’re building developers in your country which are going to be some version of the companies of the future, I think you would prefer to be seeing that built on a democratic AI system because it is going to facilitate your country being able to use this technology for your own nation building purposes,” Lehane said.
— CNBC’s Dylan Butts contributed to this report.
Federal trade court strikes down Trump’s reciprocal tariffs
Published Wed, May 28 20257:52 PM EDTUpdated Thu, May 29 202512:08 PM EDT
Christina Wilkie@in/christina-wilkie-6004564/@christinawilkie
Kevin Breuninger@KevinWilliamB
Key Points
- A federal trade court struck down President Donald Trump’s worldwide reciprocal tariffs and ordered the administration to stop collecting them.
- A three-judge panel on the Court of International Trade said Trump exceeded “any authority granted” by the International Emergency Economic Powers Act in imposing the import levies.
- In halting tariffs Trump ordered on Canada, Mexico and China to combat drug trafficking, the judges said they “fail because they do not deal with the threats set forth in those orders.”
- The government immediately appealed the ruling to the U.S. Court of Appeals for the Federal Circuit.
U.S. federal trade court strikes down Trump’s reciprocal tariffs
The U.S. Court of International Trade on Wednesday blocked steep reciprocal tariffs unilaterally imposed by President Donald Trump on scores of countries in April to correct what he said were persistent trade imbalances.
The ruling deals a potentially serious blow to the Republican president’s economic agenda and ongoing efforts to negotiate trade deals with various nations.
Dow futures jumped 500 points on news of the ruling, which the Trump administration immediately appealed to the U.S. Court of Appeals for the Federal Circuit.
The Supreme Court could end up having the last say in the case.
In its ruling, a three-judge panel on the Court of International Trade said that the International Emergency Economic Powers Act, which Trump invoked to impose the tariffs, does not authorize a president to levy universal duties on imports.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the judges wrote.
And separate, specific tariffs on Canada, Mexico and China related to drug trafficking “fail because they do not deal with the threats set forth in those orders,” the panel wrote.
Implementing tariffs typically requires congressional approval.
But Trump chose to bypass Congress by declaring a national economic emergency under IEEPA, which became law in 1977, and then using the purported emergency as justification for cutting Congress out of the process.
The panel not only ordered a permanent halt to the tariffs at issue in the case, but it also barred any future modifications to them.
The Trump administration was given 10 days to make the necessary changes to carry out the judges’ orders.
Several existing tariffs on specific products like aluminum and steel are not impacted by Wednesday’s ruling, because the president did not invoke IEEPA powers to justify their necessity.
White House spokesperson Kush Desai, in a statement on the ruling, said, “Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits.”
“These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base – facts that the court did not dispute.”
“It is not for unelected judges to decide how to properly address a national emergency,” Desai added.
One of the lead plaintiffs in the case, Oregon Attorney General Dan Rayfield, called the ruling “a victory not just for Oregon, but for working families, small businesses, and everyday Americans.”
“President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating,” Rayfield said in a statement.
“They triggered retaliatory measures, inflated prices on essential goods, and placed an unfair burden on American families, small businesses and manufacturers.”
Trade expert Jack Slagle called the ruling “a significant setback for the administration, which has leaned heavily on IEEPA to impose tariffs at will against China, Mexico, Canada, and everywhere else.”
But, “even if the Supreme Court doesn’t hold up the tariffs, it doesn’t necessarily mean the end of tariffs on imported goods,” said Slagle, founder of NexINT Global, in an email to CNBC. “It may not even result in a relative pause of the trade conflict.”
“We can expect that the president and his trade advisors will be reviewing all options, and to be clear, this is all far from over,” he said.
Wednesday’s ruling responded to two separate lawsuits challenging Trump’s tariffs.
One suit was filed by a group of state attorneys general. The other suit was filed by five American businesses that rely on goods imported to the U.S., which are affected by tariffs.
The three-judge panel said in its ruling that Trump’s tariff orders were “unlawful as to all,” not just to the plaintiffs.
Trump, on April 2, unveiled sweeping reciprocal tariffs on imports from nations around the world, ranging from 11% to 84%.
Days later, on April 9, he issued a 90-day pause in the duties, but kept in place the 10% baseline tariffs on most products entering the country.
The panel in its ruling Wednesday said it did not see a clear connection between the purported emergency that Trump was using to justify the tariffs that responded to drug trafficking, and what tariffs can do in practice.
Trump had argued at the time that a 25% tariff on goods from Mexico and Canada, and a 10% levy on imports from China, were urgently necessary because the countries had failed to “arrest, seize, detain, or otherwise intercept” drugs and drug traffickers.
But the judges found that there was no clear link between the president’s stated goal of cutting international drug trafficking, and the method Trump was using to pursue it: charging import duties on legal trade.
“Customs’s collection of tariffs on lawful imports does not evidently relate to foreign governments’ efforts ‘to arrest, seize, detain, or otherwise intercept’ bad actors within their respective jurisdictions,” the panel said.
https://www.cnbc.com/2025/05/29/blocked-trump-tariffs-trade-court-appeal.html
Trump tariffs reinstated by appeals court for now
Published Thu, May 29 20253:12 PM EDTUpdated Thu, May 29 202511:40 PM EDT
Kevin Breuninger@KevinWilliamB
- A federal appeals court granted the Trump administration’s request to temporarily pause a lower-court ruling that struck down most of President Donald Trump’s tariffs.
- The administration had told the U.S. Court of Appeals for the Federal Circuit that it might seek “emergency relief” from the Supreme Court.
- Trump officials including Peter Navarro and Stephen Miller heaped criticism on the trade court judges following their ruling.
Trump tariffs reinstated by appeals court for now
A federal appeals court on Thursday granted the Trump administration’s request to temporarily pause a lower-court ruling that struck down most of President Donald Trump’s tariffs.
The Trump administration had earlier told the U.S. Court of Appeals for the Federal Circuit that it would seek “emergency relief” from the Supreme Court as soon as Friday if the tariff ruling was not quickly put on pause.
The judgment issued Wednesday night by the U.S. Court of International Trade is “temporarily stayed until further notice while this court considers the motions papers,” the appeals court said in its order.
The pause gives the Trump administration some breathing room as it prepares to argue that the trade court’s ruling should be halted for the duration of the appeals process.
Trump officials insist that they have other options for imposing tariffs if they do not prevail in the case.
“Even if we lose, we will do it another way,” Trump trade advisor Peter Navarro told reporters at the White House on Thursday afternoon.
Nonetheless, the Wednesday night ruling destabilized a pillar of Trump’s economic agenda: His tariff-fueled campaign to reshape global trade.
Already, the ruling appeared to have weakened the Trump administration’s position in a series of bilateral trade negotiations already underway.
“This decision is being hailed all over the World by every Country, other than the United States of America,” Trump wrote on social media late Thursday.
“If allowed to stand, this would completely destroy Presidential Power — The Presidency would never be the same!” he added, before calling the ruling, “the harshest financial ruling ever leveled on us as a Sovereign Nation.”
The three-judge trade court panel — which included a Trump appointee — invalidated all of Trump’s “reciprocal” tariffs and other duties.
The judges found that the 1970s-era law Trump had invoked to enact those tariffs, the International Emergency Economic Powers Act, does not “confer such unbounded authority” to presidents.
The nationwide, permanent block they imposed covered all of the retaliatory tariffs that Trump issued in early April as part of his sweeping “liberation day” plan to reshape international trade with the rest of the world.
The ruling also barred the administration from making any future modifications to the tariffs in question. The court gave the administration 10 days to make the necessary changes to carry out the orders.
The government filed a notice of appeal shortly after the judgment came down. It asked the trade court to pause any enforcement of its ruling while the appeal process played out, while also seeking “at least interim relief” from the federal appellate court.
The appeals court gave the plaintiffs — a group that includes state attorneys general and a handful of domestic businesses — one week to respond to the administration’s bid for a stay pending appeal. The government will then have until June 9 to reply.
Jeffrey Schwab, a lawyer for the business plaintiffs, called Thursday’s pause “a procedural step as the court considers the government’s request for a longer stay pending appeal.”
“We are confident the Federal Circuit will ultimately deny the government’s motion shortly thereafter, recognizing the irreparable harm these tariffs inflict on our clients,” Schwab said in a statement.
Both sides seem prepared for the case to advance rapidly to the nation’s highest court.
“Hopefully, the Supreme Court will reverse this horrible, Country threatening decision, QUICKLY and DECISIVELY,” Trump wrote Thursday.
JPMorgan’s Jamie Dimon calls on US to stockpile bullets, rare earth instead of bitcoin
By
Emma Colton, Fox News
Published May 30, 2025, 8:23 p.m. ET
Congressman Rich McCormick snaps at CNN host Kaitlin Collins over Trump’s $400M jet giftCongressman Rich McCormick snaps at CNN host Kaitlin Collins over Trump’s $400M jet gift
The United States should stockpile guns, ammunition and drones instead of bitcoin, JPMorgan Chase CEO Jamie Dimon said Friday at the inaugural Reagan National Economic Forum in California.
“We shouldn’t be stockpiling bitcoins,” Dimon said when asked about how industrial policy is entwined with national security policies during a panel.
“We should stockpiling guns, bullets, tanks, planes, drones, you know, rare earths. We know we need to do it. It’s not a mystery.”
Bitcoin is a decentralized digital currency that operates outside of banking or government authority.
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President Donald Trump signed an executive order in March establishing a Bitcoin reserve, which he described as “a virtual Fort Knox for digital gold.”
“We should be stockpiling bullets,” he continued.
“Like, you know, the military guys tell you that, you know, if there’s a war in the South China Sea, we have missiles for seven days. Okay, come on. I mean, we can’t say that with a straight face and think that’s okay. So we know what to do. We just got to now go about doing it. Get the people together, roll up our sleeves, you know, have the debates.”
Dimon joined a fireside chat during the Reagan National Economic Forum in Simi Valley, California, at the Reagan Presidential Library Friday for a sweeping discussion on the economy and how the world’s “tectonic plates are shifting” in geopolitics in the form of wars, proxy terrorists and the potential proliferation of nuclear weapons.
At the inaugural Reagan National Economic Forum in California, JPMorgan Chase CEO Jamie Dimon said the United States should stockpile guns, ammunition, and drones instead of bitcoin.POOL/AFP via Getty Images
Dimon underscored during his address that he does not view China as America’s top adversary, and instead pointed his attention to the “enemy within” that could lead to the U.S.’ status as the world’s leader crater.
“I’m not as worried about China,” Dimon said.
“China is a potential adversary. They’re doing a lot of things well, they have a lot of problems. But what I really worry about is us. Can we get our own act together, our own values, our own capability, our own management?”
Dimon specifically said, “We should stockpiling guns, bullets, tanks, planes, drones, you know, rare earths. We know we need to do it. It’s not a mystery.”Milan – stock.adobe.com
“I always get asked this question: Are we going to be the reserve currency?” he said.
“No. You know, if we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency. That’s a fact. Just read history.”
He referred to the U.S. government as a “Leviathan” that is too weak to carry out policies, while simultaneously imposing “things on the American public that they’re getting sick of.”
Bitcoin operates outside of the current banking and government authority in the U.S. and is seen as a is a decentralized digital currency, though President Trump signed an executive order in March establishing a Bitcoin reserve.ARTFULLY-79 – stock.adobe.com
Dimon argued that instead, the U.S. needs to celebrate its long-held values.
“Celebrate our virtues: freedom of speech, freedom of religion, freedom of enterprise, equal opportunity, family, God, country,” he said.
“You know, and you can acknowledge the flaws that we have, which are extraordinary — what we did the Black population for years. Don’t denigrate the great things of this country, because those are two different things.”
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“We don’t talk that much to each other — deal with our policies — this is the enemy within,” he continued.
“We’ve got to fix our permitting our regulations our immigration our taxation, which I, I think they’re on their way. We have to fix our inner city schools, our health care system.”
The Reagan National Economic forum kicked off Friday, and includes panels featuring Secretary of Energy Chris Wright, lawmakers such as Sens. Mike Rounds and Bill Cassidy, and leaders from the private sector, such as the CEO of Booz Allen Hamilton, Horacio Rozanski.
The bipartisan event works to promote “President Reagan’s enduring belief in the power of the free market and individual opportunity to drive national prosperity,” according to forum organizers.
