[2020-2021]

Probably getting caught up from NVIDIA news along with BRN, WBT and 4DS

Good call @edgescape - backed up by the following AFR articles I reckon:

23-Feb-2024: Good luck catching up to Nvidia (afr.com)

22-Feb-2024: NVDA: Chipmaker Nvidia soars after ‘insane’ Q4 earnings, artificial intelligence bulls cheer (afr.com)

22 Feb-2024: Before the Bell: Nvidia outlook fuels fresh AI-inspired rally (afr.com) (updated today)

22-Feb-2024: Nvidia and the trouble with bubbles (afr.com)

22-Feb-2024: Nvidia CEO Jensen Huang says global demand is surging for AI as revenue triples and shares jump (afr.com)

23-Feb-2024: Nvidia share price: How Australian investors can play the Nvidia AI boom on the ASX (afr.com)

Excerpt:

Picking local winners

This market power will extend to AI in time – even if they’re not monetising AI yet, these giants have the scale and earnings to invest in the technology now in a way that will allow them to set prices, protect margins and market share, and dictate competition in the future. The expense of AI development is such that size matters.

ASX investors have long recognised the advantaged position of big players in our relatively small markets; it’s not for nothing that five companies – BHP, Commonwealth Bank, CSL, NAB, and Westpac - account for 33 per cent of the ASX 200.

But when it comes to picking local winners from AI, it makes sense to look towards the largest 15 or so companies – the five firms above plus ANZ, Wesfarmers, Macquarie Group, Woodside, Goodman Group, Fortescue Rio Tinto and Telstra, Transurban and Woolworths – as having the most potential.

Some are already in the race. Telstra, for example, has already made clear its ambitions to both deploy AI and provide the infrastructure that will enable its adoption across the local economy, while Goodman has an ambitious data centre push underway.

But if we think more broadly three of the key ingredients that are likely to drive AI gains – massive data sets, deep pockets to invest in AI development, and what Boston Consulting Group’s local tech guru Patrick Forth has called an existing level of digital maturity – then it becomes clearer that big banks, big retailers and big miners like those listed above have the most to gain from early AI adoption.

Not only can they unlock early gains in what Forth has previously explained are four key areas – using analytics to optimise operations; personalisation; automation; and predictive operations and maintenance – but they have an opportunity to create an even bigger gap between themselves and smaller rivals that do not have the ability to invest in AI. Potentially, AI investment in the next few years could set up an advantage for the next decade.

Of course, we’re very early in this AI revolution, and the winners and losers are far from clear. Investors will need to look closely at how individual companies adopt AI – and then try and sort the big talk from the actual results. The advantage of first movers is also not guaranteed. There may be a lot of money wasted on failed AI experiments, and innovation can change market dynamics quickly; Nvidia looks bulletproof right now, but strong demand will eventually incentivise supply.

That’s a question for tomorrow. For now, bigger appears to be better when it comes to AI.

--- end of excerpt ---

Chanticleer podcast: Woolworths’ week from hell, Qantas’ ‘helpful’ profit drop & Nvidia AI fever grips markets (afr.com) [23-Feb-2024]

Ex-Bingo CEO Daniel Tartak sentenced | Playing the Nvidia-fuelled Al boom | Sydney’s $65m house sale (afr.com) [23-Feb-2024]

Excerpt:

Wall Street strategists break down Nvidia’s surge Nvidia is on track to see its market valuation leap more than $300b, and it’s fuelling renewed exuberance for equities overall.

Matter of opinion

As Nvidia explodes, this may be the way to play AI on the ASX The ASX has few direct links to the AI boom, but investors should think about which local stocks are best placed to lead the race to adoption.

--- end of excerpt ---

@Bear77 I think you can add Dicker Data (DDR) and Data 3 (DTL) as two other mid size ASX companies that should win from AI moving forward. They both provide the “picks and shovels”, so they’ll simply supply whatever others need in the great AI expansion. Fortunately both are already healthy, profitable, growing companies over a long time period, so this part will be a bonus.

I was tempted to trade the trade in 4DS but avoided as I don't have the time and I would probably be kept awake at night.

V. Surprised that AXE did NOT receive a speeding ticket. +35.38% rise on Friday and they only lost -5.68% today, so have held on to most of Friday's gains, and not a whisper from the ASX - perhaps they're (the ASX are) only interested if they can put you in a trading pause and roll that into a trading halt on THE DAY of the rise, not on a subsequent day - in terms of suggesting the market is not operating on a fully-informed basis. Perhaps they just figured it was all part of that Nvidia/AI bubble/reaction like we have...

I don't follow 4DS usually either @edgescape but I see what you mean - up +22.45% on Thursday, down -12.5% today, and now back to 10.5 cps, just half a cent higher than the 10 cps levels they were at in the middle of Feb (15th and 16th).

BRN hasn't retraced yet, they're up a fair bit in recent weeks:

16.5 cps up to 49 cps is a +197% increase in just 3 weeks, which is not to be sneezed at... but then again, if we zoom out a little...

Perspective.

Still, if you put $10K into each of BRN, 4DS, WBT and AXE 5 years ago, you'd be laughing now:

The XJO (S&P/ASX200 Total Return [TR] Index) returned 24% over those 5 years, so all 4 of them beat the index, but 4DS has performed worst of the four chip stocks. Some impressive gains there with the other 3! Weebit (WBT) the best with a +842% return over the 5 year period.

If you instead put $10K into each of those same companies THREE years ago, unlike the 5-year returns shown above, the 3-year returns are quite different:

Only Weebit (WBT) has been a good investment over the past 3 years. The other three are all showing negative 3-year returns, and AXE is the worst.

Disc: Not holding any of them, not within my circle of competence (wheelhouse), and too speculative.

When the chips are down: Semiconductors' rise and fall (morningstar.com.au) [18-Oct-2022]

The Rise and Fall of Chip Stocks. Over the past 12 months, we’ve seen… | by ADI Investments, LLC. | Medium [08-Oct-2022]

3 Rising Chip Challengers Taking the Fight to Nvidia | InvestorPlace [01-March-2024]

Chip Stocks Have Soared. Why That Might Not Last. - Barron's (barrons.com) [14-Feb-2024]