With the bull market in US stocks stretching into a fourth year, there are more concerns than ever about the sustainability of spending on AI computing and whether the returns will justify the investments https://t.co/kaKZb78hBv ...

Well, thank you very much for having me to glad to be able to speak to all of you again. So, I'm Preston Smith from Purdue University and I'm going to talk about how our AI computing investment is is part of the foundation for our institutional strategy at Purdue. So, Purdue right now has four major pillars strategic projects.You can see here a new campus in Indianapolis. If you if you're familiar with Indiana geography, Purdue is between Indianapolis and Chicago about halfway and Indianapolis will be at th ...

Business Idea - SpaceX is considering deploying AI computing (inference) in orbit, leveraging the high value per kg and revenue per kW of GPUs [1] - The proposed system, potentially named "Star Thought," could be based on Starlink v3 satellites [2][3] - The system would use sun-synchronous orbit (SSO) at 560 km to maximize sunlight exposure and eliminate the need for batteries [3] Technical Design - Satellites would use a "sun slicer" solar array configuration to minimize drag while maximizing sunlight capture, generating approximately 130 kW of electrical power [3][4] - The design incorporates MLI heat reflectors to passively cool the back side of the main bus, where GPUs are racked [4] - A potential design involves directly attaching GPUs to solar modules, using local wifi connections instead of high-voltage cables to maximize power density [6] - This distributed architecture helps with thermal management by avoiding concentrated heat generation [7] Financial Analysis - A model with 200 H100-equivalent GPUs could generate 13,000 tokens per second, resulting in $4 million in annual revenue at $10/token [5] - Assuming an all-in cost of $50,000/kW, the system could achieve a 60% ROI per year [5] - The economics are viable if the revenue per kWh exceeds $4.00 [8] Scalability - One Starship launch could deploy 100 metric tons to LEO, equating to approximately 30 MW of inference capacity [8] - 1,000 launches could achieve 30 GW of inference capacity [8]

Market Analysis - The October SPY high of 689.70 is expected to be reached, as markets typically do not end on a high volume high, indicating a test that will determine the next market move [1] - A positive divergence is observed between the SPX and SPX/VIX ratio, with the SPX/VIX ratio making a higher high while the SPX has not [1] SPX and SPX/VIX Ratio Insights - The SPX/VIX ratio usually leads the SPX, suggesting that the SPX will trade to a higher high [2] - Historical data shows instances where the SPX made higher highs while the SPX/VIX did not, and vice versa, indicating potential future movements [2] Zweig Breadth Thrust (ZBT) Monitoring - The ZBT is being monitored for a possible bullish signal, requiring the 10-day average of the NYSE advancing/NYSE Total to reach .40 or lower and then rally to .60 or higher within ten days [3] - The ZBT closed at .38 on November 20 and at .45 on November 21, initiating the countdown, with a target of .60 by December 5 [3] - As of the latest data, the ZBT closed at .55, just .05 shy of the target, with two trading days remaining [3] GSG Commodity Index Outlook - The GSG Commodity Index has rallied 300% from the COVID 2020 low to mid-2022, followed by a narrow trading range that retraced 38.2% of the rally, indicating a potential consolidation phase [4] - Increased volume over the last three months suggests a developing "sign of strength" and a nearing breakout for the GSG index, which includes grains, metals, and energy [4] - The outlook for gold and silver is positive, although higher inflation is anticipated [4]

Financial Data and Key Metrics Changes - Total revenues for the first half of 2025 were $61.2 million, climbing 55.5% year over year [5][22] - Gross loss recorded was $1.2 million, with a gross margin of -2% compared to 6% in the prior year [23] - Net loss for the first half of 2025 was $136.3 million, primarily driven by non-cash impairments [24] - Adjusted EBITDA was -$7.1 million, compared to -$2.6 million last year, reflecting ongoing investments in business transformation [25] Business Line Data and Key Metrics Changes - Talent management revenue surged 110.6% year over year to $46.1 million [8][22] - Event production revenues grew 30.1% year over year to $11.3 million [9][22] - Esports revenue was $3.8 million, impacted by timing effects and fewer sponsorships [5][22] Market Data and Key Metrics Changes - In China, esports experienced first-half softness due to market normalization and delayed revenue recognition [5] - Western esports showed signs of recovery, with expectations to break even or make a slight profit on an adjusted EBITDA basis in the second half of 2025 [6][12] Company Strategy and Development Direction - The company is focusing on a dual-engine model, with entertainment as the core and a new mining and digital assets division as the second growth engine [4][12] - Plans to expand into music festivals and broader live entertainment, with a pipeline of events across key cities [9][10] - The establishment of a mining and digital asset division aims to combine near-term monetization through Bitcoin mining with long-term strategic positioning in digital infrastructure and AI computing [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA in the second half of 2025, supported by operational efficiency and financial incentives from Abu Dhabi [11][25] - The company anticipates a meaningful cash flow visibility from mining operations, with potential annualized revenue exceeding $300 million [20] Other Important Information - The company recorded non-cash goodwill impairment of $106.3 million and intangible asset impairment of $19.5 million, primarily related to the Ninjas in Pajamas brand [24] - The company is on track to open its first esports-themed hotel in January, which is seen as a significant opportunity for revenue generation [10][55] Q&A Session Summary Question: Applicability of event production model geographically and financially - Management confirmed the model is highly replicable in China and selected international markets, with plans for around 10 more large-scale music festivals next year [31][32] Question: Competitive performance and profitability in esports segment - Management expects league revenue confirmation letters to normalize in the second half of 2025, which will improve performance [33] Question: Trajectory into the second half of 2025 and beyond - Management indicated that the reported loss was primarily due to non-cash impairments and expects continued revenue momentum and cost efficiency improvements [36][37] Question: Differentiation versus pure player miners in the mining division - Management highlighted the strategic advantage of existing brand recognition and partnerships, allowing for rapid scaling of mining capacity [39][41] Question: Update on Abu Dhabi headquarters build-out and financial impacts - Management reported that the headquarters build is progressing on schedule and is already benefiting from financial incentives [44][46] Question: Rationale behind goodwill and intangible asset impairments - Management explained that the impairments reflect a necessary adjustment to align with current market conditions and do not impact liquidity [47][48] Question: Progress on additional asset purchase agreements for mining capacity - Management confirmed that the acquisition remains active and is targeting a December closing [50] Question: Update on esports hotel strategy - Management expressed excitement about the upcoming opening and plans for aggressive expansion in the esports hotel business [54][55]

Market Overview - The US dollar has gained against major currencies, particularly the Japanese yen and New Zealand dollar, with a notable increase of 0.24% against the yen [1] - The dollar's strength is attributed to hawkish Federal Reserve minutes indicating a lower likelihood of a December rate cut, with the probability now at around 25%, down from 50% [2][3] Federal Reserve Insights - The minutes from the Federal Reserve's latest monetary policy meeting revealed that many participants do not see a need for a December rate cut, while several believe it may be warranted [2] - Most Fed members agree that further reductions to the federal funds rate are appropriate, suggesting that a potential December cut would not indicate a change in policy direction [4] Labor Market Data - Market participants are focused on the delayed Non-Farm Payroll (NFP) report for September, which is expected to show a small improvement in job gains, rising from 22,000 to 53,000 [7][8] - A reading above 100,000 may be necessary for traders to adopt a more hawkish stance regarding future rate cuts [8] Japanese Yen Performance - The Japanese yen has weakened significantly, with the dollar/yen exchange rate surpassing 156.80, as Japan's Finance Minister stated that the yen was not discussed with the Bank of Japan (BoJ) Governor [9] - Traders interpreted this as a lack of imminent intervention, leading to increased short positions on the yen [10] Economic Outlook - The probability of a December rate hike by the BoJ is currently at 30%, with a slight majority of economists expecting a rate increase in the near future [10] - Further declines in the yen could potentially lead to a rate hike as policymakers aim to prevent inflation spikes [12] Nvidia's Market Impact - Nvidia's revenue forecasts exceeded analysts' expectations, contributing to a positive sentiment on Wall Street, with all three main indices closing higher [13] - Despite this, concerns about a potential tech bubble remain due to high forward price-to-earnings ratios in the S&P 500 [14]

Core Viewpoint - Berkshire Hathaway, led by Warren Buffett, is shifting its investment strategy by reducing its stake in Apple and increasing its investment in Google, reflecting a change in big tech exposure and a focus on value and growth [1][3][4]. Investment Strategy Changes - Berkshire Hathaway has sold over 40% of its Apple shares, which previously constituted nearly 25% of its portfolio, due to concerns over Apple's elevated valuation despite its stock price doubling since 2022 while revenue remained flat [1][2]. - The sale of Apple shares has allowed Berkshire to accumulate a record cash reserve of $382 billion and to invest $4.3 billion in Google, acquiring 17.8 million shares, making Google its 10th-largest holding [3]. Market Performance and Valuation - Alphabet's shares have increased by 46% year-to-date, driven by advancements in AI and data center operations, indicating a favorable market environment for tech investments [4]. - The valuation metrics used to assess Apple's stock suggest it is trading at a premium compared to its fair market value, prompting Berkshire's decision to divest [2]. Management Transition - Warren Buffett is set to step down as CEO by the end of the year, and the shift from Apple to Google may reflect the strategic direction of Berkshire's new management team [4].

Financial Data and Key Metrics Changes - Applied Materials reported record annual revenue of $28.4 billion for fiscal 2025, representing a 4% increase year-over-year [16][18] - Non-GAAP gross margin increased by 120 basis points to 48.8%, the highest level in 25 years [17] - Non-GAAP earnings per share rose by 9% [18] - Free cash flow was $5.7 billion, with capital spending of $2.3 billion [18] Business Line Data and Key Metrics Changes - Semiconductor systems revenue grew by 4%, despite trade restrictions impacting access to the Chinese market [16] - Applied Global Services (AGS) revenue increased by 3% to a record $6.4 billion, with recurring revenue from parts, services, and software growing by double digits [17] - Display revenue surged by 20% [17] Market Data and Key Metrics Changes - Revenue from China declined to 29% of total company revenue, down from a peak of 45% in Q1 fiscal 2024 [19] - DRAM revenue from leading-edge customers grew by over 50% over the past four fiscal quarters [6][16] - NAND investment is expected to double in 2025, although it remains a small portion of the wafer fab equipment market [5] Company Strategy and Development Direction - The company is focusing on an inflection-focused innovation strategy to extend leadership in high-growth areas such as leading-edge logic, DRAM, and advanced packaging [9][12] - The construction of the EPIC Center in Silicon Valley is on track to open next year, aimed at enhancing collaborative semiconductor equipment and process innovation [18] - The company is preparing for increased demand in the second half of calendar 2026, aligning supply chain and manufacturing to meet customer needs [15][16] Management's Comments on Operating Environment and Future Outlook - Management anticipates that AI computing will drive substantial investment in semiconductor infrastructure, with the semiconductor industry expected to grow at a compound annual rate of 10-15% over the next five years [8] - The company expects wafer fab equipment spending in China to be lower in 2026, with no significant changes to market restrictions anticipated [5] - Management expressed confidence in maintaining market share and competing effectively in areas where they can operate [5][33] Other Important Information - The company announced changes in reporting segments to improve operational efficiency and visibility into semiconductor and services businesses [20] - The company is adopting AI and digital tools to enhance productivity and streamline operations [13] Q&A Session Summary Question: How have conversations with clients evolved regarding AI infrastructure spending? - Management noted that AI is the primary focus for customers, driving demand for segments like leading-edge foundry logic and DRAM, where Applied has strong positions [24][25] Question: What are the implications of the headcount reduction on gross margins and operating expenses? - Management indicated that the reduction was part of a broader strategy to increase productivity and that they expect to add back necessary skills in the future [27][28] Question: How is the company positioned against increasing competition from domestic Chinese firms? - Management expressed confidence in their strong positions in leading-edge foundry logic and DRAM, despite increased competition [31][33] Question: What is the expected growth trajectory for the first half of fiscal 2026? - Management expects the semiconductor business to remain flat until significant growth begins in the second half of the year [42] Question: How does the company view the impact of trade restrictions on its market share in China? - Management acknowledged losing share due to increased restrictions but emphasized strong performance in segments where they can compete [55][56]

Core Insights - AMD is entering a new growth era driven by its leadership in technology and AI, with a long-term revenue CAGR target exceeding 35% and a non-GAAP EPS target above $20 [1][12] - The company emphasizes its broad product portfolio and strategic partnerships, positioning itself to lead in high-performance and AI computing [2] Product Leadership and Momentum - AMD's ROCm™ open software has seen a 10x increase in downloads year-over-year, indicating strong developer engagement [4] - The AI PC portfolio has expanded 2.5x since 2024, with AMD Ryzen™ powering over 250 platforms, and is expected to achieve up to 10x performance gains with next-generation processors [5] - AMD has secured over $50 billion in design wins since 2022 in its embedded segment, positioning itself for AI-driven growth from cloud to edge [6] Technology Leadership - AMD is extending its innovations in chiplet design, packaging, and interconnect technology to enhance AI performance and efficiency [7] - The AMD Instinct™ MI350 Series GPUs are the fastest ramping products in the company's history, with significant deployments by leading cloud providers [8] Long-Term Growth Targets - AMD aims for a greater than 60% revenue CAGR in its data center business and over 80% CAGR in data center AI [12] - The company expects to achieve more than 50% market share in server CPUs and over 40% in client revenue market share [12] - AMD plans to exceed 70% revenue market share in adaptive computing and expand its embedded segment opportunities [12]

Nvidia has signed a €1 billion partnership with Deutsche Telekom to set up an "AI factory" in Munich that aims to boost Germany's AI computing power by 50%. https://t.co/9BCWKD8jWv ...