November 26th, 2024 | 07:10 CET
Super Micro Computers, F3 Uranium, MicroStrategy – Why technologies like AI are shaping our energy future
Data centers for artificial intelligence (AI) and cryptocurrencies are driving global energy consumption higher, even as the world faces the challenge of climate change. Technologies such as Bitcoin mining and AI applications are extremely energy-intensive, and demand for them is expected to increase significantly by 2030. In this context, nuclear energy is gaining importance as a virtually CO₂-free power source. However, the downside is that the demand for uranium to fuel reactors is growing rapidly, while supply remains limited. Experts are predicting a new bull cycle in the uranium market – a development that could have a lasting impact not only on investors but also on the energy transition.
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
SUPER MICRO COMPUT.DL-_01 | US86800U1043 , F3 URANIUM CORP | CA30336Y1079 , MICROSTRATEG.A NEW DL-001 | US5949724083
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
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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Super Micro Computer – Turbulence and opportunities for recovery
After significant challenges in 2024, Super Micro Computer (SMC) remains the focus of investors. Delays in filing key financial reports and the loss of auditor Ernst & Young had put the stock under severe pressure. A decline of more than 67% in the share price led to a temporary low, but recent steps by the Company, including the appointment of BDO USA as its new auditor and the submission of a compliance plan to Nasdaq, are cause for cautious optimism. Securing the stock market listing remains essential to regain market confidence.
Despite operational uncertainties and renewed accusations regarding accounting practices, SMCI has recently benefited from positive external stimuli. Partnerships, such as the collaboration with Nvidia in the field of AI servers, strengthen the market position in the long term. Nvidia CEO Jensen Huang recently reaffirmed the importance of the cooperation, which contributed to a short-term recovery in the share price. SMC's advanced server water cooling system in data centers is significantly more efficient than air cooling, as water dissipates heat much better and can thus reduce the energy consumption for cooling by up to 80%. This is an enormous saving for data center operators.
If the AI boom continues, this will also provide long-term support for SMC's stock. Nevertheless, the question remains whether the Company can maintain its technical and strategic advantage over competitors such as Dell or Hewlett-Packard. Analysts have mixed views on SMCI. While the delays in the 10-K report and uncertainties about internal controls continue to weigh on the stock, some market observers see an attractive opportunity for investors willing to take risks. However, the price increase of over 100% following the auditor appointment shows potential. The current price is USD 34.97.
F3 Uranium – Financing secured
The global uranium supply is facing a growing crisis: rising prices are meeting with tight supply, and geopolitical tensions, particularly Russia's export restrictions to the US, are exacerbating the situation. Delays in mine production and supply chain problems are creating further bottlenecks. At the same time, demand continues to rise due to the expansion of nuclear energy and the energy needs of AI data centers. Despite higher uranium prices, the shares of exploration and development companies are lagging. The US, in particular, is facing a uranium supply shortage. F3 Uranium could provide a solution here.
The PLN project of the Canadians, strategically located in the Athabasca Basin, is developing into a promising asset in the uranium sector. The 42,961-hectare project includes three properties, PLN, Minto and Broach, known for their high-grade uranium deposits. In particular, the JR zone on the PLN property has emerged as the Company's central focus, complemented by exploration activities in the neighbouring A1 and B1 shear zones. The Company's potential to develop new high-grade deposits is underscored by ongoing drilling programs aimed at expanding resources. The geological characteristics of the B1 shear zone also indicate significant further opportunities.
F3 Uranium recently announced the results of its drilling at the JR zone. A total of 13 drill holes were examined as part of the ongoing drilling program, including hole PLN24-161, which returned 10.5 m grading 2.66% U3O8. Within this interval, a high-grade inclusion of 2.0 m averaging 12.0% U3O8 was identified, extending to an ultra-high-grade core of 0.5 m of 20.7% U3O8. Another drill hole, PLN24-184, intersected significant mineralization over 13.5 m. The successful private placement generated CAD 8 million in revenue for the Company. These funds will be used to further develop exploration activities. The share is currently trading at CAD 0.24.
MicroStrategy - Bitcoin as a foundation
MicroStrategy, the Company led by Michael Saylor, has catapulted itself to the forefront of the crypto market by making massive investments in Bitcoin. The strategy is bold and divides opinions among investors. Formerly a provider of business intelligence software, the Company underwent a radical shift in 2020: its focus is now on Bitcoin. With around 331,200 Bitcoin, the Company has effectively become an investment vehicle for the cryptocurrency. This holding was financed through equity, bonds, and share issues. Saylors' strategy of taking advantage of Bitcoin's fluctuations has catapulted the Company to the forefront of tech-heavy securities this year alone.
A crucial point for investors is the valuation of MicroStrategy's shares. While the Bitcoin holdings represent about USD 35 billion, the Company's market capitalization is significantly higher. This "premium" reflects the market's optimistic expectations, but it also carries risks. Critics such as Citron Research warn that MicroStrategy is increasingly acting like a speculative fund. The issuance of new shares and rising debt would increase the risk, especially if the Bitcoin price were to drop dramatically. In addition, the traditional software business now contributes less than 1% to market capitalization, illustrating the Company's dependence on the crypto market.
Despite remarkable share price increases – the stock has seen a gain of over 500% in 2024 – MicroStrategy remains a risky investment. Betting heavily on Bitcoin could bring long-term profits, but it also involves significant uncertainties. In particular, the refinancing of existing debt and the possible market correction pose risks. Investors should also consider the speculative nature of the stock, as the value is far higher than the Company's actual Bitcoin holdings. The price drop of over 25% last Thursday shows how volatile the value is. Currently, the stock is trading at USD 439.53, bringing the market capitalization to almost USD 95 billion.
Technological innovations are increasingly influencing the energy future: Super Micro Computer shows how efficient AI servers and partnerships with Nvidia could reduce energy consumption in data centers. At the same time, F3 Uranium is exploring promising uranium projects to meet the growing demand for CO2-free nuclear power. Both companies are addressing the growing energy demand through AI-based technologies. At the same time, MicroStrategy remains a pioneer in the crypto world with its Bitcoin-focused strategy, but is heavily dependent on the market's volatility. Together, these companies illustrate that technological developments and energy supply are closely linked and will play a decisive role in shaping our future.
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