If that’s enough to get the revenues doubling, read on…
AI Collision 💥
Ignore the AI revolution at your own peril.
From lofty heights and all-time-high territory in June this year, it’s fair to say AI stocks (and a lot of growth and tech stocks) took a two-month beating into the month of August.
It all then culminated with that wild Monday 5 August when Japan bumped rates and spooked the entire financial system.
Looking back to June, we were covering the incredible rise of AI-related companies and published the following:
I think the best thing is to just send you a screenshot from X.com for you to see for yourself.
Yep, that’s Huang (in his customary leather jacket) like an 80s glam rocker signing the chest of a female fan.
Yeah, definitely a top signal wasn’t it.
Nonetheless, at $140 a share, Huang signing body parts, it was all a little too much. And Nvidia hasn’t traded up there since. At least not yet.
But Nvidia wasn’t the only AI-related stock to be popping off in June that took the proverbial fall from grace into August.
Back in July I wrote about how a group of specialist companies were going to be critical for the rollout of AI:
If in one corner you’ve got an increasing number of analysts saying that AI is heading into or already in bubble territory. Then on the other, you’ve got people (like me) saying that’s a view, but also if you’re fearful and out of this market then you’re missing massive profit potential.
And I think another aspect of this market to cast the eye towards is those that make memory chips for the world’s markets.
More specifically, high-bandwidth memory (HBM) chips.
The list of those companies includes some well-known names, and some not-so-well-known names.
You probably know Samsung Electronics. But SK Hynix and Micron? Probably not as much.
After its results release last week, it might very well be on track for that. The highlights of its results are best summed up by president and CEO Sanjay Mehrotra:
“Micron delivered 93% year-over-year revenue growth in fiscal Q4, as robust AI demand drove a strong ramp of our data center DRAM products and our industry-leading high bandwidth memory. Our NAND revenue record was led by data center SSD sales, which exceeded $1 billion in quarterly revenue for the first time,”
“We are entering fiscal 2025 with the best competitive positioning in Micron’s history. We forecast record revenue in fiscal Q1 and a substantial revenue record with significantly improved profitability in fiscal 2025.”
For every major step forward in the development of AI chips, make sure you don’t forget that also comes with increases and demands for more and better memory too.
It’s why Micron blew the roof off with its earnings, and why it jumped 20% higher in trading the day after its results.
Now it should be said that it’s still trading well below the $140 from June. But what the company’s earnings show is that as AI scales, and scales, and scales, so does its profits. And if they looked good at $140, how do you view them now at $100?
So don’t forget that every time you buy a new smart device, computer, laptop, pretty much any kind of high-tech device, you’re also part of the contribution to companies’ bottom-lines like Micron or SK Hynix.
And every time you hear of a new kind of AI chip, bear in mind that it’s not just going to be the likes of Nvidia or AMD that benefit… use your memory to remember the memory companies too.
I’m not sure about you, but right now almost every social feed of mine is filled up with new and breaking coverage about developments in the nuclear power industry.
It seems that announcement from Microsoft and Constellation we wrote about last week really sent the proverbial rocket up the backside of mainstream news outlets.
Since then the rebooting of the Palisades nuclear reactor in Michigan has been getting more coverage and other potential “reboots” of nuclear energy plants have now started filtering through.
For example, according to reports now, the Duane Arnold Energy Centre in Palo, Iowa, is gunning for some funding and backing to try and get its energy generation back online in the near future.
These institutions include, Abu Dhabi Commercial Bank, Ares Management, Bank of America, Barclays, BNP Paribas, Brookfield, Citi, Crédit Agricole CIB, Goldman Sachs, Guggenheim Securities LLC, Morgan Stanley, Rothschild & Co, Segra Capital Management, and Societe Generale.
The combined market cap of those 14 tallies up to around $900 billion – so not exactly banking minnows any of them.
Further to this we know that private capital, venture capital, is also flowing into nuclear opportunities – seemingly as readily as it is flowing into AI opportunities.
“Founders Fund, the venture capital firm co-founded by billionaire investor Peter Thiel, is backing a nuclear start-up aiming to produce the fuel used to power the latest generation of reactors, as artificial intelligence groups look to atomic power to meet their electricity needs. The venture, which is at an early stage but is already staffed by nuclear industry veterans and SpaceX engineers, will seek to create a new production method for high-assay low-enriched uranium (Haleu), according to two people familiar with the matter.”
The development of HALEU fuel is a whole different conversation for another day – in fact, it’s something I’ve been specifically writing about to our subscribers at Southbank Growth Advantagefor several months now – so to see capital from Peter Thiel flowing to this area is certainly vindication for the position I’ve taken on it all.
You might catch a glimpse of more on this hitting your inbox in the coming weeks too – about this intersection of AI and nuclear energy, so do keep an eye out for that too.
But the clear message here, as I’ve covered for a few weeks now, is that without nuclear, maybe we just don’t get the AI future Big Tech is shooting for.
Be it through the reboot of existing plants, the development and launch of new ones or even the processes and supply chain developments in creating the fuel for these things – there’s a lot happening in nuclear and much of it is directly tied to the growth and explosion of AI in our world.
Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).
Boom 📈
Brainchip (ASX:BRN) up 34%
Appen (ASX:APX) up 19%
Micron (NASDAQ:MU) up 7%
Bust 📉
BigBear.ai (NYSE:BBAI) down 11%
Veritone (NASDAQ:VERI) down 7%
Lantern Pharma (NASDAQ:LTRN) down 7%
From the hive mind 🧠
AI and movies – it’s contentious and controversial. But what if AI is giving humans more inspiration to be more creative and to pursue even more brilliant movie ideas? I get the feeling this might just be a terrific take on an alt-history AI idea.
Speaking of AI, movies and controversy, legendary filmmaker James Cameron recently joined the board of Stability AI. Thanks to Stability AI being one of the world’s leading generative AI companies, to say this announcement has gone down like a sack of spuds with the movie community is an understatement. But maybe it’s also a sign of great things to come?
It’s a tight race based on our poll from Tuesday, so we’ll let that run a few more days over the weekend.
But we should also look at our poll results from this time last week, as the results are an overwhelming win for one particular answer.
You can see it below:
This is quite the result. But it goes to show that I think there’s more vision and common sense here amongst fellow AI Collision readers than there is in government.
So, if anyone has a hotline to Ed Miliband, please let him know this is what the people want!
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How do I vote for reopening coal mines & nuclear power stations for power? sorry,elderly technophobe
Charles Cooper
1 month ago
Hi Sam, I have just watched your video regarding AI on the cusp. I really enjoy your writing but would be very grateful if you could make videos shorter and less repetitive. Thank you for your work.
How do I vote for reopening coal mines & nuclear power stations for power? sorry,elderly technophobe
Hi Sam, I have just watched your video regarding AI on the cusp. I really enjoy your writing but would be very grateful if you could make videos shorter and less repetitive. Thank you for your work.