News
BlackRock & Palantir Stocks Soar; Robotaxi Day, Nvidia & TSMC Boost AI
① Former Bank of Japan Official: Next Rate Hike Expected in January Next Year
A former official of the Bank of Japan, who once oversaw monetary policy, stated on Tuesday that the most likely timing for the central bank's next rate hike will be in January next year. Yesterday, the yield on Japanese government bonds (JGBs) saw a slight increase, but lacked sustained momentum due to a lack of catalysts, one day before the highly anticipated release of the U.S. consumer price report. Domestic and U.S. monetary policies continue to be the dominant themes in the Japanese bond market, and today's U.S. inflation data could alter bets on the pace of the Federal Reserve's easing, adding a cautious atmosphere. Noriatsu Tanji, Chief Bond Strategist at Mizuho Securities, indicated that the current wage increase of about 3% may not be sufficient to sustainably achieve the Bank of Japan's 2% inflation target. He stated that whether underlying inflation will accelerate is a subtle issue. Given the uncertainty of whether next year's spring labor negotiations will be better than this year, it seems there are still many obstacles to overcome.
Fluctuations in the yen exchange rate may affect the U.S. Dollar Index, and the expectation of a rate cut by the Federal Reserve has weakened, which may put pressure on the renminbi exchange rate in the short term and slow the inflow of foreign capital.
② Morgan Stanley and Jefferies Raise BlackRock's Target Price, Investing in Private Company Information Sector to Benefit
BlackRock's stock price has been on an upward trend recently, closing up 0.73% overnight at $956.01, with a year-to-date increase of 19.98%. Morgan Stanley raised its target price for BlackRock from $1036 to $1150, maintaining a "buy" rating. Jefferies raised its target price for BlackRock from $934 to $1075.
Advertisement
In the global private equity market, there are 4774 publicly listed companies in the United States, while the number of private companies controlled by private equity capital (currently managing a scale of $13 trillion) is 12,350. Among companies with revenues exceeding $100 million, publicly listed companies account for 13%, and private companies account for 87%. Conclusion: The surge in future IPOs and mergers and acquisitions between companies will benefit investment banks such as Goldman Sachs, Morgan Stanley, and Bank of America, as well as private equity firms like Blackstone, and large fund management companies like BlackRock. On July 1st this year, BlackRock announced a $3.2 billion acquisition of private equity information company Preqin. BlackRock estimates the potential market size for private market data to be $8 billion, growing at an annual rate of 12%, reaching $18 billion by 2030. This acquisition adds a highly complementary data business to BlackRock's investment technology, marking its strategic expansion into the rapidly growing private market data sector. BlackRock's stock price has risen by 20% year-to-date, significantly outperforming the S&P Financial Index, and the market is optimistic about its layout in the private company information sector.
Chen Zhaoling, an investment advisor at Guodu Securities: Recently, there has been significant volatility in the financial industry of A-shares, with the securities sector moving from a full-line limit-up to obvious differentiation. The performance of the sector may determine the short-term space and the rhythm of the rise in the market.
③ Ark Invest is Bullish on Palantir, Possessing the Potential to Disrupt Tech Giants
According to Ark Invest, in the coming years, large technology companies will face fierce competition, and emerging players in the software and data management sectors will gradually capture market share. Rahul Bhushan, Managing Director of Ark Invest Europe, said in an interview that companies like Palantir Technologies are expected to disrupt the current tech landscape dominated by Amazon AWS, Microsoft Azure, and Google Cloud. Palantir is one of the top ten holdings in the Ark Innovation Fund. He explained that in the current AI technology stack, 80% of the value is focused on chips and hardware, which has been the main trend over the past two and a half years. But the real opportunity lies in the downstream of the AI technology stack, especially in companies focused on software. Palantir is a data analytics company that provides customized AI and data services for its clients, rather than offering off-the-shelf products like tech giants. When AI capabilities are combined with Palantir's services, its value becomes more prominent. Many organizations' data is scattered across various isolated systems, in different formats, and stored in outdated systems, and Palantir's advantage lies in integrating this data and then overlaying AI, which not only allows for insights but also actually recommends courses of action. In addition, Databricks (held in Ark's venture capital fund) and Kratos, which mainly operates in the defense sector, are also considered attractive investment opportunities by Bhushan.
Palantir has joined the S&P 500 index, and its stock price has been setting new historical highs, with a stock price increase of over 151% so far this year. As an enterprise automation big data company, its market value is close to $100 billion. The company's revenue outlook for 2024 is $2.7 billion; the free cash flow outlook is $800 million to $1 billion. Enterprise workflow automation based on AI is Palantir's biggest business highlight, and the company has significant potential to seize AI market share from large tech giants.The A-share market has seen a short-term volume adjustment, mainly due to market divergence in expectations for macroeconomic improvements. Improved liquidity is conducive to the return of funds to growth sectors, and it is advisable to pay attention to AI-related sectors when the market is low.
Tesla's Robotaxi debut is approaching, and the third-generation humanoid robot is expected to appear on the same stage.
At 19:00 local time (10:00 AM Beijing time on Friday), Tesla will hold a "Robotaxi Day" event in California with the theme slogan "We, Robot" (We, Robots). Tesla will introduce a brand-new model designed specifically for autonomous driving, rather than using existing or modified Tesla cars for taxi services. Elon Musk has temporarily named the Robotaxi model "Cybercab." This compact two-door, two-seat model, similar to the Cybertruck, features sharp edges and a stainless steel finish, and may not be equipped with a steering wheel and pedals, relying entirely on Tesla's Full Self-Driving (FSD) software. The manufacturing cost per vehicle will be very low, and the cost per ride may be similar to that of a bus ticket. It will be produced at the Texas Gigafactory and will adopt a brand-new "boxless" manufacturing strategy (processing different parts of the car separately and only assembling the components in the final stage, aiming to reduce costs and factory footprint), with plans to achieve mass production this year. Tesla will allow car owners to make money by deploying their Cybercabs as taxis on ride-hailing networks, which Musk calls "a combination of Airbnb and Uber." To promote the commercialization process of Robotaxis, Tesla may announce a partnership with Uber, but it is expected that Tesla will not provide a clear commercialization path at that time. In addition, the robot Optimus Gen3, Model 2, and Cybervan are expected to appear on the same stage as the Robotaxi.
Tesla's self-driving taxi will debut on October 10th, and Tesla will compete with Google's WAYMO and Uber's autonomous driving. At the same time, pay attention to the progress of humanoid robots.
Tesla's "Robotaxi Day" event is a recent focal point in the investment market. Investors are concerned about whether Tesla's new car Robotaxi will bring new breakthroughs to the field of fully autonomous driving and accelerate the commercialization of the autonomous driving market. In addition, the third-generation humanoid robot developed by the company is also highly anticipated. The launch of these two new products is of great significance for Tesla. There has been some divergence in the market's positioning of Tesla in the past, whether it is an AI (Artificial Intelligence) development company or just a car manufacturer. If these two products are successfully launched and recognized by the market, it will have a significant impact on Tesla's market positioning in the AI field and help increase valuation. Tesla's stock price was stable overnight, and investors are believed to be waiting for the progress of related events.
Technology + policy implementation, the commercial space for Robotaxis is expected to open up. Recently, the A-share market's intelligent driving + Tesla concept has been significantly stronger than the market.
NVIDIA's stock price is approaching its historical high, and Wall Street is still bullish.
At Tuesday's "AI Summit DC" artificial intelligence summit, NVIDIA promoted the energy efficiency of its latest chips, which excited investors, and the stock price closed up more than 4% that day, setting a three-month high. NVIDIA said that the Blackwell chip, which began to be introduced to customers this year for developing OpenAI's GPT-4 software, only requires 3GW of electricity, while ten years ago this process required up to 5500GW of electricity. The company also pointed out its progress in software, including the creation of "proxy blueprints" that allow companies to quickly deploy customized AI services. This software is part of NVIDIA's expanding range of products and services, which includes chips, servers, network equipment, artificial intelligence models, and services. The overall goal is to help companies more easily integrate everything needed to use artificial intelligence, laying the foundation for a new industrial revolution. In addition to proxy software, Deloitte also uses some of NVIDIA's software in its CyberSphere online security service, and AT&T, Lowe's, and ServiceNow are also adopting NVIDIA's products. NVIDIA's stock price closed down 0.18% overnight, at $132.62, failing to achieve a six-day increase, but the stock price is still close to the closing peak of $135.58 set in June. At the same time, Wall Street is also bullish. Analysts said that strong demand for the new Blackwell chip series will make NVIDIA achieve strong performance next year, and the product is expected to make a significant contribution in the fiscal quarter ending in January next year. NVIDIA expects this product line to bring in "tens of billions of dollars" in revenue in that quarter, and Wall Street's forecast is about $4 billion.
It is expected that the production of Blackwell chips in the fourth quarter of this year will be between 250,000 and 300,000, lower than the early target of 450,000, and by the first quarter of 2025, the production capacity of Blackwell chips can reach between 750,000 and 800,000, nearly tripling the fourth quarter of this year. It is expected that the sales volume of Hopper chips (including H200 and H20) in the fourth quarter will be about 1.5 million, and gradually decrease to 1 million by the first quarter of 2025. Given that the price of Blackwell's B200 chip is about 60% to 70% higher than Hopper's H200, the revenue brought by Blackwell should exceed Hopper in the first quarter of 2025.
NVIDIA's stock price has once again approached its historical high, and one of the biggest fundamental factors is the company's new model AI chip Blackwell, which has been warmly welcomed by the market and is in short supply. This situation brings three pieces of information to the market: First, NVIDIA's leading position in artificial intelligence chips is still far ahead, and its product performance is efficient and recognized by the industry market. Second, the demand for artificial intelligence chips is still large. Although investors were concerned about NVIDIA's current high valuation and the possibility of slowing growth in the future, the strong demand for Blackwell has eased market concerns. Third, with the company's new product sales ideal, NVIDIA's financial performance in the next few quarters will be anticipated. With the above favorable factors, plus the current strong overall market situation in the US stock market, it is expected that NVIDIA will continue to approach its historical high stock price.⑥ AI Chips Maintain Strong Demand, TSMC's Q3 Revenue Surpasses Expectations with a 39% Increase
TSMC, the main chip manufacturer for NVIDIA and Apple, has recently announced a 39% increase in its Q3 revenue, which is better than expected, alleviating concerns that spending on artificial intelligence hardware is starting to decrease. TSMC will announce its full Q3 performance next Thursday. Some analysts are worried that the delayed delivery of NVIDIA's latest Blackwell chips might disrupt the industry, but most investors do not consider this a long-term issue for TSMC. With both Intel and Samsung Electronics struggling in the custom chip manufacturing business, TSMC's market leadership is expected to help boost its profit margins. Bloomberg Intelligence analyst Charles Shum stated that although Apple's A18 chip orders might decrease due to weak demand for the new iPhone 16, strong orders from NVIDIA and Intel could offset any revenue gap for TSMC. Other key topics include the potential for early mass production of the 2-nanometer (N2) node and plans to expand its CoWoS packaging capacity in 2025. Currently, more than half of TSMC's revenue comes from high-performance computing, a business area driven by artificial intelligence demand. Despite increasing concerns from analysts about demand for the new iPhone 16 series being lower than expected, TSMC remains the sole manufacturer of iPhone processors.
TSMC expects a sequential increase of 11% in Q3 2024 revenue, with a gross margin maintained at 55%. Looking ahead to Q4, growth will come from AI chips and Apple's 3-nanometer chips; outsourcing orders from Intel's PC chips (2-nanometer/3-nanometer) and Samsung's HBM4 will drive growth. The total capital expenditure for 2024 is expected to reach $32 billion.
TSMC's September revenue data performed ideally, indicating that the group's overall Q3 revenue figures will achieve a year-on-year growth of 39%, better than market expectations. This revenue data from TSMC generally reflects that the current global market demand for high-end AI chips remains very strong, and TSMC is expected to continue benefiting from the industry's prosperous cycle. Looking back at the current cycle of human intelligence chip needs, it has been maintained for about two years, but as more and more technology companies develop their own AI models, the incremental demand for chips forms a "domino effect," and it is expected that this high-spirited market situation will be difficult to reverse in the short term. TSMC's stock price fell after reaching a historical high in July this year and is now gradually recovering lost ground, and it is expected that with the support of the fundamentals, the stock price will once again challenge the historical high level.
⑦ Ray Dalio, Founder of Bridgewater Associates: No Need to Overly Focus on Daily Fluctuations in the Chinese Stock Market, Diversified Investment is Crucial
The Greenwich Economic Forum was held in Greenwich, USA, on October 8th and 9th. Ray Dalio, founder of Bridgewater Associates, emphasized at the conference that asset diversification in the current market is still crucial. Dalio pointed out that the global economy is mainly influenced by five major forces: debt cycles, internal order, great power conflicts, natural disasters, and technological progress. He used this framework to analyze several major trends in today's global macro economy. He believes that the possibility of the Federal Reserve significantly lowering interest rates is slim, and the current economy is generally in a relatively balanced state, coupled with an election year, he believes the market is overly optimistic about the expectation of interest rate cuts, but the risk is more likely to be upward rather than downward. When asked about his views on China's recent stimulus policies, Dalio said that Chinese policymakers are facing the problem of local debt, needing to restructure non-performing debt and reduce interest rates below the inflation rate and nominal growth rate. He also said that the daily fluctuations of the Chinese market should not be the focus of investors' attention, and emphasized that investors should avoid being overly concentrated in one market and ensure that there are 10 to 15 unrelated sources of return in the investment portfolio. The investment ratio should avoid risks exceeding 7% to 10% in any one market. Dalio pointed out that in a diversified investment portfolio, he would consider national diversification and asset class diversification from a strategic perspective.
Leave A Comments