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This Week’s Alpha Coverage: YouTube Playlist.
Editor’s Pick:
[News] DOE eyes talks with Big Tech on AI power needs
The Biden administration wants to "accelerate" its conversations with big technology companies on how to generate more electricity — including with nuclear power — to meet their massive demand for artificial intelligence computing.
The DOE is exploring how energy-hungry tech firms might be able to host small nuclear plants on the campuses of their massive data centers.
In recent years, electricity consumption has been largely flat, but the needs of electric vehicles, AI computing and data centers — plus clean tech manufacturing — has added new demands on utilities.
Link to Axios News Article - Apr. 01, 2024
[News] Copper climbs to 15-month high; Citi says entering new bull market phase
Copper has entered its second secular bull market this century, "driven by booming decarbonization related demand growth," Citi analysts say, adding that "only higher prices will solve these deficits."
Copper prices rose by more than 5x in three years during copper's bull market of the 2000s, driven by urbanization and industrialization in China, and corporate consumers should hedge their copper exposures because there is potential for "explosive price upside" again over the next three years, Citi says.
Bank of America metals strategists say the copper supply crisis is already here, as the "lack of mine projects is becoming an increasing issue for copper.”
Copper demand linked to artificial intelligence and data centers could add as much as 1M metric tons by 2030 and exacerbate supply deficits towards the end of the decade, commodity trader Trafigura said Monday.
The 1M tons is "on top of what we have" already, a 4M-5M ton deficit gap by 2030, Trafigura chief economist Saad Rahim told the Financial Times Global Commodities Summit in Switzerland. "That's not something that anyone has actually factored into a lot of these supply and demand balances."
Link to Seeking Alpha News Article - Apr. 09, 2024
[Podcast] BG2 w/ Bill Gurley & Brad Gerstner | Ep6. AI Demand / Supply - Models, Agents, the $2T Compute Build Out, Need for More Nuclear & More
Key topics:
Demand for Compute and how that can become a national security issue, thanks to AI
Energy is an AI trade and Nuclear is the best potential solution.
Link to Full YouTube Video (01:08 Hours) - Apr 4, 2024
News, Facts, Analyst & Market Commentary - Short Reads:
Tesla rises after robotaxi development, while Uber and Lyft fall
Deepwater Asset Management analyst Gene Munster said it is the right move for Tesla (TSLA) if it is accurate that the company "Being the first to do full autonomy at scale is huge first mover advantage," he noted. While Tesla (TSLA) has set a Robotaxi event for August, Munster thinks that Tesla's Robotaxi fleet will not be on the road until 2027. Morgan Stanley also thinks it will take some time for the Robotaxi fleet to be a major threat in the industry. "While we do believe Tesla has advantages around developing the computer vision/robotics technologies necessary to be dominant in autonomous driving, we believe a host of legal/regulatory issues will make this journey measured in decades rather than years," warned analyst Adam Jonas. In that regard, Tesla (TSLA) was noted to already be facing lawsuits and investigations related to crashes with its existing autopilot and full self-driving driver-assistance systems.
Link to Seeking Alpha News Article - Apr. 08, 2024
TSM 0.00%↑ INTC 0.00%↑ $SSNLF
Taiwan Semiconductor gets up to $11.6B in US grants, loans to boost local chip manufacturing
The U.S. signed a tentative deal with Taiwan Semiconductor Manufacturing (NYSE:TSM) to provide the chipmaker up to $6.6B in grants and as much as $5B in loans to boost domestic manufacturing of advanced semiconductors.
TSM said Arizona's first fab is on track to start production using 4nm technology in the first half of 2025. The second fab will produce the world's most advanced 2nm process technology, in addition to the previously announced 3nm technology, with production starting in 2028. The third fab will manufacture chips using 2nm or more advanced processes, with production starting by the end of the decade.
The CHIPS Act funding aims to increase U.S. semiconductor manufacturing and research, especially in advanced semiconductors. Several companies are expected to get funds under the act, with Intel (INTC) already having inked a deal for about $20B in grants and potential loans. Samsung Electronics (OTCPK:SSNLF) is expected to be awarded more than $6B.
Link to Seeking Alpha News Article - Apr. 08, 2024
HP 0.00%↑ DELL 0.00%↑ AAPL 0.00%↑ $LNVGF
[Newsletter Exclusive] PC market recovery underway
Overall, the worldwide PC market had a healthy start to 2024, with total shipments of desktops and notebooks growing 3.2% annually to 57.2 million units in the first-quarter. Notebook shipments were up 4.2% to 45.1 million units, while desktop shipments were relatively flat, down just 0.4% at 12.1 million units.
According to Canalys, this growth highlights the ongoing recovery in PC demand across all segments, with purchases set to accelerate throughout the year, supported by the tailwinds of Windows 11 refresh and AI-capable PCs.
Link to Seeking Alpha News Article - Apr. 09, 2024
Intel unveils Gaudi 3 AI accelerator, setting up race with Nvidia
The Gaudi 3 AI accelerator delivers 50% on average better inference and 40% on average better power efficiency than Nvidia's H100, at a fraction of the cost, according to Intel.
The chip will be "a lot lower" in price that Nvidia's H100, which starts around $30,000, CNBC reported.
The company noted that Gaudi 3 will be available to original equipment manufacturers, including Dell Technologies (DELL), HPE, Lenovo (OTCPK:LNVGY) (OTCPK:LNVGF) and Super Micro Computer (SMCI), in the second quarter of 2024.
Link to Seeking Alpha News Article - Apr. 09, 2024
General Motors' Cruise unit is expected to start robotaxi tests again
While Cruise has reportedly been in talks with officials in 20 different cities about self-driving tests, the autonomous driving company is returning to Phoenix, where it already has vehicles in place.
Cruise has run self-driving tests in San Francisco, Austin, and Phoenix. Other cities where Cruise is expected to be considering a launch include Atlanta, Seattle, Miami, Raleigh, and several locations in Texas.
Last week, Tesla (TSLA) announced a robotaxi event for August 8, while on Monday, Chinese ride-hailing app Didi Global (OTCPK:DIDIY) and Guangzhou Automobile Group's (OTCPK:GNZUF) electric vehicle unit set plans to mass produce robotaxis in 2025.
Link to Seeking Alpha News Article - Apr. 09, 2024
Google unveils in-house Axion chips to cut AI costs, reliance on Nvidia, others
Based on chip designs from British design firm Arm (NASDAQ:ARM), Axion chips are also adept at handling AI-related work in the data center and can help process large amounts of data and handle the fact that the company's services are used by billions of people.
The Axion processors have a 30% increase in performance compared to similar Arm-based chips for the cloud, the news outlet reported, citing internal data from Google.
The unveiling of Axion marks an expansion of Google's in-house chip business as it already has worked on tensor processing unit chips, also known as TPUs. The latest version of its tensor processing unit chip, the Cloud TPU v5p, used for AI, was announced in December.
Google has relied on Broadcom (AVGO) to help grow its in-house processor business, working with the Hock Tan-led company's custom chip unit, especially for its TPUs.
Cloud competitors Amazon (AMZN) and Microsoft (MSFT) have also created their own processors that can help with AI-related work.
Link to Seeking Alpha News Article - Apr. 09, 2024
Rocket Lab secures $14.49M task order by the U.S. Space Force
The mission, called Space Test Program-30, falls under the Space Systems Command (SSC) Assured Access to Space organization and is part of Orbital Services Program-4.
The mission will be Rocket Lab’s third for the U.S. Space Force, further strengthening Electron’s position as the leading small launch vehicle, delivering reliable and responsive launches to the DoD.
Link to Seeking Alpha News Article - Apr. 09, 2024
Meta reveals its latest custom-made chips for AI workloads
Social media titan Meta's latest generation of the Meta Training and Inference Accelerator, MTIA, designed for AI-workloads, are intended to power its ranking and recommendation ads models.
The latest MTIA more than doubles the compute and memory bandwidth of its predecessor, which was released last year.
"We currently have several programs underway aimed at expanding the scope of MTIA, including support for GenAI workloads," Meta added.
Link to Seeking Alpha News Article - Apr. 10, 2024
AAPL 0.00%↑ EPI 0.00%↑ INQQ 0.00%↑
[Newsletter Exclusive] Apple now assembles 1 in 7 iPhones in India, accelerating push beyond China - report
Apple (NASDAQ:AAPL) doubled its production of iPhones in India, assembling about $14B worth of phones last fiscal year, a sign that the company is accelerating its push to diversify beyond China, Bloomberg News reported.
The Cupertino, Calif.-based company now makes nearly 14% or about 1 in 7 of its iPhones in India, the report added, citing people with knowledge of the matter.
Link to Seeking Alpha News Article - Apr. 10, 2024
NVDA 0.00%↑ GOOG 0.00%↑ INTC 0.00%↑
'Don't sweat': Nvidia's recent slide is a 'refreshing noise,' BofA says
At current levels, shares are "compelling," trading at 28 times estimate 2025 earnings, with earnings growing at a 40% compound annual growth rate, analyst Vivek Arya said.
The increased chatter of competition is also not a concern Arya explained, particularly from Google's (GOOG) (GOOGL) in-house Axion CPUs, which were announced yesterday.
"Since NVDA does not sell any CPU to Google, we see no implication on NVDA, though we do flag a more competitive environment for INTC and AMD," Arya said.
Separately on Tuesday, Intel (INTC) unveiled its Gaudi 3 AI accelerator, which will cost a "fraction" of what Nvidia's H100 chip costs. Arya believes Gaudi 3 will have less than 1% of the AI accelerator market.
"We maintain our core view that NVDA will continue to dominate the ~$90B CY24 accelerator market (rising to $200B by CY27E) with 75%+ share, followed by 10-15% of the market in custom chips (such as Google TPU, Amazon Trainium/Inferentia, Microsoft Maia and others) and remaining 10-15% spread across other merchant (AMD, INTC, private companies)," Arya said.
Link to Seeking Alpha News Article - Apr. 10, 2024
Roblox rises on video-ad sales deal with PubMatic
At the moment, the 71M-plus daily visitors to Roblox's virtual worlds are able to see billboard ads displayed on surfaces such as in-game billboards.
Roblox (RBLX) says that immersive video ads are in alpha testing and will be broadly available to its advertisers later this year.
That's where PubMatic (PUBM) comes in, making that video ad inventory available to its buyers through programmatic guaranteed private marketplaces, auction package deals and open exchange.
Roblox says the ads will continue to be served only to users age 13 and up.
Link to Seeking Alpha News Article - Apr. 10, 2024
Albemarle upgraded at BofA, saying lithium pricing has bottomed
Albemarle (NYSE:ALB) -2.1% in Wednesday's trading, even after Bank of America upgraded the stock to Buy from Neutral with a $156 price target, raised from $137, based on the bank's view that lithium pricing bottomed in Q1 and market fundamentals could improve from here.
Lithium carbonate prices peaked at ~$80K/metric ton in November 2022 and bottomed at ~$13K/ton in February 2024, but prices have ticked up lately to ~$16K, and BofA's Matthew DeYoe sees more gains ahead.
Link to Seeking Alpha News Article - Apr. 10, 2024
$BTC BITX 0.00%↑
Spot bitcoin ETFs could make their way to Hong Kong in April - report
Hong Kong is set to greenlight next week the first round of applications for spot bitcoin (BTC-USD) exchange-traded funds, according to a media report dated Wednesday.
At least four entities have submitted applications to roll out spot bitcoin (BTC-USD) ETFs in Hong Kong, Reuters reported, citing two people familiar with the matter.
Such products, which allow institutional and retail traders to gain exposure to bitcoin (BTC-USD) without having to invest directly in the underlying asset, went live early this year in the U.S.
In March, the London Stock Exchange started accepting applications for Bitcoin, Ethereum ETNs.
Link to Seeking Alpha News Article - Apr. 10, 2024
MSOS 0.00%↑ $GTBIF
FDA chief sees no reason for delay in cannabis rescheduling
Amid an ongoing review by the Drug Enforcement Administration (DEA) to reschedule marijuana from a high-risk to a low-risk category, the head of the U.S. Food and Drug Administration (FDA), Robert Califf, said Thursday that there's "no reason" for the DEA to delay its decision.
In August, the U.S. Department of Health and Human Services (HHS) wrote a letter to the DEA recommending cannabis be reclassified from a Schedule I to a Schedule III drug under the Controlled Substances Act (CSA) based on the FDA's findings.
In January, the DEA confirmed the ongoing review. A favorable decision will see marijuana moving to Schedule III, a low-risk category for medications like Tylenol and ketamine, from its current category in Schedule I, which includes dangerous drugs like heroin and LSD.
Meanwhile, rescheduling opponent Rep. Pete Sessions (R-TX) argued that the FDA's assessment of cannabis that led to the HHS recommendation was not based on "scientific facts or realities of how marijuana has been abused and used in our country today."
"With all due respect, I think [cannabis] is differentiable from heroin and, I think, cigarettes," Califf said.
Link to Seeking Alpha News Article - Apr. 11, 2024
Adobe buying videos to build text-to-video AI model - report
The tech giant is offering its network of photographers and artists $120 to submit videos of people carrying out everyday activities such as walking or showing emotions such as joy and anger, among other things. The aim is to get assets to train AI, the report added.
Over the last year, Adobe has launched services which use text to produce images and illustrations that have been used billions of times so far, according to the report.
Microsoft (MSFT)-backed OpenAI demonstrated its video-generation model called Sora, which worried investors that the creative software leader could be impacted by the new technology.
Link to Seeking Alpha News Article - Apr. 11, 2024
[Newsletter Exclusive] AMD, Intel slip as Citi says March notebook shipments 'well above' expectations
Notebook shipments were up 44% month-over-month, more than double the 21% rise that was expected, due to "pull-in demand and new model launches," analyst Christopher Danely said. Danely maintained his Buy rating on AMD and Neutral rating on Intel.
The strength in March aided overall first-quarter shipments, which were down 5% quarter-over-quarter, well above Citi's estimate of a 12% decline and the normal seasonal decline of 17%. The better-than-expected notebook sales are seen as good news for both AMD and Intel and should "result in upside" in PC processor sales for the period, Danely added.
Link to Seeking Alpha News Article - Apr. 11, 2024
Albemarle upgraded at Berenberg, seeing fresh start after disappointing Q4
Albemarle (NYSE:ALB) +0.4% in Thursday's trading as Berenberg upgrades shares to Buy from Hold with a $160 price target, raised from $130, citing expectations for rising lithium volumes, upside to lithium prices and no need for a further equity raise.
Recent pessimism regarding electric vehicle sales growth is a contrarian buy sign, Berenberg believes, saying the fundamental growth story for lithium miners remains unchanged, and spodumene prices have started to firm up, indicating support and perhaps even upside for current lithium prices.
Link to Seeking Alpha News Article - Apr. 11, 2024
Rocket Lab secures $32M U.S. Space Force Space Systems Command contract
Under the contract, RKLB will design, build, launch, and operate a rendezvous proximity operation capable spacecraft.
The mission is targeted for launch in 2025.
Link to Seeking Alpha News Article - Apr. 11, 2024
INTC 0.00%↑ AMD 0.00%↑ KWEB 0.00%↑
China instructs telecom carriers to phase out foreign chips in setback for Intel, AMD : WSJ
China was Intel's (INTC) largest market last year, accounting for more than 27% of its revenue. For AMD (AMD), China was its third-largest market, contributing 15% to its revenue.
Chinese regulators have instructed state-owned mobile operators to examine their networks for non-Chinese semiconductors and draw out timelines to replace them, the report added.
Link to Seeking Alpha News Article - Apr. 12, 2024
Huawei teases launch of new high-end smartphone: Reuters
According to checks made by Reuters at three Huawei stores in Beijing, interested customers could register to receive information about a phone without making a deposit.
Since the launch of Huawei Mate 60 Pro smartphone, the Chinese tech giant has given stiff competition to Apple (NASDAQ:AAPL).
Apple's (AAPL) share of the Chinese smartphone market fell to about 16% compared to 19% in the same period in 2023, Counterpoint Research reported last month. Huawei's market share increased to about 17% from around 9% a year earlier.
Link to Seeking Alpha News Article - Apr. 12, 2024
Zoetis hits 52-week low on adverse events linked to arthritis drugs
Zoetis (NYSE:ZTS) shares reached a new 52-week low on Friday after The Wall Street Journal reported widespread adverse events linked to the animal health company’s osteoarthritis pain drugs Librela and Solensia.
Zoetis (ZTS) said drugs were safe and noted that with over 18M injections administered, side effects linked to both Solensia and Librela stood at less than 1%.
“In both human health, animal health, there’s no drug that’s risk-free. When those reports come in, of course we take them very seriously,” its R&D head, Rob Polzer, remarked.
Link to Seeking Alpha News Article - Apr. 12, 2024
[Newsletter Exclsuive] GLP-1s benefit Parkinson’s: Barclays sees implications across biopharma
Barclays cites potential implications across the biopharma sector after a mid-stage trial indicated that the diabetes drug lixisenatide, which belongs to a popular class of obesity drugs called GLP-1 agonists, benefited patients with Parkinson's disease.
The placebo-controlled trial involved 156 patients with Parkinson's disease.
As published in The New England Journal of Medicine early this month, patients with Parkinson's who took lixisenatide, an injectable marketed by Sanofi (SNY), witnessed no worsening of their motor disabilities at 12 months.
Despite the relatively smaller sample size and a typical GLP-1-like adverse event profile, the effect on the trial's primary endpoint was "sizeable and clinically meaningful," Barclays analyst Carter Gould wrote.
Link to Seeking Alpha News Article - Apr. 12, 2024
Opinion Pieces - Facts & Opinions - Long Reads:
MercadoLibre: LatAm's E-Commerce Juggernaut Ready To Rip Higher (Upgrade)
MELI management highlighted that its margins were affected for Q4, as the company ramped up its efforts to drive 1P sales while also investing in improving its logistics network. As a result, MercadoLibre reported significant growth in its 1P business in Brazil, with an 81% YoY increase. MercadoLibre sees the growth of its 1P business as highly strategic, aiming to "provide consumers with the best buying experience by ensuring easy access to a diverse range of products." However, investors must also deal with the near-term impact on its profitability, which could affect buying sentiments moving ahead.
In addition, MercadoLibre has attained a substantial penetration rate in its fulfillment network, reaching nearly 50%. It demonstrates sellers' confidence in MELI's effective logistics infrastructure, enhancing its network effects moat against smaller peers. Therefore, it should strengthen MercadoLibre's ability to widen its gap in the fast-growing LatAm region, providing significant leverage for MELI.
Link to Seeking Alpha Opinion Piece - Apr. 08, 2024
YouTube:
Compound & Friends - Rates Might Go Higher I TCAF 138
On episode 138 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Dion Rabouin and Callie Cox to discuss: the Fed's next move, why inflation is so stubborn, Larry Fink's shareholder letter, the craziest meme stock yet, why people play the lottery, the problem with housing, and much more!
Neil Dutta’s commentary on inflation & wage growth - Clip
Small Stocks Love a Manufacturing Rebound - Clip
Link to Full Video (1:28 Hours) - Apr 12, 2024
Charts & Technicals:
TSLA 0.00%↑ GM 0.00%↑ F 0.00%↑
Gas-powered vehicle sales are declining
Link to Seeking Alpha News Article - Apr. 11, 2024
Disclosure: We own positions in some/all of the tickers mentioned in this article.
