AI Tidal Wave: How Semiconductor Stocks Are Outpacing Tech Giants July 31, 2024 - Baystreet.ca VANCOUVER – USA News Group – In this ongoing artificial intelligence (AI) rally, not all tech stocks are experiencing the same growth. According to Reuters, tech giants such as Microsoft are facing setbacks, while chipmakers continue to climb, marking a divide in the benefits of this AI surge. Analysts are highlighting how semiconductor stocks are riding the “AI tidal wave”, which they also claim is only getting started. In fact, enthusiasm around the sector pushed VanEckSemiconductor ETF by 51% in the first half of 2024. Now analysts at Precedence Research are projecting the global semiconductor market to surpass US$1.13 trillion by 2033. The results show for themselves, with several chipmakers making strong gains over the last quarter, including Advanced Micro Devices, Inc. (NASDAQ: AMD), NVIDIA Corporation (NASDAQ: NVDA), Micron Technology, Inc. (NASDAQ: MU), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), and Vertiv Holdings Co (NYSE: VRT). Global semiconductor developer Advanced Micro Devices, Inc. (NASDAQ: AMD) is coming off of a big financial quarter, having recently reported revenue of $5.8 billion in Q2 2024, with a gross margin of 49%, operating income of $269 million, and a net income of $265 million, while representing a diluted earnings per share of $0.16. This was further bolstered by record revenue in AMD’s Data Center segment, which surged 115% year-over-year to $2.8 billion, primarily driven by the steep ramp of AMD Instinct™ GPU shipments, and strong growth in 4th Gen AMD EPYC™ CPU sales. “We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue,” said Dr. Lisa Su, Chair and CEO of AMD. “Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors. The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.” AMD’s numbers look even better on a non-GAAP basis, showing gross margin of 53%, operating income of $1.3 billion, and net income of $1.1 billion for a diluted earnings per share of $0.69. The company’s Client segment revenue also rose to $1.5 billion, up 49% year-over-year. “AMD executed well in the second quarter, with revenue above the midpoint of our guidance driven by strong growth in the Data Center and Client segments,” said Jean Hu, EVP, CFO and Treasurer of AMD. “In addition, we expanded gross margin and delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth.” One example of AMD’s strategic investments moving forward is the recent announcement of a definitive agreement to acquire Silo AI, the largest private AI lab in Europe for approximately $665 million. Beyond the assets and infrastructure acquired, bringing Silo AI into the AMD fold also comes with a world-class team of AI scientists and engineers with extensive experience developing tailored AI models, platforms and solutions for leading enterprises spanning cloud, embedded and endpoint computing markets. Another company that benefitted from AMD’s results was NVIDIA Corporation (NASDAQ: NVDA), backed by a bullish call from Morgan Stanley. Back in May, NVIDIA reported record quarterly revenue in Q1 2024 of $26 billion, up 18% from the previous Q4, and up 262% year-over-year. Embedded in these results was another record of quarterly Data Center revenue of $22.6 billion, up 23% from Q4, and up 427% year-over-year. “The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence,” said Jensen Huang, founder and CEO of NVIDIA. “AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.” Also within the report was an announcement of a ten-for-one forward stock split of NVIDIA’s issued common stock. As well, the company announced an increase of NVIDIA’s quarterly cash dividend by 150% from $0.04 per share to $0.10 per share of common stock. Competitor Micron Technology, Inc. (NASDAQ: MU) also saw gains in its financial results for its Q3 2024, which ended May 30, 2024. In the quarter, Micron generated a revenue of $6.81 billion, up 17% from the previous quarter and up nearly 82% year-over-year. As well, Micron saw its operating cash flow increase to $2.48 billion, up 103% from the previous quarter, and up a whopping 10,233% year-over-year. “Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3,” said Sanjay Mehrotra, President and CEO of Micron Technology. “We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND. We are excited about the expanding AI-driven opportunities ahead, andare well positioned to deliver a substantial revenue record in fiscal 2025.” Earlier in July 2024, Taiwan Semiconductor Manufacturing Company Limited (TSMC) (NYSE: TSM) briefly surpassed $1 trillion in market cap after Morgan Stanley and other brokers boosted their price targets on the chipmaker before its earnings. However, shares of TSMC fell shortly after releasing its Q2 2024 financial results, despite positive earnings and an upbeat revenue outlook. In Q2, TSMC saw its revenue increase 40.1% to $20.82 billion, and its net income and diluted EPS both increased 36.3%. “Our business in the second quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” said Wendell Huang, Senior VP and Chief Financial Officer of TSMC. “Moving into third quarter 2024, we expect ourbusiness to be supported by strong smartphone and AI-related demand for our leading-edge process technologies.” Based on TSMC’s current business outlook, its management team expects revenue to be between US$22.4 billion and US$23.2 billion, with a gross margin between 53.5-55.5%, and an operating profit margin between 42.5-44.5% in Q3 2024. Global provider of critical digital infrastructure and continuity solutions, Vertiv Holdings Co (NYSE: VRT), also saw significant growth in its latest financial results. In Q2 2024, Vertiv saw its organic orders up 57% year-over-year, and up 37% on a trailing twelve-month bases. Net sales in the quarter rose to $1.953 billion, up 13% year-over-year. Net cash generated by Vertiv’s operating activities rose nearly 50%, increasing by $125 million to $378 million, year-over-year from Q2 2023. "Vertiv delivered another strong performance in the second quarter with order growth again exceeding our expectations, rising 57% year-over-year and increasing 10% sequentially over an exceptional first quarter," said Giordano Albertazzi, CEO of Vertiv. "We continue to see increased scaling of AI deployment and Vertiv has the capacity in place to seize this pivotal moment while continuing to invest in capacity for the future. Vertiv is the connective tissue between IT and facilities in the data center, and we are just beginning to tap the tremendous potential of our unique position in the industry as we leverage the most complete portfolio of critical digital infrastructure solutions across the entire thermal and power technology spectrum, supported by over 3,750 field service engineers globally to help our customers navigate this increasingly complex environment." CONTACT: USA NEWS GROUP [email protected] (604) 265-2873 DISCLAIMER: Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Baystreet.ca is a wholly-owned subsidiary of BayStreet.ca Media Corp. (“BAY”). The owner/operator of BAY own 319 shares of Advanced Micro Devices, Inc. BAY reserves the right to buy and sell, and will buy and sell shares of Advanced Micro Devices, Inc. at any time thereafter without any further notice.While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.
AI Tidal Wave: How Semiconductor Stocks Are Outpacing Tech Giants July 31, 2024 - Baystreet.ca VANCOUVER – USA News Group – In this ongoing artificial intelligence (AI) rally, not all tech stocks are experiencing the same growth. According to Reuters, tech giants such as Microsoft are facing setbacks, while chipmakers continue to climb, marking a divide in the benefits of this AI surge. Analysts are highlighting how semiconductor stocks are riding the “AI tidal wave”, which they also claim is only getting started. In fact, enthusiasm around the sector pushed VanEckSemiconductor ETF by 51% in the first half of 2024. Now analysts at Precedence Research are projecting the global semiconductor market to surpass US$1.13 trillion by 2033. The results show for themselves, with several chipmakers making strong gains over the last quarter, including Advanced Micro Devices, Inc. (NASDAQ: AMD), NVIDIA Corporation (NASDAQ: NVDA), Micron Technology, Inc. (NASDAQ: MU), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), and Vertiv Holdings Co (NYSE: VRT). Global semiconductor developer Advanced Micro Devices, Inc. (NASDAQ: AMD) is coming off of a big financial quarter, having recently reported revenue of $5.8 billion in Q2 2024, with a gross margin of 49%, operating income of $269 million, and a net income of $265 million, while representing a diluted earnings per share of $0.16. This was further bolstered by record revenue in AMD’s Data Center segment, which surged 115% year-over-year to $2.8 billion, primarily driven by the steep ramp of AMD Instinct™ GPU shipments, and strong growth in 4th Gen AMD EPYC™ CPU sales. “We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue,” said Dr. Lisa Su, Chair and CEO of AMD. “Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors. The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.” AMD’s numbers look even better on a non-GAAP basis, showing gross margin of 53%, operating income of $1.3 billion, and net income of $1.1 billion for a diluted earnings per share of $0.69. The company’s Client segment revenue also rose to $1.5 billion, up 49% year-over-year. “AMD executed well in the second quarter, with revenue above the midpoint of our guidance driven by strong growth in the Data Center and Client segments,” said Jean Hu, EVP, CFO and Treasurer of AMD. “In addition, we expanded gross margin and delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth.” One example of AMD’s strategic investments moving forward is the recent announcement of a definitive agreement to acquire Silo AI, the largest private AI lab in Europe for approximately $665 million. Beyond the assets and infrastructure acquired, bringing Silo AI into the AMD fold also comes with a world-class team of AI scientists and engineers with extensive experience developing tailored AI models, platforms and solutions for leading enterprises spanning cloud, embedded and endpoint computing markets. Another company that benefitted from AMD’s results was NVIDIA Corporation (NASDAQ: NVDA), backed by a bullish call from Morgan Stanley. Back in May, NVIDIA reported record quarterly revenue in Q1 2024 of $26 billion, up 18% from the previous Q4, and up 262% year-over-year. Embedded in these results was another record of quarterly Data Center revenue of $22.6 billion, up 23% from Q4, and up 427% year-over-year. “The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence,” said Jensen Huang, founder and CEO of NVIDIA. “AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.” Also within the report was an announcement of a ten-for-one forward stock split of NVIDIA’s issued common stock. As well, the company announced an increase of NVIDIA’s quarterly cash dividend by 150% from $0.04 per share to $0.10 per share of common stock. Competitor Micron Technology, Inc. (NASDAQ: MU) also saw gains in its financial results for its Q3 2024, which ended May 30, 2024. In the quarter, Micron generated a revenue of $6.81 billion, up 17% from the previous quarter and up nearly 82% year-over-year. As well, Micron saw its operating cash flow increase to $2.48 billion, up 103% from the previous quarter, and up a whopping 10,233% year-over-year. “Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3,” said Sanjay Mehrotra, President and CEO of Micron Technology. “We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND. We are excited about the expanding AI-driven opportunities ahead, andare well positioned to deliver a substantial revenue record in fiscal 2025.” Earlier in July 2024, Taiwan Semiconductor Manufacturing Company Limited (TSMC) (NYSE: TSM) briefly surpassed $1 trillion in market cap after Morgan Stanley and other brokers boosted their price targets on the chipmaker before its earnings. However, shares of TSMC fell shortly after releasing its Q2 2024 financial results, despite positive earnings and an upbeat revenue outlook. In Q2, TSMC saw its revenue increase 40.1% to $20.82 billion, and its net income and diluted EPS both increased 36.3%. “Our business in the second quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” said Wendell Huang, Senior VP and Chief Financial Officer of TSMC. “Moving into third quarter 2024, we expect ourbusiness to be supported by strong smartphone and AI-related demand for our leading-edge process technologies.” Based on TSMC’s current business outlook, its management team expects revenue to be between US$22.4 billion and US$23.2 billion, with a gross margin between 53.5-55.5%, and an operating profit margin between 42.5-44.5% in Q3 2024. Global provider of critical digital infrastructure and continuity solutions, Vertiv Holdings Co (NYSE: VRT), also saw significant growth in its latest financial results. In Q2 2024, Vertiv saw its organic orders up 57% year-over-year, and up 37% on a trailing twelve-month bases. Net sales in the quarter rose to $1.953 billion, up 13% year-over-year. Net cash generated by Vertiv’s operating activities rose nearly 50%, increasing by $125 million to $378 million, year-over-year from Q2 2023. "Vertiv delivered another strong performance in the second quarter with order growth again exceeding our expectations, rising 57% year-over-year and increasing 10% sequentially over an exceptional first quarter," said Giordano Albertazzi, CEO of Vertiv. "We continue to see increased scaling of AI deployment and Vertiv has the capacity in place to seize this pivotal moment while continuing to invest in capacity for the future. Vertiv is the connective tissue between IT and facilities in the data center, and we are just beginning to tap the tremendous potential of our unique position in the industry as we leverage the most complete portfolio of critical digital infrastructure solutions across the entire thermal and power technology spectrum, supported by over 3,750 field service engineers globally to help our customers navigate this increasingly complex environment." CONTACT: USA NEWS GROUP [email protected] (604) 265-2873 DISCLAIMER: Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Baystreet.ca is a wholly-owned subsidiary of BayStreet.ca Media Corp. (“BAY”). The owner/operator of BAY own 319 shares of Advanced Micro Devices, Inc. BAY reserves the right to buy and sell, and will buy and sell shares of Advanced Micro Devices, Inc. at any time thereafter without any further notice.While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.