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<a target="_blank" href="https://www.businessinsider.com/tesla-ceo-elon-musk">Tesla CEO Elon Musk</a> threw his money and influence behind Donald Trump.He gave speeches, <a target="_blank" href="https://www.businessinsider.com/elon-musk-private-jet-hits-swing-states-campaigns-donald-trump-2024-10">hosted rallies</a> in swing states, posted frequently on X, and funneled at least $119 million into a <a target="_blank" href="https://www.businessinsider.com/elon-musk-super-pac-america-continuing-after-election-midterms-2024-11">pro-Trump super PAC</a> called America PAC.When Trump won the election, Tesla's stock soared. Its share price is now up nearly 33% year to date.On Tuesday, President-elect <a target="_blank" href="https://www.businessinsider.com/trump-elon-musk-vivek-ramaswamy-department-government-efficiency-doge-2024-11">Trump announced</a> that Musk would take on an advisory role and co-lead the Department of Government Efficiency, or DOGE, alongside the entrepreneur Vivek Ramaswamy.Inside Tesla, the response to Trump's victory, and Musk's role in it, has been mixed. Business Insider spoke with nine current employees in states across the country, including California and Texas. Though they represent a sliver of the automaker's global workforce of more than 100,000 employees, the conversations offer a glimpse into the internal response to the election.Some of the workers said they wish Musk would pay more attention to Tesla. Others said the CEO's involvement with Trump could benefit the company.Most of them were celebrating the company's surging stock price, as Tesla stock makes up a significant share of most workers' <a target="_blank" href="https://www.businessinsider.com/tesla-salary-database-elon-musk-pay-strategy-2024-11">compensation</a>.<h2 id="f2ff1729-e00e-492e-a77e-d3344b215374">Hope, celebration, and conflict</h2>One engineer said that while they hadn't voted for Trump, they felt Musk could "supercharge" the US government. Another employee who did vote for Trump said they were "excited for what this could mean for Tesla and for our country."Another employee said Trump's win and the sudden surge in Tesla's stock price had many at the company feeling more hopeful."Since being hired, the stock has primarily trended sideways, and it was difficult for a lot of employees to see value in the company as many of us are given stock to compensate for lower hourly pay," one employee said. "Now that the stock is moving in a positive direction, there is a sense of renewed hope for the company with employees generally."For others who spoke to Business Insider, the rising share price led to conflicted emotions."On one hand, you want to celebrate the fact that the stock is up an insane amount, but on the other, it's difficult to be truly happy because of Trump and what it means for Tesla's mission," one engineer said. The employee said that Trump's climate-crisis denial could be a roadblock to Tesla's mission of transitioning to sustainable energy.Trump has <a target="_blank" href="https://www.reuters.com/world/us/trump-says-he-would-consider-ending-7500-electric-vehicle-credit-2024-08-19/">said</a> he plans to increase US oil production and may roll back vehicle-emissions standards and incentives designed to promote the production and adoption of electric cars. At an October rally in Detroit, Trump <a target="_blank" href="https://www.factcheck.org/2024/10/the-issues-trumps-proposal-to-lower-prices-by-increasing-energy-production/">said</a> he planned to "frack, frack, frack, and drill, baby, drill." Musk has <a target="_blank" href="https://www.cnbc.com/2024/05/23/tesla-ceo-elon-musk-says-he-favors-no-tariffs-on-chinese-evs.html#:~:text=Tesla%20has%20been%20struggling%20this,Q&amp;A%20session%20was%20being%20livestreamed.">said</a> in the past that he doesn't agree with tax incentives for electric cars.Tesla and Musk did not respond to a request for comment.<h2 id="2854b357-98e7-4ef9-ae66-46c451c3e979">Musk's growing list of commitments</h2>Some Tesla factory workers in Texas and California were given time off to vote on Election Day in compliance with state laws, multiple factory workers in both states said. Separately, Tesla managers were sent a guide on how to address political discussions in the workplace, one worker said.Postelection, three employees said the election hasn't been discussed much at work. "No one is saying anything," said one. "I think everyone is just waiting to see how this all plays out now.""There's this feeling that no one fully knows where anyone else stands," one manager told BI.Some Tesla-connected figures have been more open. Tesla's director of AI, Ashok Elluswamy, posted about Trump's victory on X.Kimbal Musk, Elon Musk's brother and a Tesla board member, also appeared to celebrate the win.The DOGE advisory role will be another time commitment for Musk, who's already involved with five companies. Musk's private jet has flown to and from Palm Beach, Florida, near Trump's estate in Mar-a-Lago, five times since November 5, according to data from the <a target="_blank" href="https://jetspy.com/">jet-tracking company JetSpy</a>. On Wednesday, Musk's jet flew from Palm Beach to an airport near Washington, DC, where he attended Trump's first postelection meeting with House Republicans.Six workers said they felt Musk had taken his focus off Tesla."It feels like a lot of political theater," one worker said. "We sell cars. Anywhere else you'd expect the CEO to be focused on that."Do you work at one of Musk's companies or have a tip? Reach out to the reporter via a non-work email and device at <a target="_blank" href="mailto:gkay@businessinsider.com">gkay@businessinsider.com</a> or 248-894-6012

At Tesla, some are celebrating stock gains — others worry Elon will lose focus

<ul class="summary-list"><li>Trump's victory over Harris raises questions about Republican control of the House.</li><li>Wall Street strategists are closely monitoring financial markets and potential policy impacts.</li></ul>It's fair to say that much of <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-post-election-results-bullish-trump-trade-peter-tuchman-2024-11">Wall Street didn't get enough sleep</a> on election night after being caught off guard by the speed at which results began coming in.Dominic Pappalardo, the chief multi-asset strategist at Morningstar Wealth, was home watching <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/polymarket-prediction-betting-markets-vindicated-by-trumps-strong-showing-1033958821">prediction markets</a> and how percentages were skewing state by state. He was also keeping an eye on financial markets to see if they were making directional moves.Over in London, Richard Kelly, the head of global strategy at TD Securities, was on his firm's trading floor, busy answering endless client questions on 'What about this' and 'What about that'-type scenarios."As much as we all tried to think ahead of what the different policies would be, there are always a lot more questions that come up on the day, and they all have to be much more concrete," Kelly said. "So it's just been a whirlwind."Former President <a target="_blank" class="" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Donald Trump's victory</a> over Vice President Kamala Harris has been called for Tuesday's election, but Wall Street is still waiting on one more key answer: <a target="_blank" class="" href="https://www.businessinsider.com/congress-balance-of-power-results-competitive-republicans-democrats-2024-11">Will Republicans take the House</a>, too? It seems increasingly likely. Yet, the result would be based on a handful of seats."Technically, we don't need to know until the first half of December legally, and these things are so close in terms of the margin of error," Kelly said. "There's some of these races where literally hundreds of ballots is the differential of Republican versus Democrat. So it's not going to be today."The small tilt in the House makes a big difference because a handful of seats are enough to create some friction on Trump policies, Kelly noted.<h2 id="e4827f7a-5ee5-4a62-aa3b-da6a8ce8b3ef">Stocks</h2>Sector rotations among stocks are slightly muddy because the overall <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-election-trump-stock-rally-rise-sp500-outlook-regulation-mergers-2024-11">market is up so much that everything rallied</a> with the broad market, Pappalardo said. But one noteworthy sector is financials, which performed better than the overall market into Wednesday's early trading hours. It's unsurprising since the Republicans campaigned on policies favorable to banks and financial stocks, including decreased regulation. The steepening yield curve is also positive for banks as it boosts their profit margins since they borrow on the front-end yield and lend at the back-end yield, he added.Technology is another sector the market is viewing favorably: Tech companies have been creating a lot of profit, so Trump's promised corporate tax cuts will be quite beneficial, Pappalardo said.Meanwhile, the utilities sector lagged the broader market the most as we moved into Wednesday's early trading hours. Investors moving away from defensives toward cyclicals is likely a sign that investors believe the economy is positioned for growth, Pappalardo noted.While the rallies are positive for stocks, looking ahead, Pappalardo expects things to return to normality. In other words, investors will focus on traditional fundamentals like corporate earnings and interest rate policy.<h2 id="5e50dfbb-c80b-4dee-8272-69eff4f2145f">Bonds</h2>Wednesday was a long day for Gennadiy Goldberg, the head of US rates strategy at TD Securities. He stayed up past midnight watching the yield move before passing the baton off to his colleagues in London."Once the polls started to close, the market already started to move," Goldberg said. "It took the market very little time to start penciling in higher odds of the Trump victory."The swift and strong Republican win pushed the 10-year yield up from around 4.3% to around 4.45%.The <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-a-bond#:~:text=Bonds%20are%20loans%20that%20investors,the%20principal%20investment%20at%20maturity.">bond market</a> was expressing signs of nervousness. This sector of the market is worried about who's going to pay the bill for potentially higher budget deficits. The result is a pricing-in of higher debt premiums, Goldberg said.Additionally, aggressive immigration and tariff policies could be inflationary. And if it looks like inflation pressures are either reaccelerating or just stubbornly high, it could leave the Fed nervous about cutting rates further, Goldberg said.Kelly added that the 10-year could still move higher to 4.75%, and that's where he thinks the market could get more comfortable buying.<h2 id="b628f761-842f-464c-a039-7d296873c4e9">Currencies</h2>Jayati Bharadwaj, a global FX strategist at TD Securities, was at home in front of multiple screens until about 1 a.m. as she watched <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-forex">currencies move</a> amid the strong Trump lead. Initially, she expected the results to take a few days to become clear, but she was surprised by how quickly the outcome became evident. Currency markets also reacted swiftly against the backdrop of a strengthening dollar."The Chinese renminbi, the Mexican peso, and the euro were hit particularly hard because once markets saw the election results being called, they had to start pricing in the threat of tariffs," Bharadwaj said.She expects the euro to trade even weaker relative to the dollar once Trump takes office. Right now, it's trading at $1.07; expect it to move to $1.05, she said. If the Republicans take the House, then the euro could drop below $1.05, she added.Kelly added that China has been under the microscope since Trump talked about 60% tariffs on its imports. Other countries could face 10% tariffs across the board. So, if you're highly leveraged to trade, like Europe or the UK, it could be very negative for the euro and pound. He noted that it could also be negative on the currencies of Canada and Mexico, depending on how USMCA members will be impacted.On the flip side, the yen could weaken less than other currencies relative to the US dollar. The Bank of Japan may return to rate hikes over the next few months after it had paused, Kelly said. This means watch out for further unwinding in the yen carry trade. Therefore, the next question investors have to ask is: how many long equity positions have been funded at very low Japanese rates, Kelly said.For this reason, Bharadwaj cautions traders about jumping back into any carry trades because there will be a lot of currency volatility.<h2 id="2b454727-3f51-473d-b815-35fcf1e90886">Gold</h2>One surprise is that <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/gold-price">gold hasn't weakened</a> as much as expected, Kelly said. As the dollar strengthened, he anticipated a more significant pullback. Given the uncertainty and volatility that took place the day after the elections, it might be too soon as investors digest results. However, he anticipates further weakening in gold, which is down 2% from Election Day.

Chief strategists project their outlooks on stocks, bonds, currencies, and gold amid a Trump victory 

Tesla attracts millions of job seekers annually. The few who receive offers typically face a calculated gamble: Accept lower base pay up front for the chance of a potentially lucrative future payout.Business Insider secured access to an internal Tesla pay database, covering nearly 100,000 employees as of December 2021. That data, along with public filings and interviews with people who have worked for the automaker, reveal the company's pay strategy. Tesla offers lower base salaries than its tech and automotive peers but offers substantial stock grants.Even Tesla's top earners must bet on the company. This high-risk, high-reward system is coupled with a selective hiring process that has in the past included <a target="_blank" href="https://www.businessinsider.com/elon-musk-email-tesla-approve-new-hires-2023-5">Elon Musk's sign-off for every hire</a>.Using Tesla's internal salary database, BI looked at median base pay for the roughly 13,000 full-time, salaried, US-based employees across the internal job categories that Tesla uses to define workers in business units, such as engineering, manufacturing, or data management. (BI excluded pay for hourly workers, many of whom work in manufacturing, as it was not possible to accurately calculate their median annual pay based on hourly payroll data.)BI further broke down the data to look at median base pay by job title, analyzing the numbers for full-time, US-based, salaried roles with at least five employees.The base pay for these titles, which include directors of engineering and managers who work in Tesla's service centers fixing vehicles, ranges from about $35,000 to $324,000, according to the data.Nine current and former workers told BI the pay structure has largely remained in place since December 2021 and is ultimately part of Musk's quest to hire only the most <a target="_blank" href="https://www.businessinsider.com/elon-musk-tells-twitter-tesla-staff-be-hardcore-old-email-2022-11">"hardcore" workers</a>."The whole system is set up to find the fanatics," a current Tesla worker with knowledge of the company's hiring process said. "They could get better pay somewhere else, but we want the people who are die-hard Tesla."A former Tesla recruiter who worked with the company until 2024 said the automaker's <a target="_blank" href="https://www.businessinsider.com/how-to-get-hired-at-tesla-job-interview-process">interview process</a> for engineers — which typically entails at least nine interviews and can take months — and the company's pay structure are designed to weed out workers who are looking to just "clock in and clock out.""It's a culture thing," the former recruiter said. "It's not even about how smart you are or how much you know. They're looking for a willingness to learn and put in the extra hours."Tesla, Musk, and the company's board of directors did not respond to requests for comment.In a December 2023 <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.sec.gov/Archives/edgar/data/1318605/000162828024002390/tsla-20231231.htm">regulatory filing</a>, Tesla reported it employed more than 140,000 people worldwide. In April, Tesla told staff it planned to <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/elon-musk-sent-tesla-employees-email-announcing-layoffs-read-memo-2024-4">cut more than 10% of its workforce</a>. A June <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.cnbc.com/2024/06/21/tesla-has-downsized-by-at-least-14percent-this-year-internal-number-shows.html#:~:text=Tesla%20internal%20records%20viewed%20by,includes%20hourly%20and%20salaried%20workers.">estimate</a> from CNBC placed Tesla's headcount at just over 120,000.Using separate data from the Securities and Exchange Commission, BI compared the company's median base pay with that of traditional automakers and the six largest tech firms by market cap. Tesla lags behind all of them except Amazon. While there are a variety of factors that can affect a company's median salary — for example, Amazon's large warehouse workforce or Apple's large retail workforce — the data is consistent with what four current and former Tesla employees say: Tesla's base salaries are generally less than competitors'.Nvidia, Ford, Meta, and Amazon declined to comment on their employee compensation packages. Apple, Microsoft, and Alphabet did not respond to a request for comment. GM said it has doubled its staff in Silicon Valley over the past six months and is competitive in hiring talent away from tech firms.Nine current and former people in engineering and sales said that Tesla's stock grants make it easier to accept lower base salaries. Tesla stock could make them rich, if only on paper. On November 8, the automaker's stock surged more 8% in the wake of Donald Trump's re-election, hitting a market cap of $1 trillion.Some Tesla employees can receive millions of dollars in stock. In 2020 and 2021, 44 US-based employees were offered stock worth more than $1 million, according to the database.To get a sense of which employees were more likely to take home large grants, BI broke up stock grants based on job category. The data show that most workers in engineering received stock grants above $25,000. The value of the stock is based on the value of the shares at the time they were granted, but it's subject to change based on Tesla's share price.Of the stock offerings at Tesla, about 75% were restricted stock units, or RSUs, while nonqualified stock options made up 21%, and were given exclusively as merit-based compensation, according to BI's analysis of US-based, full-time workers. Only 4% of employees — including many executives and other high-level workers — received the stock as incentive stock options, or ISOs.Zaheer Mohiuddin, the cofounder of <a target="_blank" href="http://Levels.fyi">Levels.fyi</a>, said RSUs are very common in tech, while incentive stock options are typically reserved for longtime high-level employees or nonpublic companies. RSUs are typically included in standard compensation packages, while nonqualified stock options and ISOs are often used as additional incentives.RSUs give employees actual shares that vest over time, while ISOs simply provide the right to purchase stock at a preset price before expiration — which is potentially profitable if the stock price rises above that level, but also requires the employee to have money on hand to pay for the stock in the first place.Outside of one person within Tesla's executive job category who had no stock amount listed, Tesla executives received stock offerings worth between $950,000 and $20 million, according to the database, which displayed the latest stock amount for each employee as of December 2021. All but one of the executives' offerings were ISOs.Tesla is far from the first company to enhance base pay with stock grants. Companies like Meta, Google, and Amazon have been known to offer employees healthy stock grants. Employee survey data from 2024 from the compensation-benchmarking company <a target="_blank" href="http://Levels.fyi">Levels.fyi</a> found that Tesla's median base pay and stock grants for US-based software engineers are slightly lower than that of US-based software engineers at Meta, Amazon, Apple, Netflix, and Alphabet, collectively.Over the past five years, Tesla's stock has spiked well over 1,000%; that performance potentially makes those grants attractive.Greg Selker, a managing director at the executive recruitment firm Stanton Chase, told BI that while other Big Tech companies might have higher base pay and equity grants to match, Tesla's strength also lies in its image."There's a mission-driven element to it that allows Tesla to get away with paying less," Selker said. "These people are working to bring about the decarbonization of the planet."Musk has previously described what the stock options can do for employees. "We give everyone stock options; we've made many people who are just working the line — who didn't even know what stocks were — we've made them millionaires," he <a target="_blank" href="https://fortune.com/2023/11/30/tesla-elon-mus-unionize-staff-millionaires-stock-options/">said</a> last year.BI examined the median stock grants and the percentage of employees who received grants for each job category and found that a majority of workers in nearly every category received some type of stock grant.Tesla's pay strategy has more in common with other Silicon Valley companies like Google or Meta than it does with traditional automakers, Harley Shaiken, an auto industry and labor expert, told BI. Traditional automakers like GM or Ford rely on higher base pay while companies like Tesla, which has seen higher stock returns over the past five years, can attract talent through stock grants, Shaiken said."Tech workers are looking for the opportunity for a big payday, not just an incremental salary bump," he said.One former sales manager said Tesla's stock offerings initially attracted him to the role, but he compared them to "golden handcuffs.""The stock is the major hook. You might be unhappy in your role, but you just decide, 'I'm going to keep my head down and wait a few months longer until I vest,'" he said.Tesla's stock offerings have given some workers opportunities for major paydays. Drew Baglino, Tesla's former senior vice president of powertrain and energy engineering, and Zachary Kirkhorn, the former CFO, were awarded $20 million each.Other executives, including Musk's right-hand man Omead Afshar, received $10 million in stock offerings, according to the database."It's part of the benefit of taking a chance on a company like Tesla," one engineer who joined the company in 2015 told BI. "You might have to deal with the aches and pains of a startup — the long hours, some of the uncertainty — but there can also be a significant payoff."Aaron Greenspan, a vocal critic of Musk and the founder of PlainSite, an organization that provides access to legal documents and advocates for legal transparency, first referenced Afshar's stock grant in a lawsuit filed against defendants including Musk and Tesla, accusing them of defamation, among other claims. Lawyers for Musk and Tesla have called his claims "largely unintelligible allegations." The lawsuit is ongoing.Tesla awards stock grants with promotions and annual reviews and bases them on the company's performance, according to the salary database and conversations with four current employees. Last year, the company cut back on merit-based stock awards for staff, <a target="_blank" href="https://www.bloomberg.com/news/articles/2023-12-19/tesla-skips-merit-based-stock-awards-squeezing-compensation">Bloomberg reported</a> and the four employees told BI. In June, Musk told staff he planned to award <a target="_blank" href="https://www.businessinsider.com/tesla-stock-option-grants-awards-elon-musk-email-2024-6#:~:text=Tesla%20will%20reward%20employees%20for,at%20Tesla%20earlier%20this%20year.">additional stock grants for "exceptional performance."</a> During annual performance reviews in July, managers were limited to recommending no more than 20% of their team to be considered for the extra award, two people with knowledge said. Tesla typically awards employees restricted stock units that vest over a period of four years, the data show.Selker said historically Tesla workers have been able to count on their stock continuing to grow."It's a bet they have to make," he said. So far, stock grants have "proven to be better than cash in your pocket.""Now, if the stock were to become inconsistent or halve, then Tesla will have to change its strategy," he added.Tesla's stock has experienced significant volatility this year, slumping as low as 44% in mid-April from its price at the start of the year. Following Donald Trump's re-election, it's up nearly 30% overall year to date.At least one longtime Tesla staffer worries about new hires."I feel lucky that I got in early, but I see a lot of younger engineers expecting to reap the same benefits," they said. "And I'm not sure they will."Do you work for Tesla or have a tip? Reach out to the reporter via a non-work email and device at <a target="_blank" href="mailto:gkay@businessinsider.com">gkay@businessinsider.com</a> or <a target="_blank" rel="noopener noreferrer nofollow" class="c-link">248-894-6012</a>.

Internal Tesla salary database shows Elon Musk's strategy: Lower salaries, bigger stock grants

It took something surprisingly small — something that's been described as "teeny tiny" and "ultra-cropped" — to propel <keyword id="19948011" type="General" weightage="100" keywordseo="Prada" source="keywords" meta.keywordsubtype="org" meta.entityname="Prada" meta.hostid="261" meta.entityid="Prada">Prada</keyword> to its place as one of the year's few luxury winners. In fact, it measures under 10 inches long. <keyword id="20885719" type="General" weightage="20" keywordseo="Miu-Miu" source="keywords" meta.keywordsubtype="org" meta.entityname="Miu Miu" meta.hostid="261" meta.entityid="Miu Miu">Miu Miu</keyword>'s micro miniskirt, which debuted in 2021 and subsequently went viral, taking over both TikTok and magazine front covers, is emblematic of the brand's show-stopping couple of years — and has no doubt helped its parent company, Prada, do what few luxury companies have been able to do this year: grow. "I think the 'miracle' at Prada is Miu Miu," Luca Solca, a senior analyst at Bernstein, told Business Insider. Thanks to <a target="_blank" href="https://www.businessinsider.com/miu-miu-revenue-jumps-93-gen-z-asia-sales-prada-2024-7">Miu Miu's hot streak</a>, as well as a series of smart business moves at Prada itself — a focus on a controlled retail pipeline and store productivity, plus some experienced new hires — the company is <a target="_blank" href="https://www.businessinsider.com/zara-inditex-pandora-thrive-amid-luxury-downturn-aspirational-consumer-trends-2024-9">bucking negative luxury trends</a>. It's selling well in Asia, its stock is up, and investors are excited. Net revenue for the first half of the year was 14% higher than in the same period in 2023 and 34% more than 2022. At luxury bellwethers LVMH and Kering, first-half sales fell 1% and 11%, respectively, compared to last year.Its stock is up more than 30% year-to-date, even more than that of <a target="_blank" href="https://www.businessinsider.com/hermes-became-ultimate-status-symbol-2024-2">Hermès, luxury's perennial market leader</a>. Along with Moncler, it's one of only two buy-rated luxury stocks at HSBC. The 111-year-old, family-run, Milanese leather goods shop turned cutting-edge fashion superhouse is now enjoying one of its greatest runs in history. <h2>The trendy little sister</h2>As any elder sibling knows well, sometimes the flashy, fun younger sister can outshine even the most well-prepared eldest. Miu Miu is doing just that. The more experimental brand has become the "It" girl of the fashion industry. It's number two on The Lyst Fashion Index, a quarterly measure of the hottest fashion brands. Searches for Miu Miu are up 47% this year on luxury resale platform The RealReal. The micro minis that stormed the runway in 2021, a sneaker collab with New Balance, and the quilted Wander bags have become must-have looks. That's translated into impressive results: <keyword id="19957111" type="General" weightage="20" keywordseo="retail-sales" source="keywords">Retail sales</keyword> were up 50% in 2023 and 86% in the first half of this year. Last quarter, website traffic was up 110% year over year, Stifel's Rogerio Fujimori reported in his July note. The brand will likely hit $1 billion in revenue this year. <div type="image" title="Miu Miu micro miniskirt" height="3109" width="4663" msid="113815737" hostid="261"></div>Part of it is the brand's messaging. "Miu Miu is resonating with consumers because of a savvy mix of product and communication marketing," Solca said. In a recent note, he highlighted the brand's events — a tennis club, literary club, and film series — that go beyond just fashion to form a "cultural aesthetic." Miu Miu has embraced stars (Sydney Sweeney and Gigi Hadid were featured in recent campaigns), which has energized its following. The brand has also managed to tap into Asian markets — one of the <a target="_blank" href="https://www.businessinsider.com/china-luxury-retail-sales-slowdown-brands-fashion-2024-7">most challenging sectors for luxury brands</a>. Again, some smart marketing has helped. The brand enlisted K-pop icons as ambassadors and dressed Chinese stars Lexie Liu, Zhao Jinmai, and Wu Yanshu. It also increased spending on Little Red Book, a social media platform in China, and threw events in Tokyo, Taipei, and Nanjing. In short — pun intended — you can't get trendier than Miu Miu right now, and being trendy is good for business. <h2>The business behind the boom</h2>But Miu Miu's popularity, as attention-grabbing as it is, is only part of the story. The brand accounted for 15% of Prada's sales last year. HSBC analysts called its growth a "(big) cherry on the cake" — the cake being Prada (which didn't respond to a request for comment from Business Insider for this story). Behind Miu Miu's Mary Jane shoes and Arcade bags is a success story at its parent company. The group's namesake line is growing, albeit at a slower and steadier pace. Prada's retail sales were up 3% in the first half of the year compared to last year and 7% in 2023. It's been among Lyst's top five hottest brands since 2022. This didn't happen by accident: In 2017, Prada committed to a turnaround strategy following a few losing yearsand a drop in profitability. At more than 100 years old, Prada hadn't entered the new millennium: Its full product line wasn't available through e-commerce, and its advertising wasn't digitized. "In 2015, the tide really turned for them," Jelena Sokolova, a senior analyst for Morningstar, told Business Insider. "They fared worse than the industry: Sales were negative for a number of years; their earnings plummeted." In response, Prada focused on retail, a channel in which it can control prices and cut back on wholesale, which now represents only 11% of sales. It made an effort to cut down on discounts — a problem that has <a target="_blank" href="https://www.businessinsider.com/how-burberry-became-fashions-biggest-fail-stock-drop-ceo-ousting-2024-8">plagued labels like Burberry</a> and Gucci and can lead to diminishing brand perception. At its retail stores, new CEO Andrea Guerra, who arrived in 2023 from LVMH, has drilled down on productivity, or how much money each square foot of retail space generates, by launching in-store installations, forming one-to-one relationships between sales associates and customers, and infusing stores with wearable pieces and collaborations. The company closed stores that weren't performing and renovated the ones that were. It's worked: Retail productivity has increased 32.5% between 2019 and 2023. <div type="image" title="Prada store" height="3333" width="5000" msid="113815742" hostid="261"></div>There has also been a slew of management changes. In 2020, the company brought on Raf Simons, heralded as one of the biggest stars in the design world, as co-creative director, sharing the title with Muccia Prada — the company's billionaire heiress who The New York Times has <a target="_blank" href="https://www.nytimes.com/2023/10/04/style/miu-miu-chanel-louis-vuitton-paris-fashion-week.html">referred</a> to as "the most influential woman in fashion." Prada now has more time to use her keen sense of design at Miu Miu. In the years following, it recruited talent from LVMH and Goldman Sachs to join its top ranks. And then there is the sheer cyclicality of fashion and the fact that, after a few years of being less-than-hot, Prada is once again on the rise. It has embraced the 1990s and Y2K aesthetic — a heyday for Prada — popular with Gen Z and was the most searched brand among the demographic on The RealReal. Hit products pushed the profitable leather goods category to revenues of more than $2 billion last year. There was a reimagining of the early 2010s it-bag, the Galleria, complete with a Scarlett Johansson-led campaign. Other handbag rereleases, like that of the Nylon, have taken off, while new purse styles like the Buckle and Arqué got callouts in last year's earnings report. That momentum gave the brand an upper hand going into the luxury downturn. "People prioritize which brands they want to spend on. With a limited budget, first, you drop the ones that were not hot to begin with," Sokolova said. <h2>Can Prada's hot streak last?</h2>Just as fashion comes in, it can come out. And Prada's story — particularly Miu Miu's rapid-fire growth — in some ways mimics that of <a target="_blank" href="https://www.businessinsider.com/gucci-sales-profit-reputation-falling-luxury-kering-michele-china-2024-5">Gucci's hype-driven rise and plummeting fall under Alessandro Michele</a>. "You kind of become a victim of your own success," Sokolova said. Both Prada and Miu Miu are susceptible to volatility, though for different reasons. Miu Miu is still relatively small, meaning its brand identity is not yet established enough to withstand the whims of consumers. CEO Guerra has acknowledged that such incredible growth can lead to a challenge. "There appears to be a glass ceiling," Solca wrote in a recent note. "Being prominent brings fatigue: after a while, consumers feel they have seen and done enough with these brands and move on." Prada, meanwhile, is more exposed in the cyclical ready-to-wear category — which makes up 32% of sales — than other brands like Gucci and YSL. But there are signs of continued growth: Miu Miu is adding 10 to 15 stores next year, while Prada is adding five to 10, the company has said. The brand's retail footprint is particularly underpenetrated in the US. The company's beauty business is still nascent. Last year, it launched skincare and makeup through a partnership with L'Oréal, and there is more money to be made in that sector. With so much control of its sales chain, the company can raise prices and limit overexposure through low-end collaborations or expansion into cheap categories. Plus, the slowdown hasn't happened yet: Miu Miu website traffic and sales continued to grow between the first and second quarters, and the company maintains it's not a flash in the pan. "This is a result of many years of work on the brand, on the products, on the people," Guerra said about Miu Miu's success on the company's most recent earnings call. Meanwhile, <a target="_blank" href="https://www.businessinsider.com/prada-white-tank-top-status-symbol-2024-2">Prada has maintained its brand value</a>. But the woman Miuccia Prada herself knows the pressure is on. "I was very nervous for this show," she told reporters backstage at the line's fashion show earlier this month about the new collection, <a target="_blank" href="https://www.nytimes.com/2024/09/20/style/prada-fendi-milan-fashion-week.html">The New York Times reported</a>. "Much more than usual." September 30, 2024 — An earlier version of this story misspelled the name of Miuccia Prada.

How Prada is beating the odds and bucking the luxury slump 

<ul class="summary-list"><li>Walmart stock has soared 58% this year to record highs, making its founding family richer than ever.</li><li>Retail legend Sam Walton's three surviving children are each worth more than $100 billion.</li></ul>Walmart stock has soared to record highs, lifting the retailer's <a target="_blank" class="" href="https://www.businessinsider.com/life-of-the-walton-family-behind-walmart-and-sams-club-2018-12">founding family</a> to new levels of wealth. Experts say its signature strategy has fueled the stellar run, and they're not surprised to see the Waltons reap the rewards.Shares of Walmart have jumped 58% this year to about $83, valuing the company at nearly $670 billion at Wednesday's close. The stock surge has added more than $32 billion to the fortunes of each of founder Sam Walton's three surviving children — Jim, Rob, and Alice.The siblings rank among the world's 20 wealthiest people and have net worths <a target="_blank" class="" href="https://www.businessinsider.com/wealth-billionaires-musk-bezos-zuckerberg-net-worth-jensen-huang-waltoans-2024-8">in excess of $100 billion</a>, per the Bloomberg Billionaires Index. Together they're <a target="_blank" class="" href="https://www.businessinsider.com/walton-family-wealth-walmart-record-stock-billionaires-retail-rich-list-2024-8">far richer than Elon Musk</a>, who tops the rich list with a $237 billion net worth.Walmart generated $643 billion in net sales and $27 billion in operating income last year. The Sam's Club owner has about 10,500 stores worldwide and employs around 2.1 million people, including almost 1.6 million in the US — roughly 1% of the workforce.The megaretailer and its biggest shareholders owe much of their success to selling everyday products at low prices, David King, the Higdon Professor of Management at Florida State University and the coauthor of a 2017 case study on Walmart, told Business Insider.Value for money is top of mind for many shoppers, who've been hit in recent years by higher prices for basics such as food, fuel, and housing, and higher monthly payments on their credit cards, car loans, mortgages, and other debts.Inflation skyrocketed to a 40-year high of more than 9% in mid-2022 and remained above the Federal Reserve's 2% target in September. The central bank sought to curb the pace of price growth by raising interest rates to above 5% between March 2022 and July 2023, and only made its first cut this September.<h2 id="2abcc6e7-15b4-464c-9f4e-c778b703cf0f">Logistics network</h2>Walmart also benefits from ubiquity, with 90% of the US population living within 10 miles of one of its stores, according to its website. The retailer has steadily expanded by entering smaller markets that could only support one large retailer — limiting competition — then using its scale economies to undercut mom-and-pop stores and drive them out of business, King said.The company has also built a national logistics network to support its growing store count and thus bolster its purchasing power, enabling it to negotiate ever-lower prices from suppliers and offer greater value and convenience to customers, King added. He noted that Walmart and its associated businesses accounted for 16% of Procter &amp; Gamble's sales last year.Art Weinstein, a marketing professor at Nova Southeastern University in Florida who's published academic research on Walmart, attributed its <a target="_blank" class="" href="https://businessinsider.com/walmart-finding-groove-should-terrify-target-2024-5">success</a> to similar factors.He told BI the stock's outperformance reflects inflationary pressures and investors perceiving Walmart as a "safe investment in troubling world markets."Weinstein credited Sam Walton's philosophy of centering the customer plus the company's low prices, one-stop shopping experience, supply chain expertise, strong partnerships with suppliers, vast scale in grocery retailing, and innovations such as the Walmart+ subscription program.<div type="image" title="exterior of a walmart" height="3109" width="4664" msid="114543373" hostid="261" sizebytes="626096"></div><h2 id="c237c42e-eee2-4359-abf8-7b50afd3e99c">Family fortunes</h2>Sam Walton shrewdly structured his fledgling company as a family partnership in 1953, giving 20% stakes to each of his four children. Put differently, he <a target="_blank" class="" href="https://www.businessinsider.com/walton-family-sam-walmart-stock-billionaires-estate-planning-inheritance-wealth-2024-8">handed 80% of Walmart to his kids</a> when it was worth next to nothing, sparing them from paying billions of dollars in estate taxes to inherit his stock after he died in 1992.King told BI he wasn't surprised to see the Waltons near the top of a rich list dominated by technology bosses like Musk, Jeff Bezos, and Mark Zuckerberg."Walmart is a family firm that is in its second generation, or the initial value created by Sam Walton has not been split across multiple heirs," King said.The late John T. Walton's son, Lukas Walton, ranks in the top 50 of Bloomberg's wealth index with a nearly $37 billion fortune. But it's true the vast majority of the family fortune remains in the hands of Sam Walton's children."Wealth rarely lasts past the grandchildren or three generations, as the number of heirs in the third generation increases and they are used to living wealthy," King said.The management professor added that the Waltons have retained more of the company over the years because Walmart, unlike many tech companies, has largely self-financed its scaling."The wealth is more concentrated, because Walmart used mostly internal growth that funded expansion from revenues," he said. "In contrast, tech billionaires are more dependent on external investors to scale up, giving more ownership to investors, versus founders."<h2 id="3dfe9f76-de5b-4d2b-86f2-4207e3cf2b49">$100 billion club</h2>Weinstein, the marketing professor, also told BI he wasn't surprised to see the Waltons in the $100 billion club, as the US stock market rewards strong business performance.Tech firms and founders are "generally the most high-profile wealth creators as it is easier to scale online companies which benefit from the network effect, and tech firms may be perceived as sexier, more interesting, and revolutionary," he said, giving Musk's empire of businesses including Tesla and SpaceX as an example."Walmart's success takes largely a different path by truly mastering the daily business fundamentals," Weinstein added.Yet he ticked off several threats to Walmart. It faces <a target="_blank" class="" href="https://www.businessinsider.com/walmart-fulfilment-creating-pressure-for-amazon-wells-fargo-says-2024-10">competition</a> from local rivals like Amazon and Target, as well as Chinese upstarts such as <a target="_blank" class="" href="https://www.businessinsider.com/how-do-shein-temu-and-amazon-compare-2023-8">Temu and Shein</a>.The company might struggle to find talent when it's already the largest employer in the US, and bagging great executives could be tough when top graduates tend to prefer management consulting and tech gigs. Retail's long working days and weekend shifts are also a "turn-off for many excellent employees," he said."One potential concern is that Walmart attracts older customers," he added. "Will their products and stores <a target="_blank" class="" href="https://www.businessinsider.com/walmart-tiktok-attracts-gen-z-shoppers-2020-1">appeal</a> to millennial and Gen Z shoppers going forward?"

Why Walmart stock keeps hitting new highs, making the Waltons richer than ever

<ul class="summary-list"><li>The US economy is on solid footing with cooling inflation and continued growth.</li><li>Yet, the outlook for the stock market is less clear, with analysts divided over how long the bull rally can run. </li></ul>Things are looking great for the US economy.Inflation is falling, <a target="_blank" class="" href="https://www.businessinsider.com/employee-productivity-booming-workers-jobs-ai-stock-market-gdp-2024-3">productivity is rising,</a> and the Federal Reserve is easing monetary policy, which should act as a tailwind for economic growth.Economists have shifted from arguing about a potential recession to forecasting whether a "soft landing" or "no landing" is more likely. It seems the debate is simply <a target="_blank" href="https://www.businessinsider.com/america-new-economic-supercycle-growth-inflation-stock-market-global-chaos-2024-10">about how fast the economy can grow from here.</a>But the outlook for the stock market is less clear, with major Wall Street banks still divided on whether stock prices have further room to run.Stocks are trading near record highs, with the <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> on track to deliver back-to-back annual gains of more than 20%.Among the top analysts at Wall Street banks, there's some disagreement about whether all of the good news is priced in already or if the market can continue to rise beyond already lofty valuations. On the one hand, most see the gains set to continue, pushing past election uncertainty and continuing to lift stocks into 2025. However, beyond that timeline, uncertainty builds and outlooks get murky. Here's what Wall Street is saying about the prospects for the stock market heading into 2025 and beyond.<h2 id="62a39dfb-29e2-437a-b286-98b65dca264e">The Bulls</h2>A slew of Wall Street banks are chasing the record rally in the stock market this year, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-targets-bull-market-goldman-ubs-bmo-2024-10">boosting their S&amp;P 500 year-end price targets</a> to play catch-up.Strategists at UBS <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-prediction-us-economy-no-landing-ubs-2024-10">increased their S&amp;P 500 price targets</a> in a note last week, expecting the S&amp;P 500 to hit 6,300 by June 2025 and 6,600 at the end of next year.That represents potential upside of 8% and 13%, respectively.UBS CIO head of US equities David Lefkowitz said "healthy" earnings growth will pave the way for further stock gains."Third-quarter earnings season has started on a positive note with bank management teams highlighting that consumer spending remains healthy and consistent with normal economic growth," Lefkowitz said.The bank said improving inflation, more Fed rate cuts, and accelerating investment in artificial intelligence should all help support the stock market next year.Strength begets more strength, and that's a big part of BMO strategist Brian Belski's bullish outlook for stocks into 2025.Belski <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-bmo-raises-year-end-sp500-price-target-2024-9">increased his year-end S&amp;P 500 price target to 6,100</a> from 5,600 last month, making him one of the most bullish strategists on Wall Street."We continue to be surprised by the strength of market gains and decided yet again that something more than an incremental adjustment was warranted," Belski said in the note.He's also encouraged by the broadening out of the stock market rally, as it's no longer concentrated in a handful of tech giants. That's healthy behavior for sustainable stock market gains, according to the note."This is a trend we expect to continue and should help to support future market gains even if the price and fundamental performance of Mag-X stocks continues to decelerate in the months ahead," Belski said.<h2 id="fc7c3d7b-c8d5-4665-bd3c-1c08a92b6ce4">The Bears</h2>The bearish strategists on Wall Street are sticking to their views even after being wrong all year. Their top worry is the potential for fewer interest rate cuts than expected and growing hype in AI that might fail to deliver.JPMorgan strategists have held firm to their bearish S&amp;P 500 year-end price target of 4,200, which represents potential downside of 28% from current levels.In a note earlier this month, JPMorgan strategist Dubravko Lakos-Bujas admitted that a recession appears off the table but said that AI investments are unlikely to pay off with lingering questions around monetization issues.Additionally, investor expectations of a Federal Reserve that is about to embark on a string of interest rate cuts could be disappointed if the economy continues to stay resilient, as it would limit the Fed's ability to cut rates, likely putting downward pressure on stock prices.Finally, JPMorgan warned in a note on Monday that third-quarter earnings have seen a flurry of estimate downgrades as sell-side analysts lower their expectations."Earnings downgrades have been significant," JPMorgan said, adding that they "appear to be worsening."Stifel strategist Barry Bannister has warned investors about <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-sp500-prediction-bubble-overvalued-stifel-outlook-2024-10">a potential plunge in the stock market in 2025.</a>Elevated valuations, unfounded expectations for more Fed rate cuts, and hype for AI that ultimately falls short of expectations could create a perfect storm for lower stock prices next year."We took a clean sheet look at the equity market and came away with the same smh (shaking my head) emoji reaction. Despite all the soft-landing and Fed rate cut optimism, the S&amp;P 500 up almost 40% y/y has simply over-shot," Bannister said.While the strategist admitted that a "mania" could take hold in the market and push stock prices even higher from here, it will ultimately end with a crescendo and then a fresh swing to the downside."Sure, we can cherry-pick with the best of them and apply the most over-valued cyclically adjusted valuation level of the past 35 years to show about 10% further upside, but that same analysis of a century of manias also returns the S&amp;P 500 in 2025 to where 2024 began (down 26% from that prospective peak)," Bannister said.<h2 id="1f44d16a-28c8-40a7-bee1-9a426c3bf02e">Somewhere in between</h2>Goldman Sachs strategist David Kostin is bullish, at least in the short term.The bank's chief stock strategist recently increased his year-end S&amp;P 500 price target to 6,000 on the prospect of further growth in corporate earnings. "The primary driver of the upward revision to our 2025 EPS estimate is greater margin expansion," Kostin said. "The macro backdrop remains conducive to modest margin expansion, with prices charged outpacing input cost growth."And yet, Kostin also argues that <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">a golden era of stock market returns is probably over</a>. In a note over the weekend, Kostin issued his 10-year forecast for the stock market. He said that a combination of extreme market concentration and high valuations suggests the S&amp;P 500 will deliver annualized returns of just 3% over the next 10 years. That's compared to the S&amp;P 500's annualized return of about 13% over the past 10 years."Investors should be prepared for equity returns during the next decade that are towards the lower end of their typical performance distribution relative to bonds and inflation," Kostin said.Goldman also sees stocks struggling relative to other assets over the next decade. The bank says the S&amp;P 500 has about a 72% chance of trailing bond-market returns and a 33% probability of lagging inflation through 2034.His long-term view aligns with other bears who fret that the coming decade will look much worse than the last. Stifel's Bannister has also argued for a "lost decade" for the stock market.

Wall Street is divided on the future of stocks. Here are bull and bear cases from the biggest banks.

<ul class="summary-list"><li>Short-sellers betting against renewable energy stocks made $1.3 billion since Trump's win, Bloomberg reported. </li><li>Trump is expected to roll back many of the Biden administration's climate programs.</li></ul>It was a tough week for clean energy stocks after Donald Trump clinched the presidential election, but for the short sellers betting against them, the gains have been impressive. Traders betting against renewables have gains on paper of around $1.3 billion since Trump's win sent stocks in the sector tumbling, according to Bloomberg.Among the most-shorted renewable names are shares of Plug Power, SolarEdge Technologies, and Enphase Energy, which have each seen declines of over 24% since market close on Tuesday. First Solar and Bloom Energy have also been popular targets for short-sellers, and have lost around 11% and 3% since Tuesday.The renewables selloff comes after Trump won the US presidential election earlier this week.Trump, who frequently used the slogan "drill, baby, drill" while on the campaign trail, is expected to roll back many of the Biden administration's clean energy initiatives. In particular, Trump has long been critical of the Inflation Reduction Act's billions of dollars toward solar and wind subsidies.Trump could also slash subsidies for electric vehicles and manufacturing EV batteries in the US, which has led EV makers' stocks to tumble (<a target="_blank" href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-trump-win-elon-musk-election-tsla-2024-11">excluding Tesla</a>, which is headed by key Trump ally Elon Musk and is expected to benefit from the former president's return to the White House).Trump is also expected to pull out of the Paris Agreement again, which would remove the US from worldwide climate diplomacy talks with Europe and China.Trump has also promised to make it easier to develop energy infrastructure. In the spring, he asked top oil executives for a <a target="_blank" href="https://www.businessinsider.com/trump-asked-oil-execs-for-1bn-2024?utm_source=Iterable&amp;utm_medium=email&amp;utm_campaign=campaign_BI%20Sustainability,%20November%207,%202024">$1 billion contribution</a> to his campaign in exchange for dismantling Biden's environmental policies, handing out more drilling leases, and expediting permits for new liquefied natural gas exports, according to a report from the Washington Post.

Traders betting against clean energy stocks have made $1.3 billion since Trump's election win

<ul class="summary-list"><li>AI stocks like Nvidia, Super Micro Computer, and Broadcom soared nearly 20% this week.</li><li>The rally was sparked as Oracle and Nvidia CEOs addressing concerns about AI returns.</li></ul>The stock market's artificial intelligence trade was revived this week, with shares of AI stalwarts like <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/nvda-stock">Nvidia</a>, <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/smci-stock">Super Micro Computer</a>, and <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/avgo-stock">Broadcom</a> all soaring nearly 20%.AI-related names and semiconductor shares were caught in a slump following Nvidia's second-quarter earnings two weeks ago. Nvidia shares slid sharply after the company failed to meet sky-high expectations, which led to investors questioning how much further the AI trade could possibly run after a yearslong hot streak. Questions about the return on the billions of dollars worth of investment into AI by big firms led to a sell-off in the wider space. But the market staged a comeback this week as key players separately addressed some burning questions investors are asking about what to expect from big AI spend. At midday on Friday, shares of Nvidia and Oracle were both 16% higher for the week, while Super Micro Computer stock was up 19%, and Broadcom rose 21%. Helping to drive the week's resurgence were <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/orcl-stock">Oracle</a> cofounder, chairman, and billionaire investor Larry Ellison, along with Nvidia cofounder and CEO Jensen Huang.Both executives addressed concerns about <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/ai-stocks-risk-nvidia-gpus-blackwell-tech-outlook-depreciation-accounting-2024-8">the return on investment for AI infrastructure spend,</a> and investors seem to be taking their word for it.<h2 id="b46ae1b0-31fd-46e1-a2f2-5e74ba98258f">Oracle's Ellison: 'This race goes on forever'</h2>Oracle reported solid earnings after the market close on Monday, and on the earnings call, Ellison made a point to talk up the immense potential of artificial intelligence.Talking about the sustainability of AI infrastructure spending trends, which have exploded in recent years, Ellison said it's not going to stop."This race goes on forever, to build a better and better neural network. And the cost of that training gets to be astronomical," Ellison said.He added: "I think this is an ongoing battle for technical supremacy that will be fought by a handful of companies and maybe one nation-state over the next five years at least, but probably more like 10. So this business is just growing larger and larger and larger. There's no slowdown or shift coming."Since those bullish comments, Oracle shares soared as much as 24% at their intraday peak on Friday.At its analyst day on Friday, Oracle also gave investors long-term annual revenue guidance of $104 billion by 2029 with earnings per share set to grow more than 20% between now and then."This matched the bullishness the Company has been coyly hinting at for a number of months now; this was the upside to expectations that justifies continued multiple expansion, in our view," KeyBanc analyst Jackson Ader said in a note.According to Ellison, building an AI training model for cloud companies will cost upward of $100 billion."That's over the next four, five years for anyone who wants to play in that game. That's a lot of money, and it doesn't get easier," Ellison said.That should be great news for Nvidia, which is the main supplier of AI-enabling GPU chips that cloud companies use to build their models.<h2 id="ce90f725-5b29-4e18-9be9-fff77569b08c">Nvidia's Huang: 'You get a 10x savings'</h2>At a Goldman Sachs conference on Wednesday, Nvidia CEO Jensen Huang was directly asked about concerns related to its customers' return on investment in AI spending, and Huang gave a direct answer."The return on that is fantastic because the demand is so great that for every dollar they spend with us translates to $5 worth of rentals. And that's happening all over the world and everything is all sold out," Huang said of the cloud hyper scalers buying his company's chips.On top of that, Huang explained that could companies are seeing immense cost savings with Nvidia's GPUs thanks to the computation inflation found with CPUs."You reduce the computing time by about 20 times, and so you get a 10x savings," Huang said of running Nvidia's GPU accelerators relative to traditional CPUs.Shares of Nvidia have surged 12% since Huang took the stage at Goldman's conference Wednesday morning.The AI rally has spread throughout the tech sector this week, with semiconductor stocks seeing renewed interest and a nearly 10% surge.

Why the stock market's AI trade came back to life this week

<ul class="summary-list"><li>The Federal Reserve delivered on Morgan Stanley's best-case scenario for rate cuts last week.</li><li>Morgan Stanley is now looking ahead at the perfect mixture of conditions for a strong fourth quarter.</li></ul>The Federal Reserve nailed the rate-cut scenario that Morgan Stanley called its <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/best-case-scenario-stock-market-outlook-fed-rate-cut-ms-2024-9">best-case result</a> leading into the decision. Now it's up to the labor market whether the firm can get its ideal fourth-quarter setup.Heading into last week's announcement, Morgan Stanley was looking for a 50-basis-point cut that didn't also stoke worries about unnecessary growth. That ended up playing out, and stocks ripped higher to records the next day.Now, in new research, Morgan Stanley's chief US equity strategist Mike Wilson is outlining what has to take place for a similar strong fourth quarter."A drop in the unemployment rate and strong payroll data (without downward revisions) is likely the most risk-on signal for equities in 4Q," he wrote. "Such a development can counter seasonal weakness in earnings revisions and election-related volatility — 2 important dynamics the market faces over the next month and a half."Job market deterioration was a major factor in the Fed's decision to cut by half a point. In reducing rates this much, the central bank seeks to stave off any potential labor-led slowdown and ensure support for the economy.Incoming payrolls data will gauge its success. With September's figures set for release on October 4th, Morgan Stanley outlined three main outcomes to expect:The best scenario is if unemployment drops below 4.1% and non-farm payrolls reach above 150,000. In this case, the market could see a sustained rotation into cyclical equities as investors take on more risk appetite.Depending on future rate cuts, other benefactors include small caps, industrials, consumer discretionary and housing stocks.The worst-case scenario occurs if unemployment rises above 4.3% and non-farm payrolls fall below 100,000. This would be a risk-off outcome, giving defensive equities the upper hand.Alternatively, the jobs report could stay at current levels. This mixed outcome offers no obvious risk level, though large-cap quality stocks could generally outperform.Bank of America similarly highlighted that labor reports are now the biggest market movers <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-most-important-daysstock-market-between-now-and-election-2024-9?_gl=1*i7qn1n*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcyNzE3OTAwMi42NDQuMC4xNzI3MTc5MDAyLjYwLjAuMA..">ahead of the election</a>. Stock options are pricing in over 1% moves on the S&amp;P 500 for October 4th, in whichever direction.To be sure, job conditions are not the only thing Morgan Stanley is watching. Also of interest are earning revisions, manufacturing data, and the Conference Board Leading Economic Indicators and Employment Trends index."Bottom line, the Fed's larger than expected rate cut can buy more time for high quality stocks to remain expensive and even help lower quality stocks to find some support; however, the labor and other growth data now likely needs to improve in order to justify these conditions through year end," Wilson wrote.

You Searched For "hand sanitiser out of stock" and got 9 results

At Tesla, some are celebrating stock gains — others worry Elon will lose focus

Grace Kay

Chief strategists project their outlooks on stocks, bonds, currencies, and gold amid a Trump victory

Laila Maidan

Internal Tesla salary database shows Elon Musk's strategy: Lower salaries, bigger stock grants

Grace Kay,Madison Hoff

How Prada is beating the odds and bucking the luxury slump

Madeline Berg

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