CNBC Daily Open: Red hot tech

Traders work on the floor of the New York Stock Exchange during morning trading on July 06, 2023 in New York City.

Michael M. Santiago | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Mixed Asia markets
Asia-Pacific markets were
mixed Wednesday as traders wait for key U.S. inflation data slated to be released later this week. In Japan, the Nikkei 225 fell 0.81%, while the Topix was down 0.67%. The country saw wholesale inflation slow to its lowest pace in six months, with the corporate goods price index rising just 4.1% year-on-year, official data showed. Overnight in the U.S., the Dow Jones Industrial Average gained 0.93%, while the tech-focused Nasdaq Composite climbed 0.55% and the S&P 500 rose 0.67%.

Google shake-up
Google employee No. 8 Urs Holzle will step back from management after 24 years of leading technical teams as part of a shakeup within the company’s cloud organization, according to an email from Cloud CEO Thomas Kurian viewed by CNBC. In a separate development, Google recently “deprioritized” work on an AI-powered mobile chatbot app for Gen Z users that features interactive digital characters amid an internal reorganization, CNBC has learned.

Buffett likes energy infrastructure
Warren Buffett’s big energy and utility division has agreed to purchase a 50% stake in the Cove Point liquefied natural gas facility for $3.3 billion. While the deal, which was announced Monday, isn’t large for Berkshire, it builds on a growing bet on energy infrastructure at the conglomerate as it gains control of one of the rare functional facilities in the U.S. that can export LNG.

Thai generational divide
Thailand’s Parliament will vote for a new prime minister on Thursday. The country’s young and urban will soon find out whether their backing of a progressive opposition party at May’s elections will translate into genuine power.

U.S. anti-trust divergence
When a federal judge rejected the Federal Trade Commission’s request for a preliminary injunction to prevent Microsoft from completing its acquisition of Activision Blizzard, she also rejected FTC Chair Lina Khan’s vision of antitrust enforcement. The ruling is another example of a judge who is unconvinced of Khan’s theories of how a tech company can leverage acquisitions in adjacent markets to harm competition.

[PRO] Goldman’s bullish on Xpeng
Goldman Sachs initiated coverage of Xpeng with a buy rating, seeing nearly 30% upside for the Chinese electric-vehicle maker. The Wall Street firm set a 12-month price target on U.S.-listed Xpeng shares at $18.10, a roughly 28% gain from Monday’s close of $14.15. 

The bottom line

The flood to U.S. technology stocks is forcing special changes.

On Friday, Nasdaq will announce changes to the weighting of component stocks in its popular Nasdaq 100 Index, which has surged about 37% year to date — far more than the S&P 500 and the Dow Jones Industrial Average.

While the index is already rebalanced on a quarterly basis, Nasdaq tries to keep the five biggest stocks below a 40% combined weighting in one rebalance per year designated as the annual adjustment.

The tripling in Nvidia’s stock price this year is likely among the reasons that pushed this threshold.

Will something similar happen on the other side of the world?

China’s technology sector is also starting to see a relief rally after regulators issued a 7.12 billion yuan ($985 million) fine for Ant Group, which many see as the end of Beijing’s crackdown on its domestic technology companies.

Alibaba and Tencent are the two giants that may be on the verge of another breakout. The hunger for tech stocks seems to have no bounds.

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