Why Are Amazon, Apple, and Nvidia Moving Markets? | The Opening Trade 10/31

Transcript

KRITI: GOOD MORNING FROM LONDON. I AM KRITI GUPTA ALONGSIDE TOM MACKENZIE. ASIAN LEADERS MEETING IN THE APEC SUMMIT AND SOUTH KOREA, WHERE NVIDIA CEO JENSEN HUANG IS EXPECTED TO SPEAK. WHEN HE DOES, WE WILL BRING YOU THOSE HEADLINES LIVE. OFF THE BACK OF THE U.S. CHINA TRADE NEGOTIATIONS, CHINA BUYS MORE U.S. SOYBEANS BUT EXPORTERS ARE STARTING TO ... Read More

Key Insights

• Amazon’s cloud business grew by about 20% to $33 billion in revenue, marking its strongest growth rate in almost three years. Because AWS is described as Amazon’s key profit driver, the acceleration supported a strong positive market reaction to the company’s earnings.
• Amazon’s artificial intelligence investments are producing identifiable commercial opportunities. Andy Jassy said Amazon’s chatbot could add $10 billion in annual sales, while a call-center product was on track to generate $1 billion in revenue, offering investors specific examples of potential returns.
• Apple’s outlook remained upbeat despite tariff expenses and challenges in China. The company was absorbing $1.1 billion in tariff costs, expected a strong holiday season, and anticipated improvement in China after reporting a larger decline there than analysts had forecast.
• Apple’s services business accounts for 30% of revenue, reducing its dependence on hardware alone. Services mentioned in the discussion included AppleCare and customer support, while iPhone demand and expectations for holiday sales continued to shape the near-term outlook.
• Nvidia’s South Korean strategy combines national infrastructure commitments with corporate partnerships. Samsung and Hyundai were linked to its expansion, while South Korea’s sovereign artificial intelligence plans included data centers equipped with GPUs based on Nvidia’s Blackwell design.
• Nvidia’s ability to sell Blackwell chips in China remained uncertain. Jensen Huang said he hoped such sales could happen someday, but Nvidia had not applied for Washington’s required permission and no decision had been made about access under existing export controls.
• China’s manufacturing economy showed sustained weakness, with factory orders experiencing their longest slowdown streak in nine years. New export orders were particularly soft, while the domestic economy remained constrained by the property slump and weak consumer confidence.
• US-China trade tensions were eased but not resolved. China received a 10% reduction in fentanyl-related tariffs, rare-earth export controls were delayed for one year, and Chinese manufacturers continued developing supply chains in countries such as Vietnam to prepare for future volatility.

Questions & Answers

Q: Why are Amazon, Apple, and Nvidia moving markets?

Amazon reported AWS growth of around 20% and $33 billion in revenue, while Apple projected stronger sales and expected a strong holiday season. Nvidia was also making deals in South Korea with Hyundai and Samsung, adding to investor attention around major technology companies.

Q: Why did Amazon’s earnings lift market sentiment?

Amazon’s cloud unit recorded its strongest growth rate in almost three years, with AWS growing around 20% to $33 billion in revenue. Because AWS was described as Amazon’s key profit driver, that acceleration supported optimism around the company.

Q: How is artificial intelligence contributing to Amazon’s business?

Andy Jassy gave specific examples of artificial intelligence supporting Amazon’s business units. He said Amazon’s chatbot could add $10 billion in annual sales, while a call-center product was on track to generate $1 billion in revenue.

Q: Why were investors optimistic about Apple’s outlook?

Apple expected stronger sales and a strong holiday season driven by iPhone demand. The company remained upbeat even while absorbing $1.1 billion in tariff costs and facing fierce competition in China.

Q: How important is Apple’s services business?

Services account for 30% of Apple’s revenue, giving the company a substantial business beyond hardware. The discussion cited AppleCare and Genius Bar support as examples of those services.

Q: What challenges does Apple face in China?

Apple reported a decline in China that was larger than expected, and the market remained highly competitive. Even so, the company expected its China performance to turn around and projected stronger overall sales.

Q: How is Nvidia expanding its business in South Korea?

Nvidia was pursuing partnerships in South Korea with Hyundai and Samsung. The dealmaking formed part of a wider week of activity that also included Deutsche Telekom and Nokia.

Q: How did US-China trade developments affect the market outlook?

China’s planned rare-earth export controls were delayed by one year, benefiting the United States and China’s other trading partners. China also agreed to buy more US soybeans, although exporters remained wary of future disruptions and manufacturers continued to prepare for trade uncertainty.

Summary & Key Takeaways

• US stock futures advanced as investors responded positively to Amazon and Apple. Amazon’s cloud unit produced its fastest growth in almost three years, while management provided examples of artificial intelligence generating business returns. Apple reported better revenue and projected strong holiday sales despite tariff costs and competitive pressure in China.

• Nvidia strengthened its South Korean relationships through partnerships involving Samsung and Hyundai, sovereign artificial intelligence, data centers, robotics, and accelerated computing. Jensen Huang described Nvidia’s software libraries as tools for applying accelerated computing across fields including computational lithography, quantum physics, molecular dynamics, fluid dynamics, robotics, and artificial intelligence.

• China remained central to the market outlook after trade negotiations produced tariff relief and delayed rare-earth export controls. However, weak factory orders, soft new export orders, a continuing property slump, and limited domestic confidence pointed to economic pressure. Manufacturers were also preparing supply chains for further long-term trade volatility.