Meta Delays Avocado AI Launch to May
Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly.AVOCADO AI DELAYED:Metahas delayed the launch of its Avocado AI model to at least May over performance concerns and has discussed temporarily licensing Gemini to power its products, The New York Times' Eli Tan. While Avocado outperformed Meta's previous AI model and did better from Google'sGemini 2.5 model from March, it has not performed as strongly as Gemini 3.0 from November, people familiar with the matter say.NVIDIA CHIPS:ByteDance is working with Aolani Cloud to use 500 NvidiaBlackwell computing systems in Malaysia, totaling around 36,000 B200 chips, in an effort to become a global AI leader, Jon Emont and Liza Lin of The Wall Street Journal, people familiar with the matter told the Journal. ByteDance intends to use the computing power for AI research and development outside of China, the sources added.AI CONSULTING JV:Anthropic is in talks with Blackstoneand other private equity firms to form a joint venture selling consulting services for integrating Claude into portfolio companies, The Information's Anissa Gardizy, Valida Pau, and Stephanie Palazzolo.CLAUDE PARTNER NETWORK:Anthropic said it is launching the Claude Partner Network, a program for partner organizations helping enterprises adopt Claude. The company is committing an initial $100M to support its partners with training courses, dedicated technical support, and joint market development. Partners who join from today will get immediate access to a new technical certification and be eligible for investment, says Anthropic. Alongside the network, the company is introducing the first Claude technical certification: Claude Certified Architect, Foundations, available today for partners. This is a technical exam for solution architects building production applications with Claude. Later this year, the company says it will introduce additional certifications for sellers, architects, and developers. Partners who join the network now will get priority access to new certifications as they roll out. Finally, Anthropic is launching a Code Modernization starter kit, which gives its partners a straightforward starting point for migrating legacy codebases and remediating enterprises' technical debt. "This is one of the highest-demand enterprise workloads, and one where Claude's agentic coding capabilities most directly translate into client outcomes," the company adds.MORE NEWS FOR META AI:In a blog, Metaannounced it is partnering with a variety of news outlets, including News Corp, Le Figaro, Prisa and Sueddeutsche Zeitung, to integrate real-time news stories into Meta AI responses. "We're committed to making Meta AI more responsive, accurate, and balanced," the Facebook parent said. "Real-time events can be challenging for current AI systems to keep up with, but by integrating more and different types of news sources, our aim is to improve Meta AI's ability to deliver timely and relevant content and information with a wide variety of viewpoints and content types. We have consistently emphasized that our business decisions are driven by the goal of providing valuable experiences for people who use our technologies. We are excited about the ways people are using Meta AI, whether it's to spark new ideas, edit and animate media, dive deeper into topics of interest, find creative inspiration, and more. As our products evolve, we continue to experiment with different Meta AI experiences for everyone using our services."AI INFERENCE SOLUTIONS:Amazon Web Servicesand Cerebras Systems announced a collaboration that will, in the coming months, deliver the "fastest AI inference solutions available for generative AI applications and LLM workloads." The solution, to be deployed on Amazon Bedrock in AWS data centers, combines AWS Trainium-powered servers, Cerebras CS-3 systems, and Elastic Fabric Adapter networking. Later this year, AWS will also offer leading open-source LLMs and Amazon Nova using Cerebras hardware. "Inference is where AI delivers real value to customers, but speed remains a critical bottleneck for demanding workloads like real-time coding assistance and interactive applications," said David Brown, Vice President, Compute & ML Services, AWS. "What we're building with Cerebras solves that: by splitting the inference workload across Trainium and CS-3, and connecting them with Amazon's Elastic Fabric Adapter, each system does what it's best at. The result will be inference that's an order of magnitude faster and higher performance than what's available today."
Trade with 70% Backtested Accuracy
Analyst Views on NVDA
About NVDA
About the author
Nvidia's Data Center Business Outlook is Positive
- Revenue Concentration: In Q1, Nvidia reported total revenue of $81.6 billion, with $75.2 billion coming from its data center division, indicating a strong reliance on this segment, which may lead the company to further shift focus away from gaming to enhance its competitive edge in data centers.
- Strong Capex Expectations: The four major hyperscalers are projected to spend around $650 billion on capital expenditures in 2023, with expectations to exceed $1 trillion by 2027, positioning Nvidia to benefit significantly from this massive spending, driving future growth.
- Significant Growth Rate: Nvidia's revenue grew by 85% year-over-year in Q1, a remarkable figure for a megacap company, suggesting that the market has yet to fully recognize its value; if valued similarly to peers, Nvidia's stock could be 2 to 3 times its current price, highlighting its undervalued potential.
- Increased Investment Confidence: With Nvidia's products at the core of a multitrillion-dollar infrastructure build-out, the unique combination of growth, value, and limited risk enhances investor confidence in its future performance, suggesting it will strongly outperform the S&P 500.
Nvidia's Dominance in Data Center Market Continues to Grow
- Market Dominance: Nvidia's increasing dominance in the data center market indicates its growing competitiveness in AI technology, which could significantly impact future market dynamics.
- Potential Trillionaire: The rapid advancement of AI technology has sparked discussions about the possibility of the world's first trillionaire, suggesting immense wealth creation opportunities within the industry.
- Key Technology Supplier: A little-known company labeled as an 'Indispensable Monopoly' provides critical technology for both Nvidia and Intel, highlighting its importance and influence within the entire ecosystem.
- Investment Advice: Despite Nvidia's strong market performance, the analyst team identified 10 best stocks that do not include Nvidia, advising investors to carefully consider their investment decisions.
Zscaler Shares Plunge 30% After Weak Q3 Outlook
- Strong Revenue Performance: Zscaler reported a 25% year-over-year revenue increase in Q3, reaching $850.5 million, which surpassed management's previous guidance of $834-$836 million, indicating robust performance among existing customers.
- Weak Outlook Guidance: Despite solid revenue results, the company forecasts only a 22% revenue growth for Q4, estimating between $875 million and $878 million, which falls short of the $878.6 million consensus, reflecting management's cautious stance on future growth.
- Executive Departures Impact: The departure of two sales executives has heightened investor concerns, particularly as the company struggles to attract new customers, which could hinder future sales growth and market share.
- Lackluster ARR Growth: While the acquisition of Red Canary is projected to contribute $136 million in ARR, the overall ARR growth is expected to be only 16%-17%, indicating weakness in the core business and an uncertain growth outlook ahead.
Microsoft and Nvidia to Launch New PCs at Upcoming Conferences
- Industry Conference Debut: Microsoft will join Nvidia next week at the Computex tradeshow in Taipei and the Build developer conference in San Francisco to unveil the first Windows computers powered by Nvidia chips, marking a significant collaboration in hardware innovation.
- Product Teaser: Nvidia teased the launch on social media, stating it will usher in a 'new era of PC' and provided coordinates for the Computex event, reflecting strong confidence and market anticipation for the new product.
- Developer Engagement: Microsoft's head of Windows and Devices, Pavan Davuluri, generated excitement among developers by hinting at new opportunities with the upcoming product, clarifying it is not a new OS version, which underscores Microsoft's commitment to its developer ecosystem.
- Market Reaction Anticipation: This launch is expected to elicit positive market reactions regarding the prospects of Microsoft and Nvidia's collaboration, particularly in high-performance computing and gaming sectors, further solidifying their leadership positions in the industry.
Broadcom's Optimistic Outlook in AI Chip Market
- Significant Revenue Growth: Broadcom reported a 29% year-over-year revenue increase in Q1 FY2026 to $19.3 billion, with AI revenue soaring by 106% to $8.4 billion, highlighting the company's robust performance and rapid market demand in the AI sector.
- Optimistic Future Outlook: The company anticipates Q2 FY2026 revenue of $22 billion, representing a 47% year-over-year increase, indicating substantial growth potential amid surging demand for AI processors.
- Market Share Leadership: With a 60% share of the ASIC market, Broadcom is well-positioned as ASIC shipments for AI servers are projected to rise nearly 45% in 2026, further solidifying its market dominance and driving revenue growth.
- Upward Earnings Projections: Analysts forecast a 67% increase in Broadcom's earnings per share to $11.36 for FY2026, and with the rapid growth of AI revenue, the company's profitability is expected to significantly improve in the coming years, attracting more investor interest.
Broadcom's AI Chip Market Growth Potential is Huge
- Accelerated Revenue Growth: Broadcom reported a 29% year-over-year revenue increase in Q1 FY2026 to $19.3 billion, while its AI revenue surged by 106% to $8.4 billion, highlighting the company's robust growth potential in the AI sector.
- Optimistic Future Outlook: The company anticipates Q2 FY2026 revenue of $22 billion, representing a 47% year-over-year increase, indicating that revenue growth momentum will continue amid soaring demand for AI processors.
- Market Share Advantage: With a 60% share of the ASIC market, Broadcom is well-positioned as ASIC shipments for AI servers are expected to rise by nearly 45% in 2026, further solidifying its leadership in the AI chip market.
- Upward Earnings Forecast: Analysts project a 67% increase in Broadcom's earnings per share to $11.36 for FY2026, and with the rapid growth of AI revenue, the company's profitability is set to significantly improve, driving stock price appreciation in the coming years.
Nvidia's Data Center Business Outlook is Positive
- Revenue Concentration: In Q1, Nvidia reported total revenue of $81.6 billion, with $75.2 billion coming from its data center division, indicating a strong reliance on this segment, which may lead the company to further shift focus away from gaming to enhance its competitive edge in data centers.
- Strong Capex Expectations: The four major hyperscalers are projected to spend around $650 billion on capital expenditures in 2023, with expectations to exceed $1 trillion by 2027, positioning Nvidia to benefit significantly from this massive spending, driving future growth.
- Significant Growth Rate: Nvidia's revenue grew by 85% year-over-year in Q1, a remarkable figure for a megacap company, suggesting that the market has yet to fully recognize its value; if valued similarly to peers, Nvidia's stock could be 2 to 3 times its current price, highlighting its undervalued potential.
- Increased Investment Confidence: With Nvidia's products at the core of a multitrillion-dollar infrastructure build-out, the unique combination of growth, value, and limited risk enhances investor confidence in its future performance, suggesting it will strongly outperform the S&P 500.
Nvidia's Dominance in Data Center Market Continues to Grow
- Market Dominance: Nvidia's increasing dominance in the data center market indicates its growing competitiveness in AI technology, which could significantly impact future market dynamics.
- Potential Trillionaire: The rapid advancement of AI technology has sparked discussions about the possibility of the world's first trillionaire, suggesting immense wealth creation opportunities within the industry.
- Key Technology Supplier: A little-known company labeled as an 'Indispensable Monopoly' provides critical technology for both Nvidia and Intel, highlighting its importance and influence within the entire ecosystem.
- Investment Advice: Despite Nvidia's strong market performance, the analyst team identified 10 best stocks that do not include Nvidia, advising investors to carefully consider their investment decisions.
Zscaler Shares Plunge 30% After Weak Q3 Outlook
- Strong Revenue Performance: Zscaler reported a 25% year-over-year revenue increase in Q3, reaching $850.5 million, which surpassed management's previous guidance of $834-$836 million, indicating robust performance among existing customers.
- Weak Outlook Guidance: Despite solid revenue results, the company forecasts only a 22% revenue growth for Q4, estimating between $875 million and $878 million, which falls short of the $878.6 million consensus, reflecting management's cautious stance on future growth.
- Executive Departures Impact: The departure of two sales executives has heightened investor concerns, particularly as the company struggles to attract new customers, which could hinder future sales growth and market share.
- Lackluster ARR Growth: While the acquisition of Red Canary is projected to contribute $136 million in ARR, the overall ARR growth is expected to be only 16%-17%, indicating weakness in the core business and an uncertain growth outlook ahead.
Microsoft and Nvidia to Launch New PCs at Upcoming Conferences
- Industry Conference Debut: Microsoft will join Nvidia next week at the Computex tradeshow in Taipei and the Build developer conference in San Francisco to unveil the first Windows computers powered by Nvidia chips, marking a significant collaboration in hardware innovation.
- Product Teaser: Nvidia teased the launch on social media, stating it will usher in a 'new era of PC' and provided coordinates for the Computex event, reflecting strong confidence and market anticipation for the new product.
- Developer Engagement: Microsoft's head of Windows and Devices, Pavan Davuluri, generated excitement among developers by hinting at new opportunities with the upcoming product, clarifying it is not a new OS version, which underscores Microsoft's commitment to its developer ecosystem.
- Market Reaction Anticipation: This launch is expected to elicit positive market reactions regarding the prospects of Microsoft and Nvidia's collaboration, particularly in high-performance computing and gaming sectors, further solidifying their leadership positions in the industry.
Broadcom's Optimistic Outlook in AI Chip Market
- Significant Revenue Growth: Broadcom reported a 29% year-over-year revenue increase in Q1 FY2026 to $19.3 billion, with AI revenue soaring by 106% to $8.4 billion, highlighting the company's robust performance and rapid market demand in the AI sector.
- Optimistic Future Outlook: The company anticipates Q2 FY2026 revenue of $22 billion, representing a 47% year-over-year increase, indicating substantial growth potential amid surging demand for AI processors.
- Market Share Leadership: With a 60% share of the ASIC market, Broadcom is well-positioned as ASIC shipments for AI servers are projected to rise nearly 45% in 2026, further solidifying its market dominance and driving revenue growth.
- Upward Earnings Projections: Analysts forecast a 67% increase in Broadcom's earnings per share to $11.36 for FY2026, and with the rapid growth of AI revenue, the company's profitability is expected to significantly improve in the coming years, attracting more investor interest.
Broadcom's AI Chip Market Growth Potential is Huge
- Accelerated Revenue Growth: Broadcom reported a 29% year-over-year revenue increase in Q1 FY2026 to $19.3 billion, while its AI revenue surged by 106% to $8.4 billion, highlighting the company's robust growth potential in the AI sector.
- Optimistic Future Outlook: The company anticipates Q2 FY2026 revenue of $22 billion, representing a 47% year-over-year increase, indicating that revenue growth momentum will continue amid soaring demand for AI processors.
- Market Share Advantage: With a 60% share of the ASIC market, Broadcom is well-positioned as ASIC shipments for AI servers are expected to rise by nearly 45% in 2026, further solidifying its leadership in the AI chip market.
- Upward Earnings Forecast: Analysts project a 67% increase in Broadcom's earnings per share to $11.36 for FY2026, and with the rapid growth of AI revenue, the company's profitability is set to significantly improve, driving stock price appreciation in the coming years.
