Alpha Coverage #85
Weekly Stock Market Newsletter
Weekly newsletter bringing you a summary of unbiased, critical, thesis changing stock market news with long term impact. We cover news articles, opinion pieces and all forms of media to help you stay ahead of the curve.
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This Week’s Alpha Coverage: YouTube Playlist.
Editor’s Pick:
TSLA 0.00%↑ GOOG 0.00%↑ GM 0.00%↑ AUR 0.00%↑
[News] Trump team plans to ease U.S. rules for self-driving cars in boost for Tesla: report
President-elect Donald Trump’s transition team has told advisors that they intend to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities, Bloomberg reported Sunday.
The new rules are expected to benefit Tesla.
Last month, Tesla unveiled a two-seat Cybercab prototype with no steering wheel or pedals. Current federal rules pose serious challenges for companies looking to release vehicles without steering wheels or foot pedals in significant numbers.
There are also discussions happening in early stages in Congress about a bipartisan measure that would create federal rules around autonomous vehicles, the report added.
Currently, the National Highway Traffic Safety Administration allows carmakers to deploy 2,500 self-driving vehicles per year under a granted exemption. Legislative attempts to increase that number to as much as 100,000 have previously failed.
Link to Seeking Alpha News Article - Nov. 17, 2024
AMD 0.00%↑ IBM 0.00%↑ ORCL 0.00%↑ MSFT 0.00%↑
[News] IBM inks AI partnership with AMD
International Business Machines (NYSE:IBM) will deploy Advanced Micro Devices (NASDAQ:AMD) Instinct MI300X accelerators as a service on IBM Cloud, it said on Monday.
The offering, which is expected to be available in the first half of 2025, aims to enhance performance and power efficiency for Gen AI models and high-performance computing applications for enterprise clients, the company said.
In September, Oracle tapped AMD accelerators to power demanding AI workloads
In May, Microsoft started selling clusters of AMD's flagship MI300X AI chips via the company's Azure cloud service.
Link to Seeking Alpha News Article - Nov. 18, 2024
Link to Seeking Alpha News Article - Sep. 26, 2024
Link to Seeking Alpha News Article - May 17, 2024
[News] Centrus slides as Russia cancels license to export low-enriched uranium to U.S.
Centrus Energy (NYSE:LEU) -3.5% pre-market Tuesday after disclosing it received a notice from Russia's TENEX that its government passed an order canceling its license to export low-enriched uranium to the U.S. through year-end 2025.
Russia, the world's largest supplier of enriched uranium, said last week it had imposed temporary restrictions on the fuel's export to the U.S., after the U.S. had banned Russian uranium imports.
TENEX is required to obtain a specific export license from Russian authorities to fulfill remaining 2024 shipments and all 2025 shipments of low-enriched uranium.
Centrus (LEU) said TENEX is seeking the necessary export licenses, but there is no certainty whether or when they would be issued by the Russian authorities.
If TENEX is unable to secure export licenses, it would affect Centrus' (LEU) ability to meet delivery obligations to customers, the company said.
Link to Seeking Alpha News Article - Nov. 19, 2024
#BTC #ETH #SOL
[News] Trump advisers weigh White House crypto role - report
President-elect Donald Trump's team of advisers is holding talks with the digital asset industry about whether to form a new White House position focused on cryptocurrency policy, according to a media report.
The team is vetting candidates for such a role, Bloomberg News reported, citing people familiar with the transition efforts.
It's not yet clear whether the role would be a senior White House staff position or a "crypto czar" - Washington, DC, jargon for a point person that would oversee policy and regulation across the federal government, the report said.
Link to Seeking Alpha News Article - Nov. 20, 2024
News, Facts, Analyst & Market Commentary - Short Reads:
[Newsletter Exclusive] Insider trades: Notable buys and sells by significant shareholders, executives and directors
Badri Kothandaraman, President & CEO, Enphase Energy (NASDAQ:ENPH), expanded holdings in the company by purchasing its shares. Kothandaraman acquired 5,000 shares at $60.38 per share for a value of $301,902. With this, Kothandaraman’s total holdings in the company comes up to 1.6M.
Link to Seeking Alpha News Article - Nov. 16, 2024
Nvidia's Blackwell AI chips overheating in servers: report
According to the report, the Blackwell graphics processing units overheat when they are connected together with server racks that are designed to hold up to 72 chips, sources familiar with the issue said.
Nvidia staffers who have been taking on the issue reportedly said the company has repeatedly asked suppliers to change the design of the racks to avoid overheating problems, The Information reported.
The Blackwell chips were unveiled in March, and Nvidia said before that the chips would ship in the second quarter before delays occurred.
Link to Seeking Alpha News Article - Nov. 17, 2024
Nvidia teams with Google to design quantum AI processors
Google Quantum AI is using the hybrid quantum-classical computing platform and the NVIDIA Eos supercomputer — comprising 1,024 H100 GPUs — to perform the work and simulate the physics of quantum processors.
“The development of commercially useful quantum computers is only possible if we can scale up quantum hardware while keeping noise in check,” said Guifre Vidal, research scientist from Google Quantum AI, in a statement. “Using NVIDIA accelerated computing, we’re exploring the noise implications of increasingly larger quantum chip designs.”
Link to Seeking Alpha News Article - Nov. 18, 2024
AMD 0.00%↑ QCOM 0.00%↑ ARM 0.00%↑ MU 0.00%↑ TSM 0.00%↑
[Newsletter Exclusive] Barclays weighs in on Nvidia Blackwell ramp, Apple iPhone cuts and other chip news
Orders for AMD's (NASDAQ:AMD) MI300 and 325 AI accelerators recently up-ticked for the fourth-quarter, but there is the expected sequential decline in the first-quarter, O'Malley added. He also noted that early signs for AMD's Xilinx unit appear up double-digits year-over-year, but may be weaker to start the year.
The AI PC hype from earlier this year appears to be just hype, as there is no "real adoption," O'Malley said. "AI PCs are only [hundreds of thousands for all of 2025] with ODMs hopeful for more robust uptick with Lunar Lake and Strix Point," he said, noting that the supply chain talked about a new Qualcomm chip based on Arm (ARM) architecture that could launch in the second-quarter of next year at a $700 price point, compared to roughly $1,500 currently.
The memory market is mixed, with NAND spending weak and high-bandwidth memory still soaring due to artificial intelligence.
Capex spending for next year is likely to be "flattish" compared to expectations of growth, with Taiwan Semiconductor (TSM) appearing poised to convert nodes (moving to N3 from N5), while Samsung has had issues with its 3 nanometer yields.
Link to Seeking Alpha News Article - Nov. 18, 2024
[Newsletter Exclusive] Monolithic Power upgraded at Loop; KeyBanc sees lowered market share on Blackwell woes
Loop upgraded Monolithic Power Systems (NASDAQ:MPWR) to Buy from Hold with a $660 price target.
KeyBanc Capital said it believes Monolithic will lose significant market share on Blackwell with the ramp of GB200/B200.
Analyst John Vinh expects Infineon to be the primary supplier (60% to 70%) on Blackwell, with Renesas having secondary share. While Monolithic is attempting to requalify, the earliest this could happen would be with Blackwell Ultra (GB300/B300) in the second half of 2025. Thus, KeyBanc lowered its estimates and price target to $700 from $1,075.
Link to Seeking Alpha News Article - Nov. 18, 2024
SHOP 0.00%↑ #Perplexity
[Newsletter Exclusive] Shopify products will be listed in Perplexity's new AI shopping tool
The company said Perplexity Pro users in the U.S. will have access to a first-of-its kind AI commerce experience called Buy with Pro, which lets them check out seamlessly right on the Perplexity website or app for select products from select merchants.
The new Perplexity tool will use information drawn from sellers' sites, including from Shopify (SHOP)-hosted content.
"We’re also inviting merchants to work with us to bring their products to Perplexity Shopping for product recommendations and Buy with Pro experience," wrote Perplexity CEO Aravind Srinivas.
Link to Seeking Alpha News Article - Nov. 18, 2024
Delta Air Lines and Shake Shack beef up in-flight meals
For lucky first-class travelers out of Boston, Delta (NYSE:DAL) is now serving passengers Shake Shack (NYSE:SHAK) cheeseburgers in a first-of-its-kind partnership between the carrier and the hamburger chain.
First-class passengers on Delta (DAL) routes over 900 miles will have the option to include a Shake Shack (SHAK) burger with an in-flight meal. The partnership will be launched on flights out of Boston, Massachusetts, and will be expanded to other U.S. markets throughout 2025.
Link to Seeking Alpha News Article - Nov. 19, 2024
TTD 0.00%↑ ROKU 0.00%↑ GOOG 0.00%↑ AMZN 0.00%↑
Trade Desk working on TV OS 'Ventura,' CEO says efforts won't compete with Roku - report
In an interview with Axios, CEO and founder of the adtech company Jeff Green said it had been working on the TV OS Ventura for three years and expects a public rollout in the second half of next year.
He thinks existing OS providers, like Roku (NASDAQ:ROKU), Amazon's Fire TV (AMZN), and Google's Android TV (GOOG) (GOOGL), have a conflict of interest because they own content, which has muddled the advertising ecosystem for everyone, the report said.
Green said the company has "no intention of getting into the hardware business" but rather will work with third parties to bring its OS to their devices. The company's privacy framework, Unified ID 2.0, will be part of Ventura, Green told Axios.
Link to Seeking Alpha News Article - Nov. 20, 2024
Centrus Energy lays groundwork for potential uranium enrichment expansion
Centrus Energy (NYSE:LEU) +8.5% in Wednesday's trading after saying it is resuming centrifuge manufacturing activities and expanding manufacturing capacity at its Oak Ridge, Tennessee, facility.
The company said it plans to spend an additional ~$60M for the effort over the next 18 months, which would lay the groundwork to support a potential large-scale expansion of uranium enrichment at the Centrus' (LEU) American Centrifuge Plant in Ohio.
Such a large-scale expansion would require a multi-billion dollar public and private investment, the company said.
Link to Seeking Alpha News Article - Nov. 20, 2024
Uber Technologies adds new airport ride features ahead of the holiday travel blitz
A new option for riders traveling to or from an airport is the Uber XXL service. With UberXXL, riders will have access to larger trunk space, which was noted to be perfect for airport pick-ups and drop-offs when there is extra baggage in play. Uber XXL was also highlighted as having comfortable seating for larger groups.
The new option is available today at more than 60 airports globally, with more coming down the road. In terms of pricing, fares on UberXXL will set somewhere between UberXL and Uber Black.
The company also said its UberX Share program at airports will provide travelers with a new, more affordable, hassle-free travel option. Riders can share their trip with just one other airport traveler and save up to 25% compared to a typical UberX fare, even if they are not matched with a co-rider. UberX Share at airports will be available today in the U.S. at airports in Austin, Denver, New York, Washington, D.C., Miami, New Orleans, Phoenix, San Francisco, and internationally at Amsterdam and Madrid – with more to come.
In addition, the Uber Reserve feature was highlighted as making it easy to schedule airport rides. "With our new Flight Capture feature, riders can easily enter their flight details for a recommended best time to leave to help ensure a timely and stress-free airport arrival," updated Uber (UBER). "Our flight-tracking capability will alert riders if their flight gets delayed, and we’ll ask them whether they want to adjust their airport drop off accordingly."
Link to Seeking Alpha News Article - Nov. 20, 2024
Nvidia Non-GAAP EPS of $0.81 beats by $0.06, revenue of $35.08B beats by $1.95B
Nvidia said it sees the demand for Blackwell exceeding supply for several quarters in fiscal 2026. It will continue to ship both Hopper and Blackwell shipments in the coming fourth-quarter of fiscal 2025, though it expects both to have “certain supply constraints.”
Data center revenue flew past expectations, coming in at $30.8B, compared to estimates of $29.14B.
Looking to the fourth-quarter of fiscal 2025, Nvidia expects to generate $37.5B in revenue, plus or minus 2%. Analysts were forecasting $37.1B in revenue for the Jensen Huang-led company.
However, some buy-side estimates called for revenue for the next quarter to be as high as $41B.
Link to Seeking Alpha News Article - Nov. 20, 2024
Link to Seeking Alpha News Article - Nov. 20, 2024
[Newsletter Exclusive] Nvidia's results and guidance were exceptional. Wall Street says ignore the noise.
"NVIDIA's FQ3 results were very solid ... with record Datacenter revenues at ~$30.8B (Street at ~$29.1B) amid continued strong demand for their Hopper products, with H200 growing to double-digit billions," Bernstein analyst Stacy Rasgon wrote in a note to clients.
Rasgon, who raised his price target to $175 from $155 after the results, said while bears may point to a "smaller-than-typical guidance beat," lower networking attach rates and a slide in gross margins for next year, it's still "respectable," given the supply constraints and possibly conservative.
"To that end, Blackwell demand still appears off the chart, and is likely to exceed supply for some time to come with the prospect for a very strong forthcoming datacenter year still easily in the cards," Rasgon, who has an Outperform rating on Nvidia, continued. "And while of course Jensen will Jensen, he did not sound concerned that the need for compute would be easing anytime soon, and the sheer complexity of what the company is accomplishing continues to significantly broaden their moat vs what the competition has. Overall, the story still looks well intact."
Piper Sandler analyst Harsh Kumar said Nvidia is likely being conservative with its guidance, given it's going through a product transition.
"Our suspicion is that NVDA's visibility extends into the vast majority of calendar 2025," Kumar, who reiterated his Overweight rating and $175 price target, wrote. "We also continue to believe that starting April, the beat cadence will be quite a bit higher than the $2B cadence NVDA has more or less maintained thus far."
Link to Seeking Alpha News Article - Nov. 21, 2024
[Newsletter Exclusive] China's Huawei plans to mass-produce latest AI chip in early 2025 - report
Huawei's plan to develop more powerful chips for AI and phones is facing hurdles due to the U.S. export restrictions. Huawei has been designing its next two Ascend processors around the same 7-nanometer architecture which has been mainstream for years. However, Huawei's production partner Semiconductor Manufacturing International (OTCQX:SIUIF) is struggling to make even 7nm chips at steady volumes as its 7nm production lines have been impacted by poor yield and reliability issues.
The 910C is being made by SIUIF on its N+2 process, but due to unavailability of advanced lithography equipment the chip's yield has been limited to about 20%, the Reuters' report noted.
Advanced chips require yields of over 70% to be commercially viable. Huawei's most recent advanced processor 910B, mad SIUIF, has a yield of about 50%. This has resulted in Huawei cutting production targets and delaying fulfilling orders for that chip, the report added.
Link to Seeking Alpha News Article - Nov. 21, 2024
#Neuralink
Elon Musk's Neuralink cleared for first international brain chip trial in Canada
Neuralink, Elon Musk's brain chip startup, has received approval to begin its first international clinical trial in Canada to test the efficacy of its implant in helping paralyzed people control external devices just by thinking.
The trial is open to Canadian residents with limited or no ability to use both hands due to amyotrophic lateral sclerosis (ALS) or cervical spinal cord injury.
Link to Seeking Alpha News Article - Nov. 21, 2024
[Newsletter Exclusive] GE Vernova jumps as Wells Fargo launches at Overweight on strong power demand
GE Vernova (NYSE:GEV) +2.9% in Thursday's trading as Wells Fargo initiates coverage with an Overweight rating with a $385 price target, anticipating strong demand for the company's power generation and grid products.
Wells Fargo analyst Michael Blum says GE Vernova's (GEV) transformers, HVDC, and grid software offerings are well positioned to benefit from growing power demand driven by data center build outs, U.S. reshoring, and electrification trends tied to the energy transition and decarbonization goals.
Link to Seeking Alpha News Article - Nov. 21, 2024
Google must sell Chrome to restore competition in online search, DOJ argues
Alphabet's Google (GOOGL.O), opening a new tab must sell its Chrome browser, share data and search results with rivals and take other measures - including possibly selling Android - to end its monopoly on online search, prosecutors argued to a judge on Wednesday.
The measures would be in place for up to a decade, enforced via a court-appointed committee to remedy what the judge overseeing the case deemed an illegal monopoly in search and related advertising in the U.S., where Google processes 90% of searches.
Their proposals include ending exclusive agreements in which Google pays billions of dollars annually to Apple (AAPL.O), opens new tab and other device vendors to make its search engine the default on their tablets and smartphones.
U.S. District Judge Amit Mehta has scheduled a trial on the proposals for April, though President-elect Donald Trump and the DOJ's next antitrust head could step in and change course in the case.
The proposals are wide-ranging, including barring Google from re-entering the browser market for five years and insisting Google sell its Android mobile operating system if other remedies fail to restore competition. The DOJ has also requested a prohibition on Google buying or investing in search rivals, query-based artificial intelligence products or advertising technology.
Link to Reuters News Article - Nov. 21, 2024
AMZN 0.00%↑ #Anthropic
Amazon announces additional $4B investment into Anthropic
Amazon (NASDAQ:AMZN) said on Friday that it will invest an additional $4B into generative artificial intelligence startup Anthropic, while simultaneously unveiling a deeper collaboration between the two companies.
Shares of the tech giant were up more than 1% in premarket trading.
As part of the deeper collaboration, Amazon Web Services will become Anthropic's primary training partner and the maker of the Claude AI chatbot will use Amazon's Trainium processors to train and deploy its largest foundation models.
Anthropic has traditionally used chips created by Nvidia (NVDA), which dominates the AI accelerator market with an estimated market share north of 70%.
Amazon previously invested $4B into San Francisco-based Anthropic, including a $2.75B tranche that came this past March. Other investors include Google (GOOG) (GOOGL) and Salesforce (CRM).
Link to Seeking Alpha News Article - Nov. 22, 2024
AMZN 0.00%↑ QUBT 0.00%↑ QBTS 0.00%↑
AWS launches Quantum Embark, quantum computing stocks blastoff
Quantum Embark was created to help customers prepare for the era of quantum computing, a nascent field that harnesses the powers of quantum mechanics.
"It has the potential to revolutionize industries by solving problems that are beyond the ability of even the most powerful classical computers," AWS said in a blog post.
Quantum Embark is an advisory program intended to help customers "compute intensive use cases, develop an understanding of the state of the art, pinpoint relevant quantum technologies to focus on, and ultimately make informed decisions about future resourcing and their long-term quantum roadmap," AWS added.
The news prompted quantum computing-related stocks to skyrocket.
Quantum Computing (NASDAQ:QUBT) surged 28% by the time the markets closed on Friday. D-Wave Quantum (NYSE:QBTS) rocketed 48% by the end of the trade day, and was up another 9% during early post-market action.
Link to Seeking Alpha News Article - Nov. 22, 2024
Opinion Pieces - Facts & Opinions - Long Reads:
BlackSky: Next-Gen Satellites Bring Opportunities And Risks
BlackSky operates a constellation of 16 electro-optical imaging satellites. The company’s current constellation is made up of Gen-2 satellites that provide 1-meter resolution imagery. The company's Gen-3 satellites will produce sharper 35-centimeter resolution imagery and will also have dual optical-infrared sensors that allow for imaging in low-light conditions, along with high-speed communication to improve timeliness. BlackSky’s Gen-3 satellite is already in production and remains on track for launch in 2024. The company is currently working through final pre-ship testing of its first high-resolution satellite and expects to ship it to the launch site in the next few weeks. Once the on-orbit performance of this first satellite has been demonstrated, BlackSky will begin a regular cadence of Gen-3 deployments. These will be dovetailed into the existing constellation, with the constellation expanded as dictated by demand.
In addition to improving the capabilities of its constellation, BlackSky continues to land new contracts. This includes a 5-year Luno A contract that is worth up to $290 million. The Luno program is one of the government's largest contracts to procure commercial space-based analytics services. Luno A is a follow-on contract to the Luno contract BlackSky was awarded in 2021. BlackSky will assist the NGA in monitoring global economic and environmental activity, using AI to detect and identify objects like ships, aircraft, vehicles, and shipping containers.
BlackSky won new and follow-on contracts worth up to $780 million in the third quarter, which was one of its strongest quarters for bookings in the past two years. Demand continues to be driven by US defense and intelligence agencies who value BlackSky’s high-frequency imagery and advanced analytics.
Most prominent of these was a $476 million IDIQ contract from NASA to support their commercial small-sat data acquisition program. BlackSky will provide NASA with high-revisit satellite imaging data that will be used in Earth and applied science research.
Link to Seeking Alpha Opinion Piece - Nov. 19, 2024
ReNew Energy Global Still Unloved For No Good Reason
India has a significant goal of achieving 500 GW of renewable power by 2030 and this year the total renewable power capacity exceeded 200 GW (203.2 GW).
India’s entire electric energy capacity is now 452.7 GW, and so renewables account for 46.3% of the country’s total installed capacity.
Solar PV capacity increased over the past year by 27.9% to 92.1 GW.
Renew’s total operating capacity has grown by approximately 30% and in fact the results are even better than this as 400 MW of capacity were sold (profitably) last year. PPAs for 2.9 GW of renewable energy capacity have been signed in the current fiscal year, growing the current portfolio from 13.8 GW to 16.3 GW.
Solar and wind power are distributed energy sources and renewables projects in the early days (and continuing still) in the US and China were focused on building the capacity without necessarily paying attention to connectivity to the grid. ReNew Energy has been focused from its beginning on building renewables projects that deliver power to the grid on completion. So connectivity and supply chain issues are key in deciding about beginning a major new project; this applies to both bid wins and contracted capacity. Lack of foresight on connectivity has been a problem for some Indian projects, as it has been elsewhere, but ReNew Energy has a strong track record of avoiding delays in connectivity by making sure it has this area covered at project commencement. The Q2 report provided confidence that ReNew Energy continues to lead the pack in this area.
ReNew Energy became a manufacturer in a strategic move to ensure its supply chain, as India moved to restrict imports of solar modules. The move has been successful and it is clear that there is a market for excess panels if ReNew Energy can produce more panels than it needs. The company is looking to de-risk its capital by finding partners for its manufacturing business.
Link to Seeking Alpha Opinion Piece - Nov. 22, 2024
Charts & Technicals:
Snowflake in charts: Customer count continues to swell in FQ3
Link to Seeking Alpha News Article - Nov. 20, 2024
NVIDIA in charts: Data Center revenue jumps 112% Y/Y; up 17% Q/Q
Link to Seeking Alpha News Article - Nov. 20, 2024
Disclosure: We own positions in some/all of the tickers mentioned in this article.
