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Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Forget about the debt ceiling. Tech investors are in buy mode.

The Nasdaq Composite closed out its fifth-straight weekly gain on Friday, jumping 2.5% in the past five days, and is now up 24% this year, far outpacing the other major U.S. indexes. The S&P 500 is up 9.5% for the year and the Dow Jones Industrial Average is down slightly.

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Excitement surrounding chipmaker Nvidia’s blowout earnings report and its leadership position in artificial intelligence technology drove this week’s rally, but investors also snapped up shares of Microsoft, Meta and Alphabet, each of which have their own AI story to tell.

And with optimism brewing that lawmakers are close to a deal to raise the debt ceiling, and that the Federal Reserve may be slowing its pace of interest rate hikes, this year’s stock market is starting to look less like 2022 and more like the tech-happy decade that preceded it.

“Being concentrated in these mega-cap tech stocks has been where to be in this market,” said Victoria Greene, chief investment officer of G Squared Private Wealth, in an interview on CNBC’s “Worldwide Exchange” Friday morning. “You cannot deny the potential in AI, you cannot deny the earnings prowess that these companies have.”

Greene: The tech rally is likely to continue due to earnings power and the potential of AI

To start the year, the main theme in tech was layoffs and cost cuts. Many of the biggest companies in the industry, including Meta, Alphabet, Amazon and Microsoft, were eliminating thousands of jobs following a dismal 2022 for revenue growth and stock prices. In earnings reports, they emphasized efficiency and their ability to “do more with less,” a theme that resonates with the Wall Street crowd.

But investors have shifted their focus to AI now that companies are showcasing real-world applications of the long-hyped technology. OpenAI has exploded after releasing the chatbot ChatGPT last year, and its biggest investor, Microsoft, is embedding the core technology in as many products as it can.

Google, meanwhile, is touting its rival AI model at every opportunity, and Meta CEO Mark Zuckerberg would much rather tell shareholders about his company’s AI advancements than the company’s money-bleeding metaverse efforts.

Enter Nvidia.

The chipmaker, known best for its graphics processing units (GPUs) that power advanced video games, is riding the AI wave. The stock soared 25% this week to a record and lifted the company’s market cap to nearly $1 trillion after first-quarter earnings topped estimates.

Nvidia shares are now up 167% this year, topping all companies in the S&P 500. The next three top gainers in the index are also tech companies: Meta, Advanced Micro Devices and Salesforce.

The story for Nvidia is based on what’s coming, as its revenue in the latest quarter fell 13% from a year earlier because of a 38% drop in the gaming division. But the company’s sales forecast for the current quarter was roughly 50% higher than Wall Street estimates, and CEO Jensen Huang said Nvidia is seeing “surging demand” for its data center products.

Nvidia said cloud vendors and internet companies are buying up GPU chips and using the processors to train and deploy generative AI applications like ChatGPT.

“At this point in the cycle, I think it’s really important to not fight consensus,” said Brent Bracelin, an analyst at Piper Sandler who covers cloud and software companies, in a Friday interview on CNBC’s “Squawk on the Street.”

“The consensus is, on AI, the big get bigger,” Bracelin said. “And I think that’s going to continue to be the best way to play the AI trends.”

Microsoft, which Bracelin recommends buying, rose 4.6% this week and is now up 39% for the year. Meta gained 6.7% for the week and has more than doubled in 2023 after losing almost two-thirds of its value last year. Alphabet rose 1.5% this week, bringing its increase for the year to 41%.

One of the biggest drags on tech stocks last year was the central bank’s consistent interest rate hikes. The increases have continued into 2023, with the fed funds target range climbing to 5%-5.25% in early May. But at the last Fed meeting, some members indicated that they expected a slowdown in economic growth to remove the need for further tightening, according to minutes released on Wednesday.

Less aggressive monetary policy is seen as a bullish sign for tech and other riskier assets, which typically outperform in a more stable rate environment.

Still, some investors are concerned that the tech rally has gone too far given the vulnerabilities that remain in the economy and in government. The divided Congress is making a debt ceiling deal difficult as the Treasury Department’s June 1 deadline approaches. Republican negotiator Rep. Garret Graves of Louisiana told reporters Friday afternoon in the Capitol that, “We continue to have major issues that we have not bridged the gap on.”

Treasury Secretary Janet Yellen said later on Friday that the U.S. will likely have enough reserves to push off a potential debt default until June 5.

Alli McCartney, managing director at UBS Private Wealth Management, told CNBC’s “Squawk on the Street” on Friday that following the recent rebound in tech stocks, “it’s probably time to take some of that off the table.” She said her group has spent a lot of time looking at the venture market and where deals are happening, and they’ve noticed some clear froth.

“You’re either AI or you’re not right now,” McCartney said. “We really have to be ready to see if we don’t get a perfect debt ceiling, if we don’t get a perfect landing, what does that mean, because at these kinds of levels we are definitely pricing in the U.S. hitting the high note on everything and that seems like a terribly precarious place to be given the risks out there.”

WATCH: CNBC’s full interview with UBS’ Alli McCartney

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China’s BYD pushes into emerging markets amid policy uncertainty in the U.S., Europe

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China's BYD pushes into emerging markets amid policy uncertainty in the U.S., Europe

BYD electric cars waiting to be loaded onto a ship are seen stacked at the international container terminal of Taicang Port in Suzhou, in China’s eastern Jiangsu province on February 8, 2024.

STR | AFP | Getty Images

In the race against Tesla for the global electric car market, Chinese automaker BYD is pushing hard overseas despite rising barriers to the U.S. market.

The Shenzhen-based company has already tested the waters in a number of countries with some immediate sales success, often just one year after entering. 

Given policy uncertainty around Chinese EV exports to major markets like the U.S. and Europe, BYD is seeking to bolster overseas sales by moving production to regions perceived as more friendly. Already, the company has factories in Thailand, Brazil, Indonesia, Hungary and Uzbekistan in the works. 

“They are targeting countries without very strong domestic auto industries, where they are likely to face less political pushback or headwinds from a policy perspective,” said CLSA research analyst Xiao Feng, noting that recent developments in the U.S. underscored the need for such an approach. 

The Biden administration last month said it’s begun investigating whether Chinese-made cars pose national security risks, and raised the possibility of restricting the vehicles. The U.S. has tried to support adoption of electric cars domestically, but sales penetration is well below that of China.

Most China EV makers, including BYD, have 'very limited U.S. volume exposure,' analyst says

BYD is moving quickly, beginning with Thailand, where the company expects its first factory outside China to be in operation by the end of this year. The automaker surpassed Toyota to grab the top spot for passenger car sales in Thailand in January, despite having no sales there just one year prior, according to data from Marklines.

Once operating, the Thailand factory will likely serve the rest of Southeast Asia. EY predicts the electric car market in the region will grow exponentially to at least $80 billion a year in sales in the next decade. 

BYD has established itself in Southeast Asia as the top-selling EV brand, grabbing more than one-third of the market last year after barely selling cars there previously, according to data from Counterpoint Research. 

Edge against Tesla

BYD sold 70,000 electric cars in Southeast Asia last year with a 35% market share, putting it ahead of rivals Vinfast and Tesla, according to data from Counterpoint Research.

One of BYD’s advantages over Tesla is a number of offerings in the mass market, as well as a mix of hybrid and battery-powered cars. Tesla exclusively makes more premium-priced, battery-only cars. Having hybrid options is beneficial for emerging markets where battery-charging infrastructure remains limited.

Southeast Asia will likely remain BYD’s strongest overseas market in the short term as the company pursues its goal of doubling its car exports from last year to 500,000 in 2024, according to Canalys automotive analyst Alvin Liu.

“The Southeast Asian EVs market is still in its early stages, and consumer habits need to be cultivated,” said Liu. “Cost-effectiveness” is particularly important, he added, with BYD’s Atto 3 and Dolphin models sold in the region at very competitive prices.

Why China is beating the U.S. in electric vehicles

The company is also investing $1.3 billion to build an electric car factory in Indonesia in 2024, local media reported in January. This year, BYD also reportedly plans to significantly increase the number of its stores in Singapore and the Philippines. 

The company did not respond to a request for comment about the reported plans. 

While BYD does not break out capital expenditure by country, it disclosed 81.52 billion yuan ($11.33 billion) in autos-related capex in the first six months of 2023, nearly double the 45.94 billion yuan reported for all of 2022.

In another contrast with Tesla’s direct-dealership model, BYD often relies on local distributors and partners for sales in countries outside China. For example, in late 2022, BYD signed a distribution agreement with Sime Darby Motors in Malaysia. 

Plan for the Americas 

While U.S. scrutiny on China’s electric vehicle dominance is only growing, BYD is expanding in Brazil and has its sights on Mexico, on the U.S. border.

The company’s Americas CEO Stella Li told Reuters BYD is considering plans for a factory in Mexico, where it has started selling more electric cars.

If BYD does build a factory in the country, that could make it a “beachhead for the Americas,” Bill Russo, founder and CEO of investment advisory firm Automobility, recently told CNBC’s “Squawk Box Asia.”

“Mexico is part of the USMCA so there is an opportunity to export perhaps from Mexico to North America,” he said, referring to the free trade agreement that the United States, Mexico and Canada enacted in 2020. 

It's a 'war of attrition' for Nio and other Chinese EV makers, says advisory firm

BYD does not plan to sell passenger cars to the U.S., Li reportedly said at the end of February.

The automaker did not respond to a request for comment on this story.

China remains by far BYD’s largest market. Out of more than 3 million new energy passenger vehicles the company produced last year, just over 242,000 went overseas.

The rapid growth of BYD and other Chinese electric car companies has other automakers worried.

In February, the Alliance for American Manufacturing released a report warning that low-cost Chinese imports could be an “extinction-level event for the U.S. auto sector” and called on Washington to prematurely block imports from Mexico.

That was just weeks after company releases confirmed that BYD was well ahead of Tesla in terms of vehicle production.

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Nvidia and Johnson & Johnson to develop new AI applications for surgery

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Nvidia and Johnson & Johnson to develop new AI applications for surgery

The New York Stock Exchange welcomes Johnson & Johnson.

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Johnson & Johnson on Monday announced it is working with Nvidia to develop and scale new artificial intelligence applications for surgery. 

J&J’s MedTech unit and Nvidia plan to integrate AI within devices and platforms from pre-op to post-op to help ensure that surgeons have access to all the information they need, Nvidia’s vice president of health care Kimberly Powell said. For instance, the companies are using AI to analyze surgical video and automate the time-consuming documentation required after a procedure. 

“There’s an ability to use all the sources of data inside an operating room, whether it’s your voice, or whether it’s the video coming from a camera inside the body, or elsewhere, to take advantage of the generative AI moment that we’re in,” Powell told CNBC in an interview. 

The MedTech unit at J&J creates tools and solutions for conditions such as heart failure, kidney disease and stroke, and its technology is used in more than 75 million procedures each year, the company told CNBC. Powell said Nvidia has worked in medical devices and imaging for more than a decade. 

Shan Jegatheeswaran, vice president and global head of digital at J&J MedTech, said just one minute of surgical video is equivalent to roughly 25 CT scans, so having the compute power and infrastructure to annotate and share those videos widely will be powerful for surgeons.

In the short term, he said de-identifying and enhancing the video can help educate and train surgeons. In the long term, analytics can be layered on top of video to provide real-time decision support. More accessible surgical video means residents will not have to solely depend on the insight and availability of the more experienced physicians at their institutions. 

“Think about athletes. They look at game tape, and they get better over time as they look at themselves,” Jegatheeswaran told CNBC in an interview. “That’s sort of the starting point. That’s the holy grail in the short term.”

Powell said the collaboration is in the “early innings,” and many applications will take time to fine-tune and implement safely. However, she said nondiagnostic use cases such as automating paperwork will help save surgeons time and make a difference “right out of the gate.”

“I think all of us as patients should get really excited about the fact that this kind of technology is going to be able to enter in and be within reach of all the clinicians and all the hardworking nurses and all the health-care staff,” Powell said. “They’re going to have the very best tools and information at their disposal.”

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UnitedHealth Group has paid more than $2 billion to providers following cyberattack

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UnitedHealth Group has paid more than  billion to providers following cyberattack

UnitedHealth Group Inc. headquarters stands in Minnetonka, Minnesota, U.S.

Mike Bradley | Bloomberg | Getty Images

UnitedHealth Group said Monday that it’s paid out more than $2 billion to help health-care providers who have been affected by the cyberattack on subsidiary Change Healthcare.

“We continue to make significant progress in restoring the services impacted by this cyberattack,” UnitedHealth CEO Andrew Witty said in a press release. “We know this has been an enormous challenge for health care providers and we encourage any in need to contact us.”

UnitedHealth disclosed nearly a month ago that a cyber threat actor breached part Change Healthcare’s information technology network. The fallout has wreaked havoc across the U.S. health-care system. Change Healthcare offers e-prescription software and tools for payment management, so the interruptions left many providers temporarily unable to fill medications or get reimbursed for their services by insurers.

UnitedHealth said on Monday that it began releasing medical claims preparation software, which will be available to thousands of customers in the next several days. The company called it “an important step in the resumption of services.”

On Friday, UnitedHealth said it restored Change Healthcare’s electronic payments platform, after rebooting 99% of its pharmacy network services earlier this month. It also introduced a temporary funding assistance program to help health-care providers experiencing cash flow trouble because of the attack.

UnitedHealth said the advances will not need to be repaid until claims flows return to normal. Federal agencies like the Centers for Medicare & Medicaid Services have introduced additional options to ensure that states and other stakeholders can make interim payments to providers, according to a release.

A survey published by the American Hospital Association on Friday found that 94% of hospitals have experienced financial disruptions from the Change Healthcare attack. More than 60% of the 1,000 hospitals surveyed said the impact to their revenue has been around $1 million per day. Responses were collected between March 9 and March 12.

“We continue to call on Congress and the Administration to take additional actions now to support providers as they deal with significant fallout from this historic attack,” AHA CEO Rick Pollack said in the release.

The Biden administration announced Wednesday that it has launched an investigation into the company due to the “unprecedented magnitude of the cyberattack.”

The U.S. Department of Health and Human Services’ Office for Civil Rights is carrying out the inquiry. The OCR enforces the Health Insurance Portability and Accountability Act’s security, privacy and breach notification rules, which most health plans, providers and clearinghouses are required to follow to protect health information.

UnitedHealth hasn’t disclosed what kind of data was compromised in the attack, or whether it cooperated with the cyber threat actor in order to restore systems. The company said it’s been working closely with law enforcement and third parties like Palo Alto Networks and Google Cloud’s Mandiant to assess the breach.

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Dr. Scott Gottlieb on UnitedHealth hack: Very pervasive across the entire health care system

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