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SMCI - >>> Meet the New Stock-Split Stock That Outperformed Nvidia in the First Half and Wall Street Thinks Could Almost Double
by Adria Cimino
Motley Fool
Sep 20, 2024
https://finance.yahoo.com/news/meet-stock-split-stock-outperformed-084000909.html
Nvidia has been a tough act to follow in recent years. The artificial intelligence (AI) chip giant has delivered triple-digit increases in earnings quarter after quarter, and the share price has followed. Nvidia stock has soared more than 2,400% over the past five years, and considering the company's focus on innovation, this stellar performance may continue.
Though Nvidia has garnered the greatest share of investor attention in recent times, another tech player actually outperformed this AI powerhouse in the first half of the year. And this company followed in Nvidia's footsteps recently by announcing a stock split, a move to bring a high-flying share price down to earth -- and make the stock more accessible for a broader range of investors.
Now, Wall Street predicts this player's gains may be far from over. Let's meet the new stock-split stock that analysts think could nearly double within the coming 12 months...
.
A triple-digit first-half gain
And this stock is Super Micro Computer (NASDAQ: SMCI), a company that saw its stock price soar 188% in the first half, surpassing Nvidia's 149% increase. Though individual forecasts vary, the average Wall Street estimate calls for the stock to climb 90% from today's level.
It's important to note that this once high-flying stock has been wading through difficult waters in recent weeks. A short report released by Hindenburg Research, alleging troubles at the company, has weighed on the shares. In an unrelated move, Supermicro delayed the filing of its 10-K annual report, and this has represented an additional headwind.
I see these as short-term pressures, but they don't change Supermicro's long-term story. And considering the 20% decline in the stock since the short report, it looks dirt cheap right now -- it trades for only 13 times forward earnings estimates, down from more than 45 times earlier in the year.
In recent days, some analysts have highlighted the potential of Supermicro. For example, Needham rated Supermicro a buy in new coverage of the stock -- and Needham expects a gain of 37% in the months to come.
Why should we be so optimistic about Supermicro? First, the company has proven its ability to dominate in the area of full rack scale solutions for data centers. Supermicro's servers and other products share many common parts so the company can more quickly build a particular item to suit a customer's needs. The equipment maker also works very closely with all of the top chipmakers -- including Nvidia -- so that it can immediately include their innovations in its products. This has helped revenue in one single quarter surpass annual revenue as recently as 2021.
Supermicro's big opportunity
Second, Supermicro now faces a major opportunity that could launch a whole new wave of lasting growth for the company. One of the biggest problems facing the data centers of today and tomorrow is the fact that AI workloads produce excessive heat. Supermicro's direct liquid cooling (DLC) technology, once a slow-growth business, now promises to offer explosive growth.
The company predicts that within the coming 12 months, 25% to 30% of data centers will be equipped with DLC, and Supermicro will dominate this market. At the same time, Supermicro is preparing for demand for DLC and its equipment in general as it brings online its Malaysia facility -- one that will focus on volume and speed.
Considering forecasts of an AI market to reach $1 trillion by the end of the decade, and the key role of data centers in all of this, Supermicro's revenue could continue to climb for quite some time.
As for the stock split, Supermicro will trade at its new split-adjusted price as of Oct. 1. This won't change anything fundamental about the company or stock -- valuation and market value remain the same. So, it won't act as a catalyst for share performance, but it is a positive move as it will make it easier for more investors to buy the stock over time.
All of this represents a lot of positive points for Supermicro, setting the stage for major growth potential -- and making it a fantastic stock to buy on the dip.
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$IDVV News: International Endeavors Corp. Announces Corporate Update
Las Vegas, Nevada--(Newsfile Corp. - September 18, 2024) - International Endeavors Corp. (OTC Pink: IDVV) ("IEC"), a technology holdings company announced the following update regarding progress made in its products and services.
Winners Waygers AI
The Winners Waygers beta service has been a success. Recently it has surpassed 4000 subscribers for its AI beta mode, and has crossed 50 subscribers for its professional service. We still anticipate reaching up to 100 pro subscribers by year end.
We are planning a couple things in the short term.
1) A video demonstration of how professionals use the AI
2) Development of a section on the site that allows pros to publish their picks to paid subscribers, creating additional revenue for WITech.
AI and Futures Trading
We are proud to announce that we have revived the AI trading service. The project was slowed down by previous management due to volatility and the resources required. Recent events such as the new ETF listings have allowed us to revive the project. We are currently developing an automated trader that trades listed ETFs as well as futures including the Mini and Micro S&P. We anticipate the service being available in November of this year.
WITech Professional Services
The WITech division of IDVV has been servicing several clients, providing custom automation and bots in Financial, and Health & Wellness sectors. We have expanded to the medical sector and are currently working on an LOI for the development of AI tools we believe will help scientists in R&D stages of drug development.
We encourage everyone to follow us.
Twitter
https://twitter.com/IDVVcorp
Website(s)
https://witech.ai
https://IDVVCORP.COM
https://winnerswaygers.com
About Us
International Endeavors Corporation ("IEC") is a technology holdings company.
The Company currently is reporting its financial information on OTCMarkets.
Our filings can be seen at https://www.otcmarkets.com
Disclaimer
Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, including words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. International Endeavors Corporation (IDVV) is under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
International Endeavors Corporation
Phone: 833-705-0022
Email: otc@idvvcorp.com
SOURCE: International Endeavors Corporation, Inc.
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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/223748
SOURCE International Endeavors Corporation
https://api.newsfilecorp.com/newsinfo/223748/130
NVDA, SMCI, AVGO - >>> Step Aside, Nvidia: Billionaires Are Selling It in Favor of 2 Other High-Growth Stock-Split Stocks
by Sean Williams
Motley Fool
September 13, 2024
https://finance.yahoo.com/news/step-aside-nvidia-billionaires-selling-085100760.html
Although artificial intelligence (AI) has been all the rage on Wall Street since 2023 began, excitement surrounding stock splits has given AI a run for its money this year.
A stock split gives publicly traded companies the ability to superficially alter their share price and outstanding share count by the same magnitude. Splits are surface-scratching in the sense that they don't change a company's market cap or in any way affect underlying operating performance.
Although there are two types of stock splits -- forward and reverse -- investors usually gravitate to companies conducting forward splits. This type of split is designed to lower a company's share price to make it more nominally affordable for investors who are unable to purchase fractional shares through their broker. Companies enacting forward splits are usually outpacing their competition from an execution and innovation standpoint.
Since 2024 began, a little over a dozen leading businesses have announced or completed a stock split -- all but one of which was of the forward-split variety.
However, the outlook for some of these premier stock-split stocks is mixed among Wall Street's brightest and richest investors. Based on the latest round of form 13F filings with the Securities and Exchange Commission, billionaires were decisive sellers of cutting-edge AI stock Nvidia (NASDAQ: NVDA) in the second quarter, but were avid buyers of two other high-growth stock-split stocks.
Billionaires continue to reduce their stakes in Wall Street's AI darling
For three consecutive quarters, dating back to the start of October 2023, no fewer than seven billionaire money managers have reduced their respective stakes in Nvidia. The June-ended quarter featured seven billionaire sellers, including (total shares sold in parenthesis):
Ken Griffin of Citadel (9,282,018 shares)
David Tepper of Appaloosa Management (3,730,000 shares)
Stanley Druckenmiller of Duquesne Family Office (1,545,370 shares)
Cliff Asness of AQR Capital Management (1,360,215 shares)
Israel Englander of Millennium Management (676,242 shares)
Steven Cohen of Point72 Asset Management (409,042 shares)
Philippe Laffont of Coatue Management (96,963 shares)
With Nvidia completing its largest-ever forward split (10 for 1) in June, these billionaires might have chosen to ring the register and diversify their respective portfolios. But there looks to be more to this story than simple profit taking.
Although Nvidia has undeniably benefited from its first-mover advantages as the standout supplier of AI graphics processing units (GPUs), competition is now coming at it from all angles.
With the debut of Nvidia's Blackwell chip delayed by at least three months due to reported design flaws and supply chain issues, and the company's prized H100 GPU backlogged, it should be relatively easy for external competitors like Advanced Micro Devices to find strong demand for their AI GPUs.
Moreover, Nvidia's top customers are signaling an eventual reduced reliance on the AI kingpin. Its four largest clients by net sales are all developing AI GPUs that they plan to use in their data centers. Even with Nvidia's chips maintaining their computing advantage, the writing is on the wall that these customers intend to use their cheaper internally developed hardware.
Billionaires might also be spooked by the persistent insider selling at Nvidia. While not all insider selling is necessarily nefarious (e.g., insiders sometimes sell stock to pay their tax bill), it is noteworthy that not one executive or board member has purchased shares on the open market since December 2020.
Lastly, billionaire asset managers might be concerned about what history tells us. Since the advent of the internet roughly three decades ago, every next-big-thing trend has worked its way through an early-stage bubble. It's unlikely that AI is going to be the exception.
But while billionaires were showing Nvidia to the door, they were busy scooping up shares of two other high-growth stock-split stocks.
Super Micro Computer
The first stock-split stock that struck the fancy of six billionaire money managers during the second quarter is Super Micro Computer (NASDAQ: SMCI), a specialist in customizable rack server and storage solutions. These billionaire buyers were:
Israel Englander of Millennium Management (553,323 shares)
Jeff Yass of Susquehanna International Group (508,814 shares)
Ken Griffin of Citadel (98,752 shares)
Steven Cohen of Point72 Asset Management (45,066 shares)
Ray Dalio of Bridgewater Associates (15,777 shares)
Cliff Asness of AQR Capital Management (1,040 shares)
With the stock catapulting to north of $1,200 during the first quarter, it's not in the least bit surprising to see Supermicro's board approving a 10-for-1 forward split, to take effect after trading ends on Sept. 30.
However, the prospect of a stock split isn't the primary draw for billionaires to Supermicro. The lure is the seemingly insatiable demand from businesses wanting to be among the first to capitalize on the AI revolution by training large language models and running generative Ai solutions. To do so, they'll need the necessary infrastructure in place, which Supermicro can provide.
The company's operating results have also given billionaires reason to be excited. Net sales jumped 110% to $14.9 billion in fiscal 2024 (the company's fiscal year ends on June 30), and the midpoint of its guidance calls for $28 billion in net revenue for the current year. This forecast screams that demand is exceptional at the moment.
But it won't be an easy ride. With its use of Nvidia's H100 GPUs in its customizable data-center rack servers, and the H100 backlogged, Supermicro finds itself at the mercy of its suppliers.
Furthermore, the company is the target of a short-seller report from Hindenburg Research, which has alleged accounting manipulation. Despite denying these allegations, management did delay the annual filing of its operating results, which did little to soothe investor concerns.
Despite its relatively inexpensive valuation, Super Micro Computer has a lot to prove to Wall Street and investors.
Broadcom
The other stock-split stock that billionaires very clearly favored over Nvidia in the June-ended quarter is AI networking solutions and services providers Broadcom (NASDAQ: AVGO). Seven billionaire investors took the plunge in the second quarter, including:
Ole Andreas Halvorsen of Viking Global Investors (2,930,970 shares)
Jeff Yass of Susquehanna International Group (2,347,500 shares)
Israel Englander of Millennium Management (2,096,440 shares)
Ken Griffin of Citadel (1,880,740 shares)
John Overdeck and David Siegel of Two Sigma Investments (1,332,230 shares)
Ken Fisher of Fisher Investments (865,090 shares)
Keeping with the theme of this list, Broadcom also announced a 10-for-1 forward split (the first in the company's history), which was completed in mid-July.
Broadcom's AI ties have certainly been the fuel behind its recent uptick in growth. In particular, the company's networking solutions are responsible for connecting large numbers of AI GPUs in order to reduce tail latency and maximize the computing potential of AI-accelerating hardware. Presumably, demand for its AI networking solutions will remain robust as long as businesses keep gobbling up AI GPUs.
However, billionaires might be equally excited about Broadcom having a solid foundation that extends well beyond artificial intelligence. It generates a significant amount of revenue and profits from the wireless chips and accessories it provides for next-generation smartphones. And it's a key provider of optical components used in automated industrial equipment, as well as networking solutions for next-gen vehicles.
Lastly, billionaires might be impressed with the company's track record of earnings-accretive acquisitions. For example, the $69 billion purchase of cloud-based virtualization software company VMware in November 2023 perfectly positions Broadcom to be an important player in helping businesses with their private- and hybrid-cloud needs.
With a more diverse revenue stream than Nvidia or Super Micro Computer, Broadcom would be best-positioned to navigate an AI bubble-bursting event, should one occur.
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>>> US proposes requiring reporting for advanced AI, cloud providers
Reuters
by David Shepardson
https://www.msn.com/en-us/news/us/us-proposes-requiring-reporting-for-advanced-ai-cloud-providers/ar-AA1qgtTx?ocid=BingNewsSerp
WASHINGTON (Reuters) - The U.S. Commerce Department said Monday it is proposing to require detailed reporting requirements for advanced artificial intelligence developers and cloud computing providers to ensure the technologies are safe and can withstand cyberattacks.
The proposal from the department's Bureau of Industry and Security would set mandatory reporting to the federal government about development activities of "frontier" AI models and computing clusters.
It would also require reporting on cybersecurity measures as well as outcomes from so-called red-teaming efforts like testing for dangerous capabilities including the ability to assist in cyberattacks or lowering barriers to entry for non-experts to develop chemical, biological, radiological, or nuclear weapons.
External red-teaming has been used for years in cybersecurity to identify new risks, with the term referring to U.S. Cold War simulations where the enemy was termed the "red team."
Generative AI - which can create text, photos and videos in response to open-ended prompts - has spurred excitement as well as fears it could make some jobs obsolete, upend elections and potentially overpower humans and have catastrophic effects.
Commerce said the information collected under the proposal "will be vital for ensuring these technologies meet stringent standards for safety and reliability, can withstand cyberattacks, and have limited risk of misuse by foreign adversaries or non-state actors."
President Joe Biden in October 2023 signed an executive order requiring developers of AI systems that pose risks to U.S. national security, the economy, public health or safety to share the results of safety tests with the U.S. government before they are released to the public.
The rule would establish reporting requirements for advanced artificial intelligence (AI) models and computing clusters.
The regulatory push comes as legislative action in Congress on AI has stalled.
Earlier this year, the BIS conducted a pilot survey of AI developers. The Biden administration has taken a series of steps to prevent China from using U.S. technology for AI, as the burgeoning sector raises security concerns.
Top cloud providers include Amazon.com's AWS, Alphabet's Google Cloud and Microsoft's Azure unit.
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>>> Palantir’s Addition to the S&P 500 Is ‘Validation’ for Stock. So Is This Deal.
Barron's
by Emily Dattilo
Sept 09, 2024
https://www.barrons.com/articles/palantir-stock-price-s-and-p-500-0dffec41?siteid=yhoof2
Palantir Technologies stock divides opinion on Wall Street, but its promotion to the S&P 500 has given the bulls ammunition.
After markets closed Friday, S&P Dow Jones Indices announced that Palantir would replace American Airlines, Dell Technologies would replace Etsy, and Erie Indemnity would replace Bio-Rad Laboratories in the index before the start of trading on Sept. 23.
Being added to the S&P 500 is a heavier lift than the Russell 1000, which relies mostly on large market capitalization. To join the S&P 500, companies need to be profitable under generally accepted accounting principles for four quarters based on the sum of their profits over that span—as well as being GAAP profitable in the most recent quarter— Barron’s Associate Editor Andrew Bary wrote in June, musing that Palantir could be a likely candidate.
Wall Street has been divided on the software and data-integration company, with bulls championing the company’s AI platform and its ability to drive profits higher as demand soars and bears wondering if the stock is overvalued.
Wedbush analyst Dan Ives, who rates Palantir at Outperform with a price target of $38, called the S&P 500 addition a “validation moment.”
“We believe this is the start of a multi-year cycle for PLTR to continue generating significant deal flow on the back of AIP [artificial intelligence platform] as more organizations look to add AI capabilities that provide value and innovation in real time across operations that are unique to each enterprise,” he wrote.
A prime example of this is Palantir and oil giant BP announcing on Monday a five-year enterprise agreement that will extend their strategic relationship and introduce new AI capabilities.
“Palantir’s AIP software will assist bp to safely and reliably harness large language models (LLMs) to improve and accelerate human decision-making with suggested courses of action based on automated analysis of the underlying data,” the company said in a press release.
Palantir shares gained 9.8% to $33.30, putting them on track for their highest close in more than three years, according to Dow Jones Market Data.
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$IDVV News: IEC Announces Update on Winners Waygers AI Powered Sports Handicapping Assistant
Las Vegas, Nevada--(Newsfile Corp. - September 10, 2024) - International Endeavors Corp. (OTC PINK: IDVV) ("IEC"), a technology holdings company announced that its artificial intelligence (AI) powered sports handicapping assistant has received additional pro subscribers, and its free beta version has topped 4000 subscribers.
Previously the company announced the launch of http://winnersaygers.com, a one of a kind artificial intelligence (AI) powered sports handicapping program in beta mode. Today we are pleased to announce that the free beta service has already received 4000 subscribers.
Current subscribers are being given picks that the AI is generating for the current NFL season, and plans are to convert subscribers to several paid options towards the end of October as the AI learns more data during the current season and becomes more efficient in its strategy. Last season the AI had over a 60% win rate, with an increasingly better win rate as the season progresses and the AI is able to use more up to date information. The current focus is building subscribers while perfecting the AI's thought process.
We have received additional subscribers for the professional AI handicapping version. Used by professional handicappers that helped to develop the tools and datasets for the AI. The pro tools do not make picks for professionals, but instead help them to acquire data at a much faster pace and allow them to increase their action. We anticipate reaching up to 100 subscribers by year end. Due to that nature of the handicapping community, Pro subscribers are acquired by referrals. Each paying a negotiable signup fee of up to $10,000 per license along with a monthly subscription of $1000 to $2000.
Winners Waygers spokesperson Marrion Lewis stated "We are on track with offering the service to the mainstream. Converting the pro version to a more user friendly mainstream style has been an undertaking, but one that our team is doing well. We're confident that a product will be there that can revolutionize the industry."
Winners Waygers Video
https://vimeo.com/999064151?share=copy
Relevant Links
https://www.americangaming.org/resources/economic-impact-of-legalized-sports-betting/
https://www.statista.com/topics/10895/fantasy-sports-in-the-us/#topicOverview
https://www.espn.com/nfl/story/_/id/39469575/americans-expected-bet-231b-super-bowl-lviii
We encourage everyone to follow us.
Twitter
https://twitter.com/IDVVcorp
Website(s)
https://witech.ai
https://IDVVCORP.COM
https://winnerswaygers.com
About Us
International Endeavors Corporation ("IEC") is a technology holdings company.
The Company currently is reporting its financial information on OTCMarkets.
Our filings can be seen at https://www.otcmarkets.com
Disclaimer
Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, including words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. International Endeavors Corporation (IDVV) is under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
International Endeavors Corporation
Phone: 833-705-0022
Email: otc@idvvcorp.com
SOURCE: International Endeavors Corporation, Inc.
https://images.newsfilecorp.com/files/10187/222813_21b8d136c42aeaa5_logo.jpg
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/222813
SOURCE International Endeavors Corporation
https://api.newsfilecorp.com/newsinfo/222813/130
>>> Super Micro stock plunges 19% after company delays annual report following short-seller report
Yahoo Finance
Ines Ferré
Aug 28, 2024
https://finance.yahoo.com/news/super-micro-stock-plunges-19-after-company-delays-annual-report-following-short-seller-report-200333718.html
Super Micro Computer (SMCI) stock plunged 19% on Wednesday after the company said it would delay the filing of its annual report for its fiscal year that ended June 30.
The announcement comes a day after short seller Hindenburg Research claimed, among other things, "accounting manipulation" at the artificial intelligence high flyer.
"SMCI is unable to file its Annual Report within the prescribed time period without unreasonable effort or expense," the company said in a statement. "Additional time is needed for SMCI’s management to complete its assessment of the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024."
Super Micro shares soared from $290 in early January to about $1,200 by March, when the stock was added to the S&P 500 (^GSPC). The ticker also joined the Nasdaq 100 index (^NDX) in July.
Super Micro stock is now off more than 60% from its March peak but is still up 50% year to date. The company recently announced a 10-for-1 stock split effective Oct. 1.
The stock fell about 2% on Tuesday after Hindenburg said its three-month investigation "found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues." The firm also disclosed it had taken a short position in Super Micro.
The maker of data center servers and management software captured the attention of investors this year as it rode the AI wave. The company buys components from AI chipmaker Nvidia (NVDA).
Short sellers have been rewarded heavily from the stock's plunge.
Wednesday's drop in Super Micro’s stock price made short sellers more than $840 million in mark-to-market profits, according to S3 Partners data.
"SMCI shorts have been building their positions since SMCI was in the $900’s in April but have really put the pedal to the metal since mid-July," S3 Partners head of predictive analytics Ihor Dusaniwsky told Yahoo Finance on Wednesday.
"We expect continued short selling in SMCI as it’s stock price keep dipping – but beware of a slew of buy-to-covers when its stock price stabilizes and short sellers look to realize their recent outsized gains," added Dusaniwsky.
On Wednesday CFRA analysts downgraded the stock's rating to a Hold from Buy following Hindenburg Research's allegations.
"While we believe the evidence presented does not conclusively demonstrate significant accounting malpractice or verifiable sanction evasions, SMCI's delayed 10-K filing and potential reputational damage raises concerns," wrote CFRA Research senior equity analyst Shreya Gheewala.
In its report, Hindenburg claimed that despite a $17.5 million settlement in August 2020 with the SEC following an inquiry for "widespread accounting violations," Super Micro's business practices did not improve, and senior executives who had left amid the scandal were later rehired.
The report quoted a former salesperson: "Almost all of them are back. Almost all of the people that were let go that were the cause of this malfeasance."
"Even after the SEC settlement, pressure to meet quotas pushed salespeople to stuff the channel with distributors using 'partial shipments' or by shipping defective products around quarter-end, per our interviews with former employees and customers," Hindenburg said in its report.
"All told, we believe Super Micro is a serial recidivist."
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>>> 4 Hidden Stocks to Play the AI Data-Center Megatrend
Barron's
By Tae Kim
Aug 20, 2024
https://www.barrons.com/articles/ai-data-center-stocks-constellation-energy-teradyne-b1289ad0?siteid=yhoof2
In this article
WCC
CCOI
TER
CEG
The rise of artificial intelligence is sparking the construction of new data centers, which is providing significant opportunities for investors.
KeyBanc Capital Markets’ research team on Monday shared its top ideas about what companies will benefit from the AI infrastructure trend. The stocks include Wesco International (WCC), Cogent Communications Holdings (CCOI), Teradyne (TER), and Constellation Energy (CEG). All four stocks have Overweight ratings.
“For our names exposed to data center hardware/infrastructure, C2Q24 earnings season largely continued to showcase robust demand trends around the theme,” the team wrote.
Wesco stands to gain because investment spending on data centers should add to demand for logistics services among the company’s cloud-computing and enterprise customers, according to industrial tech analyst Ken Newman. He has a target of $195 for the stock price, while shares were down 0.9% to $157.46 on Tuesday afternoon.
Communications services analyst Brandon Nispel is optimistic about Cogent’s data-center connectivity solutions, including its optical wavelength services, which provide data transportation across long distances. He has a $80 price forecast for the shares; the stock was up 0.5% to $76.11.
Semiconductor capital-equipment analyst Steve Barger said Teradyne’s testing services will thrive as demand for AI chips grows. And electric utilities analyst Sophie Karp is bullish on Constellation Energy because of rising electricity demand from data centers. Barger has a $180 target for Teradyne and Karp has a $230 price forecast for Constellation.
Teradyne stock dropped 1.5% to $132.01. Constellation stock was down 1.1% to $190.58.
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AVGO, SMCI, NVDA - >>> 3 Stock-Split Stocks to Buy Hand Over Fist Before They Soar as Much as 204% According to Select Wall Street Analysts
Motley Fool
by Danny Vena
Aug 12, 2024
https://finance.yahoo.com/news/3-stock-split-stocks-buy-220500617.html
One of the most intriguing developments for investors over the past few years is the return to popularity of stock splits. While the practice was commonplace in the late 1990s, it had fallen out of favor but has enjoyed a resurgence over the past several years. This corporate action is usually taken in response to years of strong operating and financial results, which ultimately drive a thriving stock price.
History suggests that top-performing businesses tend to continue firing on all cylinders. Companies that conduct forward stock splits generate share price increases of 25%, on average, in the year following the announcement, compared with average gains of 12% for the S&P 500, according to data compiled by Bank of America analyst Jared Woodard.
Here are three stock-split stocks with room to run, according to certain Wall Street analysts.
Broadcom: Implied upside 76%
The first stock-split stock with a lot of potential upside growth is Broadcom (NASDAQ: AVGO). The company occupies an enviable position in technology circles, supplying a wide range of software, semiconductor, and security offerings spanning the cable, broadband, mobile, and data center spaces. Broadcom says that "99% of all internet traffic crosses through some type of Broadcom technology," giving it a critical position in the ongoing artificial intelligence (AI) revolution.
Recent results show that business is booming. In the second quarter, revenue of $12.5 billion climbed 43% year over year, fueling adjusted earnings per share (EPS) of $10.96, which grew 6%. It's worth noting the recent acquisition of VMWare is weighing on the company's profit margin, which management expects to normalize by 2025. The company expects its strong growth to continue, raising its full-year revenue forecast to $51 billion, which would represent growth of 42%.
Its history of execution and robust growth led to Broadcom's 10-for-1 stock split, which took place in mid-July. Despite gains of 152% since early last year, many on Wall Street remain incredibly bullish. Just ahead of the split last month, Rosenblatt analyst Hans Mosesmann reiterated his buy rating and boosted his price target to a split-adjusted $240, which represents a potential upside for investors of 76% compared to Wednesday's closing price.
The analyst believes the accelerating adoption of generative AI will fuel greater sales of AI-related hardware, including application-specific integrated circuits (ASICs), networking, and switching chips. He also expects the integration of VMWare will begin to make a meaningful contribution.
He's not alone in his bullish take on Broadcom. Of the 38 analysts who offered an opinion on the stock in July, 33 rated the stock a buy or strong buy, and none recommended selling.
Nvidia: Implied upside 99%
The second stock-split stock with a boatload of potential is Nvidia (NASDAQ: NVDA). The company is the leading supplier of graphics processing units (GPUs) used in video games, cloud computing, and data center operations. This helped Nvidia quickly dominate the market for the chips used for generative AI, which supercharged its sales, as these GPUs provide the computational horsepower needed for AI.
For its fiscal 2025 first quarter (ended April 28), Nvidia generated record revenue of $26 billion, up a whopping 262% year over year, resulting in diluted EPS of $5.98, which surged 629%. The results were driven by the data center segment — which includes AI processors — as revenue for the segment soared 427% to $22.6 billion.
Nvidia's blockbuster results have propelled its stock price up 600% since the start of 2023, leading to its high-profile 10-for-1 stock split in June. However, some on Wall Street believe there's much more to come. Mosesmann has a buy rating on Nvidia and a Street-high price target of $200, which represents a potential upside of 99% compared to Wednesday's closing price.
The analyst believes that many of his colleagues fail to grasp the importance of the software integrated with Nvidia's AI processors, giving it a serious competitive edge. "We anticipate this software aspect will significantly increase in the next decade in terms of overall sales mix, with an upward bias to valuation due to sustainability," Mosesmann wrote in a note to clients.
He isn't the only one who believes there's much more to come. Of the 58 analysts who covered the stock in June, 53 rated the stock a buy or strong buy, and none recommended selling.
Super Micro Computer: Implied upside 204%
The last of our trio of stock split stocks with plenty of room to run is Super Micro Computer (NASDAQ: SMCI), also known as Supermicro. The company has been supplying custom servers to the tech industry for more than 30 years. Supermicro's building-block approach to rack-scale servers with direct liquid cooling technology is a perfect fit for the rigors of AI processing, as is the company's legendary focus on energy efficiency.
Supermicro has established strong working relationships with all the biggest chipmakers, ensuring it can get its hands on the most in-demand processors, including those from Nvidia, Advanced Micro Devices, and Intel.
In its fiscal 2024 fourth quarter (ended June 30), Supermicro generated record revenue of $5.3 billion, up 143% year over year and 38% quarter over quarter. This resulted in adjusted earnings per share (EPS) of $6.25, up 78%.
While some investors were concerned about the company's declining profit margin, CEO Charles Liang cited a bottleneck involving some server components, which pushed some deals into the next quarter. This, in turn, altered the product mix to include more lower-margin sales. He expects a rebound in the coming quarters.
Supermicro's robust results since early last year have driven stock price gains of 516%, leading the company to announce a 10-for-1 stock split just this week. Some on Wall Street believe this is just the beginning. Loop Capital analyst Ananda Baruah has a buy rating on the shares and a Street-high price target of $1,500. That represents a potential upside of 204% compared to Wednesday's closing price.
The analyst believes investors continue to underestimate Supermicro's sales potential, suggesting it can deliver a revenue run rate of $40 billion during fiscal 2026, up from less than $15 billion to close out fiscal 2024. Management is forecasting a similar performance, guiding for net sales of roughly $28 billion at the midpoint of its guidance for fiscal 2025.
Wall Street seems to agree. Of the 17 analysts who offered an opinion in July, 12 rated the stock a buy or strong buy, and none recommended selling.
A note on valuation
Each of these stock-split stocks has a long runway ahead, yet despite their prospects, remain attractively priced. Nvidia, Broadcom, and Supermicro are currently trading for 36 times, 29 times, and 14 times forward earnings, compared to a price-to-earnings (P/E) ratio of 27 for the S&P 500. While two of the three fetch a slight premium compared to the broader market, their track record of business and performance, blistering stock price gains, and solid future potential make them worth every penny.
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>>> Super Micro Computer Just Made a Game-Changing Move. Here's What You Need to Know.
Motley Fool
by Billy Duberstein
Aug 12, 2024
https://finance.yahoo.com/news/super-micro-computer-just-made-075100491.html
As this earnings season has shown, large companies continue to invest heavily in AI. But one problem has been the massive electricity needs of these power-hungry AI servers. And with even higher-powered AI chips coming next year, this problem is set to compound.
To alleviate AI's massive power needs, data center operators are just starting to adopt direct liquid cooling (DLC) for AI server racks, as opposed to the traditional air-cooled racks used in the vast majority of data centers today.
Liquid-cooled data centers made up only about 1% of the market heading into this year but are now set to take off, perhaps leading to a big upheaval in the fast-growing AI server industry. With its long history of leading in new energy-efficient technologies, it's no surprise that Super Micro Computer is positioning itself to dominate this industry disruption.
From 1% to 15% in the blink of an eye
Liquid cooling has been only 1% of the data center market until now because, traditionally, it takes a long time to deploy, costs more, and leaks can cause component failure. Moreover, managing liquid-cooling systems takes a different kind of expertise than managing air-cooled systems.
However, it appears as though Supermicro may have cracked some sort of code in deploying liquid-cooled racks at scale. And that could be a big deal.
While analysts squirmed over the decline in Supermicro's gross margins last quarter, the decline may actually be good news for long-term investors. According to management, since unveiling its new liquid-cooled solutions at Computex in early June, the company has seen stronger-than-expected demand for its liquid-cooled racks. Therefore, the company had to pay for expedited shipping for liquid-cooling components, which cost more and hurt gross margins last quarter.
However, stronger-than-expected demand is not a bad problem to have. On the recent earnings conference call, Supermicro CEO Charles Liang said the company had shipped about 1,000 liquid-cooled racks in June and July, which Liang said amounted to more than 15% of all new global data center deployments globally over those two months. Liang also noted that Supermicro is forecasting that 25% to 30% of all new data center deployments will use DLC solutions over the next 12 months, "with most deployments coming from Super Micro, we believe."
Supermicro is investing to dominate this market
In the pre-AI world of traditional servers, Supermicro's premium, customized servers tended to have a relatively low market share in the fragmented industry of enterprise servers, at around 5%. However, Liang thinks Supermicro accounts for "at least" 70% to 80% of all the DLC servers shipped over the last few months.
While it's unlikely that Supermicro will hang on to that much market share over time, the company is clearly making the investments today to maintain a leading market share in DLC.
That could turn the enterprise server industry on its head, given that DLC is very rapidly going from 1% to potentially 30% of the server market in just one year. The explosion of DLC revenue is why Supermicro projects $26 billion to $30 billion in revenue over the next 12 months, roughly a doubling relative to the $14.9 billion it just made in the 12 months ending in June.
Why Supermicro isn't charging more
When executed well without leaks, DLC's advantages include up to 40% lower power consumption, better computing performance, and a faster time-to-online due to not having to install large air conditioners, all while lowering a data center's carbon footprint.
Given that, analysts are wondering why Supermicro isn't charging more. The company saw its gross margins fall to 11.3% in the quarter, partly due to expedited shipping costs, but it is only targeting a return to its traditional 14% to 17% gross margin range by the end of this year.
But if you have a value-add solution, such as DLC, you have two options: Either charge a higher price or try to disrupt the industry with large volumes at a lower price. Supermicro is apparently taking the latter disruptive path, at least at this early stage of the liquid-cooling era.
That may prove to be the smart long-term strategy, as it could pave the way for more market share. AI is a revolutionary technology, but it is expensive. Therefore, Supermicro keeping prices low could open more overall spending on AI servers from its customers. And if DLC eventually costs only on par with air-cooled servers, it could potentially be deployed even in traditional data centers, too.
With Supermicro also deploying a new data center building block solution (DCBBS) later this year — which incorporates end-to-end data center construction, including maintenance software and services — the company may generate more recurring maintenance/software revenue attached to its deployments than it did in the past when it was just a hardware parts provider.
So, getting more high-volume customers up front could be a smart move. Furthermore, Supermicro's costs are likely to come down next year as its new Malaysian manufacturing plant comes online in November with dramatically lower costs.
While many Supermicro investors appear to want more profits now, the company's heavy investments in taking the lead in direct liquid cooling for AI data centers — perhaps a big lead — could prove to be a game-changer.
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$IDVV News: Winners Waygers AI Powered Sports Handicapping Assistant Launched In Beta
Carlsbad, California--(Newsfile Corp. - August 15, 2024) - International Endeavors Corp. (OTC Pink: IDVV) ("IEC"), a technology holdings company announced that its WITech.ai division launched a one of a kind artificial intelligence (AI) powered sports handicapping assistant today.
We are pleased to announce the launch of winnerswaygers.com in a free beta mode today thus expanding our AI's ability into sports handicapping. IEC's WITech division plans to expand the service quickly into a subscription based model featuring all major sports using the popularity of the NFL football and fantasy betting season as a catalyst to make users aware of the service.
The AI is currently used by professional handicappers that helped to develop the tools and datasets for the AI. WITech is transforming the current complex model into a user friendly service that will appeal to all.
Current plans are to launch in phases starting with a beta mode offering users the ability to sign up for the service for free. Upon the start of the NFL season in September 2024 users will begin receiving handicapping information from the AI to assist in their decision making.
Our goal after beta is to launch our paid subscription service featuring an interactive sports handicapping bot in Mid October 2024 along with an expansion into Hockey and Basketball. We will be offering a discount to any users of the beta version who wish to upgrade at that time.
We are planning in Q4 of 2024 to begin charging $77 per league selected, for example NFL, and will offer an all sports league package for $247 per year/season. As previously indicated there will be a discount for beta members. At that time the beta version will become a free weekly newsletter featuring one pick to allow potential paid subscribers to see how the service works. We have been seeing massive interest in this service and feel we will have thousands of subscribers as the paid service gets rolled out.
Winners Waygers spokesperson Marrion Lewis stated, "We are excited offer the service to the mainstream. For far too long only professionals have had access to the complex data used to make more accurate sports bets. We plan to change the game. The NFL is the most popular sport to bet, so it is fitting to use it for our launch. I'm personally rooting for the chiefs, but we'll let the AI decide."
IDVV board member Ray Valdez stated, "This is the first expansion of the company into adult related, and more importantly recession resilient sectors. With the potential of many thousands of subscribers we are looking forward to discussing winners waygers along with other opportunities the company is pursuing shortly."
Winners Waygers Video
https://vimeo.com/999064151?share=copy
Relevant Links
https://www.americangaming.org/resources/economic-impact-of-legalized-sports-betting/
https://www.statista.com/topics/10895/fantasy-sports-in-the-us/#topicOverview
https://www.espn.com/nfl/story/_/id/39469575/americans-expected-bet-231b-super-bowl-lviii
We encourage everyone to follow us.
Twitter
https://twitter.com/IDVVcorp
Website(s)
https://witech.ai
https://IDVVCORP.COM
About Us
International Endeavors Corporation ("IEC") is a technology holdings company.
The Company currently is reporting its financial information on OTCMarkets.
Our filings can be seen at https://www.otcmarkets.com.
Disclaimer
Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, including words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. International Endeavors Corporation (IDVV) is under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
International Endeavors Corporation
Phone:833-705-0022
Email: otc@idvvcorp.com
SOURCE: International Endeavors Corporation, Inc.
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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/220044
SOURCE International Endeavors Corporation
https://api.newsfilecorp.com/newsinfo/220044/130
Broadcom - >>> 1 Stock-Split Artificial Intelligence (AI) Stock to Buy Before It Skyrockets 67%, According to One Wall Street Analyst
by Adam Levy
Motley Fool
Aug 7, 2024
https://finance.yahoo.com/news/1-stock-split-artificial-intelligence-082800345.html
The growing demand for artificial intelligence (AI) has produced some massive stock gains for some companies and their investors. Several stocks have climbed so much in such a short period of time that management decided to split their shares.
While a stock split doesn't change the value of a company, it can make the stock more attractive to retail investors. Additionally, it can provide more precision for stock-based compensation packages, a common practice in the tech industry.
Recent high-profile stock splits in the AI industry include Nvidia and Lam Research, which both announced 10-for-1 stock splits earlier this year. But Broadcom (NASDAQ: AVGO), which recently underwent a 10-for-1 split, could be a better buy with the potential for its price to climb 67% within the next year, according to one Wall Street analyst.
Rosenblatt Securities slapped a $240 (split-adjusted) price target on the stock a few weeks ago. Here's why the analysts think the stock could climb 67% within a year.
The other AI chipmaker
While Nvidia gets all the headlines about the demand for its GPUs to help train large language models, Broadcom has also seen soaring demand for its AI-related chips. The chip designer provides two types of chips that are extremely useful in data centers focused on generative AI. Combined, AI-related revenue increased 280% year over year in the second quarter.
Broadcom's networking chips help data centers get the most out of the equipment they buy. Big tech is spending billions every quarter on Nvidia GPUs. However, those clusters of GPUs require the efficient routing of data in order to maximize their processing power. Broadcom's chips ensure data gets to where it needs to go as quickly as possible so that there's minimal time wasted without GPUs crunching data. As data centers bring more and larger clusters online, demand for networking chips can grow exponentially, and that's exactly what we've seen.
Broadcom also develops AI accelerators. AI accelerators are custom chips designed specifically for training and running generative AI algorithms. Broadcom works with Alphabet's Google and other hyperscale cloud platforms on custom solutions. These chips have proven very cost-efficient alternatives to Nvidia's GPUs. For example, Apple used Google's Tensor Processing Unit designs to train its Apple Intelligence foundation models.
Broadcom's management says cloud providers are accelerating their investments in accelerator designs. Not only does that mean more accelerator sales for Broadcom, but it should also support its networking chips. "Networking these AI accelerators is very challenging, but the technology does exist today in Broadcom," CEO Hock Tan told analysts during the company's second-quarter earnings call. In other words, when a customer uses its AI accelerator designs, it's also more likely to use its networking chips, too. That creates a strong cycle of growth for the business.
That trend is the primary reason Rosenblatt increased its Broadcom price target. But there's another reason as well.
AI chips are just one part of Broadcom's business
While AI chips might be the fastest-growing part of Broadcom's operations, it also has an excellent enterprise software business.
The most recent addition to its software solutions portfolio is VMWare, which the company acquired last year. It's since taken steps to transform the product into a simple subscription service. It's already signed 3,000 of its largest 10,000 customers to build self-service virtual private clouds, resulting in strong bookings growth. Management expects its annualized booking value to accelerate from $1.2 billion in the first quarter to reach a $4 billion quarterly run rate.
Importantly, the simplification of VMWare and the integration with its other software products and sales team should lead to strong synergies. Management has already incurred about $2 billion of restructuring costs related to the acquisition, but it's bringing down the costs of ongoing operations. Pre-acquisition VMWare had $2.3 billion in average quarterly operating expenses, management sees that falling to $1.3 billion by the end of the year by eliminating redundancies with its existing operations.
The improved synergies of the software segment with VMWare are another reason Rosenblatt is bullish on Broadcom. Ongoing progress in integrating VMWare should lead to strong margin expansion in the back half of the year.
Shares of Broadcom currently trade for a forward P/E of around 24. That's well below many other big AI companies. What's more, the company is well-positioned to support that valuation with strong earnings-per-share growth over the next few years from AI chip sales and improving software margin. While the stock might not climb another 67% from here by mid-year next year, it certainly looks like a good stock to buy at its current price.
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>>> Super Micro Computer Misses Earnings Estimates, Announces 10-for-1 Stock Split
Investopedia
by Naomi Buchanan
Aug 6, 2024
https://finance.yahoo.com/news/super-micro-computer-misses-earnings-225616849.html
Key Takeaways
Super Micro Computer reported fiscal fourth-quarter earnings that missed analysts' estimates and announced a 10-for-1 stock split.
Revenue more than doubled year-over-year and came in slightly ahead of analysts' expectations, but the company's margins fell as costs rose, holding back profits.
Super Micro Computer CEO Charles Liang said the company has benefited from "record" demand for artificial intelligence infrastructure.
Net income of $353 million or $5.51 per share surged from the year prior, but missed analysts' projections.
Record Demand for New AI Infrastructure
The CEO added the company could be "well positioned to become the largest IT infrastructure company, driven by our technology leadership including rack-scale DLC liquid cooling and business values of our new Datacenter Building Block Solutions."
Super Micro Computer said it expects revenue to be between $6 billion and $7 billion for the first quarter of fiscal 2025, while its full-year sales outlook was in the range of $26 billion and $30 billion, above analysts' projections.
The company also announced a 10-for-1 forward split, with split-adjusted trading expected to start on Oct. 1.
Super Micro Computer shares were down more than 12% at $540.02 in extended trading as of 6:50 p.m. ET Tuesday following the company's earnings release.
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$IDVV: Corporate Update
CARLSBAD, CA, August 1, 2024 (OTCMARKETS) -- International Endeavors Corp. ("IEC") (OTC PINK: IDVV), a technology holdings company announced the following statement.
The company WITech division has finalized its agreement to launch Winners Waygers an AI (Artificial intelligence) based sports handicapping service developed an to assist with picking winners, research, and odds management for fantasy leagues, and professional sports handicapping (NFL, NBA, UFC, MLB, MLS) and Horse betting.
Currently the service is being used by professional handicappers and WITech plans to bring the service mainstream beginning with the NFL Season, then expanding it out to other mainstream sports. A slow launch is necessary due to the complexity that only professional handicappers can understand. We want to make the service very simple and easy to use as we roll it out mainstream.
We are planning to launch in phases. Starting with a limited time only free beta site by August 15th that will allow users to sign up for NFL picks, combined with data and research. Following phases we anticipate rolling out in Q4 will begin to combine additional sports and a generative AI bot that will allow paying members to ask handicapping questions and receive data to assist the in making bets.
To address the questions about the July release. Our initial plans were to begin the launch in July, but we had to secure portions of the backend of the website as portions of the backend were corrupted by persons trying to scrape data from the site. We discovered the breach, and have since repaired the issue.
We are launching and we see a massive opportunity for a subscription-based model.
We encourage everyone to follow us.
Twitter
https://twitter.com/IDVVcorp
Website(s)
https://witech.ai
https://IDVVCORP.COM
About Us
International Endeavors Corporation ("IEC") is a technology holdings company.
The Company currently is reporting its financial information on OTCMarkets.
Our filings can be seen at https://www.otcmarkets.com
Disclaimer
Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, including words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. International Endeavors Corporation (IDVV) is under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
International Endeavors Corporation
Phone:833-705-0022
Email:otc@idvvcorp.com
SOURCE:
International Endeavors Corporation, Inc.
>>> Palantir Technologies -- Shares of Palantir Technologies (NYSE: PLTR) are up 63% over the last year due to growing demand for its enterprise AI software platform. A growing number of U.S. companies are turning to Palantir to use AI models with their data, which could be the start of a long stretch of high growth.
https://finance.yahoo.com/news/2-monster-stocks-could-create-080500097.html
Palantir is used for a variety of use cases, including military operations, supply chain analysis, and investigating financial crimes. The U.S. government made up over half the company's revenue last quarter, which validates the capabilities of Palantir's technology, but government spending can also be a two-edged sword considering the potential for budget caps.
However, Palantir is starting to see momentum in diversifying away from the government. U.S. commercial revenue grew 40% year over year last quarter to $150 million and accounted for nearly a quarter of Palantir's business. Management expects U.S. commercial revenue to be up 45% in 2024 over 2023 and expects this segment to remain a significant growth driver over the long term.
Another positive indicator is that management is seeing a significant shortening in deal cycles. Some customers are signing deals just days after trying the product. To capitalize on the growing demand, management wants to broaden the market for its offering outside the U.S., in addition to state and local governments, researchers, and academic institutions.
It's clear Palantir has only just begun to tap its potential. The company reported a record net profit of $106 million in Q1 on $634 million of revenue, and Wall Street analysts currently expect the company to grow earnings at an annualized rate of 22% over the next several years.
As demand for AI software takes off over the next decade, Palantir shares should be a very rewarding holding for patient investors.
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Broadcom - >>> Forget Nvidia: Billionaire Ken Griffin Raised His Position in This Rival AI Stock by More Than 500%
by Adria Cimino
Motley Fool
Jul 31, 2024
https://finance.yahoo.com/news/forget-nvidia-billionaire-ken-griffin-094000273.html
Nvidia (NASDAQ: NVDA) shares have soared, resulting in a major boost for investors that got in on the shares early. And many billionaire investors have benefited -- including Ken Griffin, chief executive of Citadel. Griffin initially bought Nvidia back in 2013, and as recently as late last year his fund held more than three million shares of the artificial intelligence (AI) chip giant.
But Griffin wasn't a buyer of Nvidia in recent months. In fact, in the first quarter of this year, he reduced his position in Nvidia by 68% to about 1.1 million shares. And at the same time, he increased his holding of another AI stock by more than 500%. Does this mean that, like Griffin, you should forget Nvidia and bet on this AI player? Let's find out.
Citadel's track record
First, it's important to note investors have a pretty good reason for following Griffin's path. Since launching Citadel back in 1990, Griffin has built the fund to $63 billion in investment capital today. And Citadel has scored recognition as the most profitable hedge fund ever. So, when Griffin makes a particular bet on a stock, it's worth taking note -- and in some instances, you may decide to follow.
Now let's consider the billionaire's latest move. The hedge fund giant increased his position in Broadcom (NASDAQ: AVGO) by more than 500% to about 295,000 shares, a clear sign of confidence in this AI company. Griffin has probably already started to win from this move since the stock has advanced about 35% so far this year.
And the company completed a 10-for-1 stock split earlier this month, offering current holders additional shares to lower the per-share price of its stock. This doesn't change the value of Griffin's holding -- or yours if you're a Broadcom shareholder -- but it does offer shareholders a greater number of shares. A stock split is generally positive for a stock over time as it allows a wider range of investors to more easily buy it.
We don't know the exact reason why Griffin decided to increase his holding of Broadcom in the triple digits, but there's a lot of evidence showing Broadcom could be an AI winner down the road. In the most recent quarter, the semiconductor and networking giant said AI revenue surged 280% to more than $3.1 billion. Demand from mega-scale data centers for AI networking and custom accelerators is driving this growth, the company says.
Broadcom's new wave of growth
As these data centers, or hyperscalers, continue to expand, Broadcom is seeing more and more growth in its networking business. The company doubled the number of switches it sold in the quarter year over year and now is developing next-generation switches and optics that should drive a new wave of growth.
Broadcom is optimistic about this growth continuing, and considering forecasts for the AI market, there's reason for investors to be confident about the company's future too. Today's $200 billion AI market is set to reach more than $1 trillion later this decade. It's important to remember that right now more than 99% of Internet traffic travels through a Broadcom technology -- so the company, as a leader, is well positioned to benefit from the AI boom.
On top of this, Broadcom also is seeing growth from its acquisition of cloud software company VMware. In fact, it predicts VMWare will help drive a 42% increase in annual revenue this year to about $51 billion.
Nvidia vs Broadcom
So, is it time to forget Nvidia and turn to Broadcom? It's important to note that the companies could be considered rivals or peers because they are both chipmakers. But, while Nvidia is more focused on serving data centers with chips and other related products and services, Broadcom's business covers a lot more territory. The company makes thousands of products used not only in data centers but also in home connectivity, smartphones, and telecommunications in general. So, while Broadcom is growing thanks to AI, it doesn't depend on this market as much as Nvidia does -- this could make Broadcom a safer bet over time.
Still, it's also key to remember Citadel's Griffin hasn't exited his Nvidia position. He holds a considerable number of shares. So, the billionaire clearly hasn't lost faith in Nvidia and continues to believe the stock could generate solid returns.
All of this means there are reasons to be optimistic about both of these AI stocks. That said, one thing right now supports the idea of forgetting Nvidia and following Griffin into Broadcom, and that's valuation. Broadcom trades for 31x forward earnings estimates compared to 41x for Nvidia.
This is a very reasonable price considering the company's track record of growth and potential for gains from AI and the VMware acquisition. And that's why, right now you may want to forget Nvidia, and follow billionaire investor Griffin into Broadcom.
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>>> Where Will Supermicro Stock Be in 5 Years?
by Will Healy
Motley Fool
Jul 31, 2024
https://finance.yahoo.com/news/where-supermicro-stock-5-years-091500517.html
Looking back on Super Micro Computer (NASDAQ: SMCI) five years ago, few likely envisioned it would reach the heights it has today. It has existed since 1993 and has traded as a stock since 2007. Despite building a large, successful business, the company was largely unknown outside its industry and drew little interest from stock investors.
Supermicro's fortunes changed dramatically when its partnership with Nvidia brought about exponentially higher sales of AI-capable servers. This helped lead to the AI stock rising by over 3,500% over the last five years. Admittedly, another 3,500% increase in the next five years is unlikely, but the stock can probably generate market-beating returns during that time. Here's why.
The state of Supermicro
The most surprising things about Supermicro are its longtime obscurity and meteoric rise to prominence. The company describes itself as a "rack-scale total IT solutions provider" that creates environmentally friendly and energy-saving machinery.
It produces first-to-market hardware for the edge, 5G, data centers, the cloud, and AI in approximately 6 million square feet of manufacturing space. Moreover, it operates in more than 100 countries, meaning it built an extensive footprint despite receiving little attention from investors until recently.
The company's growth has now become too significant for investors to ignore. In the first nine months of fiscal 2024 (ended March 31), it reported $9.6 billion in revenue, a 95% yearly increase. With that, net income surged to $855 million compared with $446 million in the same year-ago period.
Where Supermicro is going
Additionally, its rapid growth is on track to continue. Markets.us estimates the compound annual growth rate (CAGR) for the AI server industry will exceed 30% through 2033.
Fortunately for Supermicro's shareholders, company estimates far exceed that rapidly growing industry CAGR. In the most recent earnings report, the company raised its fiscal 2024 revenue guidance to $14.7 billion, which would mean a 107% growth rate if revenue levels match the company estimate.
As for the stock, it has risen by almost 130% over the last year. Still, nearly all of that growth occurred in the first three months of the calendar year, and the stock has pulled back by more than 40% since peaking in March.
However, that price correction could dramatically increase Supermicro's odds of outperforming the indexes. Its P/E ratio had reached 90 as its stock peaked. Now, with rising profits and falling stock prices, the earnings multiple has dropped to 39. Its PEG ratio of just 0.6 confirms that its P/E ratio is at a very low level, considering the rapid growth of its profits.
Furthermore, analysts forecast that Supermicro's net income will grow by an average of 62% per year for the next five years. Admittedly, this is a "way too early" estimate and will likely change significantly as more information becomes known. Still, if profits grow at an average close to this estimate, it is likely the rapid growth of Supermicro stock will continue.
Supermicro in five years
Although a lot can happen in five years, Supermicro stands a high likelihood of beating the market over that time. As stated before, investors should not expect another 3,500% gain over five years, nor should they expect the company to maintain revenue growth near the triple-digits over the long run.
Nonetheless, the AI servers produced by Supermicro are experiencing unprecedented demand, leading to massive gains in the stock price. Moreover, even if estimates for the future change significantly, both Supermicro and its industry should experience rapid growth rates for years to come.
Additionally, considering the growth rates of the recent past, the 39 P/E ratio and the PEG ratio under 1 arguably make Supermicro a bargain stock. Given its recent pullback, now might be a good time to add shares.
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>>> Meta Platforms Just Released an Artificial Intelligence (AI) Game-Changer -- And It Could Be Dangerous
by Billy Duberstein
Motley Fool
Jul 28, 2024
https://finance.yahoo.com/news/meta-platforms-just-released-artificial-143000336.html
The race to build the best artificial intelligence (AI) models is definitely on, with current leader OpenAI making waves in late 2022, and up-and-coming competitors, Alphabet's Gemini and AI start-up Anthropic, also building top-performing models with hundreds of billions of parameters.
However, investors shouldn't count out Meta Platforms, which is taking the most unique and differentiated approach to building generative AI models.
Will this approach allow Meta to leap ahead of the industry? Or do the risks outweigh the benefits?
When competitors go closed, Meta goes open
Last week, Mark Zuckerberg and Meta celebrated the release of Meta's Llama 3.1 model, which features 405 billion parameters.
That's a massive model. Until now, Meta had only released 8 billion parameter and 70 billion parameter Llama models. But Llama 3.1 405B is Meta's first salvo in "frontier" models, pushing the boundaries of the planet's most advanced generative AI large language models (LLMs). According to Meta, the new model outdoes even the most advanced LLMs, such as ChatGPT 4-Omni and the Claude 3.5 Sonnet model from Anthropic, on many -- though not all -- parameters. Zuckerberg also claims inferencing the Llama 3.1 costs a mere 50% of the cost of running ChatGPT 4o.
Not only is Llama performing in line with or better than many of the best models on the market today, but it also has the distinction of being the only open-source frontier model.
Open-source advantages
Open-source software means the license holder allows the software's source code to be freely accessible and modified by outside parties. Outside developers can then make changes to the software, which allows them to improve functionality, fix bugs, or improve security.
By giving away the software code for free, developers have a chance to potentially improve the product quicker than a "closed" software system where only a company's employees have access to alter the code. As outside developers gravitate toward "free" open-source software rather than expensive proprietary software, the open-source model is best if one wants to scale up usage quickly. In addition to these general open-source advantages, Llama can run anywhere, so it doesn't force developers to send their private data to a closed model or specific cloud.
This is why Mark Zuckerberg thinks Meta AI will become the world's most-used AI assistant by the end of this year, overtaking OpenAI.
In his blog post accompanying the release, Mark Zuckerberg wrote that he sees the development of LLMs progressing similarly to the development of operating systems Linux and Unix back in the 1990s. Though closed-system Unix took an early lead, the advantages of Linux's open-source model eventually paved the way for it to become the standard operating system for cloud computing and mobile devices.
Zuckerberg also notes that Meta has benefited from open-source tools in the past, such as its development of open-source data center architecture and AI software like Pytorch, which Meta initially developed. Since Meta's core business comes from advertising, not monetizing software or data center architecture directly, the open sourcing didn't impede its ability to generate revenue and invest in research and development. Meanwhile, Meta eventually saved billions of dollars by allowing these tools to develop with the help of outside parties and then using them to run its core social media platforms.
The same holds true for Llama AI. Meta isn't a software provider or a public cloud provider, so it does not really depend on selling its model directly for revenue.
But Meta should profit from Llama...eventually
That is not to say Meta doesn't eventually envision seeing revenue from Llama. But it will likely do so by using the underlying model and building services on top of it. On the recent Q1 conference call with analysts, Zuckerberg hinted at building business messaging customer service AIs on WhatsApp, introducing ads into AI interactions in Meta AI, or perhaps charging for access to the largest AI workloads with more compute.
Other open-source software companies, such as Red Hat, have previously monetized AI models by selling customer service and consulting services. And WordPress has used a dual-license model to monetize its website-building software, offering large enterprises a "deluxe" paid version. So, there is precedent for profiting from open-source models.
Meta probably won't see any direct revenue from Llama in the near term, but over the next few years, the company should begin to deploy and benefit from ancillary services built on top of the underlying Llama model.
The drawbacks
But there are also risks to open source -- especially in the context of AI. These risks have to do with privacy and security, elements for which Meta has been criticized in the past. Concerns over privacy and security are likely why talks with Apple (NASDAQ: AAPL) to get Llama on the new Apple Intelligence platform fell apart earlier this year. Apple, perhaps the most closed business model in tech, always puts a premium on privacy and security. Thus, the disagreement with Meta and exclusion from Apple Intelligence could be a red flag.
Specifically, there may be qualms about opening up the source code and model weights for all to see, as this could empower bad actors who wish to tweak the code for nefarious purposes. That risks intervention by government authorities, which may limit Llama's distribution to prevent it from getting into the hands of hostile governments, such as China, Russia, or Iran.
Zuckerberg's response is that these countries are good at espionage and will likely be able to access leading models anyway, even in a closed system. That essentially means fewer "good guys" will have access to top models (only a few large companies), which actually risks putting the U.S. at a disadvantage. Plus, Zuckerberg believes stifling open innovation risks the U.S. and its allies not having the best AI at all.
But that seems like a murky argument: Since these bad actors will get access to leading AI models anyway, should we just give them the code for free? It's unclear whether that argument will actually sway the U.S. government to go along with that line of thinking.
A big factor in the AI race
Meta's selection of open source for AI has the chance to make it the leading AI company in the world and, therefore, perhaps become the world's most valuable company one day. But the approach also risks government scrutiny and regulation, which threatens its ability to compete in the AI wars at all.
For Meta investors and AI tech investors, in general, the rollout of Llama 3.1 and the potential government reaction to it during an election year are key points to watch over the coming months.
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>>> Palantir Technologies (NYSE:PLTR) has finally broken free from its sub-$25 trading range and renewing its meme stock status in some cases. However, those following the company know that Palantir has always been a strong contender among tech stocks, despite its price volatility, which makes short-term trading challenging.
https://finance.yahoo.com/news/3-tech-stocks-could-grow-143000673.html
One of Palantir’s key strengths today is its rapid diversification beyond government contracts. While these contracts provide reliable revenue and long-term stability, relying heavily on a few clients is risky. Recognizing this, Palantir has successfully expanded its reach into the corporate sector. Its impressive client list now includes Tampa General Hospital, United Airlines , AARP, and Wendy’s, among others.
This expansion into the corporate world is creating a snowball effect for Palantir. As it delivers substantial value to diverse private firms, its reputation and client base continue to grow. The company’s operational model fosters a certain client stickiness that leads to high switching costs, making it difficult for customers to transition to competitors once they’ve integrated Palantir’s solutions.
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>>> Symbotic (NASDAQ:SYM) is transforming the seemingly mundane sector of warehouse management with its AI-driven solutions. While it might not spark the same excitement as AI-generated content, major corporations like Walmart (NYSE:WMT) and Target (NYSE:TGT) recognize its offerings’ benefit to their bottom line. This level of corporate endorsement is a strong indicator of the company’s value, but Symbotic isn’t stopping there.
https://finance.yahoo.com/news/7-ai-stocks-overlooked-sectors-104200970.html
Recently, the company announced the development of a new AI-managed warehouse system designed for smaller companies. This system is intended for shared-use facilities where multiple small businesses operate. This strategic move significantly broadens Symbotic’s total addressable market, positioning it to capitalize on the rapidly growing warehouse and storage sector. By targeting smaller-scale operations, Symbotic is poised to tap into a previously underserved segment, offering substantial growth potential for investors.
Symbotic is also unique among AI stocks on this list in that it’s suffering from high short interest, which currently sits at nearly 28%. This scenario makes Symbotic primed for a short squeeze considering its strengths, prospects and current per-share pricing drop since January.
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>>> Parsons (NYSE:PSN) might not have the name recognition of sister companies like Palantir. Still, it’s a powerhouse in the defense tech sector with a unique focus on AI-driven hardware solutions. Unlike firms concentrating on software, Parsons excels in applying AI to physical systems, making significant strides in several critical areas.
https://finance.yahoo.com/news/7-ai-stocks-overlooked-sectors-104200970.html
Parsons’ portfolio includes developing ballistic missile sites, advanced rocketry, nuclear facility management and vital infrastructure projects. These activities require sophisticated data management and AI oversight, positioning Parsons as a leader in hardware-centric AI applications.
Beyond defense, Parsons is innovating with AI-driven drone technology for infrastructure inspection. These tools revolutionize evaluating and maintaining critical infrastructure such as bridges, roadways and water treatment plants. This strategic expansion positions Parsons as a vital player in applying AI to complex and hazardous environments, ensuring comprehensive safety assessments and ongoing infrastructure integrity. Better yet, expect infrastructure to be a major political talking point as we near the elections, creating unique tailwinds for Parsons that few other AI stocks can adequately capture.
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>>> Vertiv Holdings (VRT) -- Of course, all AI stocks need essential infrastructure to keep the lights on and GPUs running, and Vertiv Holdings (NYSE:VRT) is a standout in this segment. Vertiv owns and operates a range of key AI infrastructure, including power continuity, heat management and monitoring software services.
https://finance.yahoo.com/news/7-ai-stocks-overlooked-sectors-104200970.html
As with many AI stocks, Vertiv’s strength continues unabated. In the most recent report, order rates climbed 60% year over year, and net sales jumped 8%. Unlike many AI stocks, though, Vertiv is effectively agnostic to which hardware or software AI stocks come out on top. They’re selling picks and shovels to artificial intelligence gold miners and win no matter which companies ultimately dominate the industry.
Analysts widely see Vertiv as a top AI stock, with Oppenheimer saying shares are worth $100, more than 10% upside, and nearly every research firm or analyst covering the company affirming a buy rating. Shares may seem overvalued if you look at price-to-earnings ratio alone, it current sits at 44x. But, considering its growth trajectory and tailwinds, buying sooner rather than later may be the best move.
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>>> Mitek Systems, Inc. (MITK) provides mobile image capture and digital identity verification solutions worldwide. Its product portfolio includes Mobile Deposit that enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet; Mobile Verify, an identity verification solution that is integrated into mobile apps, mobile websites, and desktop applications; and Mobile Fill, which includes automatic image capture, minimizes the numbers of clicks, and expedites form fill completion. The company also offers MiSnap, a mobile-capture software development kit that enables an intuitive user experience and instant capture of quality images of identity documents and checks. CheckReader enables financial institutions to automatically extract data from checks once they have been scanned or photographed by the application; Check Fraud Defender, an AI-powered and cloud-hosted model for fighting check fraud; and Check Intelligence that enables financial institutions to automatically extract data from a check image received across any deposit channel, including branch, ATM, remote deposit capture, and mobile. In addition, it provides MiVIP, an end-to-end KYC platform that allows companies to design, build, and deploy robust KYC journeys with little or no development resources; and MiPass provides protection against most sophisticated forms of identity theft and dangerous fraud techniques, such as deepfakes and synthetic identities. Further, the company provides ID_CLOUD, an automated identity verification solution that is integrated into a customers' application to read and validate identity documents; IDLive Face, a passive facial liveness detection product; IDVoice, a robust AI-driven voice biometric engine; IDLive Voice to stop spoofing attacks on voice biometric systems; and IDLive Doc that works to fight fraud related to digitally displayed document images. The company was incorporated in 1986 and is based in San Diego, California.
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https://finance.yahoo.com/quote/MITK/profile/
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>>> Why Super Micro Computer Stock Is Plummeting This Week
by Keith Noonan
Motley Fool
Jul 26, 2024
https://finance.yahoo.com/news/why-super-micro-computer-stock-104500369.html
Super Micro Computer (NASDAQ: SMCI) stock is sinking in this week's trading. The high-performance server specialist's share price was down 12.7% from last week's close heading into this Friday's market opening, according to data from S&P Global Market Intelligence.
Tech stocks continued to pull back this week as investors assessed risks related to geopolitical dynamics between the U.S., China, and Taiwan. Sell-offs intensified after Alphabet and Tesla published second-quarter reports that worried Wall Street.
While there wasn't any business-specific news dragging Supermicro lower, the company's valuation is getting hit in a pullback that's impacting the broader market and having a particularly pronounced impact on otherwise high-flying artificial intelligence (AI) stocks. The timing of the server specialist's addition to the Nasdaq-100 index also didn't help the stock this week.
Bearish ripple effects from earnings season hit Supermicro
In addition to geopolitical risk factors continuing to pressure growth stocks, earnings season has gotten off to a shaky start for the technology sector. Alphabet and Tesla reported Q2 earnings after the market closed on Tuesday, becoming the first of the highly influential "Magnificent Seven" companies to publish updated financial results. Unfortunately, Wall Street considered both reports to be duds -- and the disappointment created ripple effects that extended to Supermicro and other AI stocks.
Alphabet posted per-share earnings of $1.89 on revenue of $84.74 billion, which actually came in better than the average Wall Street target's call for per-share earnings of $$1.85 on sales of $84.29 billion. But the company guided for higher costs and weaker operating income margins in Q3, and investors adopted a more bearish stance in response.
Tesla's quarterly report was significantly more concerning. While Q2 revenue of $25.5 billion topped the average analyst estimate by $760 million, non-GAAP (adjusted) per-share earnings of $0.52 fell short of the market's target by $0.10 per share. Comments from management about the business's near-term outlook and spending plans also worried investors.
Joining the Nasdaq-100 index didn't boost Supermicro stock this week
Super Micro Computer was added to the Nasdaq-100 on July 22, and the timing of the addition may also be playing a role in this week's sell-offs. While being added to major indexes is often a bullish catalyst because it causes exchange-traded funds (ETFs) to buy the stock, it's actually a negative catalyst when the underlying index level and corresponding ETF prices are dropping. For reference, the Nasdaq-100 index has fallen roughly 4.5% over the last week of trading.
Investors who are eager for the next major, business-specific updates that could Supermicro's stock price won't have to wait long. The company is scheduled to report quarterly results after the market closes on Aug. 6.
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AI questions answered -- What is the meaning of life?
>>> The meaning of life is a philosophical question that has been pondered by humans for centuries. It can encompass various aspects including purpose, existence, and the nature of reality. Different cultures, religions, and philosophies offer diverse perspectives on this question. Some common themes include:
Religious and Spiritual Beliefs: Many religions provide their own interpretations of the meaning of life, often involving a higher power or spiritual journey.
Philosophical Perspectives: Philosophers have debated the meaning of life, with some suggesting it is about seeking happiness, knowledge, or fulfilling one's potential.
Scientific Views: From a scientific standpoint, life can be seen as a result of evolutionary processes, with meaning being a human construct.
Personal Meaning: For many, the meaning of life is a personal journey, involving relationships, achievements, and personal growth.
Ultimately, the meaning of life can be subjective and may vary greatly from person to person.
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https://ih.advfn.com/intelligence
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>>> Nvidia (NASDAQ: NVDA) has grown at a torrential rate in recent years, with many expecting it to keep doing so. (Others see it as needing to take a breather.) The company made a name for itself with gaming chips, but now it's not only a leader in graphics processing units (GPUs) for games but also in chips for data centers. And data centers are booming, as much of our AI activity runs through them.
The stock's valuation is steep, but if it keeps growing like crazy, it can be warranted. Proceed with caution if you're risk-averse.
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https://finance.yahoo.com/news/7-semiconductor-stocks-could-millionaire-093800468.html
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AI is really hot right now. It's so great to see it applied in medicine and even immunotherapy. Going to be very interesting with big companies investing in new AI solutions and tools.
Constellation Energy - >>> Forget Nvidia: Jim Cramer Says This Company Could Be About to Cash In on Artificial Intelligence (AI) Data Centers
by Adam Spatacco
Motley Fool
May 20, 2024
https://finance.yahoo.com/news/forget-nvidia-jim-cramer-says-122100994.html
One of the biggest investment areas among artificial intelligence (AI) opportunities is data centers. Applications in generative AI are fueling a new wave of demand for cloud storage, server racks, network infrastructure, and more.
While Nvidia is a major provider of data center services, other players are emerging with formidable solutions. Moreover, even big tech giants, such as Amazon, are investing significant sums into building their own data centers. Savvy investors understand that there are a host of opportunities making inroads in the growing data center realm -- a market expected to reach nearly $440 billion by 2028, according to Statista.
Stock analyst and media personality Jim Cramer recently named Constellation Energy (NASDAQ: CEG) as a top pick for data center services. While this may seem a bit out of the ordinary, Constellation Energy is currently discussing some interesting partnerships and could very well emerge as a big winner of the AI data center boom.
Below is an exploration of how the company could play a major role in the data center arena and whether now is a good time to scoop up some shares.
Data centers use a lot of energy
Data centers act as storage units for IT architecture and network infrastructure. These buildings house larger server racks that are filled with hardware such as graphics processing units (GPUs), which are used for accelerated computing.
While data centers play an integral role in the AI ecosystem, there's one big drawback: Data centers use a lot of electricity.
According to the Department of Energy, data centers use anywhere between 10 to 50 times more energy than a standard commercial office. This translates into roughly 2% of the total electricity consumption in the U.S.
Research from Goldman Sachs suggests that data center power demand will increase at a 15% compound annual growth rate (CAGR) through 2030 -- at which point it would reach approximately 8% of total power demand in the U.S. by 2030.
Constellation Energy offers a unique solution
Considering that the secular tailwinds fueling AI are directly correlated to rising energy consumption -- electricity, in particular -- data centers are in need of an alternative solution sooner rather than later. Constellation Energy might just have the answer.
The company operates across many aspects of the energy industry including solar, wind, and natural gas. But another solution Constellation Energy brings to the table is nuclear power. And the best part? Big tech is interested.
During Constellation Energy's most recent earnings call, management alluded that the company is in discussions with "Magnificent Seven" members Microsoft and Alphabet about potentially partnering on nuclear-powered data centers.
Furthermore, Goldman affirmed rising interest in nuclear power, calling it "an attractive generation source for data centers given it is zero carbon and reliable."
Is Constellation Energy stock a buy right now?
As of the time of this writing, Constellation Energy was trading at a price-to-earnings (P/E) ratio of 28.4 -- well above the S&P 500's P/E of 24.8.
Furthermore, after benchmarking Constellation Energy against other regulated utilities, the company appears to be trading at a premium relative to some of its competitors.
While Constellation Energy might be pricey compared to other utilities, I see the company as an under-the-radar opportunity among AI investments. Although there will be obvious investment choices among big tech and peripheral competitors in IT infrastructure, energy stocks shouldn't be forgotten when it comes to AI.
For this reason, Constellation Energy might be seen as a better value compared to many technology stocks which have seen valuation multiples expand dramatically over the last year as AI tailwinds have fueled buying activity.
Considering nuclear power is garnering the interest of the biggest AI enterprises, I wouldn't overlook the energy sector, in general.
Given Constellation Energy's relationship with big tech and its capabilities at the intersection of data center services and nuclear power, I see the stock as an attractive buying opportunity for long-term investors.
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>>> Analyst reviews Palantir stock price target ahead of earnings
The Street
by Rob Lenihan
Apr 18, 2024
https://finance.yahoo.com/news/analyst-reviews-palantir-stock-price-231500926.html
In J.R.R. Tolkien's fantasy epic "The Lord of the Rings," a palantir was an indestructible crystal ball used for communication and seeing events in other parts of the world and in the past.
In 2003, Peter Thiel, co-founder and chairman of Palantir Technologies (PLTR) , thought that would be the perfect name for the software platform company.
You won't have to look into any crystal ball to find Palantir, as the company has been creating some serious magic of its own.
While Palantir's sales are largely driven by helping the U.S. government with its counterterrorism efforts, it's also pushed more deeply into managing, interpreting and reporting data for large companies.
The company's revenue has been boosted by surging AI activity after the successful December 2022 launch of OpenAI's ChatGPT, the first large language model AI app to become widely available.
In February, Palantir posted fourth-quarter earnings of 8 cents per share on $608.4 million in sales, beating analysts' call for $602.9 million.
Palantir is scheduled to report earnings next month
Palantir CEO: U.S. commercial performance 'bombastic'
"Obviously, our performance in U.S. commercial is extraordinary; some would say bombastic," Chief Executive Alex Karp told analysts during the company's earnings call. "The numbers that just fly off the screen are the 70% year-on-year growth in Q4."
Citing the company's more than 100 contracts, Karp said "it's almost inconceivable to do that many contracts given the way our product used to be."
"And so, what you see is a convergence of our product being easier to use, an augmentation of its charisma, both driven by developments in AI, large language models, which make the product approachable foundry to the broader market," he said.
Karp said that Palantir was proud to support the U.S. and the U.S. military.
"We are proud to have an operational crucial role in Ukraine," he said. "And I am exceedingly proud that after October 7, within weeks, we are on the ground, and we are involved in operationally crucial, operations in Israel." Oct. 7, 2023, was the day that Hamas invaded Israel, killed 1,200 people and kidnaped more than 200.
Earlier this month, Palantir and Oracle (ORCL) announced a partnership where they would jointly sell cloud and AI services.
As part of the agreement, Palantir said it would move its Foundry workloads to Oracle Cloud Infrastructure and make its Gotham and AI Platforms deployable across Oracle's distributed cloud.
Gotham is an intelligence and defense tool used by militaries and counter-terrorism analysts, while Foundry is used for data integration and analysis by corporate clients.
Oracle is one of the top 10 largest cloud providers, and its position as a multidecade leader in data management has given it global reach.
Analyst is investing in Palantir for the future
On April 17, Palantir said that it had been designated as an Awardable vendor for the Chief Digital and Artificial Intelligence Office’s Tradewinds Solutions Marketplace.
The Tradewinds Solutions Marketplace is a digital repository of awardable capabilities that can address challenges the Department of Defense faces in the arena of artificial intelligence, machine learning and data analytics.
Palantir’s AI Mission Command Capability and its Predictive Maintenance & Precision Sustainment Suite have been added to the Marketplace and are available to support critical missions across the Defense Department.
Palantir is scheduled to report first-quarter earnings on May 6.
Analysts surveyed by FactSet are expecting the company to post profit of 8 cents a share on $615.3 million in revenue. A year earlier Palantir earned 5 cents a share on $525 million of revenue.
TheStreet Pro's Stephen Guilfoyle has a good feeling about Palantir. He has said more than a few times that "this is one name I am investing in for the future generations of my bloodline."
Guilfoyle noted in his April 16 column that for the 12 months ended in late December, operating cash flow printed at $712 million, more than triple the $224 million of 2022, as free cash flow printed at $697 million, up from $184 million in 2022.
"Palantir is quickly becoming a cash-flow beast," he wrote.
The stock has already given up its 21-day exponential moving average and 50-day simple moving average, he said.
“Should the stock lose contact with that pivot, there is a very good chance that it moves to fill the gap created in early February,” he said.
“That would take the shares down to about $18 and test support at the 200-day [simple moving average] as it does. This is where I suspect the real support may lie.”
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>>> Palantir looks to have many years of growth ahead
https://finance.yahoo.com/news/forget-nvidia-likely-next-once-113000380.html
Jake Lerch (Palantir Technologies): What makes for a once-in-a-generation stock buying opportunity? For me, the most important factor is a secular growth story. And today, nothing fits that bill better than the rise of artificial intelligence. So it should come as no surprise that my pick is an AI stock: Palantir Technologies.
Palantir specializes in AI-driven data analysis and pattern recognition. Through its software platforms, Palantir can help various organizations achieve very different ends. On the one hand, it could help law enforcement track and apprehend cybercriminals. On the other, it might assist healthcare organizations deliver better outcomes to patients.
In short, almost every organization today could benefit from its products in some capacity. Moreover, AI is only getting better. As it improves, the results it can deliver will also scale -- making Palantir's products even more appealing to organizations looking to increase revenue, cut costs, or improve customer satisfaction.
Best of all for potential investors, Palantir remains in the early stages of its life cycle. The company got its start partnering with governmental organizations -- law enforcement, national security agencies, and military branches. Recently, however, Palantir's commercial customer base has expanded.
In its most recent quarter (the three months ending on Dec. 31, 2023), Palantir reported commercial revenue of $284 million -- up 32% from a year earlier and representing 47% of its overall sales. American-based commercial revenue grew even faster -- 70% year over year.
To sum up, American companies are flocking to Palantir. Yet, the company still has ample room to grow -- a fantastic combination for investors.
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SoundHound AI - >>> Nvidia Just Bought 5 Artificial Intelligence (AI) Stocks, and 1 Is Up 142% Already
by Anthony Di Pizio
Motley Fool
April 6, 2024
https://finance.yahoo.com/news/nvidia-just-bought-5-artificial-095900069.html
Nvidia (NASDAQ: NVDA) was a $360 billion company at the beginning of 2023. It has added $1.8 trillion in value since then, and it's now the third-largest company in the world behind only Apple and Microsoft.
The heightened interest in artificial intelligence (AI) is the primary driver of that value creation. Nvidia makes the industry's most powerful graphics processing units (GPUs) for data centers, which developers use to build, train, and deploy their AI models. Those chips drove Nvidia's data center revenue to more than triple in fiscal 2024 (ended Jan. 28), and the momentum looks set to continue in fiscal 2025.
Nvidia is now using some of its newly acquired wealth to invest in other AI companies, which could hint at where the next wave of AI value is created.
Nvidia bought five AI stocks at the end of 2023
Nvidia filed its first-ever 13-F with the Securities and Exchange Commission on Feb. 14, and it publicly revealed new holdings in five different stocks:
SoundHound AI (NASDAQ: SOUN), which develops voice recognition and conversational AI technologies.
Arm Holdings, which designs processors for the world's largest chip companies. This was Nvidia's largest investment with a value of $147 million at the end of 2023.
Nano-X Imaging, which is improving patient outcomes by using AI to enhance medical imaging. This stock was Nvidia's smallest investment with a value of less than $0.4 million at the end of 2023.
Recursion Pharmaceuticals, which is using AI to help with drug discovery.
TuSimple Holdings, which developed an autonomous driving platform for the trucking industry.
SoundHound AI stock has been the best performer of the bunch so far, with a 142% gain in 2024 already. It values Nvidia's stake at around $8.7 million, which doesn't sound like much, but SoundHound is only a $1.5 billion company.
So should investors follow Nvidia into the conversational AI specialist?
SoundHound has a growing portfolio of AI products
Most of us are familiar with AI chatbots like ChatGPT, Gemini, and Claude. They were originally designed to ingest text-based prompts, and they are capable of generating text content, images, videos, and computer code on command. SoundHound focuses on conversational AI, which is designed to recognize voice-based prompts and respond in kind.
That opens up a range of possibilities, especially in use cases where hands-free functionality is required. For example, restaurant chains use SoundHound's Employee Assist technology to help workers get fast answers to questions in high-pressure situations, like when they might be serving customers or completing operational tasks.
Similarly, SoundHound's technology is popular with automotive manufacturers like Mercedes-Benz and Stellantis, which use it to power their in-car virtual assistants. It means drivers can instantly retrieve information about their vehicle's functionality, in addition to weather forecasts, sports results, and information about local restaurants (to name a few capabilities).
SoundHound recently announced a new partnership with Nvidia's Drive platform, which will allow car makers to deliver AI on the edge. That means drivers won't need network connectivity to use their voice assistant, which makes it available in more places and enhances data privacy.
The Drive platform is Nvidia's end-to-end solution for car manufacturers wanting to install autonomous self-driving capabilities into their new vehicles. Drive could become a key distribution channel for SoundHound's technology over the long term, considering it already serves many of the world's leading car brands.
SoundHound generates little revenue, and large losses
SoundHound brought in $45.8 million in revenue during 2023, which was a 47% increase compared to 2022. The company is still in the scale-up phase, although it did finish last year with a $661 million order backlog -- and that number doubled from the end of 2022.
Management's forecast for 2024 points to around $70 million in revenue, which would represent an accelerated growth rate of 54%.
That's great news, but SoundHound's bottom line warrants some concern in the near term because the company lost $91.7 million last year. While it's normal for small technology companies in their growth phase to lose money, SoundHound only has $95.2 million in cash and equivalents on its balance sheet, so it can't afford another year like that in 2024.
Risk-averse investors shouldn't follow Nvidia into SoundHound stock
The financial picture outlined above makes SoundHound stock a risky investment relative to other AI stocks like Nvidia or Microsoft. There is a strong possibility the company will need a cash injection within the next year or two to continue operating, and that creates uncertainty.
With that said, Nvidia's investment in SoundHound stock is a big vote of confidence, and it could breed more unique deals like the one with its Drive platform. Plus, SoundHound's order backlog could lead to accelerated revenue growth in the coming years.
But remember this: Nvidia's stake in SoundHound is only worth $8.7 million. If it went to zero, it would have virtually no impact on the $2.2 trillion chip giant. It would be the equivalent of someone with a net worth of $100,000 losing $0.39 -- yes, 39 cents.
Not only does the average investor have fewer resources than Nvidia, but they might also have a very different risk appetite. Therefore, buying SoundHound stock should be reserved for investors with a stomach for volatility, and the potential for losses.
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Vertiv Holdings - >>> Here's Why Shares in This Nvidia Partner Soared in March
by Lee Samaha
Motley Fool
Apr 5, 2024
https://finance.yahoo.com/news/heres-why-shares-nvidia-partner-121917710.html
Shares in data center equipment company Vertiv Holdings (NYSE: VRT) rose by a whopping 20.8% in March as the company rode the artificial intelligence (AI) investment boom. The stock price took a leg up in mid-March following the announcement that Vertiv would become a Solution Advisor: Consultant partner in the Nvidia (NASDAQ: NVDA) Partner Network.
Data centers are cool
You can't have a burgeoning investment in AI applications without data centers, and you can't have data centers without cooling. As such, Vertiv has a critical role in the growth of AI, a fact acknowledged by Nvidia CEO Jensen Huang at Nvidia's GPU Technology Conference (GTC) a day after the announcement. Huang noted that Nvidia and Vertiv were working on cooling systems, with Vertiv acknowledged as "very important" in ensuring the cooling of data centers.
While that's a red rag to an Nvidia bull, there's reason and hard numbers behind the optimism.
Spending on data centers continues to surge
As previously discussed, there's been an incredible boom in U.S. manufacturing construction investment over the last couple of years, led by investment in semiconductors and electronics, including data centers. In fact, U.S. manufacturing spending came in at $214 billion in 2023 compared to less than $100 billion in 2022 and even lower in the pre-pandemic era.
Moreover, the boom in interest in AI has made spending on data centers higher. For example, here's a look at capital expenditures at leading data center company Equinix. Although it dipped through 2022 in line with a correction after the boom inspired by the pandemic, it's now taken off again. Equinix management expects $2.9 billion to $3 billion in capital spending in 2024.
Vertiv will benefit from booming data center spending
The ongoing spending in data centers is also seen in Vertiv's order growth -- up 23% on a year-over-year basis in the fourth quarter of 2023 and 18% in the third quarter of 2023. Moreover, CEO Giordano Albertazzi expects spending "to continue to be strong up in the high teens on a year-on-year basis in the first quarter across the portfolio" in the first quarter.
As such, Vertiv is set for another year of strong growth, and management forecasts call for a double-digit increase in organic revenue for the full year.
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>>> Analyst unveils eye-popping Palantir stock price target after Oracle deal
The Street
Todd Campbell
April 4, 2024
https://finance.yahoo.com/news/analyst-unveils-eye-popping-palantir-233200437.html
Many tech stocks, including Palantir Technologies, have rallied significantly because of the artificial intelligence spending boom.
The company's shares have rallied 35% year-to-date, substantially outperforming the S&P 500's 9% return. However, most of Palantir's market-beating gains have come since the company reported its fourth-quarter earnings, likely surprising those who thought that most of the upside from AI had already been reflected in share prices.
One analyst who wasn't shocked by Palantir's recent rally is TheStreet Pro's Bruce Kamich. In February, before CEO Alex Karp impressed investors with better-than-expected revenue, he said, "Palantir is looking bullish ahead of earnings," setting a price target of $22.
Palantir went on to eclipse Kamich's target, and on March 4, the Peter Thiel-founded company announced a new agreement to collaborate on AI solutions with cloud service provider Oracle.
Given Palantir's rally and the potential to profit from this new deal, Kamich revisited his analysis and set a new stock price target for Palantir that will likely raise eyebrows.
Palantir's sales driven by AI tailwinds
Palantir stock price performance has been supported by a debt-free balance sheet, improving free cash flow, and profit growth.
The company's revenue has experienced tailwinds because of surging AI activity after the successful launch of OpenAI's ChatGPT in December 2022.
ChatGPT was the first large language model AI app to become widely available, and its ability to quickly search, parse, and create content made it the fastest app to reach 1 million users.
The rapid adoption of ChatGPT uncorked significant interest from enterprises and governments interested in AI solutions, including generative AI programs, to improve business processes and practices, and unlock insights from previously siloed data.
AI activity has become so prevalent across most industries that comparisons are being made to the dawn of the Internet Age in the 1990s.
Financial institutions like JP Morgan have deployed AI programs to hedge risks, evaluate loans, and price products. Healthcare companies are evaluating if it can be used to predict drug targets and clinical trial success better. Manufacturers are determining if it can increase production and quality. AI may also help retail stores anticipate sales trends, manage inventory and stop theft. The U.S. government is even considering whether AI can be useful on the battlefield.
AI's potential is seemingly endless, and many are turning to Palantir's (PLTR) expertise in managing and protecting data to train and run new AI apps.
In the past, Palantir's sales were largely driven by helping the U.S. government with its counterterrorism efforts. The company still generates significant sales from the U.S. and its allies. But it's also pushed more deeply into managing, interpreting, and reporting data for large companies.
Those relationships position it perfectly to assist businesses and government entities with designing AI solutions using its AI platform (AIP).
"The demand for [Artificial Intelligence Platform] AIP is unlike anything we have seen in the past twenty years," said Karp last summer. "We are currently in discussions with more than three hundred additional enterprises to deploy AIP within their organizations, all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data."
Thanks partly to those discussions, which have led to increasing use of its platform, Palantir's year-over-year sales growth has eclipsed 20% for three consecutive quarters, resulting in double-digit earnings per share growth.
Revenue totaled $736 million and earnings per share were 9 cents in the fourth quarter, up 21% and 16% from the previous year.
The top and bottom line strength is likely to continue. Wall Street analysts' consensus estimate for earnings in 2024 and 2025 is 33 cents and 39 cents per share, respectively, up 34% and 17%.
The new deal with Oracle (ORCL) to jointly sell cloud and AI services could open up the use of Palantir's AIP to more users, further driving sales and earnings growth.
Oracle is one of the top 10 largest cloud providers, and its position as a multi-decade leader in data management means it has a global reach.
Palantir price charts signal new target
Kamich is a technical analyst who has used price, volume, and technical analysis indicators to navigate stocks and markets for over 50 years. His interpretation of Palantir's charts is behind his correct forecast in February that its shares could climb.
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>>> NVIDIA Corporation (NASDAQ:NVDA) -- Number of Hedge Fund Holders: 173
https://www.insidermonkey.com/blog/5-best-stocks-to-buy-right-now-according-to-financial-media-1270874/3/
Number of Times Stock Appeared in Top Picks of Financial Media: 5
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On March 7, investment advisory Mizuho maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $1,000 from $850.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 15.4 million shares worth more than $7.6 billion.
In its Q4 2023 investor letter, Fred Alger Management, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super- computing parallel processing techniques for solving complex computational problems. Simply put, Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. During the period, shares contributed to performance as Nvidia reported solid fiscal third quarter results well above analyst expectations, driven by strong demand from data centers. Growing Al data center workloads are driving demand for the increased interconnections and fully accelerated software stacks, thereby enabling leading application performance and fast result times.”
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Palantir - >>> Analyst who correctly forecast Palantir's stock rally updates outlook
The Street
by Todd Campbell
Mar 29, 2024
https://finance.yahoo.com/news/analyst-correctly-forecast-palantirs-stock-173300455.html
The artificial intelligence boom has helped many tech stocks, including Palantir Technologies, produce market-beating returns.
While the S&P 500's 10% first-quarter return is nothing to sneeze at, Palantir shares surged 34%. Its shares also substantially outperformed the benchmark index over the past year, returning 172% since March 2023. Meanwhile, the S&P 500 is up about 29%.
Those extraordinary gains likely surprised many investors who were concerned that the Peter Thiel-founded company would struggle because the possible recession and congressional wrangling over the debt ceiling would dent demand.
However, where others saw risk, TheStreet Pro's Stephen Guilfoyle saw an opportunity. He bought shares when they were trading below $10 in April 2023, allowing him to profit handsomely from surging optimism over AI spending.
Given Palantir's shares rocket-ship ride higher and a current price near $23, Guilfoyle has updated his analysis and stock price target.
Palantir's demand driven by AI wave
Guilfoyle's purchase of Palantir stock last year was based on its strong, debt-free balance sheet, improving free cash flow, and a clearer pathway to profit growth.
The highly successful launch of OpenAI's ChatGPT in December 2022 has proven to be a boon for the company, making Guilfoyle's prediction prescient.
Interest in using AI to digest, interpret, and create new insights from siloed data has swelled across most industries, resulting in the most rapid research and development since the Internet Age in the 1990s.
Banks are using AI programs to hedge risks, evaluate loans, and price products. Drugmakers are exploring its use in predicting drug targets and clinical trial outcomes. Manufacturers are evaluating if it can boost production and quality. AI may also help retailers forecast demand, manage inventories, and curb theft.
AI's widespread applications seem boundless, which has led many companies and governments to turn to Palantir's deep expertise in managing and protecting data for help in training and running new AI apps.
Palantir's (PLTR) roots stretch back to helping the U.S. government design systems for counter-terrorism. Its Gotham platform continues to assist governments in those efforts today. It also offers solutions that manage, interpret, and report data across enterprise and cloud networks to large companies too.
Its deep data experience positioned it perfectly to help customers design large language models and other AI solutions using its AI platform (AIP).
"The demand for [Artificial Intelligence Platform] AIP is unlike anything we have seen in the past twenty years," said CEO Alan Karp last summer. "We are currently in discussions with more than three hundred additional enterprises to deploy AIP within their organizations, all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data."
Karp's optimism appears to have been well-placed. Palantir's year-over-year sales growth has exceeded 20% in each of the past three quarters, and its earnings per share growth in each of those quarters has been in the double-digit percentages.
Revenue totaled $736 million and earnings per share were 9 cents in the fourth quarter, up 21% and 16% from the previous year.
Wall Street analysts think Palantir's profit growth will continue. The consensus analyst estimate for earnings in 2024 and 2024 is 33 cents and 39 cents, respectively, an increase of 34% and 17%.
Palantir pause may set up another opportunity
Initially, Guilfoyle's Palantir stock price target was $12. However, he bumped that target to $18 last June, $20 last July, and $22 last August.
Shares eclipsed $22 in February, reaching a high of $27.5 in early March. Since then, they've retreated about 16% to $23.
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Nvidia - >>> Exclusive: Behind the plot to break Nvidia’s grip on AI by targeting software
Reuters
by Max A. Cherney
3-25-24
https://finance.yahoo.com/news/exclusive-behind-plot-break-nvidia-110359868.html
SAN FRANCISCO (Reuters) - Nvidia earned its $2.2 trillion market cap by producing artificial-intelligence chips that have become the lifeblood powering the new era of generative AI developers from startups to Microsoft, OpenAI and Google parent Alphabet.
Almost as important to its hardware is the company’s nearly 20 years' worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia's CUDA software platform to build AI and other apps.
Now a coalition of tech companies that includes Qualcomm, Google and Intel plans to loosen Nvidia’s chokehold by going after the chip giant’s secret weapon: the software that keeps developers tied to Nvidia chips. They are part of an expanding group of financiers and companies hacking away at Nvidia's dominance in AI.
"We're actually showing developers how you migrate out from an Nvidia platform," Vinesh Sukumar, Qualcomm's head of AI and machine learning, said in an interview with Reuters.
Starting with a piece of technology developed by Intel called OneAPI, the UXL Foundation, a consortium of tech companies, plans to build a suite of software and tools that will be able to power multiple types of AI accelerator chips, executives involved with the group told Reuters. The open-source project aims to make computer code run on any machine, regardless of what chip and hardware powers it.
"It's about specifically - in the context of machine learning frameworks - how do we create an open ecosystem, and promote productivity and choice in hardware," Google's director and chief technologist of high-performance computing, Bill Hugo, told Reuters in an interview. Google is one of the founding members of UXL and helps determine the technical direction of the project, Hugo said.
UXL's technical steering committee is preparing to nail down technical specifications in the first half of this year. Engineers plan to refine the technical details to a "mature" state by the end of the year, executives said. These executives stressed the need to build a solid foundation to include contributions from multiple companies that can also be deployed on any chip or hardware.
Beyond the initial companies involved, UXL will court cloud-computing companies such as Amazon.com and Microsoft's Azure, as well as additional chipmakers.
Since its launch in September, UXL has already begun to receive technical contributions from third parties that include foundation members and outsiders keen on using the open-source technology, the executives involved said. Intel's OneAPI is already useable, and the second step is to create a standard programming model of computing designed for AI.
UXL plans to put its resources toward addressing the most pressing computing problems dominated by a few chipmakers, such as the latest AI apps and high-performance computing applications. Those early plans feed in to the organization's longer-term goal of winning over a critical mass of developers to its platform.
UXL eventually aims to support Nvidia hardware and code, in the long run.
When asked about the open source and venture-funded software efforts to break Nvidia’s AI dominance, Nvidia executive Ian Buck said in a statement: "The world is getting accelerated. New ideas in accelerated computing are coming from all across the ecosystem, and that will help advance AI and the scope of what accelerated computing can achieve."
NEARLY 100 STARTUPS
The UXL Foundation's plans are one of many efforts to chip away at Nvidia's hold on the software that powers AI. Venture financiers and corporate dollars have poured more than $4 billion into 93 separate efforts, according to custom data compiled by PitchBook at Reuters’ request.
The interest in unseating Nvidia through a potential weakness in software has ramped up in the last year, and startups aiming to poke holes in the company's leadership gobbled up just over $2 billion in 2023 compared with $580 million from a year ago, according to the data from PitchBook.
Success in the shadow of Nvidia's group on AI data crunching is an achievement that few of the startups will be able to achieve. Nvidia's CUDA is a compelling piece of software on paper, as it is full-featured and is consistently growing both from Nvidia's contributions and the developer community.
"But that's not what really matters," said Jay Goldberg, chief executive of D2D Advisory, a finance and strategy consulting firm. "What matters is the fact that people have been using CUDA for 15 years, they built code around it."
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>>> Peter Thiel Unloads $175 Million of Palantir in First Sale Since 2021
Bloomberg
by Vernal Galpotthawela
March 15, 2024
https://finance.yahoo.com/news/peter-thiel-unloads-175-million-184318091.html
(Bloomberg) -- Peter Thiel sold some of his $3.4 billion stake in Palantir Technologies Inc. for the first time in more than two years as shares of the software and analysis company soar on artificial intelligence optimism.
Thiel sold more than 7 million shares worth roughly $175 million Tuesday, according to a filing. He still owns about 7% of the Denver-based company, the largest asset in his $10.5 billion fortune, according to the Bloomberg Billionaires Index.
The shares jumped 31% on Feb. 6, after the company reported its first annual profit and forecast higher-than-expected earnings for 2024, boosted by strong demand for its artificial intelligence technology. They are up 37% this year.
Thiel joins other billionaires including Mark Zuckerberg and Jeff Bezos who have taken advantage of the tech rally to unload shares in recent months after not selling for years.
Thiel co-founded Palantir in 2003 and remains its chairman. He owns shares directly as well as through funds with names from JRR Tolkien’s Lord of the Rings, including Mithril and Rivendell. Palantir itself is named after a crystal ball from the series.
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>>> Why C3.ai Stock Rocketed Higher Thursday Morning
by Danny Vena
Motley Fool
Feb 29, 2024
https://finance.yahoo.com/news/why-c3-ai-stock-rocketed-162410723.html
Shares of C3.ai (NYSE: AI) moved sharply higher Thursday morning, soaring by as much as 26.4%. As of 10:40 a.m. ET, the stock was still up by 24.3%.
The catalyst for that surge was the quarterly report it delivered after the close Wednesday, which revealed that the artificial intelligence (AI) specialist may finally be tapping into the widening adoption of AI.
The beginnings of a turnaround?
For its fiscal 2024 third quarter, which ended Jan 31, C3.ai generated revenue of $78.4 million, up 18% year over year. Subscription revenue grew even faster, up 23% to $70.4 million, accounting for 90% of the total. The results were further aided by the company's expanding gross profit margin of 58%, which edged higher from 56% in fiscal Q2.
Profits continued to be elusive. C3.ai booked a net loss of $72.6 million, resulting in an adjusted loss of $0.13 per share -- more than double its loss of $0.06 per share in the prior-year quarter.
To put those results into context, analysts' consensus estimates were calling for revenue of $76.1 million and a loss of $0.28 per share, so the company beat on both top and bottom lines.
Better days to come
C3.ai's results might not seem like much to celebrate, particularly given its worsening bottom-line losses. However, there are indications that better days could be coming as management increased its full-year guidance and investors let out a collective cheer.
The company cited the increasing number of new agreements it has signed with customers -- it inked 50 during the quarter, up 85% year over year. Of those, 29 were new pilots. Management expects these deals will translate into commercial revenue in the months and years to come.
For its fiscal 2024 fourth quarter, management forecasts revenue of between $82 million and $86 million, which would amount to growth of roughly 10% at the midpoint. For the full year, C3 is forecasting revenue of $306 million to $310 million, a year-over-year increase of about 15% at the midpoint. Most of that range tops analysts' consensus expectation for revenue of $306.2 million. However, as a result of its increasing investments, the company said its losses will continue, and it no longer expects to be profitable by the fiscal fourth quarter.
C3.ai still needs to show it can capitalize on the AI boom and turn a profit.
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>>> Why Palantir Technologies, Arm Holdings, and Other Artificial Intelligence (AI) Stocks Have Skyrocketed 50% or More in February
by Danny Vena
Motley Fool
February 19, 2024
https://finance.yahoo.com/news/why-palantir-technologies-arm-holdings-171500648.html
The rapid adoption of artificial intelligence (AI) has been gathering steam over the past year, but there's been a notable uptick in AI-related developments over the past several weeks. Since the start of February alone, shares of Palantir Technologies (NYSE: PLTR) have jumped 55%, Super Micro Computer (NASDAQ: SMCI) surged 72%, Arm Holdings (NASDAQ: ARM) soared 90%, and SoundHound AI (NASDAQ: SOUN) skyrocketed 121% as of the market close on Thursday.
The common thread that runs through these companies is the accelerating adoption of AI. There wasn't a single development that drove these stocks higher, but rather the growing tidal wave of AI that's beginning to overtake the tech industry.
Let's look at what drove each of these stocks higher and what it all means for the future.
Show me the money
It wasn't just the growing secular tailwinds of generative AI that drove these stocks higher. Three of the four recently reported quarterly financial results that easily surpassed investor expectations.
Supermicro was first out of the gate, reporting the results of its fiscal 2024 second quarter (ended Dec. 31, 2023). The company generated revenue of $3.7 billion, up 103% year over year and 73% sequentially. Management cited record and accelerating demand for AI servers. Profit was equally spectacular, with adjusted earnings per share (EPS) of $5.59 rising 62%. If that weren't enough, the company is forecasting full-year revenue of $14.5 billion at the midpoint of its guidance, which would represent 100% growth.
Next up was Palantir Technologies. For the fourth quarter, revenue of $608 million marked a 20% jump year over year and 9% sequentially, fueled by a 70% jump in U.S. commercial revenue. This performance helped the company generate its fifth consecutive quarter of profit according to generally accepted accounting principles (GAAP), with adjusted EPS of $0.08. The headline was the forecast for at least 40% growth from its U.S. commercial business over the coming year, thanks to robust demand for its Artificial Intelligence Platform, Palantir's generative AI solution.
Most recently, Arm Holdings delivered eye-opening results. For its fiscal 2024 third quarter, Arm generated record revenue of $824 million, up 14% year over year, driven by license revenue that grew 18% and record royalty revenue that climbed 11%. This performance resulted in adjusted EPS of $0.29, rising 32%. It was the company's forecast that really caught Wall Street off guard. Management is guiding for fourth-quarter revenue in a range of $850 million to $900 million, or growth of between 34% and 42%, lunging past the third quarter's 14% growth.
What these companies have in common, aside from the obvious ties to AI, is that each company delivered a "beat and raise" quarter, defying expectations and providing guidance that outpaced Wall Street's already bullish expectations.
The godfather of AI takes stock
There's a strong argument to be made that Nvidia saw the writing on the wall and positioned itself for the AI boom to come. Investors need only review the company's recent results to understand the magnitude of the secular tailwind involved.
For Nvidia's fiscal 2024 third quarter (ended Oct. 29, 2023), the company delivered record revenue that jumped 206% to $18.1 billion, resulting in diluted EPS that surged 1,274% to $3.71.
So when Nvidia makes a notable move in the field of AI, investors take notice.
In a regulatory filing with the Securities and Exchange Commission on Wednesday, Nvidia revealed that it had taken stakes in several AI-related companies, causing a spike in their respective shares.
Nvidia purchased 1.73 million shares of SoundHound AI, which provides voice-controlled AI solutions for businesses, in a stake valued at $6.5 million as of Thursday's market close. The company's technology has been deployed by a number of high-profile restaurants, including White Castle and Jersey Mike's, to power voice-enabled phone and drive-through ordering. It's also one of the leading providers of voice-AI solutions to carmakers, counting more than 20 automotive brands on its customer list.
SoundHound wasn't the only one. Nvidia finally confirmed the size of the stake it took in Arm Holdings: It owns 1.96 million shares worth roughly $262 million. Arm provides the designs behind some of the world's most widely used central processing units. After two years in the making, regulators quashed an attempted merger between Nvidia and Arm in early 2022.
Some viewed these purchases as a significant vote of confidence from Nvidia. As a result, many investors followed suit, piling into the stocks.
The cost isn't as high as you might think
The most common bear argument for investing in these and many AI stocks is the valuation. That view is understandable but tends to ignore the stunning growth rates of the companies in question. It reveals the limitations involved in using the price-to-earnings ratio or the price-to-sales ratio, especially when using them in a vacuum.
When dealing with high-growth stocks, the more appropriate measure is the price/earnings-to-growth (PEG) ratio, as it takes the growth rate of the company's profit into account. Since SoundHound AI isn't yet profitable, the point is moot. However, for Arm Holdings, Super Micro Computer, and Palantir Technologies, they clock in with forward PEG ratios of 0.8, 0.5, and 0.3, all well below the level of 1, which is the standard for an undervalued stock.
From that perspective, Arm Holdings, Super Micro Computer, and Palantir Technologies are not only growing quickly but are also cheaper than you might think.
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>>> Microsoft investing billions in Spain for AI, cloud in latest EU spending spree
TechRadar
by Craig Hale
https://www.msn.com/en-us/money/companies/microsoft-investing-billions-in-spain-for-ai-cloud-in-latest-eu-spending-spree/ar-BB1izmG6?OCID=ansmsnnews11
Microsoft has confirmed plans to bolster its artificial intelligence and cloud infrastructure in Spain with a substantial $2.1 billion investment over the next two years.
The news came as Spanish Prime Minister Pedro Sánchez took to X to announce Microsoft’s decision to quadruple its investment in the country.
The investment follows closely on the heels of other commitments by the company, such as its $3.45 billion investment in Germany, emphasizing Redmond’s plans to expand AI and cloud services across Europe.
Microsoft continues to invest in European AI
In December, Microsoft revealed a similar $3.2 billion spend in the UK, aimed at expanding its AI datacenter infrastructure, increasing skills, and improving security.
Spain’s Sánchez commented on X: “I want to thank [Microsoft’s] president, Brad Smith, for his trust in the Spanish economy and in our roadmap for an inclusive and secure digital transformation.”
He added that the investment would help the country strengthen cybersecurity and promote artificial intelligence in public administration.
Microsoft Vice Chair and President Braad Smith commented: “Our investment is beyond just building data centers, it’s a testament to our 37-year commitment to Spain, its security, and development and digital transformation of its government, businesses, and people.”
Specific details about the company’s investment in Spain are yet to be confirmed, but it’s reasonable to suspect it will be on similar grounds to other cash injections announced by Microsoft in recent months.
Besides giving the country’s business sector access to better technologies, with the hope of boosting its economy, Microsoft also looks to be increasing its presence across Europe, an area that it’s previously had plenty of trouble with in relation to antitrust allegations, including its own cloud platform.
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SMCI - >>> 1 Wall Street Analyst Thinks Super Micro Computer Stock Is Going to $1,040. Is It a Buy?
by Howard Smith
Motley Fool
February 18, 2024
https://finance.yahoo.com/news/1-wall-street-analyst-thinks-173000319.html
Data center systems provider Super Micro Computer (NASDAQ: SMCI) has been a darling of Wall Street lately. Its shares have soared 950% over the past year and have been on a parabolic move recently.
The stock has tripled in just the last month, but one Wall Street analyst thinks Supermicro, as it is known, still has more room to run. Bank of America Securities analyst Ruplu Bhattacharya began coverage on the supplier of accelerated computing server systems with a buy rating and a $1,040 price target. That would represent a jump of 18% over Wednesday's closing price, even after Supermicro's torrid run.
AI has legs
Companies in virtually every sector are leveraging the power of artificial intelligence (AI). The biggest beneficiary in the stock market thus far has been semiconductor chipmaker Nvidia. In that company's third quarter, overall revenue more than tripled from a year ago and soared 34% sequentially from the prior quarter. That jump came mainly from growth in Nvidia's data center business thanks to customers craving its chips that power AI applications.
But businesses don't just need the chips, they need the server infrastructure that keeps the full AI machine running. And while Nvidia's revenue tripled year over year, its earnings per share rocketed by more than 12-fold. That's the earnings power that Bhattacharya sees helping boost Supermicro too.
In a client note, he wrote: "We think this provider of server and storage solutions will be a beneficiary of AI-driven demand growth ... We believe the market for AI servers is much larger than is factored in [Wall] Street models."
Is it too late to buy Supermicro?
Bhattacharya's price target could even be conservative. If the market for AI servers grows at a 50% annual rate over the next several years as Bhattacharya thinks, Supermicro has plenty more sales and earnings growth ahead.
Yet the stock is still not overly expensive. It has a price-to-sales ratio of about 6 compared to 40 for Nvidia. And earnings could soar as they have for Nvidia. The analyst's call looks very achievable.
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>>> Palantir Stock Is Going to the Moon Following Its Jaw-Dropping Earnings Report
by Adam Spatacco
Motley Fool
February 13, 2024
https://finance.yahoo.com/news/palantir-stock-going-moon-following-095400737.html
Earnings season is in full swing, and investors still have their eyes on one big item: artificial intelligence (AI). Much of the buzz surrounding AI is saved for the "Magnificent Seven" -- a catchy moniker that includes megacap tech behemoths Microsoft, Apple, Alphabet, Amazon, Nvidia, Meta, and Tesla. But that doesn't mean no other companies are riding the wave.
With a market cap of just $51 billion, Palantir Technologies (NYSE: PLTR) may not be seen in the same light as big tech, but Palantir is making inroads in the space as well, and investors realized it last week.
Following the release of a jaw-dropping fourth-quarter earnings report on Feb. 5 after the market closed, Palantir stock rocketed by roughly 50% over the next five trading days.
From revenue to operating margins to cash flow to customer acquisition strategies, Palantir is giving investors no shortage of key performance indicators to drool over. Let's analyze the report, and what the company's current performance could spell for its future. Despite operating in the shadows of megacap tech, now could be a lucrative time to invest in Palantir as it pushes forward in the AI arms race.
Customer acquisition at its finest
2023 was full of exciting developments in the world of artificial intelligence. Microsoft invested billions into OpenAI, the start-up behind ChatGPT. Alphabet and Amazon swiftly followed, with each investing in a competing platform called Anthropic.
In an effort to stand out, Palantir created a unique lead generation strategy to help fuel interest in its newest product, its Artificial Intelligence Platform (AIP). Specifically, the company began hosting immersive seminars that it calls "boot camps." During these sessions, attendees can try out Palantir's software and get a better understanding of how the company can play a critical role in generative AI-driven use cases.
During Palantir's fourth-quarter earnings call with analysts, investors learned that the company completed over 500 boot camps last year. It conducted only 92 during 2022. While it's clear that the boot camps are in high demand, a thorough analysis of the company's customer growth is worth a look.
Palantir had 497 customers in the fourth quarter, a 35% increase over the year-ago period. Palantir is witnessing surging demand in the private sector in particular, with customer count increasing 44% annually.
This is important, because for many years Palantir was knocked by Wall Street bears over the company's heavy reliance on government deals. It's clear that the advent of AIP is building demand and business outside of its legacy public sector operation is thriving.
Margins are expanding, and cash flow is compounding
The chart below illustrates Palantir's annual revenue for the last five years.
https://media.zenfs.com/en/motleyfool.com/f14da0e2f277f368492b7e658c255d8d">https://media.zenfs.com/en/motleyfool.com/f14da0e2f277f368492b7e658c255d8d" />
Palantir was founded in 2003 and the chart shows that it took almost two decades for the company to reach the milestone of $1 billion in annual revenue. And yet in just three short years, the company has doubled its revenue. This growth is astounding considering how tough the macroeconomic outlook has been in recent years, coupled with the a fierce competitive landscape.
Perhaps more importantly, Palantir is also generating healthy margin expansion, which is flowing right to the bottom line. After adjusting for non-cash expenses like stock-based compensation, Palantir's operating margin expanded from 22% in 2022 to 28% in 2023. Furthermore, free cash flow grew 260% year over year to $730 million.
Some things to consider
The combination of top-line growth and margin expansion has helped bolster Palantir's liquidity. As of Dec. 31, the company had $3.7 billion of cash and marketable securities, and no debt on its balance sheet.
While this is encouraging to see, investors should take note of the disparity between the company's customer growth and its revenue acceleration. Even though customer count increased by 35% last year, Palantir's total revenue only grew by about 17%.
To me, this signals that Palantir is playing the long game when it comes to AI. In other words, the boot camps are merely a low-cost mechanism to get customers into the pipeline and convert them into paying users of the company's software. However, through a combination of use-case discovery rooted in AI along with enhanced customer-nurturing efforts, Palantir has the ability to upsell and cross-sell customers over time. As such, the company should enjoy significant revenue acceleration as time goes on.
I'd caution investors from buying into any hype narratives surrounding Palantir. Focusing on the long-term picture and assessing the company's position among enterprise software providers specializing in AI will be important.
For me, the fourth-quarter report was a preview of what investors could expect on an ongoing basis. As artificial intelligence software becomes more prominent in IT budgets, Palantir should be well positioned to benefit from secular tailwinds. Now looks like a great opportunity to scoop up shares for both new and existing investors, and prepare to hold on for the long term. The ride appears to just be getting started.
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>>> 4 Phenomenal Companies That Will Be Massive Winners, Regardless of Who Wins the Artificial Intelligence (AI) Arms Race
by Keithen Drury
Motley Fool
Feb 10, 2024
https://finance.yahoo.com/news/4-phenomenal-companies-massive-winners-121500269.html
Investing in artificial intelligence (AI) can be overwhelming, as many companies benefit from this trend. Whether it's a company deploying AI to improve its business or one that makes AI software, there are a lot of opportunities.
However, there are also hardware components of AI, and many of these companies will be winners regardless of what happens to individual companies. I've pinpointed four that will be massive winners over the coming years.
1. ASML
A microchip is at the core of every computer used to create an AI model. These components require highly specialized machinery to make them, and one of the key suppliers in this realm is ASML (NASDAQ: ASML). The company makes lithography machines, which make the conductive traces on chips.
Semiconductors have reached the point where the distance between these traces is as small as 3 nanometers (nm). For reference, the human hair is about 80,000 to 100,000 nanometers wide. With smaller distances between traces, these chips become more powerful and efficient -- a key need for any device.
ASML currently holds a technological monopoly in this space, as no other companies make EUV (extreme ultraviolet) lithography machines. If you're making cutting-edge chips, you must work with ASML. As a result, ASML will be a huge winner in this space.
2. Taiwan Semiconductor
Taiwan Semiconductor (NYSE: TSM) is a huge user of these machines. The company is the world's largest contract chip manufacturer, which means it makes chips for other clients.
TSMC is a leader in this field, as it has 3-nm chips but is also developing 2-nm chips slated to launch in 2025. Taiwan Semiconductor's innovative culture is always working on the next thing, which will provide continual revenue boosts as these new products launch.
Among Taiwan Semiconductor's customers are Nvidia (NASDAQ: NVDA) and AMD, which provide another critical component in the AI value chain.
3. Nvidia
Nvidia has probably received the most attention in this group, as its best-in-class GPUs (graphics processing units) are crucial in AI. GPUs are used to process vast amounts of data and train AI models, making them must-have hardware.
When a business outfits a computer to train these models, they don't just buy one or two GPUs; they buy thousands. This caused Nvidia's revenue to explode higher in 2023, as the demand for its GPUs was unprecedented.
Nvidia's strength will continue as long as AI is a massive trend, as it requires a significant computing infrastructure buildout.
4. Super Micro Computer
You can't just go out and buy a few thousand Nvidia GPUs filled with Taiwan Semiconductor chips made with ASML's lithography machines, hook them up, and expect a positive result. Instead, a specialized server is needed to maximize efficiency so a business can get the most performance out of its supercomputer.
That's where Super Micro Computer (NASDAQ: SMCI) comes in. Supermicro specializes in server design, whether it's being used for engineering simulations, drug discovery, or AI model training. Its products are highly configurable, whether a company wants a couple of hundred GPUs or a couple of thousand.
As the demand for AI computers reaches the general market, Supermicro will continue to excel, which is part of the reason the stock is up around 140% to start in 2024.
A basket of AI winners
You don't have to pick a single winner to be a successful AI investor. Instead, you could select a variety of stocks that are critical suppliers in the AI field and likely do quite well.
This group will be successful regardless of which company produces the best AI product, as they provide the building blocks necessary for all AI models.
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>>> Biden administration announces $5 billion commitment for research and development of computer chips
The Washington Post
By Josh Boak?|?AP
February 9, 2024
https://www.washingtonpost.com/business/2024/02/09/computer-chips-research-development-biden/c704b56c-c73c-11ee-bbc9-9b5ca9b20779_story.html
WASHINGTON — The Biden administration on Friday announced the investment of $5 billion in a newly established public-private consortium aimed at supporting research and development in advanced computer chips.
The National Semiconductor Technology Center is being funded through the CHIPS and Science Act. That 2022 law aims to reinvigorate the computer chip sector within the United States through tens of billions of dollars in targeted government support.
Stakeholders in the chips industry gathered on the White House campus to discuss how the center should prioritize research and worker training for an industry poised to expand because of government backing. The coronavirus pandemic exposed the risk to the economy and national security of an overdependence on Taiwan for advanced chips, while the emergence of artificial intelligence is likely to push demand for newer and more innovative chips upward.
“This is an inflection point in the industry,” Commerce Secretary Gina Raimondo told the group. “Not just because we’re dangerously dependent on one country for so many of our chips, but because AI is going to lead to an explosion of demand for chips, for sophisticated chips, more energy-efficient chips, cost-effective chips.”
The center would help to fund the design and prototyping of new chips, in addition to training workers for the sector.
Companies say they need a skilled workforce in order to capitalize on the separate $39 billion being provided by the government to fund new and expanded computer chip plants. Raimondo said there will be “a drumbeat” of funding announcements for companies in the next six to 12 weeks.
The sector would likely increase rapidly in terms of its need for highly specialized workers. Labor Department data say that about 375,000 people are employed in the production of computer chips with an average income of $82,830.
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>>> 20 Best-Performing AI ETFs for February 2024
Exchange-traded funds are one way to invest in artificial intelligence. THNQ and SPRX are some of the best-performing AI ETFs.
Nerd Wallet
By Sam Taube
Feb 2, 2024
https://www.nerdwallet.com/article/investing/best-performing-ai-etfs
Spear Alpha ETF (SPRX)
59.11%
iShares U.S. Technology ETF (IYW)
51.09%
iShares Expanded Tech Sector ETF (IGM)
47.88%
iShares U.S. Tech Independence Focused ETF (IETC)
47.57%
Clockwise Core Equity & Innovation ETF (TIME)
45.68%
Fidelity MSCI Information Technology Index ETF (FTEC)
41.06%
iShares Global Tech ETF (IXN)
40.36%
Franklin Exponential Data ETF (XDAT)
37.19%
Invesco NASDAQ Internet ETF (PNQI)
36.08%
Global X Artificial Intelligence & Technology ETF (AIQ)
34.33%
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>>> Iron Mountain Inc President and CEO William Meaney Sells 31,750 Shares
GuruFocus Research
Feb 8, 2024
https://finance.yahoo.com/news/iron-mountain-inc-president-ceo-080613866.html
William Meaney, President and CEO of Iron Mountain Inc (NYSE:IRM), executed a sale of 31,750 shares in the company on February 6, 2024, according to a recent SEC Filing. Iron Mountain Inc is a global provider of storage and information management services, offering solutions such as records storage, information destruction, and data backup and recovery.
Over the past year, the insider has sold a total of 429,179 shares and has not made any purchases of the company's stock.
The insider transaction history for Iron Mountain Inc indicates a pattern of sales by insiders, with 38 insider sells and no insider buys over the past year.
On the date of the insider's recent transaction, shares of Iron Mountain Inc were trading at $68.33, resulting in a market capitalization of $19.802 billion.
The stock's price-earnings ratio stands at 72.15, surpassing both the industry median of 18.31 and the company's historical median price-earnings ratio.
With the current share price of $68.33 and a GuruFocus Value of $58.58, Iron Mountain Inc's price-to-GF-Value ratio is 1.17, indicating that the stock is considered Modestly Overvalued according to the GF Value metric.
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Iron Mountain - >>> AI Revolution's Hidden Gem: This REIT Hack Profits from SMCI, AMD, and NVDA
Benzinga
by Shay Boloor
Feb 8, 2024
https://finance.yahoo.com/news/ai-revolutions-hidden-gem-reit-164844302.html
Iron Mountain Incorporated (NYSE:IRM), boasting a dividend yield of 3.8%, emerges as a pivotal investment opportunity within the real estate sector, uniquely positioned to capitalize on the exponential growth of data driven by advancements in artificial intelligence (AI). The company’s role in supporting the tech industry’s infrastructure needs, amid the rapid advancements by companies like Super Micro Computer (NASDAQ:SMCI), Advanced Micro Devices (NASDAQ:AMD), and NVIDIA (NASDAQ:NVDA), underscores its potential for growth and dividend sustainability. As AI technologies evolve and become more integrated into business operations, the demand for data storage, security, and management escalates, placing Iron Mountain at the forefront of this growing market.
The explosion of data generated by AI applications, from machine learning datasets to complex algorithms, necessitates robust data management and storage solutions. Iron Mountain, which specializes in information storage and management services, is strategically aligned with this demand. The company’s extensive portfolio of data centers and secure storage facilities is essential for businesses navigating the data-intensive landscape of AI, making Iron Mountain an integral player in the digital transformation era.
Investing in Iron Mountain offers investors a direct conduit to benefit from the AI-driven data boom. The company’s services are crucial for a wide array of industries leveraging AI, from tech giants to healthcare and financial services, all of which require secure and efficient data management solutions to harness the full potential of AI technologies. This widespread need for Iron Mountain’s services underscores its growth potential and investment appeal in an AI-driven future. Reflecting its strategic market position and confidence in its operational strategy, Iron Mountain announced a quarterly dividend of $0.65 per share in the fourth quarter of 2023, leading to an annual payout rate of $1.89.
The trade-off between growth and income that investors often face is elegantly balanced by Iron Mountain. As a REIT, it provides a steady income through dividends, fulfilling the income aspect. Simultaneously, its pivotal role in the data management sector, fueled by the AI revolution, positions Iron Mountain for significant growth, addressing the growth component investors seek.
Investing in Iron Mountain transcends traditional real estate investment, offering a strategic stake in the infrastructure underpinning the AI revolution. As the reliance on AI continues to escalate, driving unprecedented data growth, Iron Mountain’s services become increasingly indispensable, potentially enhancing its dividend prospects and solidifying its position as a compelling investment choice for those looking to capitalize on the digital and AI-driven future.
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>>> Is It Too Late to Buy Palantir Stock?
by Will Healy
Motley Fool
Feb 7, 2024
https://finance.yahoo.com/news/too-buy-palantir-stock-143129749.html
Palantir Technologies' (NYSE: PLTR) stock price has jumped nearly 31% since Monday afternoon right after the release of its earnings report for the fourth quarter of 2023. With its artificial intelligence platform (AIP) and U.S. commercial segment showing massive growth, investor interest in the software stock has surged.
With the stock already up approximately 163% over the last year and its valuation rising, have investors missed their opportunity to buy?
Palantir and AIP
Admittedly, the potential of the company could motivate some investors to ignore its current elevated valuation. Palantir has stood out above other SaaS stocks by analyzing data and delivering insights. It has long relied on artificial intelligence (AI) and machine learning (ML) to make its determinations. After first focusing on national defense applications, it turned to the commercial sector to apply its knowledge to the business world.
With Palantir releasing AIP last year, more commercial customers have become interested in the software after attending Palantir boot camps. On the Q4 2023 earnings call, Chief Revenue Officer and Chief Legal Officer Ryan Taylor spoke of one attendee who said they could find at least "100 use cases" for AIP. Another attendee remarked about finding "endless solutions" through the product.
Such successes were likely the biggest reason Palantir's revenue in the U.S. commercial sector rose by 70% in Q4. U.S. commercial customer counts also moved higher by 55% over the same period.
Palantir's financials and valuation
Those aforementioned successes appeared to move the stock higher despite more muted financial results. The $2.2 billion in revenue reported for 2023 increased by 17% yearly, with Q4 revenue climbing by 20%.
Also, since operating expenses rose modestly, Palantir earned considerably higher profits. Its net income of $217 million in 2023 increased from a $371 million loss in 2022. The company also earned $97 million of that profit in Q4 alone, having increased quarterly net income by 152% compared with year-ago levels.
Nonetheless, considering that Q4 2022 was its first quarterly profit, investors should remember that profits usually rise by a considerable amount when a company first reaches profitability, rendering its P/E ratio of just above 360 meaningless. Looking to the future, a forward P/E of 73 is high but not unprecedented for an AI company in today's environment.
Also, its price-to-sales (P/S) ratio of 23 is up from single digits one year ago, and investors could turn on the stock should sentiment turn negative. Still, the P/S ratio is down from the 2021 bull market when it was routinely above 25 despite Palantir not being profitable at the time. That could indicate that investors are willing to tolerate a higher sales valuation for this company.
Moreover, AIP's success could help to increase revenue and earnings growth in future quarters. That, in turn, could help the P/S and P/E ratios fall quickly, which could propel the stock higher at a faster pace.
Is it too late to buy Palantir?
Given Palantir's current state, investors should feel safe adding shares at current levels. Indeed, valuations are high, which could give pause to some prospective buyers.
However, Palantir's customers appear to see game-changing potential in its software, which gives the company tremendous pricing power. Also, the rapid increase in customer counts and U.S. commercial revenue confirms the high demand for this software, and sales and earnings multiples will likely fall as customer counts increase.
Thus, it is likely not the end of the bull run for Palantir, and customers who buy the stock now can still earn considerable returns over the long term.
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Super-micro, Palantir, Upstart - >>> 3 Artificial Intelligence (AI) Stocks That Could Help Make You a Millionaire
by Will Healy
Motley Fool
Feb 7, 2024
https://finance.yahoo.com/news/3-artificial-intelligence-ai-stocks-114500306.html
Much like the technology trends of the past, artificial intelligence (AI) could potentially help turn investors into millionaires. The performance of stocks like Nvidia and the recoveries of numerous other stocks from their 2022 bear market lows reflects the tremendous growth that these new technologies are driving for the companies involved, and the willingness of investors to pay for it.
Recently, investors have begun to gravitate toward smaller companies with the potential for massive growth. As AI makes more headway among investors, businesses, and consumers, these AI stocks could deliver outsized gains to investors.
Palantir
Investors should not ignore the AI-driven opportunity in Palantir (NYSE: PLTR). The company has long used machine learning and other AI tools to deliver analytical insights to clients in the national defense and commercial realms. The success of its platforms has helped it grow its revenue and profits.
However, the Palantir Artificial Intelligence Platform (AIP) may take its AI prowess to a much higher level. AIP employs generative AI technology, and the company has heavily promoted the product recently through what it calls "boot camps," where it helps prospective customers find real-world ways to use the technology to their benefit. Clients that attend these boot camps have reported eye-popping productivity gains from them, such as producing outputs 10 times faster with one-third of the resources.
Admittedly, the impacts of AIP have not yet shown up in the company's headline numbers. In the first three quarters of 2023, its revenue rose 16% to $1.6 billion. Also, Palantir limited operating expense growth, resulting in a net income of $120 million during that timeframe. Due to investors' optimism about the company's future, its stock has risen by about 110% over the last year.
With that gain behind it, the stock now trades at a price-to-sales ratio of 17, a valuation that may give some investors pause. Still, when factoring in the growth potential, others might see it as a relative bargain based on its forward P/E ratio of 55. If AIP's successes start translating into revenue gains, a surge in the stock could bring investors closer to millionaire status.
Supermicro
Super Micro Computer (NASDAQ: SMCI) -- better known simply as Supermicro -- has existed for over 30 years, but it may finally be getting its moment in the sunshine amid the AI revolution. It describes itself as a "rack-scale total IT solutions provider," building servers for big data, cloud computing, enterprise, 5G, and other applications.
However, it has drawn particular attention with its servers for data centers powered by Nvidia's AI chips. With more than 6 million square feet of manufacturing space and operations in over 100 countries, it has positioned itself to take this technology wherever customers demand it.
Indeed, interest in its products has begun to skyrocket. In the first six months of its fiscal 2024 (a period that ended Dec. 31), its revenue rose 58% year over year to $5.8 billion. But because operating expenses also rose rapidly, its net income increased by just 25% to $453 million.
Since those higher operating expenses appear to have been primarily related to improvements, investors seem to be less concerned about them, and more focused on the company's burgeoning AI opportunity. The stock has risen by an eye-popping 695% over the past year, and doubled since the beginning of 2024.
Despite that gain, its price-to-earnings ratio is around 43, a relatively moderate level considering its revenue growth. Considering that the stock trades at just 26 times forward earnings, it is probably not too late for investors to see further substantial gains in Supermicro.
Upstart
Upstart Holdings (NASDAQ: UPST) seeks to upend the loan evaluation business using AI. According to internal studies, it has found loan opportunities overlooked by Fair Isaac's FICO scoring tool, allowing Upstart's lending clients to approve more loans without increasing their risks.
The FICO score is particularly vulnerable to disruption since its processes have changed little since Fair Isaac launched the scoring tool in 1989. Also, because Upstart seeks to earn revenue on evaluations only, it should carry little credit risk, in theory.
Unfortunately for the company, its period of fast growth and profitability ended abruptly as interest rates rose. Its fairly small client base and high dependence on two large clients have also hampered Upstart, as did its decision to widen its business model and become the lender on some of the loans its platform approved.
Consequently, its revenue in the first nine months of 2023 fell 46% year over year to $408 million. Nonetheless, in Q3, its revenue rose 3% from the previous quarter to $147 million, suggesting that the worst may be over. Also, the stock's price-to-sales ratio stands at just 5, a small fraction of where it stood in the previous bull market.
Upstart carries significant risk, but its platform's ability to approve more loans without increasing lenders' credit risk could offer tremendous value, especially if more banks use it to replace the FICO score model. If more banks adopt its tool and interest rates head lower, Upstart could deliver massive shareholder returns.
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