OpenAI Out Of Compute! | Nvidia Earnings | Blue Chip Buy Alerts

Your weekly recap to the biggest stories in technology and the stock market.

What is going on investors!

Hope you’re doing well.

Before we jump into today’s newsletter I want to let you know what’s coming.

Next week Equity Empire will (hopefully:) launch. I know many of you have been waiting, and I appreciate your patiences.

This substack will still live on … so let me tell you what to expect going forward.

My goal is to not only make you money - but save you time as well.

Last thing you need is another thing to read.

My goal will be to give you something you’ll want to read because it will help save you time filtering through all the news stories that cross during the week.

On Monday I’ll send you a preview of the upcoming week. Events to have on your radar, things to jumpstart your week investing wise.

On Friday I’ll recap things for you, highlight stories and trends that you’ll want to be aware of.

This will be a free newsletter.

Let’s get into it …

Nvidia Earnings

If you weren’t able to check out my Nvidia NVDA 0.00%↑ earnings video, I covered everything including conference call highlights.

The big takeaway from Nvidia’s not being widely discussed:

• Networking revenues dropped -3% Q/Q and -9% Y/Y

Networking is the system of chips, switches and cables that connect the Nvidia GPUs together. Data centers primarily have 2 options when it comes to networking. Either use Nvidia’s proprietary options - or a Ethernet solution, which is offered by 3rd parties like Broadcom AVGO 0.00%↑ .

Nvidia’s CFO indicated that Networking would return to growth during the next quarter. It’s also believed the large Project Stargate project will use Nvidia’s Spectrum X networking product.

What I hear when I attend conferences with server engineers is that most would rather use 3rd party solutions rather than Nvidia’s proprietary networking solutions.

However, Nvidia will play favorites with the early allocations of Blackwell - shipping them to clients that are also attaching Nvidia’s networking product to the order.

So when you see networking revenues tick up in the upcoming quarters - it’s likely something that will tail off as Blackwell becomes more widely available.

Action Advice: The drop in Nvidia shares and the broader semiconductor industry this week creates buying opportunities. The biggest reason for this is based on the next story …

OpenAI Out of Compute

OpenAi rolled out a new language model.

But it was Sam’s admission he’s out of compute that was interesting.

GPT 4.5 won’t crush benchmarks but is expensive …

Sounds like a big fat loser for OpenAi.

But its a big winner for semiconductor providers.

Both the general public and white beards on Wall Street have zero clue how much more compute is actually needed to serve up these AI systems. The fact that the most well-funded AI startup company in the world is out of compute is stunning.

Action Advice: If you don’t want to cherrypick the winners among the semiconductors, the SMH 0.00%↑ has a slightly better asset allocation (in my opinion) than the SOXX 0.00%↑ to capture the upside that still remains.

Free Robotaxis?

WaPo reported Tesla is planning to launch in California - potentially with a free service.

I posted a short video about it on my social media feeds and one thing is clear …

A segment of the population has no sense of the Autonomous Vehicles (AV) market.

Here’s what you need to know:

AV’s would be everywhere if it wasn’t for slow Government approval.

But the markets are slowly being unlocked. And the reality is, only a handful of markets need to be unlocked for it to be a big business.

Google’s Waymo announced this week they are doing 200,000 paid rides per week … primarily in 2 markets (Los Angeles and San Francisco).

I would assume in 18 months, Miami, Las Vegas, Chicago, etc will unlock.

Tesla plans to launch its own ride-hailing app - not partnering with Uber/Lyft.

Tesla will start by launching in Austin, TX this June. By the end of the year, despite the politics in California - the company should be allowed access to the LA/SF market later this year.

Action Advice: This will quickly become a big story. Google, Tesla, and possibly Amazon will be the winners. Investors assuming Uber/Lyft maintain market share will be mistaken.

Stocks In A Buying Zone

The pullback this week triggered buying zones for several megacap tech stocks.

• Amazon - Watch The Short Video

• Microsoft

• Tesla - Watch the short video

As markets have volatility - the most important thing you can do is pick your buying zones in advance. Stocks could easily fall further, or move higher from here. No one really knows for sure. But without a plan you will be left paralyzed. Plan out those levels this weekend and be prepared.

Hope you enjoyed the weekly recap! Will return again next week. Have a safe, fun and productive week. Thanks again for all your support

Colin

Connect With Me Across Social Media Here: https://lnk.bio/equityempire