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CNBC
13 minutes ago
- CNBC
Super Micro plans to ramp up manufacturing in Europe to capitalize on AI demand
PARIS — Super Micro plans to increase its investment in Europe, including ramping up manufacturing of its AI servers in the region, CEO Charles Liang told CNBC in an interview that aired on Wednesday. The company sells servers which are packed with Nvidia chips and are key for training and implementing huge AI models. It has manufacturing facilities in the Netherlands, but could expand to other places. "But because the demand in Europe is growing very fast, so I already decided, indeed, [there's] already a plan to invest more in Europe, including manufacturing," Liang told CNBC at the Raise Summit in Paris, France. "The demand is global, and the demand will continue to improve in [the] next many years," Liang added. Liang's comments come less than a month after Nvidia CEO Jensen Huang visited various parts of Europe, signing infrastructure deals and urging the region to ramp up its computing capacity. Super Micro rode the growth wave after OpenAI's ChatGPT boom boosted demand for Nvidia's chips, which underpin big AI models. The server maker's stock hit a record high in March 2024. However, the stock is around 60% off that all-time high over concerns about its accounting and financial reporting. But the company in February filed its delayed financial report for its 2024 fiscal year, assuaging those fears. In May, the company reported weaker-than-expected guidance for the current quarter, raising concerns about demand for its product. However, Liang dismissed those fears. "Our growth rate continues to be strong, because we continue to grow our fundamental technology, and we [are] also expanding our business scope," Liang said. "So the room … to grow will be still very tremendous, very big."
CNBC
18 minutes ago
- CNBC
Retail investors outplayed fund managers over tariffs: Robinhood CEO
Retail investors, once dismissed as speculators, are now outmaneuvering professional fund managers by adhering to a simple strategy: buy into companies you believe in for the long haul, according to Robinhood's CEO. Institutional investors have spent the weeks since April 2's so-called "Liberation Day" worrying over macroeconomic signals and taking "risk off across the board," Vladimir Tenev told CNBC's "Squawk Box Europe" Tuesday. The S & P 500 fell sharply in the aftermath of the tariff announcements as institutional investors fled to perceived safe havens. The index has now not only surpassed its pre-tariff high of 5670, however , but has also rallied by 25% to 6237 since its bottom on April 8. Retail investors bought the dip — and won, Tenev said. Data from VandaTrack shows retail investors piled $85 billion into U.S. equities and ETFs between April 1 and July 7 — the highest on record, compared to the same period every year since 2021. Tenev contrasted this with institutional players who "think about stocks indirectly," often selling off assets based on macroeconomic factors like tariff news or perceived headwinds from a lack of tax cuts. Contrastingly, "what you're seeing is retail investors are investing in these companies because they believe in them," Tenev said, calling it a "back to the basics" approach. He added that investors on Robinhood's brokerage platform were particularly focused on stocks such as AI darling Nvidia , alongside Tesla and Amazon , for instance. "So when they see a massive macro-driven dislocation, they tend to look at that as a buying opportunity, because it doesn't affect the market positioning of these individual stocks on an idiosyncratic basis," he added. This conviction-led strategy is a significant divergence from the behavior of retail investors in the past, which is "healthy for the markets," Tenev said. .SPX YTD mountain
CNBC
44 minutes ago
- CNBC
Trump tariffs raise the specter of sharper economic downturn for South Korea and Japan
In the first batch of "tariff letters" sent to trading partners, U.S. President Donald Trump took aim at two of the closest U.S. allies in Asia: Japan and South Korea — both are already bearing the brunt of the existing duties on auto and steel exports. Additional tariffs would further hurt these two exports-dependent economies that are grappling with a slowdown in growth, with Japan likely staring at a technical recession, or two straight quarters of economic contraction. Both Japan and South Korea saw first-quarter gross domestic product contract on a quarter-on-quarter basis. While South Korean imports to the U.S. face 25% tariffs, the same as Trump promised in April, the rate on Japan has been raised by 1 percentage point to 25%. Exports — including services — made up almost 22% of Japan's GDP in 2023, according to the latest data from the World Bank, and 44% of South Korea's GDP in 2023. Currently, imports of automobiles and auto parts to the U.S. incur a 25% tariff, while steel and aluminum attract a 50% levy on most countries. Automobiles are Japan's largest exports to the U.S. and are also among South Korea's top exports. South Korea was also the fourth-largest exporter of steel to the U.S. in 2024, according to the International Trade Administration under the U.S. Commerce Department. Japan's Prime Minister Shigeru Ishiba reportedly said the country "actively seeks the chance of an agreement that benefits both countries, while protecting Japan's national interest." In May, Ishiba said that his country will not accept a deal that does not see the removal of auto tariffs. The newly announced tariffs will lower Japan's GDP by 0.1 percentage point by end-2026, according to Norihiro Yamaguchi, Lead Japan Economist at Oxford Economics."Given that the economy is already suffering from high tariffs on auto and elevated global trade policy uncertainly, and also weak consumption, the impact shouldn't be dismissed," he told CNBC Yamaguchi said that Japan's economy will "barely grow" in the second half of 2025 and in the first half of 2026, if not falling into a recession. The U.S. is Japan's largest export market, with 21.3 trillion yen ($145.76 billion) of shipments to the country in 2024, while South Korea exported goods worth $127.8 billion to the U.S. in the same year, and counts the U.S. as its second-largest export a "more intensified tariff policy stance," the Bank of Korea in May nearly halved GDP growth estimates for 2025 to 0.8% from February's projection of 1.5%. "The recovery in domestic demand has been delayed, while export growth is expected to slow further due to the impact of U.S. tariffs," the BOK said. Frederic Neumann, Chief Asia Economist at HSBC told CNBC that should Japan and South Korea fail to reach a deal, these tariffs will pose "considerable headwinds to growth." Both Japan and South Korea are already facing sluggish domestic demand. Offering a silver lining, Trump said that he was willing to "perhaps, consider an adjustment to this letter" if the countries were to open their "heretofore closed" markets to the U.S. Pressure tactics are being brought to bear on South Korea and Japan, said Vishnu Varathan, managing director at Mizuho Securities. "The frustration with Japan's more principled and holistic approach (covering sectoral tariffs) stalling a deal being a source of frustration for U.S. trade negotiators, and crucially for Trump, speaks for itself." he added. While Trump has not publicly expressed anger toward South Korea, Varathan said "it is not unimaginable that there are sticking points similar to Japan's, thereby invoking the letter." Markets, meanwhile, appear to be shrugging of the tariff threats — for now. HSBC's Neumann said that Trump's lettersessentially amounts to a deadline extension for tariff negotiations by three weeks. "Financial markets are taking the latest news in their stride, focusing on the possibility that the threatened tariffs may still be whittled down through negotiation," he said.
