Daily Brief Thematic (Sector/Industry): SemiAnalysis’ Jeremie Eliahou Ontiveros on the supply/demand dynamics of AI and data centers and more

• Disclaimer: Podcast does not provide investing advice
• Discussion on AI, data centers, and electrification trends
• Concerns about potential oversupply of data centers and energy optimization in the future

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• US stocks rose on Thursday, with the S&P 500 adding 1% and the Nasdaq Composite rising 1.5%. Nvidia and Tesla led the tech-heavy Nasdaq’s rally
• After hours, Applied Materials (-5%) forecast Q2 revenue of around ¥830bn, below market estimates
• Carlyle Group will acquire Japanese HR systems provider Kaonavi in a ¥50bn deal, offering ¥4,380 per share, a 120% premium

• The YTD rally in the Hong Kong and China markets has made it appealing for highly leveraged and outperforming stocks to make placements to raise fresh equity.
• GDS Holdings (9698 HK), China Youran Dairy Group (9858 HK), Shandong Gold Mining (1787 HK), Zhaojin Mining Industry (1818 HK), and BYD Electronics (285 HK) are possible candidates.
• Four of the top 30 YTD best-performing Hang Seng Composite stocks have made placements in the last three months, raising a total of HK$1.3bn with mixed performance since then.

• Intel jumping on news of possible fab JV with TSMC for US production 
• AMAT numbers missed after market on the impact from China curbs. Largely expected but a slight negative for JP SPE to start 
• Good numbers from Sony with GN&S trending well and Sumitomo Forestry new MTD surprises to the upside. 

• Sustained trade wars can unintentionally reduce carbon and GHG emissions and historical analysis suggests achieve climate benefits at least as good as structured climate policies.
• If trade had grown only as fast as GDP, average reduction in CO₂ emissions over the last decade would have easily matched the Paris Climate targets.
• Tariffs, driven by economic nationalism, are impactful, easier to implement and gain public support than carbon taxes or CBAM, so should be part of the long-term carbon solution.

• Analysts are bullish on FEHT due to strong second half fiscal year 2024 hotel revenue per available room (RevPAR) and merger and acquisition (M&A) prospects.
• DBS is cautious about the long-term market gains from China’s AI breakthrough, expressing skepticism about its potential impact on boosting the market.
• CGSI has upgraded ISDN to ‘add’ and raised their target price to 35 cents, citing an industrial automation-led recovery as the reason for the upgrade.

• OS Therapies is a clinical-stage cancer immunotherapy company that develops treatments for osteosarcoma and other solid tumors.
• Lead drug OST-HER2 is in a Phase 2b study for recurrent, fully resected, lung metastatic osteosarcoma.
• The company recently acquired the Listeria-based immunotherapy platform underlying OST-HER2, also gaining clinical programs for lung and prostate cancers.

• Investors are rightfully looking at AI investments, but it can be difficult to find the right ones.
• They might be just straight big tech companies like Google or Microsoft, or they might be private, like OpenAI. So, what should investors look for in SMID-cap AI stocks?
• First, the fundamentals of investing still apply. Investors need to consider business fundamentals (revenue growth potential is critical), market position (watch the competition), management (the ability to handle the inevitable ups and downs of a SMID-cap tech company), and valuation (relative to its peers is a good place to start).

• In yesterday’s initial comment, we already zoomed in on the bank’s 4Q24 and FY24 results. On an overall, basis, we were pleased with the results and with NII in particular.
• We feel that the FY25 NII guidance has been adequately substantiated in the FY25 results presentation slides.
• We were also pleased wit the development in costs on an underlying basis. We feel that management’s guidance of flattish costs (excl. one-offs) is based on a clear foundation. 

• India’s retail inflation fell to a 5-month low in January due to easing food prices, while industrial production growth slowed.
• Hindustan Petroleum (HPCL IN)  has signed an initial agreement with NTPC Ltd (NTPC IN) to explore LNG sourcing, aiming to support India’s rising gas-based power generation.
• Sebi’s regulatory crackdown on risky derivatives trading has caused a major revenue hit for Indian online brokerages, with trading volumes down 70%.