This Breakthrough AI Chip is BIG Trouble for Apple & Intel Stocks

Ticker Symbol: YOU
19 Nov 202316:19

TLDRThe video discusses the impact of AI on the tech industry, highlighting Nvidia's and Microsoft's growth due to AI advancements. It emphasizes the potential of edge devices and ARM chips, with Qualcomm leading the market. The script also explores the competition among tech giants like Apple, AMD, and Intel in the AI-driven future of computing, and suggests that understanding the science behind the stocks is crucial for investment.

Takeaways

  • 🚀 The AI industry has seen significant growth in 2023, with Nvidia gaining nearly $900 billion in value and Microsoft's market cap reaching 2.75 trillion.
  • 📈 The rise of generative AI is compared to the mobile internet, suggesting a long-term growth trajectory with potential market leaders yet to emerge.
  • 💡 AI is being integrated into existing applications and services, such as Microsoft's Azure AI infrastructure, Windows OS, Office 365, and Bing browser, enhancing their capabilities.
  • 🔋 Nvidia is leading in data center GPU innovation with their H200 GPUs, expected to have 80% more memory capacity and 40% more memory bandwidth than the previous generation.
  • 📊 Analysts are generally positive about Nvidia's stock, with 97.5% recommending it as a buy, and the company consistently beating revenue expectations.
  • 🌐 Qualcomm dominates the mobile processor market with a 44% share of revenue and is expanding into new markets like AR and VR with their Snapdragon chips.
  • 🔥 Qualcomm's new Snapdragon chips outperform both Intel and Apple's chips in terms of power efficiency and performance, positioning them well for the future.
  • 💼 Qualcomm's acquisition of Nuvia and their focus on power efficiency could make them a key player in the AI chip market as AI moves from the cloud to edge devices.
  • 🔄 The AI chip market is expected to become highly competitive, with companies like Nvidia, AMD, and Intel potentially entering the ARM-based PC chip market.
  • 📈 Investing in AI should consider companies with large ecosystems like Nvidia and Microsoft, as well as those with innovative chip designs like Qualcomm.

Q & A

  • What significant event happened in 2023 related to AI and Nvidia?

    -In 2023, Nvidia gained almost $900 billion in value since OpenAI announced ChatGPT, making it one of the top six companies in the trillion-dollar club.

  • How has Microsoft's market cap evolved recently?

    -Microsoft's market cap has grown to 2.75 trillion, positioning it very close to overtaking Apple as the largest company globally.

  • What is the potential new market for AI that the speaker suggests investors should look at?

    -The speaker suggests that investors should look at Edge devices and the ARM chips that will power them as the new market for AI that is about to be taken over.

  • What does the Morgan Stanley case study indicate about the rise of the mobile internet?

    -The Morgan Stanley case study shows how different kinds of stocks performed during the rise of the mobile internet, indicating that history often rhymes and can help identify potential winners in the rise of generative AI.

  • How long did it take for the mobile internet to fully disrupt and reach mass market adoption?

    -It took around 8 to 15 years for the mobile internet to fully disrupt and reach mass market adoption, starting from the launch of the first iPhone in 2007.

  • What is Qualcomm's current position in the mobile processor market?

    -Qualcomm dominates the mobile processor market, owning a 44% share of the revenue, more than Apple and Samsung combined.

  • What are some of the devices that Qualcomm's chips power?

    -Qualcomm's chips power popular mobile devices like Samsung's flagship phones, Google's Pixel Watch 2, Microsoft's Surface Pro laptops, as well as devices in bleeding-edge markets like the recently launched Meta 3 and Ray-Ban smart glasses.

  • What significant acquisition did Qualcomm make to boost its chip performance?

    -Qualcomm acquired a company called Nuvia in 2021, whose co-founders were lead architects for Apple's custom chips and now work as VPs of engineering at Qualcomm.

  • What are the potential future competitors for Qualcomm in the ARM chip market?

    -Potential future competitors for Qualcomm in the ARM chip market include Nvidia, AMD, and possibly Microsoft, as they are reportedly planning to launch ARM-based PC chips starting from 2025.

  • How does the speaker suggest one should invest in the AI market currently?

    -The speaker suggests that one should consider investing in companies with large ecosystems that can benefit from generative AI, such as Nvidia, Microsoft, and Apple, and also keep an eye on Qualcomm as it pushes the limits on power efficiency in the AI market.

  • What is Intel's stance on the rise of ARM-based PCs?

    -Intel dismisses the rise of ARM-based PCs, stating that they have always been niche and low-end, and they feel confident in their roadmap for x86 chips.

Outlines

00:00

🚀 The Rise of AI and Market Shifts

The first paragraph discusses the significant impact of AI on the market, highlighting Nvidia's and Microsoft's remarkable growth. It emphasizes the importance of looking beyond traditional data centers and enterprise software for investment opportunities, suggesting that edge devices and AI-powered ARM chips are the next frontier. The paragraph also compares the rise of generative AI to the mobile internet revolution, noting that history often rhymes but doesn't repeat, and uses this comparison to predict potential investment trends in AI.

05:02

💡 Qualcomm's Dominance and Innovation

The second paragraph focuses on Qualcomm's dominance in the mobile processor market and its expansion into cutting-edge technologies. It details how Qualcomm's chips power popular mobile devices and emerging tech like AR glasses and AI pins. The paragraph also discusses Qualcomm's impressive performance at their Snapdragon Summit, where they revealed new chips that outperform competitors in both performance and power efficiency, signaling a significant leap forward in mobile computing.

10:02

🌐 The Future of ARM-based PCs and Market Competition

The third paragraph delves into the competition in the ARM-based PC market, with a focus on Qualcomm's advancements and Apple's response. It discusses the benchmark tests that suggest Qualcomm's chips are competitive with Apple's M3 chips, especially in terms of power efficiency. The paragraph also mentions the upcoming competition from Nvidia and AMD, and the potential for Microsoft to enter the market, creating a dynamic landscape for ARM-based chips in PCs.

15:05

🤖 Investing in the AI Market

The final paragraph wraps up the discussion by considering investment strategies in the AI market. It reiterates the strong positions of Nvidia and Microsoft due to their expansive ecosystems. The paragraph also acknowledges Apple's continued relevance and Qualcomm's potential as a chipmaker to watch, especially as AI inference shifts towards edge devices. It concludes by noting the unpredictability of the market and the possibility of new players emerging, emphasizing the importance of understanding the underlying technology when making investment decisions.

Mindmap

Keywords

💡AI

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think and learn like humans. In the context of the video, AI is the driving force behind technological advancements, particularly in the development of generative AI and its integration into various applications and services. The video discusses the impact of AI on companies like Nvidia, Microsoft, and Qualcomm, and how they are positioning themselves in the AI market.

💡Nvidia

Nvidia is a technology company known for its graphics processing units (GPUs) and AI technologies. In the video, Nvidia is highlighted as a significant player in the AI market, having gained substantial value following the announcement of OpenAI's chat GPT. The company's GPUs are crucial in powering data centers and edge devices, and they are expected to benefit from the rise of generative AI. Nvidia's market performance and future prospects, including their upcoming H200 GPUs, are discussed in detail.

💡Microsoft

Microsoft is a multinational technology company that develops, manufactures, licenses, supports, and sells computer software, consumer electronics, and personal computers. In the video, Microsoft's role in the AI market is emphasized through its investment in OpenAI and the integration of AI across its product lineup, such as Azure AI infrastructure and the Office 365 suite. The company's market cap is also highlighted, showing its position as one of the largest in the world.

💡Edge Devices

Edge devices refer to any device that is connected to a network and located at the 'edge' of the network, away from the centralized data center or cloud. These devices are becoming increasingly important as they can process data locally, reducing latency and bandwidth usage. In the video, the rise of edge devices is discussed as a new market for AI, with ARM chips expected to power these devices and drive their growth.

💡ARM Chips

ARM chips are microprocessors designed by ARM Holdings that use the ARM architecture, which is known for its power efficiency and widespread use in mobile devices. In the context of the video, ARM chips are central to the discussion about the future of edge devices and AI. Companies like Qualcomm, Nvidia, and even Microsoft are looking to develop ARM-based chips to capitalize on the growing demand for power-efficient, high-performance processors.

💡Generative AI

Generative AI refers to AI systems that can create new content, such as text, images, or music, based on patterns they have learned from existing data. The video emphasizes the rapid growth and potential of generative AI, suggesting that it will soon be integrated into various devices, applications, and services, transforming the way we interact with technology.

💡Market Cap

Market capitalization, or market cap, is the total value of all a company's outstanding shares of stock. It is calculated by multiplying a company's share price by the number of its outstanding shares and is often used as a measure of a company's size and investment appeal. In the video, the market cap of companies like Nvidia and Microsoft is used to illustrate their success and growth in the AI market.

💡Qualcomm

Qualcomm is a multinational semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services. In the video, Qualcomm is presented as a key player in the edge devices market, with its chips powering a variety of popular mobile devices and being at the forefront of developing ARM-based chips for the next generation of devices.

💡Investment

Investment refers to the act of committing money, time, or other resources to a particular venture or enterprise with the expectation of achieving a profit or achieving a financial return. In the context of the video, investment is discussed in relation to the AI market, with the presenter sharing insights on how to invest in technology platforms and companies that are likely to benefit from the rise of generative AI.

💡Performance per Watt

Performance per watt is a measure of how efficiently a device or processor uses energy to perform tasks. It indicates the amount of work done (performance) for each unit of energy consumed (watt). In the video, performance per watt is a critical metric for comparing the efficiency of different chips, with the Qualcomm Snapdragon X Elite showing significant improvements in this area compared to its competitors.

💡Competition

Competition refers to the rivalry between two or more parties striving to achieve a common goal or objective. In the video, competition is discussed in the context of the AI market, where various tech companies are competing to develop and market the most advanced AI technologies and edge devices. The video also touches on the competitive landscape as it relates to ARM-based chips and the potential entry of Nvidia and AMD into this market.

Highlights

2023 has been a landmark year for AI, with significant gains in market value for companies like Nvidia and Microsoft.

Nvidia's value increased by almost $900 billion since OpenAI announced ChatGPT, making it one of the top six companies in the trillion-dollar club.

Microsoft's market cap reached 2.75 trillion, positioning it close to overtaking Apple as the largest company globally.

The focus should be on new markets that AI hasn't fully taken over yet, such as edge devices and ARM chips.

Investing in technology platforms that businesses build on top of is a key strategy, as demonstrated by interest in Nvidia and Microsoft.

The rise of generative AI may take several years to fully integrate into daily life, similar to the mobile internet's adoption timeline.

Existing devices, applications, and services are being enhanced by generative AI, improving their functionality and performance.

Microsoft and Nvidia are deploying AI across their existing product stacks, such as Azure AI, Windows OS, and data centers.

Nvidia's H200 GPUs are expected to be in high demand due to their increased memory capacity and memory bandwidth over the H100s.

Qualcomm's chips power popular mobile devices and have a significant share of the mobile processor market.

Qualcomm's Snapdragon chips are used in cutting-edge devices like the Meta 3 and Ray-Ban smart glasses.

The Snapdragon EX and Elite chips showcase significant performance improvements and power efficiency.

Qualcomm acquired Nuvia, a company with expertise in ARM-based server chips, enhancing their engineering capabilities.

Apple's M3 chips claim performance improvements over previous generations, but Qualcomm's chips show strong performance per watt.

The PC market may see a shift with Nvidia, AMD, and potentially Microsoft entering the ARM-based PC chip market.

Intel downplays the ARM-based PC market, but the success of Apple's transition from Intel chips indicates potential for growth.

Investing in AI market should consider companies with ecosystems that can benefit from generative AI, like Nvidia, Microsoft, and Qualcomm.

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