Take A Look: We’ve Got the AI Sector Covered!

We’ve Got the AI Sector Covered!

There are hundreds of AI-related stocks trading on various exchanges around the world and that number has been reduced to 31 pure-play stocks trading on Canadian or American exchanges in 7 categories and put into portfolios which are tracked on a weekly basis. What follows is a summary of these 7 portfolios’ performances this week.

An original article by Lorimer Wilson, the Managing Editor of munKNEE.com, that was initially posted on TalkMarkets.com where Lorimer is a prolific contributor (see here).

The 6 Stages Involved in the Production & Distribution of Semiconductors

There are 6 stages involved in the production and distribution of semiconductor devices such as microprocessors, memory chips, and sensors involving multiple companies, each with their own specialized contributions, and the 27 pure-play stocks in each of these stages are presented below.

1. electronic design automation (EDA) companies with sophisticated software that assist engineers in the custom design and development of complex chips;
2. equipment and material suppliers that provide essential equipment for manufacturing chips such as lithography machines, etching, test and packaging equipment, automation and inspection systems and production materials such as chemicals, gases, wafers and packaging;
3. factories (called foundries in semiconductor jargon) that concentrates all their efforts in the manufacturing of chips based on the designs provided by other semiconductor companies;
4. companies that outsource the fabrication (or fab) of chips to specialized foundries while designing and selling the chips;
5. companies that assemble chips into finished semiconductor components, tests for defects and do the very specialized packaging of the chips for shipping assembly.
6. In addition, there are Integrated Device Manufacturers (IDMs) that do all of the above elements themselves to control the entire production process.

The 6 semiconductor segments (portfolios) are presented below, in descending order, this week highlighting those pure-play constituents in each portfolio that had stock prices that are up <5%; up >10%; and up >15%, and some pertinent news, analyses and commentary. NO constituents in the above portfolios went down.

1. The IDM Portfolio: up 12.6% this week
   • Constituents:
     • up >10%: MU (+16.0%)
     • up >5%: STM, MCHP, INTC, IFNNY, ADI, NXPI
     • up<5%: TXN
   • Pertinent news, analyses and commentary:
     • Why Micron Stock Popped This Week
     • Micron Technology Is An Important AI Stock You Should Pay Attention To – Here’s Why
2. The Fabless Portfolio: up 11.1% this week
   • Constituents:
     • up >15%: NVDA (-18.9%); 
     • up >10%: MRVL (+14.5%); AVGO (+11.7%); AMD (+11.6%); MPWR (+11.1%);
     • up >5%: QCOM 
   • Pertinent news, analyses and commentary:
     • Nvidia Beats Stock Market Upswing: What Investors Need to Know
3. The Equipment and Material Suppliers Portfolio: up 8.1% this week
   • Constituents:
     • up >5%: KLAC; AMAT; ENTG; LRCX; ASML
   • Pertinent news, analyses and commentary:
     • KLA Corporation: An Important AI Stock You Should Pay Attention To
4. The Foundries Portfolio: up 4.6% this week
   • Constituents:
     • up >5%: TSEM (+5.6%);
     • up <5%: TSM; GFS; UMC
   • Pertinent news, analyses and commentary:
     • Tower Semiconductor Strong Profits May Be Masking Some Underlying Issues
5. The EDA Software Portfolio: up 4.4% this week
   • Constituents:
     • up <5%: CDNS; SNPS
6. The Assembly, Test and Packaging Portfolio: up 3.5% this week
   • Constituents:
     • up >5%: ASX (+6.9%);
     • up <5%: AMKR

Summary: up 8.7%, on average, this week vs. a 8.9% decline the previous week.

Pure-Play Quantum Computing Stocks

Building a quantum computer is extremely expensive, complex and massive, and needs to be kept in stable laboratory conditions, and cooled to nearly absolute zero (-459 degrees Fahrenheit) and, as such, are primarily confined to very few small, innovative companies developing and leveraging quantum computing.

There are only 4 pure-play quantum computing companies.  (The companies that are involved in the research and development of quantum computing but are also involved in other aspects of AI technology include Microsoft (MSFT), Nvidia (NVDA), Alphabet (GOOGL), Amazon (AMZN), Advanced Micro Devices (AMD), IBM, Intel (INTC), Honeywell Int’l (HON), and Baidu (BIDU), and are not included in the Pure-Play Quantum Computing Stocks Portfolio). The 4 constituents are presented below as to their performances this week and any news, analyses and/or commentary, where available.

The Pure-Play Quantum Computing Stocks Portfolio

• up 4.3% this week, on average:
• Constituents:
  • up >10%: RGTI (+13.9%), QBTS (+10.7%);
  • up >5%: QUBT;
  • up <5%: IONQ
• Pertinent news, analyses and commentary:
  • Should You Invest in Rigetti Computing Based on Bullish Wall Street Views?
  • D-Wave Quantum (QBTS) Releases Q2 2024 Financial Results Showing ‘Traction on All Fronts’

Summary

The above 31 constituents are up 8.7%, on average, this week and, for the record, the Nasdaq was up 5.5%, in comparison.