Introduction
The stock market has shown remarkable development , with the market index flourishing nearly 15% since the start of the fiscal year, surpassing all expectations. This upward trend demonstrates an opportune moment for investment. As an investor, staying one step ahead of bull markets is crucial, and in order to predict future trends it’s imperative to understand today’s trends.
Tesla (+24.7%)
Tesla continues to attract investors eager to capitalize on its proven potential. The company recently defied Wall Street predictions by delivering an astonishing 443,956 vehicles this quarter, greatly exceeding the expected 438,019. While this discrepancy could lead to questions about the reliability of Tesla’s earnings forecasts, it also signals possible augmentation.
Tesla’s powerful performance this quarter has given investors a new confidence in Elon Musk. Contrary to previous concerns over CEO Elon Musk’s controversial behavior. Tesla’s legendary climb demonstrates the company’s ability to overcome probable past, present, and future setbacks.
Beyond its automotive success, Tesla’s energy storage business is showing itself to be even more promising. In fact, Elon Musk predicts that with deployments more than doubling, the demand in energy storage will outpace the demand in cars this year.
Musk’s optimism is not unprecedented, especially with AI technologies making themselves useful in the energy sector. Currently, AI serves over 50 different functions in energy systems. Some important applications involve: predicting supply and demand as well as managing power grids. Ironically, AI itself is a major energy consumer. Notably consuming 100 kilowatts of electricity – a figure expected to rise as AI technology advances.
Despite Musk’s unpredictable behavior, Tesla has been able to maintain its position among the “Magnificent 7”. For current Tesla shareholders, holding onto the stock is advisable. However, potential new investors might consider waiting for a market correction before buying in.
Overall, I believe Tesla is a Hold.
Advanced Micro Devices (+3.95%)
AMD has recently rebounded from a challenging period. The company’s stock initially faltered due to concerns over a possible data breach. However, AMD has since assured the public that the break-in was no more than a false alarm, comforting AMD investors everywhere and restoring confidence in the company’s security measures. This reassurance has helped AMD become a formidable competitor to well-known microchip markets such as ARM and Nvidia in terms of investor perception.
AMD’s projected growth rate has further fueled investor enthusiasm. The company anticipates a 37% increase by 2030, conceivably reaching a value of $2 trillion by the decade’s end. This projection seems plausible given AMD has beaten it’s quarterly earnings expectations by 25%. The rising demand for AI chips also supports this hopeful outlook.
Albeit Nvidia leads the AI chip market at the moment, AMD is positioning itself as a threatening competitor. The company is ramping up chip production for major clients like Microsoft and Tesla. Although presently behind, AMD shows strong earning potential in the coming years.
Given these factors, AMD remains an attractive investment option. The expanding AI market presents a significant opportunity, and many investors believe AMD is well-positioned to capitalize on this trend.
Overall, I believe Tesla is a buy.
Iren (+16.95%)
Iris Energy (IREN) stock, while momentarily modest in value, has flourished, increasing nearly 17% in the last 5 days. The company recently announced that its expansion plans are fully funded by Bitcoin, making it increasingly likely that Iren would expand its Hartree Energy capacity from 10 exahashes (EH) to 30 EH. This improved capacity is timely given that demand for energy is booming due to advancements in AI technology.
As AI becomes more sophisticated, its energy consumption rises dramatically. Projections predict that by 2026, AI could consume over 1,000 Terawatt hours (TWh), doubling the demand from 2022. This trend, combined with revenue from Bitcoin and other large companies, explains the boom in the energy sector stock.
Most notably, Iris Energy distinguishes itself through its commitment to renewable energy and its partnership with Bitcoin. This unique positioning allows the company to expand, sell, and distribute energy sustainably and efficiently.
Overall, I believe Iren is a Buy
Overall Market Outlook
Investors are overjoyed to hear the positive news from these companies, and seek to enter the market as quickly as possible before it’s too late. AI is currently the main market driver, meaning companies that can benefit from AI advancements are particularly attractive. This includes energy sectors, electric car manufacturers, and microchip companies such as the ones mentioned in this post.
Bibliography
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Isar, Asra. “Advanced Micro Devices, Inc. (AMD): One of Phillipe Laffont’s Stock Picks?” Insider Monkey, Insider Monkey, 3 July 2024, www.insidermonkey.com/blog/advanced-micro-devices-inc-amd-one-of-phillipe-laffonts-stock-picks-1320427/.
Lee, Andrew. “Elon Musk: Tesla Energy Storage Now Growing ‘Much Faster than Car Business.’” Recharge, 4 Jan. 2024, www.rechargenews.com/energy-transition/elon-musk-tesla-energy-storage-now-growing-much-faster-than-car-business/2-1-1588464.
Rozite, Vita, et al. “Why AI and Energy Are the New Power Couple – Analysis.” IEA, 2 Nov. 2023, www.iea.org/commentaries/why-ai-and-energy-are-the-new-power-couple.
Shen, Timmy. “Iris Energy Raised $413 Million to Fund Bitcoin Mining Expansion.” The Block, The Block, 2 July 2024, www.theblock.co/post/303072/iris-energy-raised-413-million-to-fund-bitcoin-mining-expansion.
Smith, Howard. “Why Tesla Stock Continued to Surge Higher Today.” The Motley Fool, The Motley Fool, 2 July 2024, www.fool.com/investing/2024/07/02/why-tesla-stock-continued-to-surge-higher-today/.
Vincent, James. “How Much Electricity Does AI Consume?” The Verge, 16 Feb. 2024, www.theverge.com/24066646/ai-electricity-energy-watts-generative-consumption.
Zherebetska, Olena. “Ai in the Renewable Energy Market [50+ Statistics].” Intelliarts, 17 June 2024, intelliarts.com/blog/ai-in-renewable-energy-market-statistics/#:~:text=50%20use%20cases%20of%20AI,of%20up%20to%20%2413%20billion.
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