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September 2024 Quarterly Activities Report and Appendix 4C
Advancing global neurodiagnostics with strategic partnerships and regulatory milestones on a pathway to commercialisation
BlinkLab Limited (ASX:BB1) (“BlinkLab” or the “Company”) an innovative digital healthcare company leveraging smartphones, computer vision, Al and machine learning to diagnose neurodevelopmental conditions, is pleased to release its Appendix 4C and Quarterly Activity Report for the period ended 30 September 2024. During the quarter the Company made significant progress towards the launch of its upcoming FDA registration study, which is on-track to commence before the calendar year end.
Highlights
- FDA registration study on track to commence this calendar year.
- Strategic partnerships signed with leading outpatient mental healthcare providers in Europe, for Autism and ADM/
- Several clinical studies in Autism, ADI-D), Frontotemporal Dementia, Functional Neurological Disorders, Spinocerebellar Ataxia, with top European and US institutions are ongoing and results are expected next calendar year.
- Commenced regulatory work towards obtaining ISO/CE mark certifications in Europe to support future commercial launch.
- As at 30 September 2024, the Company had a cash balance of A$5.4 million following the $7 million IPO in April.
Strong progress towards initiation of FDA clinical study later this year for "BlinkLab Dx 1" We are pleased to report that, after a competitive selection process, BlinkLab are in the final stages of appointing a world-recognised Clinical Research Organisation ("CRO"), with a track record of obtaining regulatory approvals for digital healthcare and medical devices, to coordinate our upcoming FDA registration trial.
Throughout the quarter, the Company continued work on finalising the study protocol, engaging with FDA as well as reaching out and interacting with future US based clinical sites that will be conducting the registrational studies. Before the end of CY 2024, we expect to announce the outcomes of this work. We are excited about the progress that our regulatory and development team is making to start the FDA study that we believe will be the largest smartphone based clinical study in the world, in the field of autism diagnostics.
Strategic Partnerships with large European Mental Healthcare Providers
During the past quarter, we announced two major clinical and future commercialisation partnerships with large European mental healthcare providers. Together with Mental Care Group and INTER-PSY, BlinkLab has launched companion clinical studies in ADHD and autism, evaluating whether the Company's technology can enhance diagnostic accuracy and efficiency in clinical settings, with a future commitment to commercialise our products with these partners in Europe upon successful outcomes. With a national network of over 200 clinical centres serving over 100,000 patients annually, these partnerships are a huge endorsement of the BlinkLab smartphone-based tests and the potential to grow successfully outside the US.
Ongoing Work Towards Obtaining European Certifications of BlinkLab Product
As the Company continues to support the activities for the launch of FDA registrational study, the BlinkLab team has also initiated work towards obtaining applicable regulatory clearances to be able to launch the product outside the US.
Under the EU Medical Device Regulation (MDR) 2017/745, the BlinkLab diagnostic platform is classified as a class Ila medical device and will require CE marking of conformity before the device can be launched on the market. The conformity work will include implementation of quality management systems (IS013485 certification), usability engineering, labelling, adherence to general data protection regulation (GDPR), developing appropriate post-market surveillance plan and other activities. This work commenced during the prior quarter, and the Company will be providing ongoing updates as it moves forward towards EU certification and future launch in markets outside the US.
Ongoing Clinical Studies in Other Indications with World Leading Research Organisations
Since listing on the Australian Securities Exchange in April this year, BlinkLab has announced multiple clinical research collaborations with several world-renowned research institutions to conduct studies in mental and developmental conditions outside of autism and ADHD.
The data collected from these studies is fundamental to the Company's diagnostic platform and machine learning models, as distinguishing autism and ADHD from other psychiatric disorders in the real world is difficult due to their multidimensional phenotypes and significant overlap of symptoms and characteristics.
At BlinkLab we are trying to fundamentally change the diagnostic approach by collecting digital phenotype data from the broadest possible range of neurodevelopmental and neurodegenerative conditions. By training the model on large data sets from various diseases, we significantly improve future predictive performance of the BlinkLab application in real-world scenarios.
Click here for the full ASX Release
This article includes content from Blinklab Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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BlinkLab Limited
Investor Insight
BlinkLab’s transformative AI-based healthcare technology is at the forefront of innovations in the global medical field that are quickly gaining traction among keen investors.
Overview
BlinkLab (ASX:BB1) offers a smartphone-based diagnostic platform that leverages computer vision, artificial intelligence (AI) and machine learning (ML). A company started by neuroscientists at Princeton University, Blinklab has developed its novel technology over several years, providing an app-enabled, smartphone-based diagnostic tool for evaluating children with neurodevelopmental conditions such as autism and ADHD.
The app turns a smartphone into a diagnostic tool that helps to conduct remote and rapid tests that can assist in diagnosing neurodevelopmental conditions. BlinkLab’s smartphone app provides a screening tool that can help with diagnoses much earlier than the age that children are typically assessed at present (approximately 5-6 years old). It is also a remote (i.e., accessible) and inexpensive means of beginning the assessment process, which can typically be very costly and take up to multiple years currently.
BlinkLab’s smartphone app facilitates early diagnosis, reduces costs, and improves accuracy.
BlinkLab’s smartphone-based technology, which uses AI and machine learning (ML), makes it attractive to investors. Like other industries, AI is becoming very popular in the healthcare sector. According to Statista, the AI healthcare market is expected to proliferate from $11 billion in 2021 to $187 billion in 2030. The increasing use of AI is driven by advanced ML algorithms, access to data, and use of 5G technology. AI and ML technologies can evaluate and analyze enormous volumes of data faster than humans.
Artificial intelligence, and particularly machine learning, has the potential to serve as the great equaliser for many behavioural healthcare concerns like autism. According to recent data, 97 percent of adults in the United States own a cellular device, and nine in ten own a smartphone. A 2022 Global State of Digital report by We Are Social shows 66.9 percent, or about 5.34 billion, of the world’s population are mobile users. As these percentages continue to rise and internet-powered devices become ubiquitous, access to digital health services can become democratised on a global scale. While autism spectrum disorder (ASD) services are currently restricted to relatively privileged populations, digital solutions powered by emerging data, science, and methodologies can make access to autism therapy more accessible.
Large players are investing in this segment to tap into the vast potential of these new technologies. One such example was Pfizer’s acquisition of ResApp. In October 2022, Pfizer acquired Queensland University startup ResApp Health for $179 million. ResApp developed a smartphone technology to detect respiratory diseases using cough analysis accurately.
Furthermore, big tech companies such as Apple, Amazon, Microsoft and Alphabet are also now venturing into the AI healthcare market.
Company Highlights
- Australia-based BlinkLab (ASX:BB1) is focused on transforming mental healthcare through an AI-enabled smartphone application, a breakthrough technology developed with Princeton University.
- The company’s innovative approach leverages the power of smartphones, AI and machine learning to deliver screening tests specifically designed for children as young as 18 months old. This marks a significant advancement, considering traditional diagnoses typically occur around five years of age, often missing the crucial early window for effective intervention.
- Once approved by regulators, this cutting-edge digital technology is poised to capture the imagination of both investors and major pharmaceutical companies, eager to embrace transformative solutions in healthcare.
- BlinkLab is led by an experienced management team and leading experts in the field of machine learning, autism and brain development, bridging the most advanced technological innovations with groundbreaking scientific research. The company is chaired by Brian Leedman, an experienced biotechnology entrepreneur and founder of ResApp Health, a digital diagnostic company recently acquired by Pfizer.
Key Technology and Applications
Neurobehavioral assays of brain function can reveal fundamental mechanisms underlying neuropsychiatric conditions, but typically require centrally located equipment in a laboratory test facility. Consequently, these tests are often unpleasant for participants, as they often require instruments attached to their face and cannot be used at scale in daily clinical practice, particularly with paediatric patients.
BlinkLab has developed a smartphone-based software platform, known as ‘BlinkLab Test’, to perform neurobehavioural testing that is free from facial instruments or other fixed location equipment.
This AI-based platform is designed to be used at home or in similarly comfortable environments, either independently or with the assistance of a caregiver, while following instructions from the smartphone application. The tests include, but are not limited to, eyeblink conditioning (EBC), which is a form of sensory-motor associative learning, prepulse inhibition of the acoustic startle response (PPI), which measures the ability to filter out irrelevant information through sensorimotor gating, startle habituation, which measures the ability for the intrinsic damping of repetitive stimuli and sensory adaptation, and habituation of the eye blink response, which serve as biomarkers for neurological and psychiatric disorders.
The BlinkLab Test App combines a smartphone’s ability to deliver stimuli and acquire data using computer vision with a secure cloud-based portal for data storage and analysis. In the tests, each audio and/or visual stimulus is presented with millisecond-precise control over parameters such as timing, amplitude and frequency. To maintain participant attention, an entertaining movie of choice is shown with normalised audio levels. Participants’ responses are measured by the smartphone’s camera and microphone, and are processed in real time using state-of-the art computer vision techniques. Response data is then fully anonymised, and transferred securely to the analysis portal. There, BlinkLab’s in-house AI/ML algorithms then perform clustering and statistical analysis to identify the prediction value of the experiment in the particular data set.
BlinkLab Test was initially developed as a prescription diagnostic aid to healthcare professionals (HCP) considering the diagnosis of ASD in patients 18 months through 72 months of age that are at risk for developmental delay. In collaboration with Princeton University in the United States and Erasmus Medical Center in the Netherlands, the company has conducted several trials using BlinkLab Test as an early assessment tool for autism. Autism represents a global challenge, with 1 in 36 children in the U.S. having autism, up from the previous rate of 1 in 44. With no early tests currently available to detect the condition, many children are diagnosed with the condition as late as the age of five.
Blinklab’s mobile app can aid in early detection, facilitating diagnoses as early as two years of age and resulting in earlier personalised interventions and monitoring. The testing process is also far more comfortable than traditional means of diagnoses, as the child can watch their favourite movie or cartoon on the phone, and the app will record their reactions, providing key information on the functioning of the brain.
BlinkLab will be subject to regulatory oversight as a medical device and must clear clinical studies. Previous clinical trials completed by Blinklab have shown impressive indicators of success, achieving sensitivity levels of 85 percent and specificity levels of 84 percent. The company notes that these trials are very similar to those that are required by the United States Food and Drug Administration (FDA) for approval and have shown much higher levels of accuracy compared to currently approved products.
In order for the BlinkLab Test technology to be used as a clinical aid in the diagnosis of ASD, BlinkLab will need to complete a pivotal registrational study, and subsequently apply for FDA registration and reimbursement for the tests. The registrational study intends to recruit up to 500 subjects. Enrolment for this study is expected to begin in 2024, with study completion expected by mid-2025. The potential to participate in a disruptive and scalable AI-powered technology close to regulatory approval should attract attention from big medical technology companies.
Research and clinical studies
BlinkLab engages and partners with research and medical institutions across the globe to further test and develop its technology.
In May 2024, BlinkLab initiated a clinical study in partnership with US-based Turning Pointe Autism Foundation to enroll up to one hundred children previously diagnosed with autism and one hundred children without an autism diagnosis. The data obtained during this collaboration will be used to finalise the data collection and processing algorithms and AI/ML models ahead of the FDA registrational study.
The company is also participating in a clinical study of patients with spinocerebellar ataxias, conducted by Columbia University, New York, to study the effect of aerobic physical exercise on neuroplasticity in adults with spinocerebellar ataxias (SCA).
To further improve and accelerate the diagnostic evaluation of ADHD, BlinkLab forged a major research and clinical partnership with Mental Care Group (MCG) in The Netherlands, the fifth largest outpatient mental health care provider in Europe.
To validate BlinkLab’s platform for the assessment of functional neurological disorder (FND), the company has partnered with Bates College in Maine for a clinical study that aims to characterise the behavioural time course of Pavlovian eyeblink conditioning and acoustic startle habituation. It will validate the BlinkLab smartphone test for use as a remote neurobehavioral testing and diagnostic tool for FND.
At Erasmus University Medical Center, BlinkLab’s smartphone-based remote assessment, including eyeblink conditioning and prepulse inhibition of the acoustic startle reflex, is being used, among other tools, in a clinical study to set-up an overarching at-home testing lab, named the Digital Dementia Lab, to identify, develop and test a variety of digital biomarkers
measuring clinically relevant behaviour for improving early accurate diagnosis of dementia.
BlinkLab is also working with Monash University in Australia to evaluate BlinkLab as a medical device for monitoring the therapeutic effects of ketamine on cognitive processes whereby sensory information is converted into decision making. Results from this study can help facilitate cognitive behavioural therapy outcomes in patients with psychiatric conditions such as depression, schizophrenia, epilepsy, and post-traumatic stress disorder.
BlinkLab also recently signed a partnership for more clinical trialling with INTER-PSY, a large centre in the Netherlands that specialises in autism, offering assistance with diagnostics and treatments. This study also mirrors the study design of the Company’s developing FDA regulatory trial, which will be needed for future approval of BlinkLab Test as an approved diagnostic tool in the United States.
Management Team
BlinkLab is led by an experienced management team and directors with a proven track record in building companies and vast knowledge in digital healthcare, computer vision, AI and machine learning. The company’s chairman, Brian Leedman, is an experienced biotechnology entrepreneur and founder of ResApp Health, a digital diagnostic company for respiratory conditions, which was recently acquired by Pfizer for $179 million before reaching FDA approval for their main diagnostic product.
Dr. Henk-Jan Boele – Founder and Chief Executive Officer
Henk-Jan Boele is an assistant professor of neuroscience at the Medical Center of Erasmus University and a researcher at Princeton University. He obtained his PhD from Erasmus University in 2014. Boele has always been pushing scientific and methodological boundaries, and received numerous government and industry grants in the field of neuroscience.
Peter Boele – Founder and Chief Technology Officer
Peter Boele holds a bachelor’s degree in history and philosophy from Leiden University. He has over 20 years of experience in software development and has worked with Erasmus University, Leaseweb, Kaboom Informatics and Insocial.
Dr. Anton Uvarov – Founder and Chief Operational Officer
Anton Uvarov holds a Ph.D. from the University of Manitoba and an MBA from the Haskayne School of Business. He has rich experience in bio-technology investments with a particular focus on neuroscience and has successfully led several IPOs. He started his career as a biotechnology analyst with Citigroup, US.
Dr. Bas Koekkoek – Founder and Chief Scientific Officer
Bas Koekkoek is an assistant professor at Erasmus Medical Center. Koekkoek has been working at the Department of Neuroscience mainly in the role of rapid prototype of new technology and techniques for neuroscience. He has numerous publications in the area of brain development including Nature and Science journals.
Professor Sam Wang – Founder and Chair of Advisory Board
Sam Wang holds a PhD from Stanford University. He is a professor of neuroscience at Princeton University, has published over 100 articles on the brain in leading scientific journals and has received numerous awards. He gives public lectures on a regular basis and has been featured in The New York Times, The Wall Street Journal, NPR, and the Fox News Channel.
Professor Chris de Zeeuw – Founder and Scientific Advisor
Chris de Zeeuw is chairman of the Department of Neuroscience at Erasmus MC in Rotterdam and vice-director at the Netherlands Institute for Neuroscience in Amsterdam. De Zeeuw has received over 100 grants, including the Pioneer Award from ZonMw and the ERC advanced grant. In 2006, he received the Beatrix Award for Brain Research from Her Majesty the Queen; in 2014, he became an elected member of the Dutch Academy of Arts & Science; and in 2018, he received the international Casella Prize for Physiology.
Tech 5: Tech Earnings Season Kicks Off as Tesla and IBM Report Results
Tech investors navigated a complex landscape marked by political uncertainty and mixed economic signals.
The Bank of Canada cut interest rates by 50 basis points on Wednesday (October 23), and the US Leading Economic Index declined, signaling potential economic slowing. Meanwhile, the US Federal Reserve's Beige Book showed that economic activity was little changed since the last report, with some areas seeing modest growth and others slowing.
Yields for 10 year Treasuries initially rose, leading to a decline in crypto prices and hurting tech stocks, but Tesla's (NASDAQ:TSLA) strong earnings and declining yields later in the week boosted the sector.
Market watchers are now looking ahead to quarterly earnings reports from major tech companies. Stay informed on the latest developments in the tech world with the Investing News Network's round-up below.
1. Bitcoin starts strong, but ends down
The CoinDesk 20 Index (INDEXNYSEGIS:CDI20) started the week up 1.17 percent in 24 hours, with Bitcoin priced at nearly US$70,000 as trading commenced in Asia. The surge corresponded with an increase in open interest for Bitcoin futures, which hit a new record high of US$40.43 billion on Monday (October 21).
Augustine Fan, head of insights at the DeFi infrastructure firm SOFA, told CoinDesk in a Telegram note that day that the current pattern points to growing bullish sentiment in the market.
Meanwhile, the estimated leverage ratio — an open interest-based ratio tracked by CryptoQuant — was showing increased leverage, indicating that traders were starting the week with an appetite for risk.
Bitcoin performance, October 19 to 25, 2024.
Chart via CoinGecko.
However, the upward trend had reversed by Tuesday (October 22), with the weekend's gains disappearing.
As mentioned, rising Treasury yields drove crypto prices down, erasing 2 percent from the sector's total market cap. According to data tracked by CoinGlass, over US$165 million in long positions were liquidated.
Bitcoin exchange-traded funds also recorded their first net outflows in two weeks.
Bitcoin’s price continued to tumble on Wednesday, dropping to US$66,444 following the release of the Fed’s Beige Book data, which shows slow growth in the employment sector and slightly high prices for necessities like food and housing. The data fueled lingering inflation concerns and supported the argument for a smaller rate cut in November.
2. Tesla leaps after quarterly results release
Elon Musk's Tesla showed off its strongest quarterly report in a year after Wednesday's close.
The company produced about 70,000 vehicles and delivered 463,000, exceeding Q2 figures. Its GAAP net income reached US$2.2 billion, surpassing the previous quarter's US$1.5 billion. While total revenue of US$25.18 million saw a slight decrease from Q2, automotive revenue showed year-on-year and quarterly growth, reaching US$20.12 million.
Operating cashflow increased substantially, reaching US$6.3 billion compared to Q2's US$3.6 billion. GAAP earnings per share for Q3 were US$0.62, significantly higher than last quarter and the previous year.
Tesla’s share price has experienced significant swings this year as the company has adjusted timelines for several of its key products, including Full Self-Driving, new vehicle models, its robotaxi program and its humanoid robot Optimus. The National Highway Traffic Safety Administration has also launched several probes into the company’s self-driving technology following a series of traffic accidents involving Teslas.
Tesla performance, October 21 to 25, 2024.
Chart via Google Finance.
Shares ended Wednesday at US$213.65 ahead of the report’s release, down 2.45 percent from the week's start.
However, Tesla jumped by 12 percent in after-hours trading, boosted by the significant difference in cashflow and Musk’s confident forecast of a rise in vehicle deliveries by year's end. The company also confirmed that its timeline for new, affordable models remains on track, with production set to begin in the first half of 2025.
The report sparked a rebound in tech stocks after troubling Beige Book data and a rise in 10 year Treasury yields. For its part, Tesla finished the week up more than 22 percent.
3. IBM's quarterly results fail to impress
Also on Wednesday, IBM (NYSE:IBM) released its Q3 earnings report.
Its performance was driven by a 9.7 percent year-on-year increase in software revenues, with a notable 14 percent contribution coming from Red Hat, a subsidiary acquired by IBM in 2019.
Overall, the tech giant's Q3 revenue saw a modest 1 percent increase year-on-year, reaching US$15 billion, slightly below projected estimates of US$15.07 billion. Adjusted earnings per share showed stronger year-on-year growth of 5 percent, reaching US$2.30. IBM also highlighted its generative artificial intelligence (AI) segment.
"Our generative AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter," said Arvind Krishna, the company's chairman, president and CEO.
"Heading into the final quarter of 2024, we expect fourth-quarter constant currency revenue growth to be consistent with the third quarter, with continued strength in Software. We are confident in our ability to deliver more than US$12 billion in free cash flow for the year, driven by continued expansion of our operating margins," he added.
IBM performance, October 21 to 25, 2024.
Chart via Google Finance.
Shares of IBM fell 5.87 percent to US$219.05 at the opening bell on Thursday. The company finished the week 7.77 percent below its peak price of US$233.01, which came on Wednesday.
4. NVIDIA and TSMC resolve chip design issue
On Wednesday, NVIDIA (NASDAQ:NVDA) announced the resolution of a design problem that delayed the production of its newest Blackwell chips, which were revealed in March and expected to be released sometime in Q2.
CEO Jensen Huang said the flaw was “100 percent NVIDIA's fault” and credited its collaborative partner, Taiwan Semiconductor Manufacturing Corporation (TSMC) (NYSE:TSM), for its assistance resolving the issue.
"What TSMC did, was to help us recover from that yield difficulty and resume the manufacturing of Blackwell at an incredible pace," Huang told an audience in Denmark, where he was launching a new supercomputer built by NVIDIA in collaboration with the Novo Nordisk Foundation and Denmark’s Export and Investment Fund.
The market responded by sending the company’s share price up over 2 percent in the final hours of trading on Wednesday. Shares of NVIDIA are up 2.66 percent for the week, and the company even briefly dethroned Apple (NASDAQ:APPL) as the world’s most valuable company on Friday (October 25) afternoon.
Analysts at Morgan Stanley (NYSE:MS) have projected that NVIDIA could produce up to 450,000 Blackwell GPUs in the fourth quarter. TSMC is NVIDIA's primary chip manufacturer, and its advanced manufacturing technology is crucial when it comes to meeting demand from NVIDIA's long list of customers, which includes tech mega corporations Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META) and Amazon (NASDAQ:AMZN).
TSMC and NVIDIA performance, October 21 to 25, 2024.
Chart via Google Finance.
TSMC’s strong Q3 results, released last week, were largely driven by demand for its manufacturing process, which uses EUV lithography to fabricate chips with higher precision. During a recent presentation for the Potomac Institute for Policy Studies, Rick Cassidy, president of TSMC’s California-based US division, reportedly told listeners that chip yield at an Arizona plant has exceeded that of similar factories in Taiwan by 4 percent.
TSMC is in line to receive US$11.5 billion in US government grants and loans, and it qualifies for a 25 percent tax credit under the CHIPS Act, which will better position it to capitalize on the growing demand for advanced AI chips.
5. Apple exec teases announcement next week
Apple is preparing to drop major news next week, according to Greg Joswiak, the company’s senior vice president of worldwide marketing, who teased a “week of announcement” on X, formerly Twitter, on Thursday morning.
Although no details have been released, Bloomberg reported that the company will likely roll out a line of new AI Macbooks and a newly redesigned Mac mini powered by Apple’s newest M4 chip.
Also next week, Apple is set to update its iOS system with Apple Intelligence, the company's homegrown AI platform. The update will be available for: all Macs with Apple silicon M1 and M2 chips; iPad Pro and iPad Air models with M1 chips or later; and the iPhone 15 Pro, iPhone 15 Pro Max and newly released iPhone 16 series.
The market gave a muted response to the news, which came a day after tech stocks declined on the back of rising 10 year Treasury yields. Some of Apple’s product rollouts earlier this year failed to generate significant consumer enthusiasm, and Apple is lagging behind its competitors in on-device AI capabilities.
By the end of the trading week, Apple's share price had decreased by 1.38 percent, closing at US$231.41.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
12 Generative AI Stocks to Watch as ChatGPT Soars (Updated 2024)
The launch of OpenAI’s ChatGPT created a major buzz around artificial intelligence (AI) stocks.
ChatGPT is an AI chatbot software application that uses machine learning techniques to emulate human-written conversations. A hitherto niche subsector in the AI industry, this technology is called generative AI, and it's been making an impact on myriad industries, including marketing, security, healthcare, gaming, communication, customer service and software development.
While generative AI technology is in its early stages, Reid Menge, co-portfolio manager for the BlackRock Technology Opportunities Fund, sees immense potential.
“ChatGPT is nearly as smart as the human brain today,” he said, “and with the computational horsepower being used to train these AI models, imagine the capabilities of these generative AI services by 2025.”
According to Fortune Business Insights, the generative AI market is expected to grow at a compound annual growth rate of 39.6 percent between 2024 and 2032 to reach an impressive US$967.65 billion.
Although investors can’t directly take a position in privately owned OpenAI, several technology stocks offer exposure to the expected growth in generative AI technology.
Below, the Investing News Network showcases 12 generative AI stocks that stand to benefit the most from the rise in advancements and adoption of AI chatbot technologies and seven smaller generative AI companies that may be perfectly positioned to profit from their advancements.
All market cap and share price data were current as of October 23, 2024.
Biggest generative AI stocks to watch
These 12 tech giants offer investors exposure to generative AI by offering their own chatbots and generative AI products, developing the hardware and software necessary for AI and integrating AI into their product.
1. Apple (NASDAQ:AAPL)
Market cap: US$3.51 trillion
Current share price: US$230.76
Apple is increasingly incorporating AI into its products such as its virtual assistant Siri, and health and fitness tracking apps. The company's approach to AI — Apple Intelligence — emphasizes privacy by building devices that can perform AI tasks directly on the device using their A17 and A18 silicon chips.
Its newest iPhone 16, which launched in September 2024, comes with AI features like writing assistance and intelligent photo features built into the hardware of the device. The new iPad mini, which was released on October 23, was also designed to support Apple Intelligence.
2. NVIDIA (NASDAQ:NVDA)
Market cap: US$3.42 trillion
Current share price: US$139.56
Nvidia is a pioneer and global leader in graphics processing unit (GPU) technology. Nvidia designs specialized chips used to train AI and machine learning models. The company also offers supercomputing processing capabilities to scientific researchers around the world.
While its been well known in computer and gaming spaces for a long time, its focus on the AI sector has been driving its growth in recent years. Nvidia's market value has grown by 135 percent year-over-year and at one point the company even took the title of world’s most valuable company from rivals Microsoft and Apple.
Generative AI's explosive growth is driving the market for chips designed by companies like Nvidia and Marvell (NASDAQ:MRVL), another chip-making giant, and Micron (NASDAQ:MU), a company that makes memory chips, which are another important component to training generative AI systems.
3. Microsoft (NASDAQ:MSFT)
Market cap: US$3.16 trillion
Current share price: US$424.60
After having initially invested at least US$3 billion in OpenAI a few years ago, the technology behemoth Microsoft reportedly committed to investing up to another US$10 billion in the chatbot creator in the years ahead. The company also participated in OpenAI's latest funding round on October 2.
Microsoft built its own AI solutions, Bing AI and Copilot, based on OpenAI's technology. Bing is integrated into Windows 11's taskbar, allowing users to query the chatbot directly with Microsoft's Edge browser, Chrome and Safari. The company also recently partnered with Palantir to provide AI tools to US defense and intelligence agencies.
4. Alphabet (NASDAQ:GOOGL)
Market cap: US$2.01 trillion
Current share price: US$164.48
Alphabet, Google’s parent company, has played an important role in advancing generative AI technology. Its latest AI model, Gemini, is available in three sizes — Nano, Pro and Ultra — to meet various levels of user needs. According to the company, Gemini is "able to efficiently run on everything from data centers to mobile devices."
Alphabet is leveraging generative AI across its business segments. Its AI accelerator chip, TPU v5p, was developed for neural network machine learning and is designed to scale large clusters, reducing the time needed to train large language models. Alphabet's subsidiary, DeepMind, focuses on AI research and development. Its AI system, AlphaFold, won the Nobel Prize in Chemistry on October 9 for its ability to predict the structure of proteins based on a protein's unique amino acid sequence.
5. Amazon (NASDAQ:AMZN)
Market cap: US$1.94 trillion
Current share price: US$184.71
Amazon subsidiary and cloud-computing platform Amazon Web Services (AWS) evolved out of Amazon’s transition from an online retailer to one of the world’s largest technology companies. AWS’s wide range of services includes computing, storage, databases, networking, analytics, machine learning and AI.
AWS has many AI business tools on offer across four verticals: AI services, AI platforms, AI frameworks and AI infrastructure. Generative AI is nothing new to Amazon, as the technology forms the basis of conversational experiences with Amazon’s all-too-familiar Alexa.
Last year, AWS introduced Bedrock, a service that enhances software with generative AI capabilities such as turning text into images or creating text for blog posts, emails and documents. The company has since added more features to the service, including a custom model import feature that allows customers to bring their own models to the Bedrock platform.
6. Meta Platforms (NASDAQ:META)
Market cap: US$1.43 trillion
Current share price: US$563.69
Meta has expressed its commitment to continued research within the generative AI sphere with an open-source approach to its software developments. The giant behind Facebook, Instagram and WhatsApp is one of the most influential companies in tech, sharing ranks with the likes of Microsoft and Alphabet.
In April 2024, Meta introduced its Meta AI, which is built with Meta Llama 3. The AI is integrated into Meta's apps and also exists as a standalone website.
Meta's products use machine learning to streamline Facebook ad campaign generation and help businesses reach the right consumers. Its Q2 2024 quarterly report showed a 21.7 percent increase in ad revenue compared to last year.
Meta CEO Mark Zuckerberg has maintained that increased spending on AI infrastructure is necessary to maintain its competitive position. The company has been implementing cost-saving measures to offset these investments and balance the financial impacts of its AI initiatives.
7. Tesla (NASDAQ:TSLA)
Market cap: US$682.55 billion
Current share price: US$213.65
The automotive company that brought self-driving cars out of sci-fi and into reality is now on a mission to develop advanced, generative autonomous vehicles using the massive amounts of data collected from its cars. One of Tesla's goals is to develop a fully self-driving vehicle, but the company is also working on other AI initiatives like a bi-pedal autonomous Tesla Bot.
While the roll-out of Tesla’s self-driving technology has run into issues in the US, it was given the green light to begin testing the software in a pilot program in Shanghai on June 14. In July 2023, the company said it was spending "north of a billion dollars" from mid-2023 until the end of 2024 on Dojo, a supercomputer that collects the data and uses it to train generative AI models that Tesla vehicles use to operate.
Tesla CEO Elon Musk created a separate AI company called xAI, formed with the intent of using generative AI to "understand the meaning of the universe." It is currently working on a large language model called Grok that can "answer almost anything" and even prompt users to ask specific questions. Musk suggested Tesla could invest in xAI and use Grok, but this would need to be approved by Tesla's board and could be a conflict of interest.
8. Oracle (NYSE:ORCL)
Market cap: US$479.67 billion
Current share price: US$173.10
Oracle is a tech company that's been around since the 1970s. In the early 2000s, it began buying up other software companies, and today it is one of the leading providers of cloud-based database management software. Its Oracle Cloud Infrastructure (OCI) Generative AI service was released on January 23.
The software uses Cohere’s platform to allow businesses to incorporate large language models into software they're already using. Oracle has been involved in a long-term partnership agreement with Nvidia to provide generative AI solutions to complex issues. At the Oracle CloudWorld conference on September 11, Oracle announced the first supercomputer to reach "zettascale" performance, capable of 1 billion trillion calculations per second. The buildout will use as many as 131,072 Nvidia Blackwell GPUs.
9. SAP (NYSE:SAP)
Market cap: US$271.27 billion
Current share price: US$234.59
SAP is a software company out of Walldorf, Germany, with a line of generative AI products that aid companies in resource planning. In September 2023, the company released Joule, a natural language generative AI assistant designed to streamline tasks and improve workflow. Joule is available in SAP’s complete cloud portfolio and can be seamlessly integrated into the company's entire line of business AI offerings.
To further research how cloud technology can support AI applications, SAP has been collaborating with UC Berkley's Sky Computing Lab. The company was also recently recognized as one of the world’s most sustainable companies in 2024 by TIME Magazine and data firm Statista.
On September 12, SAP acquired WalkMe, a software company that provides a digital adoption platform that provides step-by-step instructions for an application.
10. Cisco Systems (NASDAQ:CSCO)
Market cap: US$224.33 billion
Current share price: US$56.28
Multinational digital communications firm Cisco Systems is a leader in IT and communications networks. The company has a large portfolio of multi-cloud products and applications, alongside strong relationships with Azure, AWS, Nvidia and Google Cloud.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. Cisco has also brought to market new generative AI tools for IT professionals, including its own AI Assistant.
11. Adobe (NASDAQ:ADBE)
Market cap: US$213.51 billion
Current share price: US$485.03
Adobe has a suite of design software that makes up its Creative Cloud platform and began rolling out AI-powered software with machine-learning capabilities in 2022. In March 2023, the company launched its generative AI iteration, Adobe Sensei GenAI, which features a list of services designed to improve marketing and content creation workflows. The AI tool is now part of its Adobe Experience Cloud.
In March 2024, Adobe and Microsoft joined forces to merge Adobe’s Experience Manager Sites capabilities with Microsoft Copilot, enabling users to harness the power of Adobe Firefly generative AI directly within Microsoft Word. In June, Adobe and TikTok signed an agreement to add TikTok's music to Adobe Express and give TikTok users access to Adobe's Symphony Assistant which uses AI to aid the creative process.
12. IBM (NYSE:IBM)
Market cap: US$214.4 billion
Current share price: US$232.75
IBM reportedly has one of the world’s largest AI research programs. The multinational tech company offers various AI solutions for cloud computing, IT operations, customer service, business automation, natural language processing and more. The MIT-IBM Watson AI Lab, a collaborative effort between the two establishments, works to advance research in healthcare, security and finance.
On September 4, the company sold its IBM QRadar SaaS assets to cybersecurity firm Palo Alto Networks (NASDAQ:PANW). IBM has also been working with the Defense Advanced Research Projects Agency to build tools capable of defending AI models from cyberattacks.
Other generative AI stocks to watch
The following companies have not yet reached the market capitalization of our top 12, but are each worth billions of dollars and have made some amazing achievements in generative AI technology in their own right, making them interesting prospects for investors.
In alphabetical order, they are:
- C3.ai (NYSE:AI), a company providing software as a service product to the financial and oil and gas industries. Its partnership with Alphabet allows C3.ai generative AI applications to be available on Google Cloud.
- CrowdStrike (NASDAQ:CRWD), a cybersecurity provider that monitors and analyzes Internet activity, detecting threats and blocking attacks with its generative AI-powered security analyzing software, Charlotte AI. This service is available to every Falcon user and provides real-time feedback on a company’s risk landscape.
- DynaTrace (NYSE:DT), a data-analysis company that provides real-time feedback on IT infrastructure for various companies using its generative AI assistant, Davis.
- Juniper Networks (NYSE:JNPR), a company that develops and markets routers, switches, network management software, network security products and software-defined networking technology. In 2021, the company introduced AI services to its networking technology and on January 29 the company unveiled the industry's first AI-Native Networking Platform.
- MicroStrategy (NASDAQ:MSTR), a data warehouse that uses generative AI to provide companies with analytical reports to help them make more informed and lucrative decisions.
- Palantir (NYSE:PLTR), a data-mining platform for government agencies. The company has been working with the US Department of Defense to research and develop generative AI and machine learning technology for national defense.
- UiPath (NYSE:PATH), a software company with roots in Romania and headquarters in New York. UiPath designs robotic process automation software to reduce or eliminate boring or repetitive tasks like data extraction and file management, saving companies in a wide range of industries hundreds of hours thanks to its AI and generative AI software.
FAQs for generative AI
What is generative AI?
Generative AI is an emerging AI technology based on deep learning models and algorithms that can generate text, images or sounds in response to prompts given by users.
What are generative AI examples?
Some of the most notable examples of generative AI are ChatGPT, DALL-E 2, Midjourney, Stable Diffusion, Gemini and Copilot.
OpenAI's DALL-E 2 is an AI system that can create realistic images and art from a description in natural language. Similar to DALL-E 2, Midjourney generates images from prompts. Stable Diffusion is a latent text-to-image diffusion model capable of generating photo-realistic images given any text input. Microsoft's Copilot is a feature of the Bing search engine that leverages the same technology as ChatGPT.
What are the hottest generative AI startups?
According to technology and business magazine e-Week, in addition to ChatGPT creator OpenAI, some of the other leading generative AI startups include Hugging Face, Synthesis AI, Jasper and Cohere.
This is an updated version of an article first published by the Investing News Network in 2023.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
AI Market Update: Q3 2024 in Review
The third quarter proved to be a turbulent period for the artificial intelligence (AI) sector.
It was marked by shifting investment strategies, heightened sensitivity to macroeconomic trends and significant funding injections as the US government aimed to bolster domestic chip production.
With hardware companies generally outperforming their cloud-focused counterparts, concerns are growing about over-concentration and the long-term profitability of AI investments.
Here the Investing News Network explores the developments that influenced the AI landscape in Q3.
Mixed performance from AI stocks in Q3
Amid a wave of quarterly reports from the tech sector, AI stocks experienced volatility, with investors reacting to both promising advancements and lingering uncertainties about the rapidly evolving industry.
This volatility was particularly pronounced in the case of NVIDIA (NASDAQ:NVDA), a bellwether for the entire AI sector. As a dominant player in the AI chip market, NVIDIA's share price movements reverberated throughout the tech landscape. The company’s Q2 earnings report on August 28 led to a drop in its share price as investors became worried by signs of slowing growth; its quarterly revenue growth was 15 percent, compared to 18 percent in Q1.
After the release of NVIDIA's report, Microsoft (NASDAQ:MSFT), Qualcomm (NASDAQ:QCOM) and Dell Technologies (NYSE:DELL) saw their share prices fall as well. NVIDIA shares were on the decline again on September 3 after reports surfaced that the US Department of Justice had sent subpoenas to the company and other firms — the government agency was looking for evidence that NVIDIA violated antitrust laws.
While stock market concentration can result in slower economic growth, Nicholas Mersch, associate portfolio manager at Purpose Investments, wrote in July that the attention toward semiconductor companies is justified.
“Value should be ascribed to those companies that are the most productive in the marketplace,” he said.
Quarterly earnings from chip companies like electronics manufacturer Foxconn Technology (TPE:2354), semiconductor manufacturer Micron Technology (NASDAQ:MU), and chip designers Advanced Micro Devices (NASDAQ:AMD) and NVIDIA beat analysts’ revenue expectations for the third quarter.
Demand for AI chips was cited as the main driver of growth, as was the case when Samsung Electronics (KRX:005930) reported its fastest sales and profit growth since 2021 for the June quarter.
However, results from companies like Arm Holdings (NASDAQ:ARM) and Qualcomm were less inspiring. While these companies reported impressive revenue growth, their earnings outlooks didn’t meet expectations and paled in comparison to giants like NVIDIA, which is forecasting revenue above US$30 billion for Q3.
This disparity in investor sentiment likely stems from several factors. For example, Arm Holdings, despite its crucial role in mobile chip architecture, hasn't capitalized on the AI boom the way companies like NVIDIA and Broadcom (NASDAQ:AVGO), with large and diverse customer bases, have been able to. Meanwhile, Qualcomm's growth prospects have been hindered by a slowdown in the smartphone market, where it faces significant challenges.
The contrast between chip stocks and cloud providers was also evident in the market’s reaction to quarterly reports from Alphabet (NASDAQ:GOOGL) and Microsoft. Alphabet surpassed estimates in Q2, but received a muted response from investors, while Microsoft’s share price dipped by 3 percent due to concerns about declining cloud growth.
AI powerhouses lay out future plans
As AI continues to gain traction, partnerships are emerging as a way for companies to keep moving.
Heading into Q3, NVIDIA CEO Jensen Huang laid out the company's strategy to maintain its dominant position, saying it will focus on expanding partnerships with computer makers and cloud providers.
The importance of strategic partnerships has been further underscored by the success of other industry giants. Microsoft’s success in the AI boom — and certainly its performance in Q3 — can be partially attributed to its business relationships, particularly its early partnership with OpenAI.
Likewise, IBM’s (NYSE:IBM) strategic cultivation of affiliations and software offerings, evidenced by its growing AI book of business, fueled a 4.3 percent increase in its share price in July and a 2.2 percent increase in September.
Apple, which is known for its closed ecosystem, has pursued fewer partnerships than its peers, potentially limiting its future growth in the AI sector. However, the company's recent partnership with OpenAI, geared at integrating ChatGPT into the newest iPhone, hints at a potential shift in its strategy.
While collaborations and other work fueled success for many AI players in Q3, Intel (NASDAQ:INTC) faced significant headwinds, despite its history as a leader in the tech industry. The company lowered its Q3 revenue forecast and announced a 15 percent labor cut alongside suspended dividend payments to fund its chip-making efforts.
Investors sent its share price down 31.74 percent between August 1 and August 5 in response. Intel lost even more ground a month later, when its advanced silicon wafer manufacturing process, Intel 18A, failed chip-making tests conducted by Broadcom. As of mid-October, the company was down about 50 percent year-to-date.
Intel CEO Pat Gelsinger presented investors with a plan to improve the company’s financial situation in September, including plans to establish its Foundry business as an independent subsidiary and a new partnership with Amazon Web Services to produce AI fabric chips using Intel 18A. The company has also reportedly been approached with acquisition offers from Qualcomm and Apollo Global Management, although no deal has been confirmed.
Will AI be profitable in the long term?
As mentioned, while some AI companies thrived during the third quarter, concerns persist among investors about the sector's long-term profitability. A prime example of this dynamic emerged just one day after Taiwan Semiconductor Manufacturing Company (NYSE:TSM) posted its results for the second quarter on July 18.
A tech selloff ensued as investors, perhaps motivated by profit taking ahead of an anticipated interest rate cut, rotated out of mega-cap tech stocks and into small-caps and other sectors.
This selloff, while potentially driven by short-term strategies, demonstrated how sensitive the AI sector remains to external factors and broader market trends. “We're concerned about the plunges of the Nasdaq and chip stocks. It's not just a short-term thing, which we see could consolidate downwards for the next two to three months,” Allen Huang, vice president at Taipei's Mega International Investment Services, told Reuters at the time.
An August 5 rout that wiped out about US$1 trillion in market capitalization from tech’s mega-cap companies also underscored the AI sector’s sensitivity to macroeconomic events.
However, as Fortune's Geoff Colvin later pointed out, “most of the major names in the chip-manufacturing industry (not companies like NVIDIA that design chips but don’t make them) defied the panic and rose.”
This is not to say that chip stocks are immune from external market risks. The potential for product delays and supply shortages introduces another layer of complexity for investors assessing the long-term viability of AI.
Reports of potential design flaws in NVIDIA's Blackwell chip series surfaced in early August, raising concerns about the delays that could impact major companies like Google, Meta (NASDAQ:META) and Microsoft. All three of these companies have heavily invested in NVIDIA to help build out their AI infrastructure.
Tech companies are allocating a significant portion of their AI spending to data center construction. These buildouts, and indeed the sheer amount of energy AI consumes, have drawn criticism from environmental groups.
Even tech companies have been vocal about the need for an energy breakthrough to power the AI buildout, reigniting talks of using nuclear energy. To that end, in September Microsoft signed a 20 year power purchase agreement with Constellation Energy (NASDAQ:CEG) to revive Three Mile Island (TMI) Unit 1.
With that in mind, some analysts have suggested that overlooked utilites stocks might be a good alternative investment, offering a less volatile way for investors to gain exposure to the AI boom.
As Fortune's Leo Schwartz said in August, "AI is the new gold, but you can't mine it without energy. And that could offer an edge to retail investors eager to buy into the trend.”
Investor takeaway
Looking head to the fourth quarter, expectations for the AI sector remain high. In its mid-year outlook, BlackRock points to data center buildouts as one of five forces that will stimulate investment in Q4.
“We see two scenarios where equities can do well: one with a concentrated group of winners in AI, even with a tough macro backdrop, and another where AI-driven growth becomes more broad-based, leading to productivity gains and sharp rate cuts,” said the firm, before emphasizing the impact of macroeconomic factors.
“The two hard economic landing scenarios differ on whether central banks can come to the rescue with rate cuts," it continues. A fifth scenario involves subdued growth, sticky inflation and higher rates.
The persistent threat of inflation and recession has weighed on markets all year. Investors will be closely monitoring the US Federal Reserve’s signals on potential interest rate cuts as it gears up to meet in November.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
Hemlock Semiconductor Secures US$325 Million to Boost US Polysilicon Production
Hemlock Semiconductor (HSC) is set to enhance its operational capacity in Michigan, US, after the announcement of a preliminary agreement for a US$325 million grant from the Biden administration.
According to a Monday (October 21) press release, the funds will be allocated to HSC as part of the government's broader efforts to strengthen the US semiconductor supply chain under the CHIPS and Science Act .
The multimillion-dollar investment will support the building of a new manufacturing facility at HSC's existing site in Hemlock, Michigan, making it a critical player in the US semiconductor supply chain. The initiative is also poised to boost the state’s economy by creating close to 180 manufacturing jobs and 1,000 construction jobs over time.
The new facility will produce and purify hyper-pure polysilicon, which is key for semiconductor manufacturing.
“Polysilicon is the bedrock of semiconductors,” said US Secretary of Commerce Gina Raimondo.
Founded in 1961, HSC is currently the only US-based manufacturer of hyper-pure polysilicon.
The proposed investment marks the company’s first major expansion in over two decades, and is anticipated to significantly boost its production capabilities as demand for advanced semiconductor technologies increases.
“HSC is proud to be a manufacturing powerhouse for two vital industries of the future — semiconductor and solar,” said HSC Chairman and CEO AB Ghosh in the same announcement.
"Bolstered by the CHIPS Act, we are planning for a once-in-a-generation investment in advanced technologies to continue serving as a top polysilicon supplier to the leading-edge semiconductor market,” he added.
National Economic Advisor Lael Brainard also highlighted the significance of the HSC investment in reinforcing Michigan’s status as a leader in innovation and manufacturing. “Today’s announcement with HSC establishes a critical capability in the supply chain for semiconductors, solar, and AI here in America,” she commented.
The funding includes a commitment of US$5 million to support the development of the local workforce. HSC has established partnerships with educational institutions, including Delta College and the Saginaw Career Complex, to create training programs aimed at preparing workers for careers in semiconductor manufacturing.
HSC is dedicated to promoting sustainability as well, and has collaborated with state authorities to promote low-carbon initiatives geared at reducing emissions associated with polysilicon production.
Overall, the CHIPS and Science Act has earmarked over US$36 billion for semiconductor manufacturing across the country with the intention of generating approximately 125,000 jobs through various initiatives.
The proposed funding reflects the administration’s commitment to revitalizing the US semiconductor industry, which has seen extensive outsourcing over the past few decades.
Don't forget to follow us @INN_Technology for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
Tech 5: TSMC, ASML Post Quarterly Results; Amazon, Google Sign Nuclear Power Deals
Chip stocks faced losses early this week, sparking volatility in the tech sector.
Meanwhile, Bitcoin was on the rise after US Vice President Kamala Harris said she plans to support innovation in the cryptocurrency industry. Elsewhere, Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) signed nuclear power deals.
Stay informed on the latest developments in the tech world with the Investing News Network's round-up.
1. Bitcoin price rises to nearly US$70,000
The price of Bitcoin rose above its 200 day moving average late on Sunday (October 13) evening, reaching US$62,640 on the back of optimism over China’s recently announced stimulus plan. The popular cryptocurrency's gains extended into Monday (October 14) morning, and it eventually surpassed US$66,400 for the first time since late July.
Bitcoin performance, October 12 to 18, 2024.
Chart via CoinGecko.
Data from CoinGlass shows over US$100 million in liquidated short positions due to the sudden price jump.
Open interest in Bitcoin futures has surged to an all-time high, indicating strong institutional participation and raising expectations for a continued price rally. Bitcoin exchange-traded funds also saw record inflows of over US$250 million every day this week, further fueling bullish sentiment among sector participants.
Crypto analyst Omkar Godbole has suggested that the recent breakout could signal a significant upswing. The US$70,000 mark is now being eyed as Bitcoin's next major resistance level, while Ether's next hurdle lies at US$2,770.
Bitcoin closed the week at US$68,362, while Ether finished the period at US$2,663.
US election speculation also impacted Bitcoin this week.
On Monday evening, Harris pledged to support a regulatory framework for crypto, although the news was somewhat dampened as she didn't share a detailed plan. Even so, that didn’t stop Ripple Labs co-founder Chris Larsen from donating US$1 million worth of XRP tokens to Future Forward, a super PAC supporting Harris’ run.
2. Chip stocks stumble on export cap reports
A Monday afternoon report from Bloomberg revealed that the US government is considering capping sales of advanced artificial intelligence (AI) chips from American companies to certain countries.
Sources familiar with the matter said the move would be made in the interest of national security, and that officials are focused on countries located in the Persian Gulf, including the United Arab Emirates and Saudi Arabia.
Both nations have invested heavily in AI, with the United Arab Emirates' Mubadala Investment Firm making significant contributions to Anthropic, and Saudi Arabia establishing a US$40 billion investment fund focused on AI.
NVIDIA and AMD performance, October 14 to 18, 2024.
Chart via Google Finance.
Shares of NVIDIA (NASDAQ:NVDA) fell by over 4 percent on Tuesday (October 15), the day after the report’s release.
Only a day earlier, the company reached its highest closing value since June, driven by positive chip industry sentiment. Shares of AMD (NASDAQ:AMD), one of NVIDIA's top rivals, also fell by over 4 percent on Tuesday morning.
According to Bloomberg, officials from the Bureau of Industry and Security, a spokesperson for the White House National Security Council and representatives from Intel (NASDAQ:INTC), AMD and NVIDIA have declined to comment.
3. ASML's Q3 results fall flat
On Tuesday, ASML (NASDAQ:ASML) mistakenly released its Q3 results one day ahead of schedule, revealing that it has lowered its total net sales guidance for 2025 to 30 billion to 35 billion euros.
The company also missed revenue expectations for the quarter by more than half, prompting a nearly 16 percent decline in its share price for the week and erasing roughly US50 billion from its market cap.
"While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness,” said ASML CEO Christophe Fouquet in a press release.
ASML performance, October 14 to 18, 2024.
Chart via Google Finance.
The impact of ASML's results sent shockwaves through the semiconductor industry, as ASML is a key supplier to many of the world's largest chipmakers. Shares of ASML's major customer, Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE:TSM), also fell about 3.3 percent in early trading on Tuesday. Intel, which has already seen its market share dwindle this year, and Samsung (KRX:005930) also saw their share prices fall by over 2 percent each.
Analysts have attributed ASML's lowered expectations to several factors, including slower-than-expected demand for logic and memory chips and potential export controls in China. “Logic foundries are ramping up new nodes at a slower pace than expected, and ASML is seeing little capacity additions in memory so far,” Morningstar's Javier Correonero wrote on Wednesday (October 16), cutting his fair value estimate for ASML shares from 900 euros to 850 euros.
4. TSMC raises revenue growth target
TSMC posted better-than-expected Q3 results on Thursday (October 17), raising its revenue target for the fourth quarter of the year to the US$26.1 billion to US$26.9 billion range.
Its Q3 earnings increased by 39 percent year-on-year to roughly US$23.5 billion, representing growth of nearly 13 percent compared to the previous quarter. Net income also increased by an impressive 31.2 percent. Investors sent the company’s share price above US$200 for the first time this year on Thursday morning ahead of the release.
TSMC and ASML performance, October 14 to 18, 2024.
Chart via Google Finance.
“Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies,” said Wendell Huang, senior vice president and CFO of TSMC. “Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies."
Shares of TSMC's two biggest customers, NVIDIA and Apple (NASDAQ:AAPL), also received a boost following the release of the report. Apple’s share price opened 1.75 percent higher when the markets opened on Friday (October 18), rising 2.66 percent for the week. NVIDIA, which suffered a setback at the start of the week, opened 2.63 percent higher ahead of the report’s release on Thursday morning. NVIDIA's share price is up 1.11 percent for the week.
5. Google, Amazon sign nuclear power deals
Last month, Microsoft (NASDAQ:MSFT) announced plans to source energy for its data centers from nuclear power, signing a multi-year purchase agreement with Constellation Energy (NASDAQ:CEG). Now, Google and Amazon are the latest Big Tech companies to look to nuclear power to meet their growing energy needs.
On Monday, Google signed an agreement to purchase nuclear energy from several small modular reactors (SMRs) that will be developed by Kairos Power. The deal is part of Google’s efforts to reach its ambitious net-zero goals.
The first SMR is set to come online by 2030, with additional deployments scheduled through 2035.
Amazon made a similar announcement on Wednesday, signing three agreements with Energy Northwest, Dominion Energy (NYSE:D) and X-Energy to support the buildout of SMRs in Virginia and Washington.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
TSMC Posts Strong Q3 Performance Despite US Export Ban Probe
Global chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE:TSM,TPE:2330) reported strong Q3 results despite ongoing controversies over alleged violations of US export controls.
The company's consolidated revenue for the quarter reached 759.69 billion New Taiwan dollars, up 39 percent year-on-year, while its net income rose 54.2 percent to total 325.26 billion New Taiwan dollars.
In US dollar terms, TSMC's Q3 revenue came in at at US$23.5 billion, a 36 percent year-on-year rise.
Wendell Huang, senior vice president and CFO of TSMC, said on Thursday (October 17) that a key driver of the firm's Q3 success was strong demand for its advanced 3 nanometer and 5 nanometer technologies.
These cutting-edge manufacturing processes, used in the production of chips for smartphones and artificial intelligence applications, accounted for a significant portion of the company’s wafer revenue.
In addition, advanced technologies — defined by TSMC as 7 nanometer and more advanced processes — generated 69 percent of the tech behemoth's wafer revenue during the quarter.
Looking ahead to the year's final quarter, TSMC expects continued demand for its advanced process technologies to drive revenue growth. The company’s management has provided a financial outlook that anticipates Q4 revenue of between US$26.1 billion and US$26.9 billion, reflecting further growth compared to the third quarter.
While TSMC’s financial performance continues to impress, the company is currently the subject of a US Department of Commerce investigation that is seeking to establish whether TSMC is working with Chinese tech giant Huawei.
The inquiry follows concerns that TSMC may be indirectly supplying chips to Huawei through intermediary companies, despite a 2020 ban that restricts the Chinese firm from accessing semiconductors made with US technology.
TSMC has issued a statement affirming its commitment to complying with international regulations. The company has also pledged to take "prompt action" to investigate any potential issues and ensure adherence to US export controls.
TSMC's previous collaboration with Huawei was halted after the US government tightened restrictions on the Chinese company as part of national security measures.
Don't forget to follow us @INN_Technology for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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