Tech 5: NVIDIA Becomes Second Most Valuable Company, GameStop Volatile as Roaring Kitty Returns

1. NVIDIA beats Apple, Roaring Kitty returns

NVIDIA overtook Apple (NASDAQ:AAPL) to become the second most valuable company in the world behind Microsoft (NASDAQ:MSFT) on Wednesday (June 5), when its share price surged 4.77 percent to close at US$1,244.40, bringing its valuation to the US$3 trillion mark. A comment from Elon Musk on X, formerly known as Twitter, saying that Tesla will spend between US$3 billion and US$4 billion on NVIDIA hardware in 2024 is considered to have been a factor.

This week also brought NVIDIA's stock split, which was announced a few weeks ago on May 22. Investors holding shares of the tech giant at the end of trading on Thursday (June 6) received nine additional shares following Friday’s close. The share price will be adjusted to reflect the split when the market reopens on June 10.

It was a hectic week for GameStop as Keith Gill, the trader known as Roaring Kitty, returned to Reddit (NYSE:RDDT). After three years of silence following his role in sparking the GameStop meme stock rally in 2021, Gill revealed GameStop holdings worth US$115.7 million in a Reddit post on Sunday (June 2) night, leading to significant volatility.

On Thursday, GameStop rallied to US$46.85 after Gill announced that his first livestream in almost four years would take place on Friday (June 7) at 12:00 p.m. EDT. Ahead of Gill's livestream, GameStop released its Q1 earnings, showing that net sales were 28.76 percent lower compared to last year — the company had originally planned to release the report on June 11. GameStop also filed to offer 75 million new shares. Its share price tumbled 25 percent on Friday, and trading was halted multiple times as investors reacted to the new developments.

2. VanEck's Sigel predicts US$22,000 Ethereum price by 2030

Matthew Sigel, VanEck’s head of digital research, has raised his price projection for Ethereum, the world’s second largest cryptocurrency, to a best-case scenario of US$22,000 by 2030, up from US$11,800 projected in May 2023.

In a Wednesday blog post, Sigel wrote, “Driven by a strong value proposition to entrepreneurs, the Ethereum network is likely to continue its rapid market share growth from traditional financial market participants and, increasingly, Big Tech. Should it do so while maintaining its dominant position among smart contract platforms, we see a credible path to US$66 billion in free cash flow to token holders supporting a US$2.2 trillion asset, or $22k per coin, by 2030.”

Also on Wednesday, US Securities and Exchange Commission Chairman Gary Gensler engaged in a conversation with CNBC, where he addressed the highly anticipated full approval of spot Ethereum exchange-traded funds, indicating that the process will likely require a considerable amount of time. The approval of S-1 registration statements, which outline crucial details regarding the proposed funds, is one of the final steps in the regulatory process.

3. Musk redirects Tesla chips to X and xAI

Emails obtained by CNBC show that Musk told NVIDIA to send H100 artificial intelligence (AI) processors meant for Tesla, including a previous order worth US$500 million, to his other companies, X and xAI.

During Tesla’s Q1 earnings call in April, Musk told investors he would be increasing the number of active H100s to 85,000 — up from 35,000 — this year, and posted a few days later that Tesla would spend US$10 billion on training and inference AI, “primarily in car.” Diverting the orders will likely delay the development of the supercomputer needed to accomplish this pricey ambition, a notion not lost on investors — Tesla’s share price sank by over 3 percent this week.

In response to these concerns, Musk claimed that Tesla’s AI infrastructure development is on track and said that the company has no immediate need for the chips from NVIDIA. In a post on X, he commented, “Tesla had no place to send the NVIDIA chips to turn them on, so they would have just sat in a warehouse."

In other Tesla news, the EV maker has upgraded its in-car navigation software on Chinese models, introducing lane-level guidance, as well as new features meant to reduce user reliance on smartphones.

4. ASML, Imec open new lithography lab

On Monday (June 3), ASML (NASDAQ:ASML) announced the opening of the Netherlands-based High NA EUV Lithography Lab in collaboration with research firm Imec. The lab will provide an early development platform for semiconductor manufacturers, giving them access to ASML’s newest chipmaking machine.

The high-NA EUV lithography machine, which cost 380 million euros, has a numerical aperture (NA) of 0.55 compared to 0.33 in current EUV models. The higher NA allows it to capture light at wider angles so it can print smaller features onto chips, thereby increasing performance while reducing power consumption. As part of the news, ASML said it anticipates high-volume manufacturing with high-NA EUV technology to happen in 2025 or 2026.

According to Reuters, the company expects to deliver the first machine to Taiwan Semiconductor Manufacturing Company (NYSE:TSM,TPE:2330) sometime this year. ASML has orders for more than a dozen more from customers including Intel (NASDAQ:INTC), Samsung Electronics (KRX:005930), SK Hynix (KRX:000660) and Micron (NASDAQ:MU).

5. Alphabet to face anti-competition lawsuit in UK

London’s Competition Appeal Tribunal (CAT) ruled that Alphabet (NASDAQ:GOOGL), the parent company of Google, must face a lawsuit brought on by Ad Tech Collective Actions worth up to 13.6 billion pounds.

The collective, which represents tech publishers based in the UK, alleges that Google engaged in anti-competitive practices and abused its dominance in the online advertising market, resulting in a loss of business for other companies.

In May, Google appealed to the CAT to block the lawsuit because it was “incoherent” and failed to explain how its practices directly impacted other enterprises. However, the CAT said that the case can proceed to trial.

Some of the tech sector’s biggest players, including Google, Apple and Microsoft, have been the subject of ongoing scrutiny and have faced several antitrust and anti-competitive allegations in recent years. This latest case is the second major lawsuit brought against Google this year. In January, the company was sued by the US Department of Justice and eight state attorneys general for anti-competitive practices in the ad tech market.