September 3rd, 2024 | 07:00 CEST
AMD, VCI Global, Dell - The AI favorites after Nvidia
The event of the past trading week was chip giant Nvidia's quarterly figures. Once again, the US giant exceeded expectations. Nevertheless, investors were disappointed, as expectations were too high. Following the exaggerated share price rally of recent months, quite a few experts are advising investors to focus on AI companies with more favorable valuations. In addition to established corporations, smaller companies stand out, particularly those with innovative business areas that could experience a similar upward trend.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
ADVANCED MIC.DEV. DL-_01 | US0079031078 , VCI GLOBAL LIMITED | VGG982181031 , DELL TECHS INC. C DL-_01 | US24703L2025
Table of contents:
"[...] 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
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Dell - Impressive figures
One of the dinosaurs that still has some catching up to do when it comes to artificial intelligence is the technology company Dell, which was founded in 1984. Over the decades, it established its original business in the areas of development, sales, repair and support of computers and related products and services.
Due to the AI hype, the Company, founded by Michael Dell, is experiencing a renaissance, reflected in the second financial quarter figures. Sales of AI-optimized servers rose by 23% to USD 3.2 billion. Group revenue grew by 9% to USD 25 billion and exceeded analysts' estimates.
Operating income was USD 1.3 billion, while non-GAAP operating income was USD 2 billion, up 15% and 3%, respectively. Diluted earnings per share rose to USD 1.17, an increase of 86%. Non-GAAP earnings per share increased by 9% to USD 1.89.
Following the figures, Dell shares rose by over 5% and overcame the striking horizontal resistance at USD 113.68. The next short-term price target will likely be closing the price gap at USD 132.29.
VCI Global - Insiders are buying here
In recent weeks, the diversified holding company VCI Global, which focuses on consulting, fintech, AI, robotics, and cybersecurity through its subsidiaries, has made several significant announcements. The Company, headquartered in Kuala Lumpur, Malaysia, and also traded in Frankfurt, is currently valued at just under USD 14 million in market capitalization. In contrast, VCI Global reported a total turnover of USD 13.7 million for the first six months, which corresponds to growth of 44% compared to the previous year.
Gross profit also increased by 57% to USD 12.9 million in this period, while net profit rose by 25% to USD 5.4 million. VCIG's income from corporate strategy consulting exploded, multiplying by 151% to USD 11.2 million.
Given the apparent undervaluation of the incubator, management approved the implementation of a share buyback program for up to USD 10 million of the Company's outstanding ordinary shares over the next two years.
CEO Dato' Victor Hoo has also increased his stake, which is a huge vote of confidence in his own company. His stake has climbed from 12.05% to 27.32% of the outstanding shares.
The share, still relatively unknown, is currently trading at EUR 0.15. However, if the Company continues on its positive trajectory, the discrepancy in the Company valuation should gradually even out. Interested investors should, however, not overlook setting a buy limit given the stock's low market liquidity.
AMD - Trend reversal in sight
Of course, chip manufacturer AMD was able to benefit from the AI hype of recent months. Nevertheless, it was nowhere near the performance of NVIDIA. Since the beginning of the year, the share price has only performed just under 2% to USD 148.56. Since the annual high on March 8, 2024, when the share price stood at USD 227.30, AMD shares have corrected by a whopping 35%.
Currently, the share price is close to its striking support area of USD 145, which could represent a new trend reversal area. Positive signals are coming from the Relative Strength Index, which is on the verge of generating a buy signal at a value of just under 50. The trend-following indicator MACD has also formed positive divergences, which could indicate a rebound.
The recent announcement that the US group will acquire server manufacturer ZT Systems for USD 4.9 billion could provide a significant boost, as it aims to gain further market share in the massive graphics processor market. AMD is thus consistently pursuing its strategy of inorganic growth. Only around four weeks ago, the Finnish AI developer Silo AI was acquired for around USD 665 million. In the recent past, AMD also added the chip developer Xilinx and Pensando Systems to its portfolio.
Dell was able to shine with strong quarterly figures and overcame a technical resistance level with its rise. AMD is also showing signs of recovery following another acquisition. Outstanding figures and a purchase by the CEO are likely to boost the momentum of VCI Global shares further.
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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.
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