Close menu




August 28th, 2023 | 07:00 CEST

AI hype soon over? Deutsche Bank, NVIDIA, Globex Mining

  • Mining
  • Gold
  • Investments
  • chips
  • AI
Photo credits: pixabay.com

In September 2022, NVIDIA and Deutsche Bank announced an innovation partnership focused on Artificial Intelligence (AI). The goal: to enhance and secure financial services. A lot has happened since last year's announcement. AI is seen as a productivity booster and "the next big thing." The prices of shares such as NVIDIA have also multiplied since then. This even makes partner Deutsche Bank uneasy. We highlight risks and show alternatives.

time to read: 3 minutes | Author: Nico Popp
ISIN: DEUTSCHE BANK AG NA O.N. | DE0005140008 , NVIDIA CORP. DL-_001 | US67066G1040 , GLOBEX MINING ENTPRS INC. | CA3799005093

Table of contents:


    Brodie Sutherland, CEO, Tocvan Ventures
    "[...] One focus will be on deposits near the surface. These would be good arguments for a quick production decision using the low-cost heap leaching method. [...]" Brodie Sutherland, CEO, Tocvan Ventures

    Full interview

     

    NVIDIA: Even AI partner Deutsche Bank remains cautious

    Last week, chip manufacturer NVIDIA scored with outstanding quarterly figures. Quite a few observers had expected that the share could initiate a correction immediately after the figures. The phenomenon of sales following positive company announcements is quite common. However, NVIDIA's results were so good that the stock exploded again. Still, investors should keep in mind that NVIDIA by no means has some sort of monopoly on AI-related sales. The Company produces relevant chips, and computing power is always needed in AI applications. That said, NVIDIA is also far from unrivaled. The billion-dollar subsidies into the chip industry in recent months indicate that there could soon be an oversupply of chips.

    As in the past, subsidies play a decisive role in this. If the state guarantees subsidies, companies need not fear overcapacities, at least in the short and medium term - after all, the investment was low-risk thanks to the state support. If, as is currently the case, several subsidy-driven investments come together, this can lead to oversupply on the market in the long term. Even Deutsche Bank - NVIDIA's AI partner - maintains its Hold rating for the highly sought-after chip stock. However, the German bankers raised the price target to USD 560. Accordingly, there would still be a little more than 20% air to the upside.

    "Adyen Moment" in the chip industry not off the table

    From a chart perspective, the recent hype may have been a flash in the pan - the stock failed to break above the July high. In addition, the market should continue to expect extraordinary things from NVIDIA in the coming quarters. The risk of the Company disappointing investors in the near future is not off the table. The danger of NVIDIA experiencing their "Adyen Moment" remains.

    Globex Mining as a beneficiary of several trends at once

    But where do opportunities even lie in the stock market? One industry that is benefiting from both global subsidies, the nearshoring trend, and digitization and the increased use of AI is the commodities industry. Whereas critical metals, such as the rare earths needed in chips, rechargeable batteries and other modern technologies, used to come predominantly from China, alternative deposits are now moving into the spotlight. The same applies, with some exceptions, to vanadium, lithium and other industrial metals.

    The Canadian company Globex Mining is an investment company with over 200 raw material projects in its portfolio. The unique feature: All projects are located in North America. The trend of nearshoring states that supply chains are increasingly regionalized. Instead of relying on lithium from South America, which may not be mined in an ESG-compliant way and where there may be dependencies on China due to credit, more and more corporate decision-makers prefer suppliers from safe jurisdictions. The US and Canada are among the top choices for products that are also manufactured in North America. Examples include e-cars, semiconductors and products related to regenerative energy.

    Alkali deal creates fantasy - market capitalization of only CAD 45 million

    For about a week, the share of Globex Mining has been on a small upward flight - the Company, which is currently valued at only about CAD 45 million, has gone up by about 10%. The share price increase may also be due to a transaction the Company announced last week. Accordingly, Edison Lithium wants to acquire exploration rights to alkali projects in the Canadian district of Saskatchewan from Globex. The deal calls for a small cash payment of just USD 35,000, but the further details have more potential: In addition to 156,250 shares of Edison Lithium, Globex will also receive a 2% contingency based on sales of any potential commercial production from the properties. Such alkali projects are related to heat storage, innovative battery technology, and application areas such as the glass and paper industries.

    Globex Mining's stock offers access to numerous resource projects around almost all common commodities. The recent exit suggests that more gems remain dormant in the Globex portfolio. Instead of selling the projects, Globex relies on selected partners to develop projects and secures a share of the profits. This business model could attract attention if commodity prices continue to rise. Investors can take a closer look at Globex as a speculative underlying investment - while greed rules around AI and high volatility is to be expected, Globex Mining stands for tangible values, which are somewhat underestimated than overestimated by the market.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by Juliane Zielonka on September 29th, 2023 | 07:00 CEST

    Defence Therapeutics, Schott Pharma, Allianz Group: Focus on Innovation, Growth and Portfolio Optimization

    • Biotechnology
    • Pharma
    • Investments

    According to a recent study, biotech company Defence Therapeutics achieves twice the immune response of conventional mRNA therapies with its Accum® mRNA technology. That translates to fewer side effects and a more effective treatment. According to Precedence Research, the market size for mRNA therapeutics is projected to reach approximately USD 137.59 billion by 2032. It is expected to grow at a CAGR of 13.2% from 2023 to 2032. In order to inject these active ingredients, precision-fit medical vials are required, and Schott Pharma is ensuring this with their IPO launched on the German stock exchange this week, which could bring a valuation of around EUR 4 billion. The Allianz Group, on the other hand, is focusing on consolidation, selling its business in the Middle East and thus flushing around EUR 210 million cash into its coffers.

    Read

    Commented by Nico Popp on September 28th, 2023 | 09:05 CEST

    Germany - Car Country? The exodus begins: Mercedes-Benz, Volkswagen, First Phosphate

    • Mining
    • phosphate
    • Electromobility
    • Energy

    Cars still play a significant role in Germany. Many households have two vehicles, some even more. However, sales of new cars have weakened recently - the question of whether to buy a combustion engine or an electric vehicle, along with inflation, have deterred many buyers. German brand manufacturers are now being attracted to the US. There, they are enticed by subsidies and an intact market. Find out what the latest plans of Mercedes-Benz, Volkswagen, and others entail and which relatively unknown company could benefit.

    Read

    Commented by André Will-Laudien on September 28th, 2023 | 08:05 CEST

    Attention: Extended correction - Buy the right stocks now! Bayer, Viva Gold, TUI, and BASF are on the list!

    • Mining
    • Gold
    • Pharma
    • chemicals
    • travel

    Higher inflation and rising interest rates - this connection should be clear to investors. The interest rate level in Germany has moved from negative territory to 2.77% in the 10-year range, but stocks continued to rise cheerfully. The party led to all-time highs of 16,528 points in July, but the fundamental situation of the companies deteriorated in parallel. Only after repeated warnings from the US Federal Reserve did the explosive NASDAQ also enter a correction. And it continues. Yesterday, the CEO of US investment bank JPMorgan, Dimon, warned that the world may not be prepared for 7% capital market interest rates. He and Dr. Jens Erhardt, the CEO of the asset management company DJE, warn of stronger setbacks on the stock markets. Some stocks have already undergone a strong correction. Here is a brief overview.

    Read