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(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) AI is dominating the Wall Street conversation Wednesday as trade war fears recede. Investors were discussing three ways to play AI amid two big earnings reports from major tech companies leading the trend. Nvidia after the bell Nvidia reports after the bell, the options market is implying a 7.5% move in either direction after earnings. Ross Mayfield of Baird is bullish on the report and expects it to give a boost to other parts of the ‘AI trade’, “It’s massive for the market and it’s massive for this narrative around AI even if materially not all that much changes” said Mayfield on CNBC’s “Worldwide Exchange” . Sarah Kunst from Cleo Capital believes the report will be highly influenced by tariffs, “Tariffs are still causing a lot of uncertainty, what we are really going to be seeing in this quarterly earnings, how much did their customers say ‘Wow if these tariffs come in hard this could add a ton of costs to our chips’ and how much did they pre-buy,” said Kunst. “If they pre-bought a lot we are going to see great numbers, if they decided to wait it out al ittle bit because they are concerned about their cash flows elsewhere we could see something lackluster. Salesforce also after bell Salesforce is also set to report after the bell. The software stock has a consensus overweight rating and a price target of $362 implying a roughly 30% increase over the next 12 months, according to analysts tracked by FactSet. Salesforce investor James Demmert of Main Street Research is equally as bullish. “We think the stock is cheap at 24 times earnings…and investors are frustrated with Capex spending, not just with Salesforce. They want to see AI come out the other side and we think this might be the quarter we see it,” said Demmert. Small caps as a contrarian call Nancy Prial of Essex Investment Management sees a major opportunity in small-cap stocks. “The small cap segment is undervalued relative to large caps,” said Prial on Worldwide Exchange. “What we are particularly exited about are two things: One, we are seeing an acceleration in earnings growth… in addition we think AI has the potential to boost the case broadly for smaller companies as it democratizes the way smaller companies can do business.” The small-cap benchmark Russell 2000 is down 6% this year, badly underperforming the S & P 500 which is back into the green after a big rally in the last month. “When you can use technology to drive productivity you don’t need to spend as much on people an that will level the playing field” for small caps, added Prial.
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