AI-driven stock rallies, potential Intel breakups, and OpenAI rejecting Musk's massive bid dominate market headlines. Meanwhile, Dell secures a major AI server deal, and Japan’s economy sees unexpected growth, driven by surging exports. All this and more in today’s edition of World Street.
China stocks
Goldman Sachs has raised its target price for Chinese stocks, forecasting that AI adoption could drive earnings growth and attract up to $200 billion in inflows. Chinese tech stocks are experiencing a strong rally, marking their best winning streak in over two years. This surge follows DeepSeek's AI breakthrough, which has renewed investor confidence in China’s technological capabilities. Goldman has lifted its 12-month target for the CSI300 index from 4,600 to 4,700 and increased its MSCI China target from 75 to 85.
Intel in play
Intel’s competitors, Taiwan Semiconductor Manufacturing Co. (TSMC) and Broadcom, are reportedly exploring potential deals that could result in splitting the U.S. chip giant into two entities, according to The Wall Street Journal. Broadcom has been evaluating Intel’s chip design and marketing business and has discussed a possible bid with advisers, though it is unlikely to proceed without a partner for Intel’s manufacturing division.
Meanwhile, TSMC, the world’s largest contract chipmaker, has independently considered acquiring control over some or all of Intel’s manufacturing plants, potentially through an investor consortium. The discussions remain preliminary, with no collaboration between TSMC and Broadcom, the Journal noted.
OpenAI rejects musk
OpenAI has rejected a $97.4 billion buyout proposal from a consortium led by billionaire Elon Musk, reaffirming that the company is not for sale. The bid is Musk’s latest move to counter the transition of OpenAI—co-founded by him and now led by Sam Altman—into a for-profit enterprise.
"OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition. Any potential reorganization will only serve to strengthen our nonprofit mission to ensure AGI benefits all of humanity," OpenAI Chairman Bret Taylor stated on X.
Musk’s lawyer, Marc Toberoff, countered the rejection, arguing that OpenAI is effectively putting control of its for-profit arm up for sale, benefiting select board members rather than the broader charitable mission.
Dell’s AI deal
Dell Technologies is finalizing a deal exceeding $5 billion to supply Elon Musk’s AI startup, xAI, with servers optimized for artificial intelligence workloads, Bloomberg News reported. Following the news, Dell’s stock climbed 4%. The company is expected to deliver servers equipped with Nvidia’s GB200 semiconductors to xAI within the year.
Japan’s economy rises
Japan’s economy expanded more than expected in the fourth quarter, driven by a surge in exports, according to preliminary government data released Monday. GDP grew 0.7% quarter-over-quarter, surpassing economists’ predictions of 0.3%, and improved from a revised 0.4% expansion in the previous quarter.
Despite weak domestic demand, which showed marginal contraction, export growth played a pivotal role in Japan’s economic momentum. Additionally, household spending in Japan, which had contracted in October (-1.3%) and November (-0.4%) on a year-over-year basis, surged 2.7% in December—marking its first rise since July 2024 and significantly exceeding analysts’ expectations.
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