What’s News in Markets: IPO Excitement, Chip Fatigue, the Decline of Dividends

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0:36Until then, here's the news moving the markets this week. Hey, listeners. It's Saturday, May 23rd. I'm Imani Moise for The Wall Street Journal. And this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's dive in. Markets spent this week chasing the next big thing. From AI to outer space and quantum computing, investors poured money into futuristic bets while brushing aside lingering concerns about the economy. A new$2 billion federal investment in quantum computing helped fuel rallies in companies tied to the emerging technology. NVIDIA beat Wall Street expectations for the 14th straight quarter, according to data from FactSet.

1:19And SpaceX prepared to launch what could be the biggest IPO in history. That lifted space-related stocks across the market. Here on Earth, warning signs about the U.S. consumer continued to pile up. Retail giants including Walmart, Target, and Home Depot all pointed to increasingly budget-conscious shoppers this week, while high gas prices and lingering uncertainty around the conflict in the Middle East continued to weigh on consumer sentiment. Still, investors saw more to be excited about than scared of. The Dow gained 2.1 percent and ended the week at a new record high. while the Nasdaq rose about half a percent.

1:57The S &P 500 increased 0.9%, notching its eighth straight week of gains, the longest weekly winning streak since 2023.

2:11For months, Wall Street has been obsessing over AI's biggest private companies from the sidelines. But this week, it finally got a meaningful glimpse behind the curtain. Three of Silicon Valley's hottest startups moved closer to going public, setting the stage for what could become the biggest IPO boom since the dot-com era. Elon Musk's SpaceX filed paperwork for a blockbuster stock offering that could raise as much as$80 billion and potentially make Musk the world's first trillionaire. Meanwhile, OpenAI, which was recently valued at more than$850 billion, is preparing to file for its own IPO soon.

2:48And rival Anthropic surprise investors by forecasting its first-ever quarterly operating profit, a rare feat in the cash-burning AI industry. While investors wait for those monster debuts, many are looking for other ways to cash in on the frenzy. European satellite stocks surged this week after SpaceX's filing ignited excitement across the industry. France's Eudelsat jumped nearly 35%, while German satellite developer OHB climbed more than 28%.

3:21Investors' obsession with finding the next big market winner may be creating a problem for the company sitting on top of the mountain. Shares in NVIDIA, currently the most valuable company in the world with a valuation of more than$5 trillion, fell more than 4 % over the week, despite the chip giant reporting another blockbuster quarter. CEO Jensen Huang told investors that demand for AI chips has gone, quote, parabolic as companies raced to build AI agents and massive data centers. The company posted more than$81 billion in quarterly revenue, up 85 % from a year ago, while profits more than tripled.

3:58But investors appear more interested in finding the next NVIDIA than rewarding the current one. Take Intel, for example. The one struggling chipmaker has suddenly become one of Wall Street's hottest AI comeback bets. Shares in the company surged 10 % this week and are now up more than 220 % this year, as investors bet Intel's processors could play a larger role in the next phase of the AI build-out. The fatigue isn't limited to NVIDIA. Analysts say Wall Street has developed a kind of apathy toward the biggest AI winners to date, with investors increasingly rotating into underdogs they believe have more room to run.

4:33According to Goldman Sachs, the AI chip trade has become so dominant that semiconductor companies now make up nearly 20 % of the S &P 500, the highest concentration on record.

4:49And AI isn't just reshaping stock indexes. It's starting to reshape how investors make money. For decades, investors could count on tech companies eventually rewarding shareholders through dividends and massive stock buyback programs. but the AI boom is changing that equation. Dividend investing has lagged the broader market this year, as excitement around artificial intelligence pushes companies to reinvest profits into data centers, chips, and computing power instead of returning that cash to shareholders. And because big tech has accounted for such a large share of recent market gains, those decisions carry extra weight.

5:23Even stock buybacks, one of Wall Street's favorite drivers of share prices in recent years are starting to slow. Excluding NVIDIA, buybacks among the so-called Magnificent Seven fell more than 70 % from a year ago in the latest quarter, as companies redirected cash toward the increasingly expensive AI arms race. Analysts say the trend reflects a growing reality inside big tech. The need to spend on AI infrastructure is crowding out other priorities, including keeping shareholders sweet with buybacks and dividends. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in our live markets coverage on WSJ.com.

6:02Today's show was produced by Alexis Moore with supervising producer Melanie Roy. I'm Imani Moise. Have a great weekend and catch you next Saturday.

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