This Week's Thematic Reads
This Week's Thematic Reads
If you missed out on this week's signals, we've got you covered
Artificial Intelligence
“Qualcomm, at the Mobile World Congress 2024, has announced over 75 new large language models optimised for the Snapdragon platform. The company has also confirmed that some of these models will be powering generative AI capabilities across next-generation smartphones, PCs, IoT, XR devices, and software-defined vehicles.” Read more here
“ServiceNow (NYSE: NOW), the leading digital workflow company making the world work better for everyone, and NVIDIA (NASDAQ: NVDA) today announced that they are broadening their relationship with the introduction of telco-specific generative AI solutions to elevate service experiences. The first solution, Now Assist for Telecommunications Service Management (TSM), is built on the Now Platform and uses NVIDIA AI to help boost agent productivity, speed time to resolution, and enhance customer experiences.” Read more here
“Google announced a new set of features for phones, cars, and wearables — using Gemini to craft messages, AI-generated captions for images, summarizing texts through AI for Android Auto, along with access to passes on Wear OS.” Read more here
“FWD Group Holdings Limited (“FWD Group” or “FWD”) today announced it is extending its partnership with Microsoft with a four-year agreement to provide access to the latest generative artificial intelligence (AI) innovations, while continuing to support FWD’s cloud-first technology strategy. FWD Group plans to drive its generative AI initiatives by leveraging Microsoft’s Azure OpenAI Service and other enterprise-grade innovations. FWD Group expects to benefit from the private networking, monitoring and security capabilities of Microsoft Azure as well as its advanced AI models.” Read more here
“Deutsche Telekom on Monday showcased a futuristic smartphone concept that relies on artificial intelligence rather than applications (apps) to handle users' specific needs. Smartphones today typically use apps for everything from messaging and social media to video games and banking. The German company said the concept, which it is showcasing on its "T-phone" device, will have an app-free user interface developed in collaboration with partners Qualcomm and Brain.“ Read more here
“Dell Technologies posted better-than-expected earnings for its latest quarter, as the company continues to see robust demand for AI servers… Dell Vice Chairman and COO Jeff Clarke said in an interview with Barron’s that “demand is well in excess of supply” for AI servers… Dell plans to launch new AI-powered PCs in the second half of the year, but expects adoptions to roll out over multiple quarters.c” Read more here
CHIPs Act
“Advanced semiconductor companies have requested more than double the amount of available federal funds for projects in the US, Commerce Secretary Gina Raimondo said, referring to a program designed to bring chip manufacturing back to American soil. Leading-edge firms — which include Intel, Taiwan Semiconductor Manufacturing, and Samsung Electronics — are seeking more than $70 billion from the 2022 Chips Act…” Read more here
“U.S. chipmakers Intel and Micron are likely to win the largest share of the $52 billion in CHIPS Act awards this year, analysts told EE Times. With the U.S. 2024 presidential election approaching, the awards will help President Joe Biden show that he’s creating jobs and returning semiconductor manufacturing to the nation following a long history of offshoring, the analysts said. Asian chipmakers Taiwan Semiconductor Manufacturing and Samsung, also among the top-four companies that have sought CHIPS subsidies, are lower on the priority list because the U.S.government wants to avoid the perception of subsidizing foreign companies, according to the analysts.” Read more here
“The Biden administration laid out an ambitious new goal for the US: produce 20% of the world’s most advanced semiconductor chips by the end of the decade. Achieving that mark — set by Commerce Secretary Gina Raimondo in a speech Monday morning — would be a dramatic turnabout for the US. It currently makes 0% of the so-called leading edge logic chips that are considerably more powerful than older-generation semiconductors, making them crucial for everything from mobile phones to AI to quantum computing.” Read more here
Cloud Computing
“Amazon Web Services Mexico (AWS), a unit of Amazon.com Inc, announced on Monday it will invest over $5 billion to open a cluster of data centers in Mexico, amid growing demand for cloud services as more firms adopt new technologies. The cluster will be built in the Mexican state of Queretaro, Ruben Mugartegui, head of Amazon Web Services Mexico unit, told Reuters in an interview, adding the investment will be spread through the next 15 years.” Read more here
“The cloud unit of Chinese telecommunications equipment giant Huawei Technologies is wooing overseas industry clients and expanding its global footprint with new data centres, banking on the explosive demand for generative artificial intelligence (AI), despite US sanctions. Huawei plans to open a new local cloud service in Egypt next month, adding to its 85 availability zones across 30 regions globally… “ Read more here
“Alphabet’s Google Cloud has intensified its critique of Microsoft’s cloud computing strategies, accusing its rival of pursuing a monopoly that could stifle innovation, particularly in emerging fields like generative artificial intelligence. The scrutiny on Microsoft and Amazon’s dominance in cloud computing has heightened in various regions including Britain, the European Union, and the United States.” Read more here
Consumer Inflation Fighters
“The Irish discount carrier may receive fewer than 40 Boeing 737 Max jets before the end of June, Chief Executive Officer Michael O’Leary said. A shortfall of that magnitude would force Ryanair to cut its annual passenger forecast to 200 million people from 205 million for the coming fiscal year, he said at a media briefing in Dublin. Aircraft shortages are likely to drive up European fares this summer, O’Leary added, as competitors such as Wizz Air Holdings Plc and Deutsche Lufthansa AG ground planes to address an engine issue on some Airbus SE jets.” Read more here
“Earnings at Bank of Montreal and Bank of Nova Scotia were marred by increasingly cash-strapped consumers and businesses amid a challenging economic landscape... On the mortgage front, soaring interest rates led to a wave of ultra-long home loans in Canada, hitting borrowers who have fixed monthly payments but variable interest rates. Many of those clients are no longer paying down any principal, extending the length of time it would take to repay their loans. When homeowners go to renew their mortgages, typically after five years, they are expected to face significantly higher payments.” Read more here
Data Privacy & Digital Identity
“Today, President Biden will issue an Executive Order to protect Americans’ sensitive personal data from exploitation by countries of concern. The Executive Order, which marks the most significant executive action any President has ever taken to protect Americans’ data security, authorizes the Attorney General to prevent the large-scale transfer of Americans’ personal data to countries of concern and provides safeguards around other activities that can give those countries access to Americans’ sensitive data.” Read more here
“U.S. President Joe Biden has signed an executive order that aims to ban the bulk sale and transfer of Americans' private data to "countries of concern" such as China, Russia, Iran, North Korea, Cuba, and Venezuela.” Read more here
“In a statement published on their dark web leak site today, BlackCat said that they allegedly stole 6TB of data from Change Healthcare's network belonging to "thousands of healthcare providers, insurance providers, pharmacies, etc… Per BlackCat's claims, the sensitive data stolen from Change Healthcare contains a wide range of information on millions of people, including their:
medical records
insurance records
dental records
payments information
claims information
patients' PII data (i.e., phone numbers, addresses, social security numbers, email addresses, and more)
active U.S. military/navy personnel PII data"
Digital Infrastructure & Connectivity
“Social media firm Meta could spend up to $37 billion on new digital infrastructure this year, $2bn more than previously anticipated. The company’s CFO Susan Li said in a statement to shareholders that continued investment in the hardware needed to train and run artificial intelligence systems would necessitate an increase in spending.” Read more here
“Microsoft is proposing to develop a new UK data center campus on the site of a decommissioned power station in Eggborough, North Yorkshire. Microsoft said it is aiming to submit the proposals for planning permission to North Yorkshire Council in Mid-2024 and start construction in early 2027.” Read more here
Nuclear Energy & Uranium
“The House on Wednesday evening approved bipartisan legislation that aims to bolster nuclear energy… The legislation aims to bolster the U.S.’s nuclear energy production by speeding up environmental reviews for new nuclear reactors and reducing fees that applicants for advanced nuclear reactor licenses must pay.” 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 expansions.
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.
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.