The global chip leader is "soaring"!
On February 13, Japanese and South Korean chip stocks performed strongly. SK hynix rose sharply at the open, driving the strength of the Korean chip sector, which closed up nearly 5% as of **. SoftBank Group's share price rose more than 10% at the open, and rose more than 6% as of **.
On February 12, Nvidia's intraday market value once surpassed Amazon and Google's parent company alphabet to become the fourth highest company in the world by market capitalization. As of **, Nvidia shares closed at 722$48 shares, market capitalization of 178 trillion US dollars (about 12 yuan.)8 trillion yuan). Since the AI wave swept in October 2022, Nvidia's stock price has risen nearly 5 times.
On the same day, the stock price of Arm, a chip design company owned by SoftBank, rose 42% at one point, as of **, 293% to close at 148US$97 shares, with a market capitalization of US$153.2 billion (about RMB 1.).1 trillion yuan). Since the release of the stock report, the stock price has been extremely active recently, and the stock price has doubled in the past three trading days.
Thanks to the sharp rise in overseas chip stocks, the related QDII** has performed well since the beginning of the year. Looking forward to the future of A-share chip stocks**, some institutions believe that the sharp rise in overseas chips proves that the upward trend of the global semiconductor business cycle has begun. The growth of the semiconductor localization sector will maintain a high growth rate in the medium and long term.
Nvidia's market capitalization once surpassed that of Google and Amazon
Eastern time on Monday (February 12), Nvidia's market value once surpassed Amazon and Google's parent company alphabet to become the world's fourth most valuable company, second only to Microsoft, Apple and Saudi Aramco. As of **, Nvidia stock price **016% to close at 722$48 shares, market capitalization of 178 trillion US dollars (about 12 yuan.)8 trillion yuan), slightly lower than Amazon and Alphabet.
It is worth mentioning that as the global leader in artificial intelligence (AI) chips, Nvidia's stock price continues to refresh record highs. Since the AI wave swept in October 2022, NVIDIA's stock price has risen nearly 5 times, including a 239% increase in 2023.
Wall Street expects Nvidia's fourth-quarter revenue to reach 202$700 million, non-GAAP EPS of 4$53, revenue and net income both posted sequential growth.
Goldman Sachs, Bank of America, Morgan Stanley and other internationally renowned institutions have recently raised their target prices for NVIDIA. Goldman Sachs said that the investment in AI infrastructure construction by countries and technology giants will further drive Nvidia's revenue, so Goldman Sachs raised its full-year earnings forecast for 2025-2026 by an average of 22%.
Arm shares doubled in three days
The same stock price performance is also SoftBank's chip design company ARM, on February 12, Eastern time, the stock once rose 42%, as of **, 293% to close at 148US$97 shares, with a market capitalization of US$153.2 billion (about RMB 1.).1 trillion yuan). The stock has been extremely active recently, and the stock price has doubled in the last three trading days.
Behind the soaring stock price is ARM's recent stellar earnings report. ARM's announcement for the third fiscal quarter of fiscal 2024 (July-September 2023) shows that revenue in the third fiscal quarter was 8US$2.4 billion, a year-on-year increase of 14%, with a net profit of US$87 million.
It is reported that ARM itself does not directly design, manufacture or first-class chip products, but mainly licenses the chip architecture (IP) and related technologies it designs to chip manufacturers, and makes money through licensing transactions and patent fees. Its royalties increased 11% year-over-year to 4$700 million, driven in part by the recovery of the smartphone market and higher sales from automotive and cloud data centers.
In addition, Arm also issued better-than-expected guidance for the fourth quarter of 2023, with revenue of 8$500 million to $900 million, compared to an expectation of $7$7.8 billion. According to ARM, the growth was driven by royalty and licensing revenues. Because the customer aims to design new chips for AI work, resulting in higher royalties.
Arm executives say the expansion strategy is starting to pay off, with customers flocking to ARM-based processors to complement Nvidia's chips for AI work in data centers, as well as working on new laptops and smartphones capable of handling chatbots and other AI functions.
The upward trend of the global semiconductor boom cycle has begun
Some analysts believe that since 2023, almost all of the outstanding performances in the NASDAQ index in the United States are related to artificial intelligence computing power, showing the subversive changes brought by artificial intelligence models to this industry.
It is worth mentioning that the Invesco Great Wall Nasdaq Technology Market Capitalization Weighted ETF (QDII), which is heavily invested in U.S. technology stocks, has risen by more than 11% this year, leading the QDII, which is the top 10 heavy stocks as of the end of 2023 Apple (Apple), Microsoft (Microsoft), Nvidia (NVIDIA), Facebook (Meta Platforms), Google (Alphabet)-A, Google (Alphabet)-C, Broadcom, Adobe, AMD, Intel.
What can this mean for A-share investment? The technology sector that has been concerned for a long time, including semiconductor equipment in the field of scientific and technological security, and the technological transformation in the field of artificial intelligence, still continues to follow the previous investment logic and continue to advance on the industrial side. Based on the expectation that economic growth will stabilize and rise in 2024, Sino Analytica** is inclined to believe that investors' pessimistic expectations are expected to reverse in tandem. The sharp rise in overseas chips verifies that the upward trend of the global semiconductor business cycle has begun. Looking to the future, we are firmly optimistic that China's science and technology will be able to break through the US blockade in an all-round way. In this process, the growth of the semiconductor localization sector will maintain a high growth rate in the medium and long term. The global artificial intelligence industry is trending fiercely, and the recovery of smartphone demand is a multiple positive. 2024 will be a year of science and technology.
Di Xinghua, manager of Guofu Global Technology Connected Hybrid (QDII)**, said that everything about AI has just begun. "We can find that some AI-related companies in the U.S. stock market do have new AI businesses on the revenue side of the statement, but at the same time, what everyone ignores is that many companies are shrinking the cost side because of AI, and the bell mouth of the entire profit curve is opened, which is very exciting. Therefore, we will think deeply about the impact of AI on the revenue side and cost side of the company. Di Xinghua believes that in the long run, the potential productivity improvement and labor force increase brought by artificial intelligence cannot be underestimated.
Looking forward to the market outlook, Yang Weiwei, manager of Great Wall, believes that AI and domestic substitution are the two major driving forces of the semiconductor industry. AI includes not only the localization of AI computing chips, but also AI-related hardware and related chips. For example, this year, some giants have begun to officially deploy AR glasses, AR glasses are a good landing carrier for AI, and related A-share chip companies will be the focus of attention.
Zhao Zongting, manager of Huaxia Chip ETF, said that the investment logic of the semiconductor chip sector is mainly three: first, the bottom of the cycle, the recovery of the economy; Second, artificial intelligence promotes the super innovation cycle, and AI chips usher in development opportunities; Third, domestic alternative R&D achievements are gradually being implemented, and breakthrough products are released.
*:* Times Brokerage China Chen Xi.