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

Ticker Symbol: YOU
19 Nov 202316:19

TLDRThe video discusses the significant impact of AI on the tech industry in 2023, highlighting Nvidia and Microsoft's growth. It emphasizes the potential of AI in edge devices and ARM chips, suggesting an upcoming AI arms race. The video explores how companies like Qualcomm, Apple, Nvidia, AMD, and Intel are positioning themselves in the market, with Qualcomm's recent chip advancements and Apple's custom ARM processors leading the charge. The presenter, Alex, advises viewers on investing in the AI market, recommending a focus on companies with strong ecosystems and the potential for innovation in edge computing.

Takeaways

  • 🚀 The AI industry has seen significant growth in 2023, with companies like Nvidia and Microsoft experiencing substantial increases in market value.
  • 📈 Nvidia's market cap reached nearly $900 billion, making it one of the top six companies in the trillion-dollar club, while Microsoft's market cap is at 2.75 trillion, approaching Apple's valuation.
  • 🔍 Investors should consider looking beyond data centers and enterprise software for the next big opportunity in AI, focusing on emerging markets that AI is yet to fully penetrate.
  • 📱 The rise of mobile internet provides a historical parallel for the potential growth and impact of generative AI, although the timeline for AI adoption may span several years.
  • 🌐 Generative AI is being integrated into existing applications and services, enhancing their capabilities and performance, such as Microsoft's Azure AI infrastructure and Nvidia's data center solutions.
  • 💡 Qualcomm is a key player in the mobile processor market, with their chips powering popular devices like Samsung phones and Microsoft Surface Pro laptops.
  • 🌟 Qualcomm's acquisition of Nuvia and the development of the Orion CPU signals a push for higher performance and efficiency in mobile computing.
  • 🔥 The competition in the AI chip market is intensifying with companies like Nvidia, AMD, and Intel potentially entering the ARM-based PC chip market after the exclusivity deal with Qualcomm ends.
  • 📊 Benchmark tests suggest that Qualcomm's chips are competitive with Apple's M3 chips in terms of performance per watt, indicating the potential for ARM-based chips in the PC market.
  • 💭 The future of the AI market depends on the continued innovation and competition among established tech giants and emerging companies, as well as the broader adoption of AI across various devices and applications.

Q & A

  • What significant change in the AI industry occurred in 2023?

    -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 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 a new market for AI that is about to be taken over.

  • What is the significance of the Morgan Stanley case study mentioned in the script?

    -The Morgan Stanley case study looks at how different kinds of stocks performed during the rise of the mobile internet, potentially helping to identify the winners during 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 the role of semiconductor companies in the rise of generative AI?

    -Semiconductor companies are crucial in the rise of generative AI as they need to build the chips that power data centers and edge devices, which are necessary for running AI applications and services.

  • What is the significance of Qualcomm's recent chip developments?

    -Qualcomm's recent chip developments, such as the Snapdragon and Orion CPUs, show significant performance improvements and power efficiency, making them strong contenders in the AI chip market.

  • How did Qualcomm enhance its chip performance and efficiency?

    -Qualcomm enhanced its chip performance and efficiency by acquiring Nuvia, a company founded by former Apple engineers who were lead architects for Apple's custom chips.

  • 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 either planning or have shown interest in launching ARM-based PC chips.

  • What is Intel's stance on the ARM-based PC market?

    -Intel is dismissive of the ARM-based PC market, considering it niche and low-end, and is confident in their x86 architecture's continued relevance in the PC market.

  • What investment strategy does the speaker recommend for the AI market?

    -The speaker recommends focusing on companies with large ecosystems that can benefit from generative AI, such as Nvidia, Microsoft, and Apple, as well as keeping an eye on Qualcomm's developments in the edge devices market.

Outlines

00:00

🚀 The Rise of AI and Market Shifts

This 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 the next AI market opportunities. The speaker suggests focusing on edge devices and AI-powered ARM chips as the upcoming battleground for tech giants. The section also compares the rise of generative AI to the mobile internet era, noting that while AI has been talked about, it may take a few more years for widespread adoption. The speaker underscores the early stages of the investment cycle for generative AI, comparing it to past tech disruptions and the potential for AI to enhance existing applications and services.

05:02

📈 Qualcomm's Dominance and Innovation

This paragraph focuses on Qualcomm's leading position in the mobile processor market, powering popular devices like Samsung phones and Microsoft Surface laptops. It discusses Qualcomm's chips' role in emerging technologies such as AR glasses and AI agents. The speaker highlights Qualcomm's 2023 Snapdragon Summit, where they unveiled their new Orion CPU, which boasts significant performance improvements over competitors. The paragraph also reveals that Qualcomm's advancements are partly due to their acquisition of Nuvia, a company founded by former Apple engineers, which has influenced the design of Qualcomm's ARM-based chips.

10:02

💼 Competition and Market Dynamics

This paragraph delves into the competitive landscape of the chip market, particularly the ARM-based PC chip segment. It mentions Apple's M3 chips and their performance claims, contrasting them with Qualcomm's offerings. The speaker provides a preliminary benchmark comparison, noting that while Apple maintains a lead in certain areas, Qualcomm's chips show promising performance and power efficiency. The paragraph also discusses the potential entry of Nvidia and AMD into the ARM PC chip market and the challenges faced by Intel. It emphasizes the importance of understanding the evolving market and the implications for investment in the AI sector.

15:05

🤖 Investing in the AI Market

In this final paragraph, the speaker reflects on the overall AI market and investment strategies. It reiterates the strong positions of Nvidia and Microsoft due to their expansive ecosystems that can leverage generative AI. Apple is acknowledged as a reliable investment due to its pioneering custom ARM chips. Qualcomm's potential is highlighted, given its extensive ecosystem and advancements in power-efficient chips. The speaker also considers the future roles of AMD and Intel, noting the market's dependency on the success of ARM chips. The paragraph concludes by encouraging viewers to invest in knowledge and understanding of the technology behind the stocks, as this knowledge is crucial for making informed investment decisions in the AI market.

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 a transformative technology that is rapidly evolving and being integrated into various applications and services, such as data centers, enterprise software, and edge devices. The rise of generative AI is a significant focus, highlighting its potential to enhance existing applications and create new ones.

💡Nvidia

Nvidia is a technology company known for its graphics processing units (GPUs) and AI computing solutions. In the video, Nvidia is highlighted as a major player in the AI market, having gained significant value following the announcement of ChatGPT. The company's GPUs are essential for powering data centers and AI applications, and it is expected to continue benefiting from the growth of generative AI.

💡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 market cap growth is mentioned, and its investment in OpenAI is highlighted. Microsoft's Azure AI infrastructure and its integration of AI across its product suite, including Windows and Office 365, are emphasized as strategic moves to capitalize on the rise of AI.

💡Edge Devices

Edge devices are hardware components that process data near the source of the data, rather than in a centralized data center or cloud. The video positions edge devices as the next frontier for AI, suggesting that AI hasn't fully taken over this market yet but is about to. These devices are expected to become increasingly important as AI moves from centralized data centers to distributed processing.

💡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 video, ARM chips are presented as crucial components for edge devices, which will be at the forefront of the AI revolution. The discussion includes Qualcomm's development of new ARM-based chips that offer significant performance improvements over existing solutions.

💡Qualcomm

Qualcomm is a multinational semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services. In the video, Qualcomm is recognized as a dominant player in the mobile processor market, with its chips powering popular mobile devices and being at the forefront of developing new chips for emerging technologies like augmented reality and AI agents.

💡Market Cap

Market capitalization, or market cap, is the total dollar market value of a company's outstanding shares of stock. It is calculated by multiplying a company's shares outstanding by the current market price of one share. In the video, market cap is used to discuss the financial performance and growth of technology companies like Nvidia and Microsoft in relation to the AI market.

💡Generative AI

Generative AI refers to AI systems that can create new content, such as text, images, or music, based on patterns learned from existing data. In the video, generative AI is portrayed as a rapidly advancing field that is expected to disrupt and enhance various industries by integrating into existing applications and services.

💡Investment

Investment in the context of the video refers to the act of allocating resources, such as money, into financial instruments, technologies, or companies with the expectation of generating a profit or achieving a financial return. The video focuses on investment opportunities in the technology sector, particularly in companies and platforms that stand to benefit from the rise of AI and generative AI.

💡5G

5G is the fifth generation of mobile communication technology, characterized by higher data transfer rates, lower latency, and improved connectivity. In the video, 5G is mentioned as a technology that complements the rise of AI, enabling new mobile-first apps and services that leverage AI capabilities.

💡Semiconductor

A semiconductor is a material, typically a silicon-based crystal, that has electrical conductivity between that of a conductor and an insulator. Semiconductors are the foundation of modern electronics, including computer chips and integrated circuits. In the video, semiconductor companies are crucial for building the chips that power data centers and edge devices, which are necessary for the deployment of AI and generative AI applications.

Highlights

2023 has been a landmark year for AI, with significant market value gains 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 world's most valuable company.

The focus should be on new markets that AI hasn't fully entered 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 is still in its early stages, with potential for further integration into everyday applications and services.

The mobile internet's rise took a long time, indicating that generative AI's full impact may also be years away.

Semiconductor companies must innovate to build chips that power the next generation of AI-enhanced applications and services.

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

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

Qualcomm's recent chips outperform both Intel and Apple's chips in terms of power efficiency and performance.

The acquisition of Nuvia by Qualcomm has led to significant advancements in chip design and power efficiency.

Apple's M3 chips claim to be faster than their predecessors but face competition from Qualcomm and potential future entries from Nvidia and AMD.

The PC market may see a shift towards ARM-based processors with companies like Nvidia and AMD planning to enter the market.

Intel downplays the potential of ARM-based PCs, but the success of Apple's transition from Intel chips indicates a viable market.

Investing in AI market should consider companies with large ecosystems and those that are pushing the boundaries of chip technology.

Understanding the science behind the stocks is crucial for making informed investment decisions in the AI market.

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