Nvidia's CPU blitz redraws the chip map.

Transcript

Tom Nvidia's going after the CPU market. Not content with owning the AI accelerator space, they're taking the fight straight to Intel and AMD's home turf. The chip map is being redrawn right now.

Marie Good morning from the New York Edition of Investment Flash. I'm Marie, with Tom and Gerald. It's Tuesday, June second, twenty twenty-six.

Tom And the story of the morning is that Nikkei Asia exclusive — Jensen Huang said it in Taipei. Nvidia wants to reinvent the entire computing stack, from PCs to servers. Last session, Nvidia jumped six point three percent, right near its fifty-two week high.

Gerald Yeah, look, Tom, you probably had a great day — Nvidia up six percent, your favorite name. But I'm looking at that seventeen point seven times forward earnings and thinking a lot of optimism is already baked in. This CPU gambit takes years to play out. Meanwhile, Intel's still up around a hundred seventy-seven percent year to date before last session. Someone still believes in a value turnaround there, and they might not be wrong.

Tom Wait — wait a second. Gerald, that seventeen times multiple is for a company that just keeps expanding its total addressable market. First GPUs for AI, now CPUs? They're not just competing, they're colonizing. This is a long-term buy, buddy. The forward multiple is a floor, not a ceiling.

Marie I'm going to push back here — this is not without risk. Nvidia's premium pricing may limit its share in the CPU market initially. Intel and AMD have deep enterprise relationships. And let's not forget, AMD trades at thirty-nine times forward, so any competitive threat there is lethal. That's the one I'd be worried about.

Gerald Right — and AMD was off one point two percent last session, so the market is already pricing that worry. To be fair, Tom, I get the bull case, but 'colonizing'? That's a strong word for a company that hasn't shipped a single CPU yet.

Tom Ha — fair enough. But you know what? The same thing was said about their data center GPUs five years ago. They were the underdog, now they're the king. I'm just saying, the ambition alone is worth a premium.

Marie And it's not just Nvidia shaking things up. Nikkei Asia also reports Japan's Kioxia has commercialized wafer-bonding NAND memory tech, ahead of Samsung. That's a direct challenge to Samsung's dominance.

Tom Calling the bottom on memory chips again — that's six bottoms this cycle.

Gerald Ha, oh come on.

Marie Okay, that's fair. But Samsung is flat recently, and if Kioxia gains share, that fourteen point seven times forward P-E on Samsung could start looking expensive. It's a sell signal we can't ignore.

Gerald Exactly. The memory race is heating up. And speaking of races, BYD and SAIC are targeting twenty twenty-seven for all-solid-state EV batteries. That's an acceleration of the timeline. BYD's stock is down eight and a half percent year to date, thirty-six percent below its high, and trades at seventeen times forward.

Tom See, this is what I mean — the disruptors are everywhere. I'd be buying BYD hand over fist on that news. A first-mover advantage in solid-state batteries? That's the EV narrative reignited.

Marie Hold on, Tom. Not so fast. This is a twenty twenty-seven target. A lot can happen. Plus, we had lithium supply news today — a US startup got exploration licenses in Germany and Poland to drill lithium right under VW and BMW battery factories. That's great for supply security, but if they succeed, more lithium supply could actually depress prices and hurt producers.

Gerald Yeah, the lithium ETF is up nearly thirty percent year to date already, so the market is pricing a tight supply story. But new domestic supply in Europe could flip that. And Volkswagen, at three point six times forward earnings — honestly, it's so cheap it's almost a value trap, but if they secure cheap lithium, maybe it's the turnaround play.

Tom Three point six times earnings? For real? That's not a value trap, that's a distress sale. But I'll stick with the lithium ETF if I'm playing that theme. Less company-specific risk.

Marie Alright, shifting gears — the Financial Times has a piece on Accenture. The fear is AI will kill its consulting business, not strengthen it. The stock is down twenty-four percent year to date, thirty-nine percent below its high. But it did bounce five percent last session. Maybe the disruption narrative is oversold?

Gerald Honestly, Marie, I think the structural decline narrative has legs. AI automates those consulting tasks, reduces billing hours. Accenture's adaptation story isn't new. I'd still sell it or avoid it.

Tom Analysts revising price targets after the fact is basically a free retirement plan. But you're right, Gerald — the pain might not be over.

Gerald That's — yeah, that's fair.

Marie We've got crypto outflows too — one point six seven billion last week, second largest this year according to CoinDesk. Bitcoin leading the charge out, but XRP and HYPE saw inflows. So it's rotation within crypto, not a blanket exit.

Tom Grayscale Bitcoin Trust down nearly three percent last session, forty-four percent below its high. The flight from bitcoin is clear, but the altcoin interest says the crypto thesis isn't dead — it's just pivoting.

Gerald And then there's the palm oil crash in Indonesia — new export rules crushing prices. The Indonesia ETF is down thirty-two percent year to date. That's a commodity story with real human fallout, farmers facing despair.

Marie Right, and dedollarisation: Russia issuing ten billion yuan sovereign bonds. That's incremental demand for the yuan. If you want to play it, the trade is long yuan against the dollar, not some illiquid Russia ETF.

Tom But the most original take today is from Bloomberg Markets — Pimco says Treasury yields are driven by Fed bets, not AI. The whole AI capex driving yields higher story is overstated, they say. If the Fed turns dovish, that could spark a bond rally. TLT, the long-duration Treasury ETF, is near its fifty-two week low. No one's talking about the reversal risk.

Marie Exactly — and we have the Friday jobs report looming. That could be the pivot. The short-duration trade is so crowded. If the economy cracks even a little, bonds could rip higher.

Gerald I've been saying for weeks the bond doom-loop is overblown. Pimco is basically backing me up. Look, if the Fed signals cuts, TLT could be the surprise winner of the second half.

Tom Alright, Gerald — don't hurt your arm patting yourself on the back.

Gerald Fair enough.

Marie But this brings us to our view today: it's a market of competitive disruption. We're long disruptors like Nvidia and BYD, maybe even Kioxia if it were listed. We're short the disrupted like Intel, AMD, Accenture. And we hedge with bonds. It's a barbell.

Tom A stock-picker's market with macro tail risks underappreciated. I like it. And remember yesterday we said AI capex got that Berkshire stamp? Today's Nvidia news just confirms we're in the middle of a build-out.

Gerald But Tom, the bear case is that all these moves are either aspirational or fully priced. Nvidia at highs, lithium at highs, and Accenture's bounce suggests the pain trade might be higher for the disrupted. We have to be careful.

Marie That's exactly the nuance. And let's not forget India's nuclear privatisation — Tata Power and Adani Green Energy named in the FT. That's a regulatory breakthrough that could unlock massive infrastructure spending. Conviction is low, but it's a space to watch.

Tom Wait, India private nuclear? That's huge. I mean, if they pull it off, those stocks could run. But yeah, execution risk. Still, I'm adding a watch on Tata Power.

Gerald And we'd be remiss not to mention the palm oil and dedollarisation stories, but those are more macro noise. The main event today is chips and the bond market disconnect.

Marie One hundred percent.

Tom Totally.

Gerald Nailed it.

Marie As always, none of this is investment advice. Just our read of the day's signals. If you're just finding us, hit follow on Spotify — or check investmentflash.com for the full digest with charts and sources.

Tom We're back tomorrow with the London Edition at seven-thirty a.m. London time. See you then.

Gerald Until then, keep your powder dry, or your chips stacked, depending on your mood.

Marie Ha — I'll take the chips. Thanks, Tom.