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The AI Investing Pulse

February 13th, 2025

In this week’s edition:

1. Analysis - The AI infrastructure stocks powering the future

2. Stock Ideas - SoundHound AI, the future of voice tech

3. News - Alibaba stock: The AI revolution, what’s next for investors

4. Startups - AI Agents - Licence to kill SaaS startups

5. Trends - Discover the future of stock analysis

6. Other News - New AI research tool launched by OpenAI

The AI Infrastructure Stocks Powering the Future

This week, we take a closer look at the hardware and infrastructure stack of AI, the engine and chassis of AI. It has drawn significant attention following the DeepSeek news, and despite recent challenges, companies remain committed to investing in the latest technologies to maintain a competitive edge.

Each layer plays a vital role, semiconductors provide the raw processing power, cloud platforms scale it globally, manufacturing equipment drives chip production, and data and storage solutions optimise data flow. Together, they form the AI infrastructure stack, driving the next wave of innovation.

However, stock performance across the sector has been mixed this year. While some companies are thriving, others face short-term headwinds, reflecting the volatile nature of the AI infrastructure space.

We explore some of the leaders and emerging players from each key category of the AI infrastructure ecosystem.

1. Semiconductors – The Engine of AI

Semiconductors are at the heart of every AI system, driving data processing, real-time inference, and model training. These chips determine how fast and efficiently AI applications can function, powering data centres, autonomous vehicles, and edge devices.

• Nvidia (NVDA) – Market Cap: $3.2T | YTD Performance: -2.3%
  Nvidia’s H100 and A100 GPUs are essential for large-scale AI models. Its CUDA ecosystem is the industry standard for AI computing, making Nvidia the leader in GPU-based AI processing.

• AMD (AMD) – Market Cap: $181B | YTD Performance: -7.5%
  AMD’s MI300X GPU is gaining traction as a competitive alternative to Nvidia’s offerings, expanding its presence in AI data centres.

• Astera Labs (ALAB) – Market Cap: $13.9B | YTD Performance: -33.9%
  Astera Labs focuses on connectivity solutions, helping reduce bottlenecks in data centres by enabling efficient communication between high-performance AI chips and memory systems.

• QuickLogic (QUIK) – Market Cap: $108M | YTD Performance: -37.3%
  QuickLogic designs low-power AI chips for edge computing, enabling real-time sensor data processing for wearables, IoT devices, and smart home systems.

2. Manufacturing Equipment & Chip Production – Building the Chassis

Manufacturing AI chips requires precision technology and advanced tools. Companies in this space enable the fabrication and quality control of cutting-edge semiconductors.

• TSMC (TSM) – Market Cap: $1T | YTD Performance: +4.5%
  TSMC is the world’s largest semiconductor manufacturer, producing chips for Nvidia, AMD, and Apple.

• ASML (ASML) – Market Cap: $293B | YTD Performance: +9.1%
  ASML dominates the market for EUV lithography machines, which are critical for producing high-performance AI chips.

• Onto Innovation (ONTO) – Market Cap: $8.3B | YTD Performance: +1.2%
  Onto Innovation provides inspection and metrology solutions, ensuring precision and yield in semiconductor manufacturing.

• Camtek (CAMT) – Market Cap: $3.9B | YTD Performance: +7.8%
  Camtek specialises in high-precision inspection, supporting advanced chip production with quality control systems.

3. Cloud Infrastructure – The Backbone of AI at Scale

Cloud infrastructure provides the compute power, storage, and connectivity needed for AI model training and real-time performance. These platforms allow businesses to scale AI models without investing in physical hardware.

• Amazon Web Services (AWS) – Amazon (AMZN) – Market Cap: $2.4T | YTD Performance: +4.3%
  AWS is the global leader in cloud infrastructure for AI, offering scalable services.

• Microsoft Azure – Microsoft (MSFT) – Market Cap: $3T | YTD Performance: -3%
  Azure powers AI-driven applications like ChatGPT, with deep integration into Microsoft’s enterprise tools.

• Vertiv (VRT) – Market Cap: $41.7B | YTD Performance: -2.1%
  Vertiv provides data centre infrastructure solutions for power, cooling, and connectivity, ensuring high-density cloud environments remain reliable.

• Grid Dynamics (GDYN) – Market Cap: $1.9B | YTD Performance: +2.2%
  Grid Dynamics focuses on cloud-native AI services and digital transformation, helping enterprises migrate to the cloud and implement AI solutions.

4. Storage & Data Solutions – Optimising Data Flow

AI generates massive volumes of data, requiring fast and scalable storage solutions to ensure smooth data flow between processors and applications. These solutions are critical for maintaining real-time performance and enabling large-scale AI model training.

• Seagate Technology (STX) – Market Cap: $21B | YTD Performance: +14.9%
  Seagate is a leader in high-capacity storage solutions, supporting large-scale AI workloads and managing vast datasets.

• Pure Storage (PSTG) – Market Cap: $21.9B | YTD Performance: +9.5%
  Known for high-speed flash storage, Pure Storage is essential for preventing data bottlenecks during AI model training and real-time analytics.

Why AI Infrastructure is Crucial

A strong AI infrastructure is the backbone of innovation. Despite mixed performance this year, these companies remain critical in enabling AI advancements. Some stocks may face short-term challenges, but the long-term potential of this sector is immense, with businesses continuing to build the capabilities required for scalable AI.

As AI continues to evolve, companies that lead in semiconductors, cloud services, and data solutions will play a pivotal role in shaping the future. Keeping a close eye on these developments is essential for understanding the next wave of growth and innovation in AI.

_{Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices.}

TOP AI STOCKS

TOP AI ETFs

AI STOCKS IDEAS 

SoundHound AI, the future of voice tech? - Mivalle

One quantum computing stock to watch right now - The Motely Fool

The AI powerhouse reshaping industries and investor portfolios - HPBL

AI STOCKS & ETFs NEWS 

Alibaba stock: The AI revolution, what’s next for investors- SmartP - Alibaba is integrating AI across its cloud computing, e-commerce, and logistics operations to transform its business model.

DeepSeek’s R1 model creates an uncertain investment landscape for AI - Forbes - DeepSeek’s R1 model is being heralded as a formidable rival to proprietary systems like OpenAI’s GPT-4 and Google’s Gemini.

Cathie Wood is betting big on these 2 AI stocks - 24/7 Wallst - Cathie Wood’s comeback could continue through the year as most of her Ark Invest funds come roaring back alongside the tech trade.

Workday unveils new Agent system of record to manage AI workforce - ERP - Workday's Agent System of Record centralises the management of AI agents, offering tools for onboarding, role definition, real-time monitoring and compliance.

3 ETFs for cybersecurity investors as AI-driven threats grow- Benzinga - AI manipulation as a result of cyber and technology risks have emerged as primary threats to business growth.

AI STARTUPS

AI Agents - Licence to kill SaaS startups- Sifted - Potentially omnipotent and sometimes even useful: AI agents are blooming like never before, with good reason.

AI investment soars to US$110B in 2024 as startup funding declines - TECHEDT - AI investments hit $110B in 2024, soaring 62% as tech startup funding drops 12%. The U.S. leads, but Europe lags.

AI chip startup Positron raises $23.5 million seed round to take on Nvidia -  Reuters - Positron says its chips use less than a third of the power of Nvidia’s top-of-the-line H100 graphical processing units, while maintaining the same performance.

AI TRENDS

Discover the future of stock analysis - SmartP - Traditional methods of stock analysis are evolving. AI-driven algorithms have begun to play a pivotal role in accurately predicting stock price movements.

AI Agents are coming for your industry: Here's who's first in line- Forbes - Every industrial sector will be impacted by agentic AI, but some will be quicker to adopt it than others.

OTHER

New AI research tool launched by OpenAI - digwatch - Deep research, powered by an upcoming OpenAI model, generates detailed reports by analysing online sources.

Sam Altman on how life will change once AGI steals your job - BGR - The CEO gives us his incredibly optimistic view of what AGI and AI agents will mean for the world in the near and more distant future and what life might be like.

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_{Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice.}