We Have Our Thematic Antennas Up for Investing Signals
These items, in the areas of AI, cybersecurity, the cash-strapped consumer and more, recently caught our attention.
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When we introduced the use of thematics in the Action Alerts PLUS portfolio, one aspect we discussed was confirming data points. Not just those from economic and related numbers or company comments and earnings reports, but also articles and other news items.
With the brunt of the December-quarter earnings season now behind us, we will be sharing some of the articles, reports and other items that have recently caught our attention, providing signals for the active portfolio, possibly for Bullpen constituents, and other stocks we're investigating.
Artificial Intelligence
"Qualcomm QCOM , at the Mobile World Congress 2024, has announced over 75 new large language models optimised for the Snapdragon platform. The company has also confirmed that some of these models will be powering generative AI capabilities across next-generation smartphones, PCs, IoT, XR devices, and software-defined vehicles." Read more here
"ServiceNow NOW , the leading digital workflow company making the world work better for everyone, and NVIDIA NVDA announced that they are broadening their relationship with the introduction of telco-specific generative AI solutions to elevate service experiences. The first solution, Now Assist for Telecommunications Service Management (TSM), is built on the Now Platform and uses NVIDIA AI to help boost agent productivity, speed time to resolution, and enhance customer experiences." Read more here
"Google announced a new set of features for phones, cars, and wearables - using Gemini to craft messages, AI-generated captions for images, summarizing texts through AI for Android Auto, along with access to passes on Wear OS." Read more here
"FWD Group Holdings Limited announced it is extending its partnership with Microsoft MSFT with a four-year agreement to provide access to the latest generative artificial intelligence (AI) innovations, while continuing to support FWD's cloud-first technology strategy. FWD Group plans to drive its generative AI initiatives by leveraging Microsoft's Azure OpenAI Service and other enterprise-grade innovations. FWD Group expects to benefit from the private networking, monitoring and security capabilities of Microsoft Azure as well as its advanced AI models." Read more here
"Deutsche Telekom showcased a futuristic smartphone concept that relies on artificial intelligence rather than applications to handle users' specific needs. Smartphones today typically use apps for everything from messaging and social media to video games and banking. The German company said the concept, which it is showcasing on its "T-phone" device, will have an app-free user interface developed in collaboration with partners Qualcomm and Brain." Read more here
"Dell Technologies DELL posted better-than-expected earnings for its latest quarter, as the company continues to see robust demand for AI servers... Dell Vice Chairman and COO Jeff Clarke said in an interview with Barron's that "demand is well in excess of supply" for AI servers... Dell plans to launch new AI-powered PCs in the second half of the year, but expects adoptions to roll out over multiple quarters." Read more here
CHIPS Act
"Advanced semiconductor companies have requested more than double the amount of available federal funds for projects in the US, Commerce Secretary Gina Raimondo said, referring to a program designed to bring chip manufacturing back to American soil. Leading-edge firms - which include Intel, Taiwan Semiconductor Manufacturing, and Samsung Electronics - are seeking more than $70 billion from the 2022 Chips Act..." Read more here
"U.S. chipmakers Intel INTC and Micron MUare likely to win the largest share of the $52 billion in CHIPS Act awards this year, analysts told EE Times. With the U.S. 2024 presidential election approaching, the awards will help President Joe Biden show that he's creating jobs and returning semiconductor manufacturing to the nation following a long history of offshoring, the analysts said. Asian chipmakers Taiwan Semiconductor Manufacturing TSM and Samsung, also among the top-four companies that have sought CHIPS subsidies, are lower on the priority list because the U.S. government wants to avoid the perception of subsidizing foreign companies, according to the analysts." Read more here
"The Biden administration laid out an ambitious new goal for the US: produce 20% of the world's most advanced semiconductor chips by the end of the decade. Achieving that mark - set by Commerce Secretary Gina Raimondo in a speech Monday morning - would be a dramatic turnabout for the US. It currently makes 0% of the so-called leading edge logic chips that are considerably more powerful than older-generation semiconductors, making them crucial for everything from mobile phones to AI to quantum computing." Read more here
Cash-Strapped Consumer
"The Irish discount carrier may receive fewer than 40 Boeing 737 Max jets before the end of June, [Ryanair] Chief Executive Officer Michael O'Leary said. A shortfall of that magnitude would force Ryanair to cut its annual passenger forecast to 200 million people from 205 million for the coming fiscal year, he said at a media briefing in Dublin. Aircraft shortages are likely to drive up European fares this summer, O'Leary added, as competitors such as Wizz Air Holdings Plc and Deutsche Lufthansa AG ground planes to address an engine issue on some Airbus SE jets." Read more here
"Earnings at Bank of Montreal BMO and Bank of Nova Scotia BNS were marred by increasingly cash-strapped consumers and businesses amid a challenging economic landscape... On the mortgage front, soaring interest rates led to a wave of ultra-long home loans in Canada, hitting borrowers who have fixed monthly payments but variable interest rates. Many of those clients are no longer paying down any principal, extending the length of time it would take to repay their loans. When homeowners go to renew their mortgages, typically after five years, they are expected to face significantly higher payments." Read more here
Cybersecurity & Data Privacy
"President Biden will issue an Executive Order to protect Americans' sensitive personal data from exploitation by countries of concern. The Executive Order, which marks the most significant executive action any President has ever taken to protect Americans' data security, authorizes the Attorney General to prevent the large-scale transfer of Americans' personal data to countries of concern and provides safeguards around other activities that can give those countries access to Americans' sensitive data." Read more here
"U.S. President Joe Biden has signed an executive order that aims to ban the bulk sale and transfer of Americans' private data to "countries of concern" such as China, Russia, Iran, North Korea, Cuba, and Venezuela." Read more here
"In a statement published on their dark web leak site today, BlackCat said that they allegedly stole 6TB of data from Change Healthcare's network belonging to "thousands of healthcare providers, insurance providers, pharmacies, etc... Per BlackCat's claims, the sensitive data stolen from Change Healthcare contains a wide range of information on millions of people..." Read more here
Digital Infrastructure & Connectivity
"Social media firm Meta META could spend up to $37 billion on new digital infrastructure this year, $2bn more than previously anticipated. The company's CFO Susan Li said in a statement to shareholders that continued investment in the hardware needed to train and run artificial intelligence systems would necessitate an increase in spending." Read more here
"Microsoft MSFT is proposing to develop a new UK data center campus on the site of a decommissioned power station in Eggborough, North Yorkshire. Microsoft said it is aiming to submit the proposals for planning permission to North Yorkshire Council in Mid-2024 and start construction in early 2027." Read more here
"Amazon Web Services Mexico, a unit of Amazon AMZN , announced it will invest over $5 billion to open a cluster of data centers in Mexico, amid growing demand for cloud services as more firms adopt new technologies. The cluster will be built in the Mexican state of Queretaro, Ruben Mugartegui, head of Amazon Web Services Mexico unit, told Reuters in an interview, adding the investment will be spread through the next 15 years." Read more here
Action Alerts PLUS is long QCOM, NVDA, MSFT and AMZN.