A widening gulf in earnings power between Tech and the rest of the S&P 500
Chart below shows how 2024 earnings expectations for the mega-cap tech and the rest of tech and rest of S&P 500 have been evolving throughout 2023. Source: Barclays, The Market Ear
The tech and AI trade is very crowded. The net long positioning on the Nasdaq 100 by asset managers and leveraged funds is at a record high
Source: Haver Analytics, Rosenberg Research
Breaking down the AI semiconductor ecosystem:
While $NVDA gets most of the attention, AI is additive to most of the semiconductor industry. Source: Eric AITechInvesting
Big tech has notched over $200B in profits in 2023 so far
To see how massive they are, this comparison of their market caps vs. the private tech sector (unicorn valuations) makes it quite clear. Source: CB Insight
The 50 most visited AI tools
Image by Writerbuddy, Sujan Sarkar
The S&P 500 technology sector's relative strength versus the broad market is at its highest level since March 2000
Source: Charlie Bilello
A picture is worth 10,000 words...
By: Raman Khanna
High R&D spending does NOT guarantee growth and/or high shareholder returns
The chart below courtesey of Eric | AI & Tech Investing shows semiconductor companies ranked by R&D over the last 12 months. $INTC $QCOM $NVDA $AMD $TSM lead the way. Intel has spent over $100B in R&D over the last decade. Despite that, they have the 2nd lowest shareholder return of all these companies (see addt'l chart below). Intel has generated $52.9B in revenue over the last twelve months. A decade ago, Intel generated $52.4B in revenue. An important cautionary tale for investors: R&D doesn't guarantee growth. Source: Eric | AI & Tech Investing
