Quick Read NVIDIA shares dropped from last week and are now underperforming broad semiconductor ETFs by 15% this year. Hyperscaler CapEx from Microsoft, Amazon and Alphabet continues to drive demand for Nvidia GPUs. There continues to be worry that NVIDIA faces pressure from programs like Amazon’s Trainium and AMD’s upcoming MI450. Yet, AMD shares fell dramatically after issuing earnings on February 4th. A recent study identified one single habit that doubled Americans’ retirement savings and moved ...

Core Viewpoint - Chip stocks, particularly those involved in artificial intelligence (AI), are not as overvalued as previously thought, providing potential investment opportunities within ETFs like QQQ and QQQM [1] Group 1: Semiconductor Stocks - Semiconductors are crucial for AI developments, leading to increased interest in ETFs that include chip stocks [1] - Nvidia, the largest holding in QQQ and QQQM, represents nearly 9% of these ETFs and continues to innovate in AI solutions, indicating strong fundamentals [1] - Broadcom, another significant holding, is experiencing accelerated growth in its AI chip business, driven by high demand for its products, particularly Google's TPU chip [1] Group 2: Investment Outlook - Despite being growth funds, QQQ and QQQM still offer value through their semiconductor holdings, which have attractive fundamental outlooks [1] - AMD is also positioned to benefit from AI developments, with expectations of meaningful revenue from its MI450 products in the latter part of the year [1]

Core Insights - AMD's stock experienced a significant decline of over 17% despite reporting quarterly earnings that exceeded Wall Street estimates, indicating a disconnect between market expectations and actual performance [1][1] - CEO Lisa Su expressed optimism about the company's future, describing 2023 as a "big inflection year" and highlighting strong demand for AMD's chips, which she stated is "on fire" [1][1] - AMD is preparing to launch its next-generation AI products in the second half of the year, with expectations that revenue from its MI450 chip will begin contributing in Q3 [1][1] Financial Performance - AMD's quarterly earnings surpassed Wall Street estimates, yet the stock still fell, suggesting that investor expectations may have been overly optimistic [1][1] - The company's shares closed around $200, significantly below Wall Street's consensus price target of approximately $276 [1][1] Market Position and Future Outlook - AMD is positioned as a competitor to Nvidia in the AI chip market, with the upcoming launch of its MI450 chip aimed at challenging Nvidia's offerings [1][1] - The data center segment, which is crucial for AMD's revenue, is projected to grow by more than 60% annually over the next three to five years as demand for AI technology accelerates [1][1]

Core Insights - The current reality of AI chips in data centers reveals that significant investments may yield less than 60% of their theoretical value due to power consumption issues [1] - The expansion of computing power is outpacing electricity supply, reshaping the development logic of the data center industry [1] Group 1: Power Consumption Challenges - The disconnection between AI chip technology and actual data center usage is a core issue leading to high power consumption [2] - Many AI chips focus on peak computing power rather than balancing efficiency and power usage, resulting in wasted energy [2] - The rapid increase in computing demand, with a growth rate of 74.1% in 2024, exacerbates the power consumption problem, turning data centers into "power black holes" [3] Group 2: Cooling Technology Innovations - Data centers rely heavily on cooling systems, which account for over 38% of total power consumption, with some cases exceeding 50% [4] - Liquid cooling technology is emerging as a key solution, with three main types: cold plate liquid cooling, immersion cooling, and spray cooling [5][6] - Despite being the most efficient, liquid cooling technology has a low adoption rate of about 10% in the industry [7] Group 3: Market Dynamics and Competitive Landscape - Companies like NVIDIA and AMD are developing customized liquid cooling solutions to enhance cooling efficiency and adapt to high-density computing environments [8] - In China, Shuguang Shuchuang leads the liquid cooling infrastructure market with a 56% share, providing solutions to major internet firms [9] - The overall manufacturing advantage of China is becoming evident in the transformation of data centers, with the manufacturing sector's value surpassing that of the US [10][11][12] Group 4: Future Directions - The future of data centers will prioritize intelligent design over sheer size, focusing on efficient power usage and effective cooling solutions [13]

從供應鏈角度，快速看一下OpenAI預計要自2H26開始部署1 GW的AMD MI450這件事，以及對Nvidia的影響：1. 過去兩週AMD的2026年的CoWoS訂單無顯著變化。2. 部署1 GW的AMD MI450約等於5萬片CoWoS-L。目前AMD的2026年的CoWoS訂單推估6-8萬片 (約80-90%用於MI400系列)，故無論是樂觀或謹慎版本都可滿足佈建1 GW MI450需求。3. 受惠AMD的OpenAI訂單，初步看比較明顯的是HBM與UALink供應鏈。MI450 HBM4主要供應商是Samsung；完整的UALink規格雖要到2027年的MI500系列才能量產，但高訂單能見度會讓相關供應商股價先反應 (如Astera Labs)。4. 從Nvidia做機櫃等級伺服器的痛苦經驗看，部署1 GW的MI450過程應該也不會太輕鬆。Nvidia能做的就是在AMD的機櫃等級伺服器順利出貨前，盡可能把競爭格局提升到另一個層次，確保接下來的優勢，而很明顯的，Nvidia也早就在做了，只要AI算力市場整體是成長的，OpenAI與AMD合作這件事，對Nvidia影響應該有限。 ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The AI industry is witnessing significant developments, including major investments and technological advancements, indicating a robust growth trajectory - Strategic partnerships, such as Microsoft's $17.4 billion agreement with Nebius for AI computing power, highlight the increasing demand for high-performance AI capabilities [5] - The launch of innovative products like the Fellou CE browser and Microsoft's rStar2-Agent demonstrates the ongoing evolution in AI applications and models [6][7] Summary by Sections 1. AI Industry Dynamics - ASML invested €1.3 billion in Mistral AI, becoming its largest shareholder, with a total funding round of approximately €1.7 billion, valuing Mistral at €10 billion, marking it as Europe's most valuable AI company [4] - Concerns exist regarding potential dilution of ASML's shareholder equity and the risk of an AI bubble, but the investment may stimulate chip demand through increased AI applications [4] 2. AI Application Insights - The Fellou CE browser, the first of its kind, integrates interaction, tasks, and memory to automate cross-application execution and multi-modal creation, achieving a 72% success rate in complex writing tasks [6] 3. AI Large Model Insights - Microsoft's rStar2-Agent, a 14 billion parameter mathematical reasoning agent, aims to enhance long-chain reasoning capabilities, achieving cutting-edge performance with only 510 steps of reinforcement learning training [7] 4. Technology Frontiers - NVIDIA announced the Rubin CPX GPU, designed for long-context AI reasoning, featuring 128GB GDDR7 memory and peak performance of 30 PFlops, with a new AI server architecture expected to launch by the end of 2026 [8][9] - AMD's MI450 aims to surpass NVIDIA's offerings in both training and inference across AI and high-performance computing markets [9] - Meta introduced the DeepConf framework for lightweight reasoning, significantly improving efficiency and accuracy in complex reasoning tasks [10] - The REFRAG framework by Meta optimizes RAG model decoding efficiency, achieving up to 30 times acceleration in generating responses while maintaining accuracy [11] - NVIDIA's UDR system allows for customizable research workflows, enhancing the autonomy and practicality of AI agents in enterprise-level document analysis [12]

Group 1: AMD's Market Position and Stock Performance - AMD's stock rose nearly 7% during recent trading and approximately 15% year-to-date, driven by growing investor confidence in its role in the AI chip market [2] - The AI semiconductor industry is expanding rapidly, with Nvidia dominating the market and more than doubling its revenue over the last two years, while AMD focuses on increasing GPU sales rather than surpassing Nvidia [2][3] Group 2: AI Market Dynamics - The AI market has seen significant investments from major tech companies, focusing on performance and training speed for large language models, which has favored Nvidia due to its leading chips and established ecosystem [3] - There is a potential plateau in the rapid enhancements of frontier AI models, leading to a shift towards inference workloads where efficiency and cost become more critical [3] Group 3: Opportunities for AMD - AMD may benefit as not all organizations can afford Nvidia's premium GPUs, leading some to opt for older Nvidia models or AMD's more budget-friendly MI series, which are suitable for inference tasks [4] - The introduction of open-source models like Llama from Meta could enable companies to run AI workloads on-site, reducing reliance on expensive cloud computing, which may also favor AMD [4] Group 4: AMD's Product Developments - At its AI Day event, AMD announced the MI350 series, launching in the second half of 2025, which promises four times the AI compute capacity of its predecessor, along with previews of the MI400 and MI450 chips [5] - AMD is enhancing its AI software and systems stack through acquisitions, positioning itself as a comprehensive AI provider, contrasting with Nvidia's proprietary environment [5] Group 5: Strategic Partnerships - AMD's partnership with Oracle aims to make its MI355X GPUs available through Oracle Cloud Infrastructure, offering over two times the price-performance advantage for large-scale AI tasks [6] Group 6: Competitive Landscape - Cloud providers like Google and Amazon are developing their own custom AI chips, which may limit long-term demand for third-party hardware solutions, while Nvidia may focus on more efficient mid-tier chips as the market shifts [6][7]