June 6th, 2023 | 07:00 CEST
AI hype - Keep a cool head now: NVIDIA, AMD, Altech Advanced Materials
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"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
NVIDIA: Can 49 analysts be wrong?
If almost 50 analysts agree, there must be something to it. Many investors are currently thinking like this and are betting on NVIDIA shares. The chip manufacturer, which has so far scored points primarily with its fast graphics cards and has made gamers' hearts beat faster, also wants to take a big slice of the AI cake. The chances of this are good: computing power is computing power. NVIDIA already profited during the crypto hype as mining hardware and will now profit again. The Company has raised its outlook and is very optimistic about the future. Contradiction on the part of analysts was largely absent. As Handelsblatt writes, 49 analysts are currently convinced by the share. But what is the short-term outlook for NVIDIA?
After the strong rise after Whitsun, the stock took a short breather. In European trading, it is important to keep an eye on the high of EUR 371. Currently, there are signs of a minor correction. But as is the case with hype topics, this could only be short-lived. The high number of skeptics and pessimists suggests that only a few investors have actively followed the price rally of the past weeks and are therefore standing on the sidelines. No matter how rapid the price trend has been, the hype can continue. Barclays analyst Blayne Curtis believes that prices of USD 500 are possible this year.
AMD: The second tier is also expensive...
The AMD share has already corrected somewhat more strongly. However, the chip manufacturer should also benefit significantly from the AI trend. Based on earnings expectations for 2023, the share is already very expensive, with a P/E ratio of 179. Although profits could be higher, this does not make the stock a bargain by any means. However, since AMD is well positioned in the area of chips for data centres, which are essential for AI applications, and had a good growth forecast in this area even before the hype, the share is interesting. While NVIDIA and AMD are big names, Taiwan's TSMC should also benefit. The world's largest contract manufacturer of chips is technically up to date and also produces for NVIDIA and Intel. Above all, the share is comparatively cheap.
Altech Advanced Materials: Future Made in Germany
Just as TSMC is a hidden champion in the chip industry, Altech Advanced Materials is an insider tip for modern power storage and batteries. The Company from Heidelberg specializes in the coating of graphite anodes and thus manages to convince in terms of capacities, durability and safety. The Company is currently working on a pilot plant in Schwarze Pumpe in Saxony and wants to convince customers with the products manufactured there. In addition to technology for batteries for electric cars, Altech is also active in the field of large-scale storage with its CERENERGY technology. The principle can be broken down to the slogan "common salt instead of lithium" and is thus very promising, especially in times of scarce raw materials and the growing importance of a green footprint of all processed raw materials.
Altech Advanced Materials is already closely networked with industry and cooperates, for example, with SGL Carbon and the silicon specialist Ferroglobe. A feasibility study for battery material coating is currently in the final phase and the first factory buildings in Schwarze Pumpe have been rented. There is a purchase option for an adjacent plot of land in order to be able to ramp up production if required. By 2024, the European battery industry aims to achieve a production capacity of 500 GWh and thus become less dependent on Asia. This will require around 500,000t of anode material, which Altech plans to produce. The first test material is to be delivered to potential customers this year. The share is a success story on both a six-month and one-year horizon. Recently, the value corrected somewhat, which is not surprising given the rapid rise. Investors should keep the Company in mind. The stock could also show promise again soon.
In a market phase where many investors consider investing in chip stocks, it makes sense not to lose sight of other future trends. The independence of German industry from Asia is one of the most urgent tasks of the coming years, just like the energy transition. Altech Advanced Materials scores with promising technology and existing contacts to large industrial companies. The current consolidation phase can be a great opportunity for all investors who first analyze calmly and only then invest.
Conflict of interest
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