Latest news with #SectorSpotlight
Business Insider
3 days ago
- Business
- Business Insider
Sector Spotlight: Nvidia results highlight notable week for semiconductors
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Confident Investing Starts Here: EARNINGS RECAP: Nvidia shares rose above $141 per share, up 5%, after reporting first quarter warnings on Wednesday. The company's Q1 beat was followed by inline Q2 guidance. Jensen Huang, founder and CEO of Nvidia, said: 'Our breakthrough Blackwell NVL72 AI supercomputer – a 'thinking machine' designed for reasoning- is now in full-scale production across system makers and cloud service providers. Global demand for NVIDIA's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure – just like electricity and the internet – and NVIDIA stands at the center of this profound transformation.' Summit Insights upgraded Nvidia to Buy from Hold after its Q1 results and guidance. The risk of double-ordering on its Hopper generation AI GPU and the risk of China export controls are now priced into the stock, the analyst told investors. Summit also believes that the data center capex spending for the training market will remain robust and benefit Nvidia AI GP and data center networking businesses, the firm added. SECTOR NEWS: A jury determined following a trial in the U.S. District Court for the Western District of Texas that Intel's (INTC) 2012 licensing pact with Finjan covered VLSI's patents because the entities are affiliated under the control of asset management firm Fortress Investment, Bloomberg's Lauren Castle reported. The development sets up a potential escape for Intel from the more than $3B in patent-infringement verdicts against the company in the long-running dispute, the author noted. Nvidia (NVDA) disclosed in its quarterly filing that its CEO Jen-Hsun Huang adopted a trading arrangement to sell 6M of the company's shares between March 20 and December 31, 2025. Nvidia is also facing new accusations from U.S. lawmakers arguing the company is too close to China, criticism which may signal new challenges for the company, Olivia Beavers and Amrith Ramkumar of The Wall Street Journal wrote. Senator Jim Banks and Senator Elizabeth Warren recently wrote in a letter to CEO Jensen Huang that plans for an Nvidia facility in Shanghai risk giving China access to cutting edge technology. In an interview on CNBC's Mad Money, Jensen Huang said Nvidia's market share in China was 95% four years ago, but is now only 50%. He said it's critically important that AI is built out on an American technology stack, not Chinese. 'We want to be the preferred technology stack,' he noted. He plans to keep the dialogue going with the Trump Administration. He sees robotics as the next growth opportunity. 'We are an infrastructure company, not just a chips company,' he added. In a conference call following the company's Q1 results, Nvidia said it will consult the U.S. government if it develops new China chips and is considering options for China chips. The company added it has no new product for China data centers ready now and that limits are quite stringent on China chips. Nvidia contended that export rules will help foreign rivals and that it expects a meaningful decrease in China data center revenue. On Tuesday, Liam Mo and Fanny Potkin of Reuters reported that Nvidia is planning to launch a new AI chipset for China at a much lower price than its recently restricted H20 model and plans to begin mass production as early as June. The graphics processing unit, GPU, will be part of Nvidia's Blackwell-architecture AI processors and is expected to cost between $6,500-$8,000. Nvidia's suppliers, including Foxconn, Inventec, Dell (DELL) and Wistron, have made a series of breakthroughs that have allowed them to accelerate production of its flagship AI data center 'racks' and start shipments of the highly anticipated 'Blackwell' AI servers, according to Financial Times' Eleanor Olcott and Michael Acton, citing several people familiar with the matter. TSMC (TSM) executive Kevin Zhang said the company is still weighing whether it plans to use ASML 's (ASML) high numerical aperture, or NA, machines for its future process nodes, Reuters' Nathan Vifflin wrote. 'A14, the enhancement I talk about, is very substantial without using High-NA. So our technology team continues to find a way to extend the life of current (Low-NA EUV machines) by harvesting the scaling benefit,' Zhang said at a press briefing. 'As long as they continue to find a way, obviously we don't have to use it,' he added. The report noted that Intel has planned to use the high-NA machine in its future manufacturing process. A Swedish business consortium and Nvidia unveiled plans to build new AI infrastructure with Nvidia accelerated computing, networking and software in Sweden to transform and prepare the country's industries for the age of AI. Swedish industry giants AstraZeneca (AZN), Ericsson (ERIC), Saab (SAABF), SEB, in partnership with Wallenberg Investments, will build the system that will be operated by a joint company to offer secure, sovereign compute access to the industry partners. The intention is that the first phase of the deployment will be two Nvidia DGX SuperPODs featuring Nvidia's latest generation Grace Blackwell GB300 systems, making it the largest enterprise AI supercomputer in Sweden once operational. It will be used to run compute-heavy AI workloads to speed up processes such as training of domain specific AI models and large-scale inference, including reasoning AI. Oracle (ORCL) will spend around $40B on Nvidia's high-performance computer chips to power OpenAI's new giant U.S. data center, according to Financial Times. Oracle will purchase around 400,000 of Nvidia's GB200 chips, its latest 'superchip' for training and running AI systems, and lease the computing power to OpenAI, according to FT's Tabby Kinder and George Hammond, citing several people familiar with the matter. ANALYST COMMENTARY: Citi analyst Atif Malik raised the firm's price target on Nvidia to $180 from $150 and keeps a Buy rating on the shares. The company reported April quarter results in-line and issued a July quarter sales outlook $1B above Citi's expectations, 'clearing the final hurdle of the China H20 ban transition quarter,' the analyst tells investors in a research note. Moreover, Blackwell sales of $24B topped Citi's $20B expectations and management maintained mid 70's gross margins target on improving Blackwell profitability with no major tariff impact, the firm contends. Citi believes that with margins expanding, Nvidia shares should 'break its range bound trend' since mid-last year and will likely make a fresh 52 week high. Needham keeps a Buy rating and $54 price target on Semtech (SMTC) after its 'solid' Q1 results driven by data center related infrastructure shipments and LoRa-enabled solutions. Demand for data center related products remains robust as the company reported a record quarter, while the momentum in Data Center is expected to carry through the second half of FY26, driven by continued strength in FiberEdge and non-NVIDIA CopperEdge and LPO ramps, the analyst tells investors in a research note. Redburn Atlantic analyst Mike Harrison initiated coverage of Broadcom (AVGO) with a Buy rating and $301 price target. The company is arguably the 'pre-eminent' application-specific integrated circuits co-partner with a strong pipeline of future customers, the analyst tells investors in a research note. Further, the firm believes the company's networking products are prevalent through the different types of networking within artificial intelligence data centers, from the compute fabric to the back-end network, as well as the interconnects that permeate throughout. The consensus is not giving Broadcom sufficient credit for the strength of its ASICs pipeline, contended Redburn. Stifel noted that Nvidia recently published a blog post providing details on its new 800V high voltage DC power architecture for next-gen AI data centers and specifically named Infineon (IFNNY), Monolithic Power (MPWR), Navitas Semiconductor (NVTS), Rohm, STMicroelectronics (STM) and Texas Instruments (TXN) as power IC/solutions supplier partners. While three of the semiconductor companies mentioned have issued press releases in conjunction with Nvidia – namely Infineon, Navitas and TI – the firm noted there were few details beyond what was discussed in Nvidia's blog post. However, it expects all of the companies called out by Nvidia to benefit from the accelerating increase in power requirements for AI data centers that are expected to require megawatt-scale racks by 2027.
Business Insider
24-05-2025
- Business
- Business Insider
Sector Spotlight: Trump executive order accelerates support for nuclear energy
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Confident Investing Starts Here: NUCLEAR SECTOR NEWS: President Donald Trump signed orders meant to accelerate the construction of nuclear power plants, including small, newer reactor types. 'We're signing tremendous executive orders today that really will make us the real power in this industry,' Trump said as he signed the directives in the Oval Office, adding that nuclear technology 'has come a long way, both in safety and costs.' Trump was joined by Interior Secretary Doug Burgum, Defense Secretary Pete Hegseth and energy industry executives including Constellation Energy (CEG) CEO Joseph Dominguez and Jake DeWitte, the co-founder and CEO of Oklo (OKLO). Nano Nuclear Energy (NNE) announced the launch of a major irradiation testing program in collaboration with the Massachusetts Institute of Technology Department of Nuclear Science and Engineering. The two-year collaboration will investigate the thermal and radiolytic behavior of nitrate molten salts, commonly referred to as 'solar salts', to assess their viability in advanced nuclear energy systems for thermal energy storage and cooling applications. 'We are proud to support this world-class irradiation study at MIT,' said Jay Yu, founder and chairman of Nano Nuclear. 'Understanding how molten salts perform under radiation is essential to unlocking next-generation reactor designs, and this facility gives us the capabilities to do that without the use of any nuclear materials.' XL Batteries and Prometheus Hyperscale announced a multi-year agreement to deploy on-site long-duration energy storage systems at data centers. In the first phase of the partnership, XL Batteries will deliver and commission a 333 kilowatt demonstration-scale standalone organic flow battery at Prometheus' facility in 2027. After that, Prometheus intends to purchase one 12.5 megawatt / 125 megawatt-hour commercial-scale system in 2028 and an additional 12.5 MW / 125 MWh system in 2029. In May of 2024, Prometheus agreed to a deal to buy 100MW of energy from Oklo for its data center planned for farmland in Wyoming. ANALYST COMMENTARY: Wedbush raised the firm's price target on Oklo to $55 from $45 and reiterated an Outperform rating on the shares. The firm says that it is highly expected that President Trump will sign executive orders as soon as Friday aiming at jump-starting the nuclear energy industry by easing the regulatory process on approvals for new reactors and strengthening fuel supply chains. The E.O. is expected to be a significant tailwind for the industry, with Oklo being the one of the main beneficiaries as support from the U.S. Government has gained significant traction since the Trump Administration took over in the past few months. The company was on track to submit its former combined license application to the U.S. NRC by the end of 2025 and deploy its first commercial power plant at Idaho National Laboratory by the end of 2027, with this E.O. potentially accelerating the timeline through increased federal funding and a much more streamlined regulatory process. Goldman Sachs initiated coverage of Nuscale Power (SMR) with a Neutral rating and $24 price target, implying 1% downside from current levels. NuScale is a small modular reactor manufacturing company which will be an 'integral player in the global race to decarbonization,' the analyst told investors in a research note. The firm believes Nuscale Power provides investors with an attractive opportunity to invest in a pure play nuclear small modular reactor manufacturer which has first mover advantage. However, citing its new technology, licensing process, 'unproven' business model, and financial targets that remain uncertain, Goldman is taking a more balanced view on the stock at current valuation levels. Additionally, Goldman Sachs assumed coverage of Cameco (CCJ) with a Buy rating and $65 price target. The firm's view of accelerating nuclear energy growth, driven by existing as well as new reactor builds, in the backdrop of 'a relatively modest supply growth environment' positions it to be more bullish on the upstream portion of the value chain, with upstream uranium producers and fuel suppliers like Cameco poised to benefit from increasing demand as well as pricing tailwinds, the analyst noted. Raymond James lowered the firm's price target on NexGen Energy (NXE) to C$12 from C$12.50 and keeps an Outperform rating on the shares. Oklo reported Q1 earnings and provided several key operational updates, including that it completed borehole drilling for site characterization work at Idaho National Laboratory for its first Aurora Powerhouse, B. Riley told investors. The firm noted that OpenAI CEO Sam Altman last month stepped down as chairman of Oklo's board, and says this move could accelerate Oklo's ability to work with OpenAI by avoiding a conflict of interest in discussions between the companies. B. Riley sees a potential OpenAI deal as a meaningful positive catalyst for the stock. The firm has a Buy rating and $58 price target on Oklo shares.
