March 18: Google-Apple and Nvidia Make AI Waves
Apple & Google talks about Gemini AI, Nvidia's Jensen Huang keynotes GTC conference
With little in the way of company earnings and economic data out this morning, the expectation was for a somewhat sleepy morning ahead of today’s GTC keynote by Nvidia (NVDA) CEO Jensen Huang.
However, that is not the morning folks will be getting given reports that Apple (AAPL) is in talks to build Google’s (GOOGL) Gemini artificial intelligence engine into the iPhone and Nvidia is in advanced negotiations to acquire AI infrastructure orchestration and management platform Run:ai.
With Apple and Google, indications are Google’s set of generative AI models would power some new features coming to the iPhone software this year in a relationship that would extend the Search pact between the two companies.
Nvidia’s interest in Run:ai is simple to see because Run:ai has developed an orchestration and virtualization software layer tailored to the unique needs of AI workloads running on GPUs and similar chipsets.
It will be interesting to hear what Jensen says about this as well as other announcements tied to his keynote at 4 PM ET dubbed, “Don’t Miss This Transformative Moment in AI.” Expected items include more details about the company’s B100 chip, potentially its most capable AI GPU yet.
We’d bet Jensen will discuss the demand for its chips to back up the company’s recent shoot-the-lights-out guidance, but also its product roadmap. With other speakers ranging from Ford Motor (F), Meta (META), Google, Salesforce (CRM), ServiceNow (NOW), L’Oréal (LRLCF), Goldman Sachs (GS), Lowe’s (LOW), and a host of others over the next few days, the conference will provide more insight to what is unfolding in the AI space.
All of this will be positive for our AI, Cloud Computing, and Digital Infrastructure investment themes and models - more on those below after today’s helping of Model Musings.
Model Musings
Aging Population
“Across the globe, nearly every nation is experiencing population aging. The United Nations states that the percentage of the global population aged 65 and above is expected to rise from 10% in 2022 to 16% in 2050. People aged 60 and older also outnumbered children younger than five years in 2020. While this demographic shift has implications for the social and economic makeup, nations remain siloed in matters regarding population aging.” Read more here
“The growing portion of the population 65 and older is expected to place unique labor demands on health care compared with other parts of the economy… The health care sector is expected to add 2.1 million jobs through 2032, according to the Bureau of Labor Statistics — 45% of all job growth in the next decade, the analysis notes. Nurse practitioner employment is expected to see a growth rate of 45%, physician assistants by 27% and home health and personal care aides by 22%.” Read more here
“To meet the demand for direct care providers, states must undergo “a systems change,” said Josh Hodges, chief customer officer at the National Council on Aging, or NCOA, an advocacy group dedicated to improving care for older Americans. States are recognizing that if they want to serve older adults, they “have to serve caregivers, and the direct care workforce is a vital part of the older adult experience,” he said. With a projected 9.3 million direct care jobs needing to be filled by 2031, states must find ways to fill that gap.” Read more here
Digital Infrastructure & Connectivity
“Spending on edge computing is growing fast and because it's 2024, analyst firm IDC believes AI is a big reason for the boost. "Edge computing will play a pivotal role in the deployment of AI applications," wrote IDC analyst Dave McCarthy. "To meet the scalability and performance requirements, organizations will need to adopt the distributed approach to architecture that edge computing provides. OEMs, ISVs, and services are taking advantage of this market opportunity to enable AI in edge locations." That need for distributed scale means that by 2027 IDC predicts global spending on edge compute will approach $350 billion – well beyond its expected $232 billion spend in 2024, which itself represents 15.4 percent growth over 2023.” Read more here
Space Economy
“SpaceX is building a network of hundreds of spy satellites under a classified contract with a U.S. intelligence agency, five sources familiar with the program said, demonstrating deepening ties between billionaire entrepreneur Elon Musk's space company and national security agencies. The network is being built by SpaceX's Starshield business unit under a $1.8 billion contract signed in 2021 with the National Reconnaissance Office (NRO), an intelligence agency that manages spy satellites, the sources said.” Read more here
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Consumer Inflation Fighters - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
EPS Diplomats - Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansion.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Precision Ag & Agri Science – Companies that look to address shrinking arable land by helping maximize crop yields utilizing technology, science, or both.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The strategies behind our Dividend Income Models:
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.
Don’t be a stranger
Thanks for reading and if you have a suggestion for an article or book we should read, or a stream we should catch, email us at info@tematicaresearch.com. The same email works if you want to know more about our thematic and targeted exposure models listed below.