Once assumed to be years away, a surprising turn of events has fast-tracked the US approval process for spot Ether exchange-traded funds (ETFs), suggesting that they could begin trading by the end of Q2 or the beginning of Q3.
Elsewhere, Big Tech’s most prominent players came together this week to establish a network standard for artificial intelligence (AI); however, two of the AI sector’s biggest names were not included.
Meanwhile, Tesla (NASDAQ:TSLA) is pushing to roll out its self-driving software in China, its second largest market.
1. NVIDIA close to becoming most valuable stock
Dell Technology (NYSE:DELL) reported its first quarterly revenue gain in two years, yet results failed to impress investors with high expectations for its AI server business. The company’s share price fell the most it has in four years on Friday (May 31) to US$131.31.
Sales at Dell increased by 6.3 percent to US$22.2 billion, topping estimates of US$21.6 billion. “Relative to very high expectations, Dell’s Q1 25 results were disappointing,” wrote Toni Sacconaghi, an analyst at Sanford Bernstein.
Meanwhile, NVIDIA’s (NASDAQ:NVDA) earnings report last week has led to a resurgence of confidence in the tech sector, according to the latest Goldman Sachs (NYSE:GS) prime brokerage report.
According to the report, the so-called Magnificent Seven companies — NVIDIA, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOGL), Tesla and Microsoft (NASDAQ:MSFT) — now account for about 20.7 percent of hedge funds’ total net exposure to US single stocks.
NVIDIA has added about US$470 billion in market capitalization since it released results last week and is closing in on Apple as the second most valuable company in the world. The stock’s surge, however, was not accompanied by a corresponding increase in the S&P 500, prompting some analysts to declare an end to NVIDIA’s leading the market.
The personal consumption expenditures (PCE) price index, widely seen as the Fed’s favored inflation indicator, showed modest US inflation in April of 0.3 percent month-on-month. Core PCE rose 0.2 percent month-on-month.
2. Spot Ether ETFs could start trading by June
After months of speculation, the US Securities and Exchange Commission (SEC) announced last week that it has approved a rule change that would permit the trading of spot Ether ETFs, marking another major milestone in the cryptocurrency industry.
Days prior, CoinDesk and Reuters had reported that the SEC asked the Nasdaq, CBOE and NYSE to update their 19b-4 filings for the ETH ETF applications “on an accelerated basis,” causing Bloomberg ETF analysts Eric Balchunas and James Seyffart to increase their odds of approval from 25 percent to 75 percent. The price of Ether also jumped from US$3,143 to US$3,472 in just over 20 minutes.
According to multiple outlets, issuers updated their filings to confirm they will not stake ETH for yield to address SEC concerns surrounding the complexities of cryptocurrency staking, including market risks, custody and control, and potential conflicts of interest.
Following the approval of the 19b-4 forms by the SEC, the Commission must also approve S-1 registration statements before trading of Ether ETFs can begin. VanEck handed in an amended version of its S-1 forms to the SEC right after approval, with BlackRock doing the same on May 29.
According to sources for the Block, the SEC has requested all remaining parties to hand in amended versions of their S-1 forms by Friday. Weeks of amendments are expected to follow before trading can commence, with Balchunas calling a June launch a ‘legit possibility,’ but reiterating that sometime around July 4 is more likely.
3. Google introduces built-in AI features for Chromebook Plus
Google announced the rollout of new AI and gaming features for its Chromebook Plus on Tuesday (May 28). Its enhancements are powered by Gemini, Google’s AI assistant, and are designed to help users enhance their productivity and creativity. New capabilities include built-in writing assistance with grammar, spelling, and style suggestions, idea generation, organization of thoughts, stunning visual creation and project and task management.
Other enhancements include built-in generative AI wallpaper and video call backgrounds that can be applied to any video conferencing software, Magic Editor on Google Photos, one-click access to Google Tasks, a screen capture tool and Game Dashboard, which enhances mobile gaming with control mapping.
Google also named some upcoming features users can expect in the coming months, including Help Me Read with Gemini, which can summarize websites or PDFs and answer questions; cross-device continuity, an enhanced Focus tool; and, eventually, AI-powered hands-free control with face and gesture tracking.
4. (Most of) Big Tech establishes AI consortium
A group of major tech companies, including Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), Cisco (NASDAQ:CSCO), Google, Hewlett Packard Enterprise (NYSE:HPE), Intel (NASDAQ:INTC), Meta and Microsoft, announced on Thursday (May 30) that they have formed a consortium that will develop a new AI networking standard, notably excludes giant NVIDIA and Marvell Technologies (NASDAQ:MRVL).
According to a press release, the Ultra Accelerator Link (UALink) “will define and establish an open industry standard that will enable AI accelerators to communicate more effectively.” With these open standards, the group aims to streamline the development and management of data centers that use AI by establishing a set of open standards that will apply to IT professionals, system integrators and original equipment manufacturers.
The upcoming standard, dubbed Specification 1.0, will have the ability to connect up to 1,024 accelerators, such as graphics processing units (GPUs), within the same pod. This will enable direct loads and stores between memory connected to these accelerators, enhancing communication efficiency and optimizing performance.
The UALink Consortium expects it will officially be incorporated in Q3 2024, at which point Specification 1.0 will become available to participating companies.
5. Tesla could launch full self-driving in China
Tesla is reportedly making a push to register its full self-driving (FSD) software with China’s Ministry of Industry and Information Technology, according to sources for Reuters. Three people with knowledge of the matter told the news outlet that the company is also evaluating selling FSD as a monthly subscription service to Chinese customers for the equivalent of US$98 per month. Currently, FSD is sold for a one-time fee of 64,000 yuan.
FSD availability in China would provide a new revenue stream for the company, whose share price has fallen over 70 percent year-to-date. In the US, the same system has been subject to a probe by the National Highway Traffic Safety Administration (NHTSA) over the efficacy of a recall made in October 2022. The probe has since led to further investigation by the Department of Justice over whether the company committed wire fraud and gave customers misleading information about its driver-assistance systems.
Also, the NHTSA announced on Friday that Tesla must recall 125,227 vehicles in the US due to failure to comply with federal seat belt laws. According to the Administration said that warning lights and chimes on the recalled vehicles may not be activated when the driver is not wearing their seatbelt.
If the software is registered, Tesla will be able to test an upgraded version of FSD in China by having employees drive on public roads. If the testing phase is successful, the upgrade will be delivered to Chinese users in the coming months.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.