May 30th, 2024 | 07:30 CEST
Takeover fever? Nel, Super Micro Computer, Kraken Energy
In the slipstream of Nvidia, the Super Micro Computer share is heading back towards an all-time high. The temporary dip following the strong quarterly figures - which fell short of even higher expectations - has ended, and the share is targeting the USD 1,000 mark. Energy producers are increasingly under the spotlight as the AI boom is set to surge energy demand. The billion-dollar takeover of Atlantica Sustainable Infrastructure by the private equity company Energy Capital Partners is currently underway. It is evident that some of the energy demand will have to be met by nuclear energy, benefiting companies like Kraken Energy, which is developing new uranium deposits in the US. Additionally, takeover speculation has recently driven up Nel ASA's share price, but is the rally already over?
time to read: 3 minutes
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Author:
Fabian Lorenz
ISIN:
NEL ASA NK-_20 | NO0010081235 , SUPER MICRO COMPUT.DL-_01 | US86800U1043 , KRAKEN ENERGY CORP | CA50075X1024
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
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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Super Micro Computer: In the slipstream of Nvidia towards an all-time high
The Super Micro Computer share seems to have overcome its weak phase. In the slipstream of Nvidia, it is on the rise again. After all, the two companies are not only linked by the friendship of their CEOs. They also work closely together operationally, as Super Micro Computer is a leading provider of AI server solutions and data centres and Dell is a major competitor in this area. This share can also benefit from the renewed AI hype.
Super Micro reported strong growth last quarter. CEO Charles Liang: "We had another record quarter with third-quarter revenue of USD 3.85 billion and non-GAAP EPS of USD 6.65 per share. This 200% year-over-year revenue growth and 308% year-over-year non-GAAP EPS growth significantly outpaced our industry peers. Strong demand for AI rack-scale PnP solutions and our team's ability to develop innovative DLC designs have enabled us to extend our market leadership in AI infrastructure." To this end, the annual forecast has been raised. The technology company aims to generate revenue of USD 14.7 billion to USD 15.1 billion in the 2024 financial year (ending June 30) instead of USD 14.3 billion to USD 14.7 billion. However, investors had likely expected a higher increase.
Kraken Energy: Positive news from the Apex uranium project
Whether the data centres are being built by Super Micro or Dell, AI's hunger for energy is one reason why Kraken Energy's shares are attractive. The Company is focused on the development of four high-grade uranium projects in the US - so there is no country risk. All properties are located in the US states of Nevada and Utah. Three projects have already produced uranium in the past, and with new technology and higher prices, a revival is now worthwhile.
Recently, encouraging news was reported regarding the Apex project. The historic Apex uranium mine, which was once the largest uranium mine in Nevada, is now set to be revived. The latest results of radon samples are promising. Strong radon anomalies and high magnetic anomalies were detected, which correlate well with the known high-grade, near-surface uranium mineralization. Kraken CEO Matthew Schwab: "As we approach drilling at the historic Apex Mine, our team continues to generate exciting new uranium targets along the currently outlined 17.5 km mineralization trend on the Apex property. Our team is excited to identify these new priority uranium targets as we continue to advance and explore the Apex property."
Kraken plans to begin drilling as early as August, so this project alone will ensure news flow for the rest of the year. If the upcoming announcements are also positive, the share price, which is currently valued at just CAD 5 million, should soon rise.
Nel: Rally over again?
The Nel ASA share has celebrated a brilliant comeback in recent weeks. In May, the share price shot up by over 50% - despite the onset of profit-taking yesterday. However, the price increase should not be overestimated. Fundamentally, nothing has changed, and a multi-year low was reached before the price jump. It is likely more of a rebound than a trend reversal. The reason for the rally was takeover speculation, triggered by a cooperation in India. The subsidiary Nel Hydrogen Electrolyser AS has concluded a technology license agreement with the Indian company Reliance Industries Limited (RIL). The Indian company will offer Nel's alkaline electrolysers exclusively in India. The two companies will also work together on the development and production of electrolysers. Nothing more, nothing less. But this was enough for the bombed-out share to fantasize about a takeover of Nel.
However, the jump in Nel's share price should not be overestimated. It is clear that the Norwegians - just like Plug Power - have been unable to prove that they can establish a sustainably profitable business model for years. The situation is completely different for AI companies such as Super Micro. The industry is making a fortune. Moreover, more and more investors are realizing that the demand for energy will grow rapidly in the coming years. This should not only benefit renewable energies but also uranium pure plays such as Kraken Energy.
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