In a whirlwind fortnight, Broadcom has shattered records, capturing the attention of investors eager to find alternatives to Nvidia. The Nasdaq is celebrating, but valuation multiples are soaring to dizzying heights. The pursuit of AI champions is relentless as we anticipate the Federal Reserve's announcement tomorrow. Broadcom has emerged as the Nvidia of the fourth quarter. The Irvine, California-based company has recently crossed the significant $1 trillion mark in market capitalization. It achieved this milestone at lightning speed, with its market cap skyrocketing from $740 billion to $1.167 trillion between December 1 and December 16. That's a remarkable 50% increase in just two weeks, while Nvidia saw a 5% decline. The American market has a penchant for creating tech giants, and Nvidia, the latest to ascend, seems to be catching its breath after transforming from a niche supplier to a titan of AI chips in a few short years. There was a brief interlude with Super Micro Computer, but it didn't quite meet expectations. Then Broadcom entered the scene.

Broadcom has quietly transformed itself into a reliable player in the tech world. Savvy investors have long recognized that the Broadcom of today is a far cry from its 2000s incarnation. Its name now frequently pops up in discussions about cutting-edge technologies. Recently, during the company's quarterly results announcement, Broadcom's chairman unveiled ambitious AI prospects, much to the delight of investors eager to diversify beyond Nvidia. He projected a $60-90 billion market for Broadcom by 2027, a significant leap from the $12 billion expected this year. Broadcom is deeply involved in Meta's and Google's advanced in-house chip projects. It's also collaborating with OpenAI and Apple, though these partnerships are newer. Essentially, Broadcom has become the go-to subcontractor for tech giants aiming to lessen their reliance on Nvidia. This naturally attracts investors looking to broaden their AI portfolios. However, Broadcom's impressive 50% stock surge has now pushed its valuation multiples above those of Nvidia.

Broadcom's performance is nothing short of impressive, with its shares climbing another 11% yesterday. This surge helped propel the Nasdaq 100 to a close of 22,096 points. Broadcom wasn't alone in its ascent; Tesla also saw a 6% increase, buoyed by the popularity of Elon Musk and Donald Trump. Meanwhile, AppLovin continues to capture the market's attention as another standout performer. In the immediate future, all eyes are on the U.S. Federal Reserve's upcoming decision. The market anticipates a quarter-point rate cut, but the real intrigue lies in the Fed's forward guidance. Investors are eager to hear what the central bank has in store for the coming months. Adding to the market's speculative fervor is bitcoin, which has surged past the $106,000 mark. This rally is fueled by expectations that the United States might establish a strategic cryptocurrency reserve, a move reportedly influenced by the pro-crypto advisers of the president-elect.

Today's macroeconomic landscape is bustling with activity on both sides of the Atlantic. In Germany, the spotlight is on the Ifo and ZEW indices, arriving at a time when the country is grappling with a political crisis. With parliamentary elections slated for February, Olaf Scholz is expected to face rejection. Meanwhile, across the pond in the United States, a slew of data points will serve as fodder for financial analysts to speculate on the likelihood of monetary easing in the near future. In France, lawmakers have passed a special law to sidestep a budget stalemate. Meanwhile, a juicy rumor from Reuters suggests that China is targeting a 5% growth rate in 2025, with plans to push the budget deficit to 4% of GDP. This leak may be Beijing's way of addressing criticism over the absence of forthcoming economic figures. But wait, there's more: Canada is in the spotlight too, as the finance minister has resigned dramatically, taking a swipe at Justin Trudeau's short-term policies. Dominic LeBlanc has been appointed as her successor.

In the Asia-Pacific region, markets are seeing red in Japan, South Korea, and India. The leaked Chinese growth projections for 2025 aren't doing the Hang Seng any favors, as it also loses ground. However, the Australian market is the silver lining, gaining 0.8% and breaking a five-session losing streak. Over in Europe, indices are also in the red, with the Stoxx Europe 600 down by 0.5%.

Today's economic highlights:

The Ifo business confidence index and ZEW financial confidence index in Germany precede retail sales, industrial production, wholesale prices and the NAHB house price index in the United States. The full calendar is here.

  • Dollar: EUR 0.9530 GBP 0.7876
  • Ounce of gold: USD 2642
  • Brent crude: USD 73.15 WTI: USD 69.60
  • 10-year US bond: 4.43
  • Bitcoin: USD 107,000

In corporate news:

  • Nucor loses 2% after reducing its targets.
  • The SEC has reached a settlement with Becton, Dickinson over allegations of deception about the risks of its Alaris infusion pump, with a $175 million penalty.
  • Meta adds live translation and AI video to Ray-Ban (EssilorLuxottica) smart glasses.
  • EBay board authorises $3 billion share buyback.
  • Chevron Australia signs long-term gas supply agreement with Alcoa.

Analyst recommendations:

  • Agree Realty Corporation: JMP Securities downgrades to market perform from market outperform.
  • Avalonbay Communities, Inc.: JP Morgan upgrades to overweight from neutral with a price target raised from USD 247 to USD 262.
  • Camden Property Trust: JP Morgan downgrades to underweight from neutral with a target price reduced from USD 129 to USD 128.
  • Cardinal Health, Inc.: Morgan Stanley maintains its overweight rating with a price target raised from USD 127 to USD 136.
  • Chubb Limited: Piper Sandler & Co upgrades to overweight from dropped coverage with a target price raised from USD 305 to USD 312.
  • Cloudflare, Inc.: Stifel upgrades to buy from hold with a price target raised from USD 95 to USD 136.
  • Cousins Properties Incorporated: KeyBanc Capital Markets upgrades to overweight from underweight with a price target raised from USD 19 to USD 34.
  • Eastgroup Properties, Inc.: KeyBanc Capital Markets downgrades to sector weight from overweight.
  • Ecolab Inc.: BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 279 to USD 290.
  • Essex Property Trust, Inc.: JP Morgan downgrades to underweight from neutral with a target price raised from USD 297 to USD 303.
  • First Industrial Realty Trust, Inc.: KeyBanc Capital Markets upgrades to sector weight from underweight.
  • Labcorp Holdings Inc.: Morgan Stanley maintains its overweight rating with a target price raised from USD 260 to USD 270.
  • Martin Marietta Materials, Inc.: Morgan Stanley maintains its overweight rating with a reduced target price from USD 657 to USD 622.
  • Match Group, Inc.: Jefferies downgrades to hold from buy with a target price reduced from USD 40 to USD 32.
  • Ppg Industries, Inc.: KeyBanc Capital Markets downgrades to sector weight from overweight.
  • Tesla, Inc.: Mizuho Securities upgrades to outperform from neutral with a price target raised from USD 230 to USD 515.
  • The Timken Company: Morgan Stanley upgrades to overweight from equal weight with a price target raised from USD 82 to USD 93.
  • Zimmer Biomet Holdings, Inc.: JP Morgan upgrades to overweight from neutral with a target price raised from USD 125 to USD 128.
  • Dr. Martens Plc: HSBC maintains its hold recommendation with a price target raised from 60 to GBP 85.
  • Sthree Plc: Jefferies maintains its hold recommendation with a price target reduced from 420 to GBX 300.