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Luke Kawa

Chip stocks jump as Nvidia’s Jensen Huang asks TSMC to boost chip output

Talking about what’s coming out of Taiwan is a lot better for Nvidia than talking about what isn’t going into China.

On Saturday in Taiwan, CEO Jensen Huang said the company’s flagship Blackwell chips are seeing “very strong demand” — in case the $500 billion in orders he recently touted didn’t make that clear.

TSMC CEO and Chairman Dr. CC Wei, whose company just released its October sales numbers, added that his counterpart “asked for wafers” in light of this hot demand, declining to provide any further details.

Shares of Nvidia are up more than 3% in premarket trading on this seeming reaffirmation of the chip designer’s robust sales pipeline.

Optimism over a potential end to the government shutdown is buoying stocks this morning, and chip stocks in particular are in the green. In addition to Nvidia’s gains, Micron and Advanced Micro Devices are also up strongly as of 6:40 a.m. ET (5% and 3.6%, respectively).

Huang also said that there would be shortages of “different things” when asked about limited supply of memory chips, of which Micron is a major producer. Recent chatter of higher memory chip prices as demand outstrips supply has buoyed that cohort.

Wedbush Securities analyst Dan Ives said last week’s downturn among tech stocks was a “short lived white knuckle moment,” and expects the cohort to more than repair those losses through year-end.

“We believe Nvidia’s earnings next week will be another major validation moment for the AI Revolution and be a positive catalyst for tech stocks into year-end as investors continue to underestimate the scale and scope of this transformational spending trend over the next few years,” he wrote.

The government shutdown certainly didn’t stop OpenAI from announcing more spending commitments. But, as was the case in March, when higher-beta AI momentum stocks bore the brunt of the market damage despite not being as sensitive to tariffs, this group has also lagged as of late despite not having much direct exposure to federal spending.

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Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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