Breakfast News: Huawei Seeks to Rival Nvidia

Breakfast News: Huawei Seeks to Rival Nvidia

April 28, 2025

1. Semiconductor Competition Heats Up

First samples of the latest generation of Huawei’s AI processor chip could be rolling off the production line as early as May, reports The Wall Street Journal. The new Ascend 910D is intended to be more powerful than the H100 from Nvidia (NVDA 4.11%), released in 2022 and currently widely used for AI training. Huawei – blacklisted by the U.S. government – is expected to ship around 800,000 older model Ascend processors to customers, as U.S. export controls boost domestic demand.

• “97.3% cheaper than ChatGPT-4”: Rumors are emerging that DeepSeek is building its next-generation AI model, R2, based on existing Huawei Ascend 910B chips, with twice the model parameters of R1 and allegedly the world’s cheapest for enterprise use.
• “Self-reliance and self-strengthening”: Reuters quotes Chinese president Xi Jinping as saying “We must … comprehensively advance technological innovation, industrial development, and AI-empowered applications.”

2. Next Up: More Magnificent 7 Earnings

Big Tech earnings season continues with Microsoft (MSFT 1.21%) set to report its third quarter after Wednesday’s closing bell. Much has changed since the company beat Q2 revenue and earnings expectations, when fears of a cloud-computing slowdown emerged. Eyes will be on AI-related plans.

• Beating the S&P 500 by 36% since 2020 Hidden Gems recommendation: Meta (META 2.65%) posts 2025 Q1 results after Wednesday’s close after strong 2024 Q4 beats in January. Guidance for 2025 created some uncertainty as the company said “we continue to monitor an active regulatory landscape,” though planned capital expenditure of $60 billion to $65 billion would be a big boost on 2024’s $39.2 billion.
• Down 16% year to date: Apple (AAPL 0.41%) reports Q2 Thursday, following a strong start to the fiscal year. The stock was one of the hardest hit by trade tariffs on China, though it’s recovered from the worst of the dip. Amazon (AMZN 1.35%) will report Q1 the same day, after downgrading its outlook at Q4 time.

3. Other Notable Results Due

We’re due an update from Stock Advisor recommendation Visa (V -0.08%) Tuesday afternoon, after the company bagged an even bigger slice of the world’s e-commerce payments processing in Q1. Watch for expected slower growth in Q2, but signs for another strong year.

• 2.9% forward dividend yield: Dividend Investor recommendation Starbucks (SBUX -0.01%) reports Q2 after Tuesday’s close, after Q1 showed early positive results in its turnaround plan under new CEO Brian Niccol.
• Record $334 billion cash pile: Berkshire Hathaway (BRK.B -0.11%) will update us Saturday, as CEO Warren Buffett famously likes to avoid quick market reactions. What to look for? Maybe some clue what it’s doing with all that cash.

4. Key Economic Updates

Important economic news is due this week, as President Trump has seemingly backed off from his desire to fire Federal Reserve chair Jerome Powell. The CME FedWatch tool shows a 90% chance of interest rates staying unchanged at the Fed’s May 7 meeting.

• Inflation falling but stubborn: A Personal Consumption Expenditures (PCE) price index print is due Wednesday. It’s expected to show a 2.2% rise year over year, down from 2.5%, with core PCE – the Fed’s preferred inflation measure, which excludes food and energy prices – predicted at 2.5%. Core PCE better reflects actual consumer behavior and reacts quickly to changes.
• Tough jobs figures?: Friday’s jobs report is expected to show a 130,000 non-farm payroll count, down from the previous 228,000, with the unemployment rate steady at 4.2%.

5. Long-Term Investors Staying Calm

Vanguard, one of the country’s biggest 401(k) operators, says its investors aren’t panicking and selling. The Washington Post reports around 97% of customers hadn’t made any trades in 2025 by mid-April, in line with normal market conditions.

• “People are thinking long-term and sticking to their plan”: Vanguard retirement consulting head Dave Stinnett praised customer reactions, while financial research firm Vanda Research says individual investors have been buying more during the dip.
• The power of buy-and-hold investing: Fool analyst Jason Moser recently highlighted a powerful visual reminder of the value in staying invested via this chart from Hartford Funds:

6. Foolish Fun

Nvidia is down around 17% since the start of the year, versus a 6% decline in the S&P 500. Two months ago, 76% of Fool members believed the company would be a market-beater over the next five years – how are you feeling about its ability to recover and beat the S&P 500 by the end of 2025? Discuss with friends and family, or become a member to hear what your fellow Fools are saying!