The lot is incredibly valuable.
ABC 7
A Silicon Valley house that went viral for its big price tag and tiny square footage will sell for significantly more than ask.
The studio apartment-sized residence on a cul-de-sac in Cupertino, California — the Bay Area city where tech titan Apple is headquartered — hit the market for an outsized $1.7 million earlier this month.
Built in 1948 and measuring in at just 384 square feet, the listing quickly went viral for being the size of a hotel room, yet commanding such a high asking price.
Barely a week after going live, though, the house has received offers and is under contract for “considerably over asking,” listing agent Faviola Perez told SFGate, declining to name the exact final price of the house. It’s the smallest to come on the market in Cupertino for at least a decade.
“It’s been an insane amount of attention that this little tiny house has gotten over the last week,” Perez told the outlet, noting that she and her listing partner have heard from interested buyers everywhere from New York to Chicago. “We knew we would get a lot of attention because of the location … But we did not foresee it going viral nationwide.”
A key part of the small abode’s appeal, she added, is that it’s set on extremely valuable land that’s ripe for development.
“The 7,841 sf lot itself offers ample space to bring your vision to life, surrounded by $4M-$5M homes, highlighting the exceptional value and investment potential at hand,” reads the listing. Perez told SFGate that, in all likelihood, the new owner will demolish the existing structure and construct a new, larger one in its place.
“[Even] with the acquisition costs on the lot and construction costs of a new home, [the new owners are] probably still under what their neighbors are at,” she said, emphasizing the lot’s surprising comparative affordability.
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Nvidia’s stock market performance is impressive, showcasing the rising impact of tech giants on Wall Street. Investor enthusiasm for artificial intelligence (AI) remains strong, despite the delay in interest rate cuts by the Federal Reserve. The previously worrisome high rates now seem to have little effect on the stock market, with the tech sector’s momentum taking the spotlight. Tech stocks are thriving, backed by a strong economy and optimistic earnings outlooks.
However, investors are not oblivious to the ongoing market debate about the risk of a stock market bubble in artificial intelligence (AI) and the implications of the high concentration of major stocks on Wall Street today. According to Bank of America’s (BofA) April Global Fund Manager Survey, 40% of money managers believe there is an AI bubble while another 45% do not dismiss the possibility, reflecting divided market sentiment.
The top ten companies on Wall Street represent 34% of the U.S. stock market value and generate 25% of its profits. A recent report by Goldman Sachs highlights this heavy reliance on a few stocks, the highest in nearly a century. While Goldman Sachs doesn’t foresee an AI bubble or expect major market fluctuations, it stresses the importance of diversification to manage risk. Goldman suggests investing in AI-driven companies beyond Nvidia and other tech giants to enhance value creation.
The top 10 stocks set the tone for the S&P 500
Nvidia, which has surged 240% in the stock market in the past year and quickly surpassed a two trillion dollar market cap, undeniably leads the AI business. It is a dominant supplier of hardware and software for AI applications like ChatGPT, Gemini and many others. Goldman Sachs has identified additional tech firms that stand to gain, though to a lesser degree, from AI and the influence of Nvidia.
Goldman places companies involved in providing the necessary infrastructure for AI technology as the next area of opportunity for investors. This includes semiconductor firms, cloud service providers, data centers and cybersecurity software developers. These companies have, on average, seen a 13% increase in value over the last six months. According to Goldman, this rise is mainly due to improved valuations rather than revenue growth, unlike Nvidia, which has maintained its multiples almost unchanged since early 2023.
In the tier just below Nvidia, companies like ARM, a chip manufacturer, have doubled their stock prices in the past year. Synopsis, a U.S. software developer, has seen a 13% rise this year. Cadence Design Systems, a computational software company, has risen by 15% in 2024 and 47% in the last 12 months. Advanced Micro Devices has seen a 30% increase this year, while Qualcomm, a software and semiconductor company, has seen its share price rise by 17%. Other AI infrastructure companies include large players in the cybersecurity sector such as Palo Alto Networks, Palantir and CrowdStrike Holdings.
In a third tier, there’s a group of companies that Goldman Sachs believes will benefit from products and applications that integrate AI technology. This group has seen an average share price increase of 20% in recent months, partly due to improved valuations and revenue growth. This tier includes companies like Meta, Intuit, Nutanix, Accenture, Adobe, Uber, Mastercard, Apple, Snowflake and Salesforce.
Long-term AI benefits
Nvidia is at the forefront of the AI boom, which is widely expected to enhance business productivity and revenue. Investors are optimistic about AI’s long-term benefits for communication companies like Pinterest and The New York Times Company, energy companies like Occidental Petroleum, and consumer services and product companies like H&R Block and Walmart.
Currently, Nvidia dominates the portfolios of many equity investors, especially hedge funds. Goldman Sachs says that by the end of 2023, 149 hedge funds had taken positions in Nvidia, whereas the next-tier companies were only represented in 40 hedge funds.
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