Stock prices of artificial intelligence (AI) related stocks super microcomputer (NASDAQ:SMCI), applied materials (NASDAQ:AMAT)and C3.ai (NYSE:AI) They rose 6.1%, 6.9% and 6.2%, respectively, in Friday trading.
These stocks had no company-specific news to mention today. But in general, artificial intelligence stocks continue to rise on the back of a solid flow of news about the outlook for AI, and the outlook for AI is looking increasingly positive.
Today’s news includes the Biden administration’s bullish announcement on Chip and Science Act grants and the news that OpenAI founder Sam Altman is looking to raise an astonishing amount of funding for an AI-related chip venture. Contains breaking news.
$5 billion for chip research, trillions for OpenAI?
On Friday, the Biden administration announced it would invest $5 billion in a public-private research and development consortium for chipmakers. The purpose of this consortium, funded by his bipartisan CHIPS Act of 2022, is to accelerate innovation in chip manufacturing and U.S. workforce development while taking responsibility for AI chips. Commerce Secretary Gina Raimondo said in her announcement:
This is a tipping point for the industry…not just because we are dangerously dependent on one country for so many chips, but because AI is driving the demand for more chips, more sophisticated chips, more energy. Because it will increase explosively. -Efficient chip, cost effective chip.
While it’s difficult to determine the direct benefit to any particular company, it could be a boon for Applied Materials, one of the world’s largest semiconductor equipment providers and one of the most diversified businesses. be. Last year, Applied announced his multi-year $4 billion investment in EPIC, his in-house R&D research platform.
It’s unclear whether Applied will be directly involved in the government consortium, but it’s possible that Applied will receive subsidies for some of its spending. It’s also likely that new government-funded research and education centers will purchase more Applied Materials equipment for their labs.
In addition to the new CHIPS Act funding announcement, the entire AI ecosystem was shocked by last night’s surprising events. wall street journal OpenAI founder and CEO Sam Altman is reportedly seeking $5 trillion to $7 trillion in funding for a major overhaul of the global semiconductor manufacturing industry.
Yes, that’s right. Trillion.
The project aims to increase the number of AI chips produced worldwide. Altman, the current leader in the AI field, argues that OpenAI’s progress is being held back by a lack of powerful AI chips needed to accelerate OpenAI’s innovation and growth.
Altman is clearly trying to change this on his own, but that would be a pretty big undertaking for a single company, much less a “startup” like OpenAI. So there are huge financial numbers flying around, with potential investors including oil-rich governments such as the United Arab Emirates.
The huge increase in the global chip manufacturing sector will likely be a boon for Applied Materials and also for super micro computers, which have carved out a niche as the go-to server platform for AI infrastructure.
It’s unclear how this news will directly impact AI software maker C3.ai, but the story appears to be a boost for most companies involved in the AI ecosystem.That includes even Nvidiarose more than 3.5% today, even though Altman’s move may be aimed at building a replacement chip for Nvidia’s dominant graphics processing unit (GPU).
The AI boom may have just begun
There’s already been a lot of movement in these stocks, but most of the gains from last year and this year seem to be a given. AI chips remain in short supply, posing a significant challenge for businesses and governments around the world. As such, both industry leaders and governments continue to invest heavily in AI chip manufacturing, which is likely to benefit these AI stocks.
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Billy Duberstein has positions in Applied Materials and Super Micro Computers with the following options: January 2025 $110 Put on Super Micro Computers, Short January 2025 $125 Put on Super Micro Computers, 2025 Put short $130 on Super Micro Computer in January 2025, call short $280 on Super Micro Computer in January 2025, put $85 short on Super Micro Computer in January 2025. His clients may own shares in the companies mentioned. The Motley Fool has a position in and recommends Applied Materials and Nvidia. The Motley Fool recommends C3.ai and Super Micro Computer. The Motley Fool has a disclosure policy.
Why Super Micro Computers, Applied Materials, and C3.ai came together today was originally published by The Motley Fool.
