Opportunities Present as the ‘Silicon Curtain’ | Australian Markets

Today James Altucher joins us again to reveal how the AI revolution is seeding the regeneration of an American icon…all half of the AI cornucopia of concepts and innovation that might additionally see one other ‘thousand flowers bloom’. Enjoy!

Best needs,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

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A seismic shift is remodeling America’s technological panorama, and Intel Corporation (INTC) is spearheading the revolution.

The world is witnessing the emergence of a new type of Cold War, measured not in megatons and missile gaps, however in nanometres and computing energy.

As China races to realize technological dominance and the US fights to take care of it, the world tech ecosystem is splitting alongside what we’d call a ‘silicon curtain’.

The stakes are high, with more than 90% of the world’s superior chips at present manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).

This risk represents each a strategic vulnerability and an extraordinary alternative for Intel.

The world obtained a stark reminder of this vulnerability earlier this yr when a highly effective 7.4 magnitude earthquake struck the island of Taiwan.

While TSMC emerged comparatively unscathed, the incident highlights the precarious nature of the world semiconductor provide chain.

The AI alternative

As artificial intelligence reshapes the technology panorama, demand for superior chips has by no means been larger.

The world AI semiconductor market conservatively projected to achieve $250 billion by 2028, represents one of the largest growth alternatives in Intel’s historical past.

This exponential growth is pushed by the proliferation of giant language fashions, generative AI, and the growing adoption of AI throughout industries from healthcare to autonomous automobiles.

While Nvidia at present dominates the AI chip market with a commanding 90% share, Intel is making strategic strikes to seize some of this sector’s explosive growth.

Intel’s Gaudi 3 AI accelerator, for instance, started delivery final yr. It guarantees efficiency aggressive with Nvidia’s choices at a more engaging price level.

Early benchmarks recommend Gaudi 3 can ship twice the efficiency per greenback in comparison with Nvidia’s H100, notably in coaching giant language fashions.

The timing of Gaudi 3’s release was notably fortuitous because it coincided with reported delays in Nvidia’s Blackwell launch and ongoing provide constraints in the high-end AI chip market.

But Intel’s AI push isn’t nearly competing in the high-end accelerator market.

The company is building AI capabilities throughout its whole product line, from shopper PCs to knowledge centre processors.

The company’s AI PC initiative goals to deliver devoted neural processing models (NPUs) to mainstream computing, enabling native AI processing for enhanced privateness and diminished cloud dependency.

In the red-hot knowledge centre sector, Intel’s Xeon processors with built-in AI acceleration are gaining traction amongst prospects who wish to run AI workloads on their present infrastructure.

The path ahead

Intel should execute flawlessly on its technological roadmap whereas concurrently remodeling itself into a modern foundry.

The indicators to this point are promising, with Intel persistently hitting its milestones and making accelerated progress on superior manufacturing nodes which have stunned even optimists.

The company’s manufacturing experience, constructed over many years of innovation, supplies a basis for this formidable transformation.

The ongoing construction of new chip fabs in the U.S. represents more than simply one other manufacturing facility, it’s a image of American technological renewal.

In Ohio, the new 1,000-acre campus will change into the largest private-sector investment in state historical past, creating 1000’s of high-paying jobs and establishing a new silicon heartland in the American Midwest.

With the potential investment reaching US$100 billion, this facility may change into the epicentre of superior chip manufacturing in the Western world.

The project’s scale and ambition mirror Intel’s dedication to rebuilding American manufacturing capabilities.

Innovation at the atomic scale

Intel’s focus isn’t simply on building factories — it’s on pushing the boundaries of what’s attainable in semiconductor manufacturing past the upcoming 18A course of pc chips.

The company’s analysis into next-generation supplies and architectures, together with new transistor designs, quantum computing technology, and unique supplies with superior properties, positions it to take care of technological management effectively into the future.

By the finish of this decade, Intel goals to supply chips containing a trillion transistors every — an achievement that may revolutionise computing capabilities.

With the measurement of the alternative, Intel’s present valuation may very well be a great entry level into what may change into one of the most important transformations of our time.

The company’s mixture of technological experience, authorities backing, and strategic positioning creates a distinctive worth proposition at present costs.

While Wall Street typically focuses on quarterly metrics, Intel’s transformation represents a multiyear journey towards technological and manufacturing management.

A trillion-dollar imaginative and prescient

The imaginative and prescient of Intel reaching a trillion-dollar valuation by 2030 isn’t simply formidable, it’s achievable.

For this to occur, Intel will need to keep executing. It has to reclaim management in making the world’s strongest chips at scale and purchase foundry prospects.

It must seize a significant share of the AI chip market and capitalise on the shift towards home manufacturing.

While every of these represents a problem, Intel is demonstrating that it could possibly execute.

Best,

James Altucher,
Editor, Investment Network Australia

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Chinese technology stocks below strain

The chart above exhibits you the relative strikes between the Hang Seng Index and the Chinese Technology Index since the low of the final main correction in October 2022.

There is clearly a high correlation between the two with technology stocks main the charge and outperforming the Hang Seng simply as the Nasdaq outperforms the S&P 500.

Notice the latest spike and failure in October 2024, the place the technology index jumped above the earlier high from January 2023 after which shortly failed to hold on. A false breakout.

That false breakout led to a sharp decline in the technology index and the Hang Seng which lasted three months.

Recent price motion noticed one more tried breakout above the October 2024 high which seems to be failing. Are we about to see one other false break emerge which may see sharp declines and months of promoting?

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps