The ‘Trillion-Dollar Club’ was already dominating the S&P 500. Then along came A.I.

Achieving a 13-figure market cap isn’t easy. But could A.I. Make it a bit easier?

Or has the bullishness over A.I. Possibly inflated some of the biggest tech stocks to unsustainable levels? My colleague, Shawn Tully, examines how the so-called Trillion-Dollar Club is accounting for an even bigger share of the S&P 500—and how A.I. Is playing a big role.

“The club’s five official, 13-figure-market-cap roster famously comprises Apple, Microsoft, Google parent Alphabet, Amazon, and new entrant Nvidia,” Tully writes. “For this analysis, I’ll add two former members that follow the club’s dynamics so closely they could still be wearing the embossed blazers: Tesla and Meta Platforms, formerly Facebook. We’ll nickname the expanded cast the Trillion Dollar Club–plus.”

Tully continues: “Investing history shows time and again that companies whose shares are pricey relative to the market eventually sink back to earth. So you’d think that folks and funds would be cycling out of these mostly mature tech superstars, which now offer half the earnings for every dollar invested versus the hundreds of other big-caps outside the manicured hedges.

“But the Club-Plus keeps catching booster rocket after booster rocket in an ascent driven more by momentum and hopes for the future of A.I. Than what will really matter—its members’ ability to hit the increasingly lofty earnings targets implied by their stock prices.”

Nvidia posted a 6% gain to surpass the $1 trillion mark for the first time on May 30. “Generative A.I. Drove significant upside in demand for our products,” EVP and CFO Colette Kress said on May 24 during the company’s earnings call for the period ending April 30.

Nvidia founder and CEO Jensen Huang said this week during the Cannes Lions Festival that generative A.I. Will “supercharge” creators across industries and content types. Huang also mentioned the importance of A.I. Being developed and deployed thoughtfully. “We have to put as much energy into the capabilities of A.I. As we do the safety of A.I.,” he said. “In the world of advertising, safety is brand alignment, brand integrity, appropriate tone, and truth.”

You can read more of Tully’s report here and all about an investing trend that’s dominated 2023.

Have a good weekend.

Sheryl Estrada
[email protected]

Big deal

The Finance Team Trends Report for 2023, released by insightsoftware on Wednesday, found that 70% of accounting and finance professionals feel pressure from the macroenvironment. For finance teams, key responsibilities stayed largely the same as in 2022. But the most significant increases in 2023 were seen in budget and forecasting (up 8%), cash forecasting (up 5%), and long-term business strategy (up 5%). "These results show that in 2023, organizations are still focusing on expanding the role of finance away from traditional record keeping and toward driving business strategy," according to the report. The findings are based on a survey of 519 senior accounting and finance professionals, 52% located in North America and 48% in Europe, the Middle East, and Africa.

Going deeper

Here are a few Coins2Day weekend reads:

"Linda Yaccarino is trying to fix Twitter’s accounting nightmare after Elon Musk refused to pay the company’s bills" by Rachel Shin

"Citi CEO Jane Fraser ‘certainly’ sees a slowdown, but big banks remain in ‘very strong health'" by Luisa Beltran

"I built a career in finance out of driving growth for diverse businesses. Here’s what I’ve learned" by Fred Royall

"Americans could live an average of 12 years longer by 2040, according to a new report. But employers must lead the charge" by Erin Prater

Leaderboard

Some notable moves this week:

Stephen Wideman was named CFO at World View, a stratospheric exploration and flight company. Wideman brings three decades of expertise in the financial industry. More recently, Wideman served as SVP and CFO at Erickson Incorporated, a provider of aviation services. His background includes experience in corporate financial management, financial planning and analysis, risk management, investor relations, and corporate treasury for consumer products to government contracts.

Sabra Purtill was named CFO at American International Group (NYSE: AIG), effective immediately. Purtill has served as interim CFO since January 2023. Shane Fitzsimons will step down from his position following a medical leave of absence. Purtill joined AIG in 2019 as deputy CFO and treasurer and then served as AIG’s chief risk officer. She also served as chief investment officer of Corebridge Financial before returning to AIG in January 2023. 

John Redett was promoted to CFO and head of corporate strategy at Carlyle (Nasdaq: CG), a global investment firm, effective Oct. 1. Redett succeeds Curt Buser, CFO at Carlyle since 2014, who is retiring. Buser will step down on Sept. 30. Redett joined Carlyle in 2007 as an investor on the Global Financial Services team. He has served as the sole head of global financial services since 2020 and was the cohead of global financial services from 2016-2020. Redett is a 25-year veteran of the financial services industry. 

Chris Suh was named CFO at Visa (NYSE: V) and will serve as CFO designate from July 10 until Aug. 1, when he will assume full responsibility for the role. Suh succeeds longstanding Visa CFO Vasant Prabhu. As previously announced, Prabhu will depart the company on Sept. 30, after a transition period. Suh joins Visa from Electronic Arts (EA), where he held the role of CFO. Before EA, Suh was the corporate VP and CFO of the Cloud + A.I. Group at Microsoft.

Daphne Kwon  was named CFO of news and media organization NPR, effective June 26. Kwon is a seasoned executive who has been an executive at several media companies including Meredith Corporation, Oxygen Media, and Disney. Most recently, she was an executive at Flipside Crypto, a cryptocurrency analytics firm.

Matti Masanovich was named SVP and CFO at Catalent, Inc. (NYSE: CTLT), effective July 5. Before joining Catalent, Masanovich served as EVP and CFO of Tenneco Automotive until it was acquired by Apollo. Previously, he was CFO at Superior Industries International and General Cable Corporation. 

Amy Levy has resigned from her position as CFO of retail company Vince Holding Corp (NYSE: VNCE) to pursue another opportunity. Her last day will be June 30. The company has appointed Michael Hand to take over as interim CFO. He has had an extensive career as a finance executive, leading finance accounting teams at Marc Jacobs, PepsiCo, and Coach. 

Nate Whaley announced he is resigning from his position as CFO of carbon-negative materials firm Origin Materials, Inc. (NASDAQ: ORGN, ORGNW). His last day will be Sept. 1, and the company has begun the process of formally looking for a replacement. Whaley will stay on in an advisor role until the end of the year to help the firm find a new candidate and ease into the transition. 

Overheard

“Tesla is showing signs that it’s ripe for a correction."

—Matt Maley, chief market strategist at Miller Tabak + Co., told Bloomberg. Maley said the stock has become "very overbought." The stock closed 2% higher Thursday. However, "Wednesday was a so-called 'outside-down' day for Tesla, which is when a stock touches a higher-high than the previous day, as well as a lower-low, and then closes below the previous day’s low," Bloomberg reported. On Wednesday, shares fell 5.5%. This activity is seen as a sign of buyer exhaustion, according to Maley.