Small-Cap Stocks Have Room to Run, Janus Henderson Portfolio Manager Says
34 minutes ago
Traders put the odds that the Federal Open Market Committee lowers interest rates by a quarter percentage point this week at 96%, which bodes well for small-cap stocks. Still, investors have been reluctant to fully embrace a small-cap renaissance that’s been repeatedly deferred over the past year.
“There is some reflexivity in that investors have waited so long for performance in small-cap stocks, they need to see the start of outperformance of small-cap stocks before they believe the trend,” said Janus Henderson portfolio manager Aaron Schaechterle in response to emailed questions from Investopedia.
Investors may be persuaded by what’s happened in recent months. The iShares Russell 2000 ETF (IWM) has outpaced the iShares Russell 1000 ETF (IWB) in the last three months, with the former posting a 12% return compared to the latter’s 9%, according to Morningstar. And there’s reason beyond rate cuts to be optimistic.
“There is room to go for small-cap relative outperformance, due in part to the valuation discount of small caps to large caps,” said Schaechterle.
Valuations indicate small-cap annualized returns of 8% over the next decade, compared to less than 1% for large-cap stocks as of the end of August, according to a recent BofA Global Research report. That’s based on historical regression of price-to-earnings ratios for the Russell 2000 and Russell 1000 indexes and their returns after.
CoreWeave Stock Pops on $6.3 Billion Nvidia Deal
1 hr 18 min ago
CoreWeave (CRWV) said Monday it has signed a $6.3 billion initial order with Nvidia (NVDA) with a condition that the AI chip star buys unsold capacity, sending shares in the cloud computing platform surging.
As part of the deal, Nvidia is obligated to buy any unsold cloud-computing capacity through April 13, 2032, if CoreWeave’s data centers aren’t fully utilized by its own customers. CoreWeave made the announcement in a filing with the Securities and Exchange Commission and said the deal was struck on Sept. 9.
Nvidia has ties with CoreWeave on several fronts. Apart from being a customer, Nvidia sells its chips to CoreWeave and has a stake in the cloud platform. Apart from Nvidia, CoreWeave’s customers include Microsoft (MSFT), OpenAI, and Facebook parent Meta Platforms (META).
Separately, on Monday, Deutsche Bank added CoreWeave to its Catalyst Call Buy Idea List, citing “a few positive factors” that will support revenue revisions upward over the next quarter or two.
CoreWeave will benefit as “spending intentions being signaled by those in industry and the scale of some of the recent contract announcements make demand for AI infrastructure appear almost insatiable and at least for the near-to-medium-term, demand significantly outstrips supply,” wrote analyst Brad Zelnick.
CoreWeave shares are rising almost 7% in intraday trading Monday and have gained about 200% since going public in March this year in one of 2025’s hottest IPOs.
Corteva Looking to Split Seed, Pesticide Businesses, Report Says
2 hr 12 min ago
Shares of Corteva (CTVA) reversed course and traded lower Monday morning following a report that the manufacturer of crop seeds and pesticides is considering splitting itself in two.
The Wall Street Journal reported that an announcement could come soon.
Corteva was created in 2018 as the agricultural arm of then-recently merged DowDuPont, and became a separate company in 2019 as part of a three-way spinoff of DowDuPont into Corteva, DuPont (DD), and Dow (DOW).
The Journal noted that Corteva and rival Bayer dominate the U.S. corn and soybean seed market, and the motivation behind separating the business may be aimed at avoiding pesticide lawsuits such as the one Bayer is facing over its Roundup weedkiller.
Investopedia has reached out to Corteva for comment.
Corteva shares were down about 5% in recent trading. Still, they are up roughly 25% this year.
Intel Stock Rises After Chipmaker Cuts Expenses Forecast
3 hr 14 min ago
Intel (INTC) shares advanced nearly 3% Monday when the struggling semiconductor manufacturer announced that it was lowering its outlook for full-year costs following the sale of a majority stake in its Altera programmable chip business.
The company had disclosed the sale of 51% of Altera to private equity firm Silver Lake for approximately $3.3 billion in April, and the deal closed last Friday. Intel added that it would retain control of the remaining 49% of Altera.
Matthias Balk / picture alliance via Getty Images
Because of the infusion of cash, Intel now has a fiscal 2025 non-GAAP operating expenses target of $16.8 billion, down from its previous guidance of $17.0 billion. In a regulatory filing, it also noted that its target of fiscal 2026 operating expenses remained unchanged at $16.0 billion.
CEO Lip-Bu Tan has been taking steps to slash spending, saying in the company’s second-quarter earnings report that Intel was “taking the actions needed to build a more financially disciplined foundry.” CFO David Zinsner added that the “changes we are making to reduce our operating costs, improve our capital efficiency and monetize non-core assets are having a positive impact.”
With today’s rise, shares of Intel are about 24% higher year-to-date.
Alphabet’s Market Cap Hits $3 Trillion for the First Time
4 hr 9 min ago
Google parent Alphabet’s market value just reached a major milestone.
Its stock was up about 3% near $249 in recent trading, pushing Alphabet’s (GOOGL) market capitalization above $3 trillion, becoming the fourth company to do so.
The only others to have reached that level are Apple (AAPL), Microsoft (MSFT), and AI darling Nvidia (NVDA), which earlier this year became the first company to top $4 trillion.
Alphabet’s stock has gotten a boost this month after a federal judge ruled the tech giant doesn’t have to sell its Chrome browser to remedy an antitrust case, in a major legal win for the search giant that eased worries it might be forced to sell a key part of its business.
In a note to clients Monday, Citi analysts became the latest to boost their price targets for the stock to a Street high of $280 from $225, citing an “improving legal landscape” in the wake of the decision, as well as growing adoption of Google’s artificial intelligence tools across its ad and cloud businesses.
With Monday’s gains, the stock has added nearly a third of its value this year, making it one of the best-performing members of the Magnificent Seven for 2025, behind only Nvidia.
Nvidia Stock Slips After China Says Chipmaker Violated Antitrust Laws
4 hr 59 min ago
China said Monday that Nvidia (NVDA) violated anti-monopoly laws and that it would keep investigating the chip giant, putting the AI bellwether under pressure as Beijing and Washington continue trade talks.
The announcement from China’s State Administration for Market Regulation followed a preliminary investigation into Nvidia’s acquisition of Israeli networking-gear maker Mellanox Technologies in 2020. The announcement was cited by Chinese state media.
WANG GANG / Feature China / Future Publishing via Getty Images
Beijing gave the deal the go-ahead, with the proviso that China continues to receive supplies. Since then, however, the U.S. has deployed export controls to limit sales of high-end chips to the Asian country.
President Donald Trump in August allowed Nvidia to continue selling its H20 chips to China in exchange for a 15% share of revenues after initially imposing restrictions.
Nvidia shares, which entered Monday up 32% since the start of the year, were down about 1.5% in recent trading.
Tesla Stock Soars as Musk Buys About $1 Billion of Shares
5 hr 58 min ago
Tesla (TSLA) shares surged more than 6% Monday morning after it was revealed CEO Elon Musk purchased some $1 billion worth of the electric vehicle’s stock.
A regulatory filing showed Musk made 25 separate purchases last Friday totaling approximately 2.57 million shares for prices ranging from about $372 to $396. The stock closed Friday at $395.94.
With today’s advance, Tesla shares moved into positive territory for 2025.
Omar Marques / Getty Images
The move is seen by investors as a further commitment by Musk to Tesla, which has struggled this year with falling demand for EVs, and backlash from the CEO’s work with the Trump administration in cutting government spending.
Dan Ives of Wedbush, a longtime Tesla bull, wrote that the move “is a huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”
In addition, earlier this month, the company proposed a long-term pay package for Musk that could reach up to $1 trillion depending on whether Tesla meets certain milestones.
Stock Future Rise Ahead of This Week’s Fed Decision
6 hr 55 min ago
Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading on Monday.
S&P 500 futures also advanced 0.2%.
Nasdaq 100 contracts were also up 0.2%.
Source link
