Chips Hitting Record Highs: What Opportunities Lie Ahead in the AI Wave? [Learn Premium Weekly Review]

Interest rate cuts are the year's main storyline for U.S. stocks, capturing the market's attention. On March 6-7 this week, Federal Reserve Chairman Jerome Powell attended the semiannual monetary policy hearing, presenting the current monetary policy and responding to Congress members' questions about economic prospects.

During the House hearing, Powell stated that he expects the U.S. economy to continue growing at a solid pace, and there's no reason to believe that high-interest rates would lead to a recession in the short term. However, he acknowledged the effective fight against inflation, suggesting that monetary easing could start before inflation reaches the 2% target. At the subsequent Senate hearing, Powell emphasized that confidence in an approaching rate cut is near. He clearly recognized the risks of cutting rates too late and noted that if inflation trends align with expectations, rate cuts could and would begin this year.

This week, the broader market faced a slump with Apple and Tesla entangled in negative news, leading to a two-day decline. However, semiconductor stocks rallied on Wednesday, with Nvidia, AMD, and TSMC reaching all-time highs. On one hand, Nvidia's premier event, GTC 2024, is scheduled from March 18 to 21, with the anticipated launch of the B100 GPU stirring market expectations. Additionally, the AI market sentiment remains undeterred by overvaluation fears, staying fervently upbeat. On Thursday, Nvidia was reaffirmed with a 'buy' rating by Mizuho, one of Japan's three banking giants.

However, as semi-companies continue to hit record highs, some analysts are looking beyond chips to other sectors to find the next wave of possible AI beneficiaries.

According to Morgan Stanley’s research, AI training and applications will lead to massive growth in data centers, and investment opportunities may arise in the area of “data center infrastructure.” This includes server rooms, servers, networks, and internet power. The following chart lists the core companies in several important aspects of the data center. Interested partners can pay attention to this.

Analysts point out that multiple factors have recently affected Apple's stock. Lackluster earnings reports, a failure to capitalize on the AI boom timely, competitive pressures on core business activities, and ongoing antitrust lawsuits have cast a shadow over the company since February. Two negative pieces of news have particularly impacted the stock this week:

1) Concerns about iPhone sales in China, with estimates pointing to a 24% drop in the first six weeks of the year.

2) A hefty fine from the EU, as Apple was accused of abusing its dominant position to limit rivals like Spotify in the music streaming market, resulting in a $1.8 billion sanction.

Looking at the latest smartphone shipment volumes in the Asia-Pacific region, while Apple remains at the top, its growth rate is declining.

In the short term, with Apple's stock RSI approaching 20, indicating an oversold condition, there may be room for a rebound.

In the long run, Apple recently announced the abandonment of its decade-long car development project to focus on AI fully. Whether this company, long known for its quality products and experiences, can continue to surprise the market may take a significant amount of time to ascertain.

Since October 2022, we’ve covered various technical analysis methods, including chart patterns, candlestick patterns, and technical indicators, as well as strategies like plotting and identifying trends. We’ve pretty much wrapped up the methods-based content.

Starting this week, we’re kicking off a brand-new series: “Technical Tracking.” This will zoom in on the price movements of popular company stocks, combining all the technical analysis techniques we’ve learned to help you make better investment trading decisions.

Currently, it's in a consolidation phase. From a technical perspective, the short-term trend is weak, a double-top pattern is forming in the weekly chart, and both the MACD and RSI indicators are showing divergent signals. The price is in a bearish channel and is testing support from the upward trend line, with the bulls expecting a rebound and the bears anticipating a possible breach.

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Analysts believe that although PANW's recent downgrade in expectations caused investor panic, AI could drive the company's future growth. Investors should be aware that direct imitation of politicians' investment behavior may be risky due to information lags and uncertainties in company development, and should not blindly follow the trend.