To The Moon

Shares of several semiconductor companies surged on Monday, significantly outperforming the broader market as AI infrastructure spending moved into the fast lane.These companies are strategically positioned in the AI space, and the market expects industry demand to continue to climb in the coming quarters.Key performers are as follows:

1. $SUPER MICRO COMPUTER INC(SMCI)$ led the way, with shares jumping 7 percent

   • AI server market expected to grow at 30.3% compound annual growth rate

2. Industry leader $NVIDIA Corp(NVDA)$ rose 2%.

3. Other AI chip-related companies

   • $Advanced Micro Devices(AMD)$ $Broadcom(AVGO)$ $Marvell Technology(MRVL)$ up 3-4%.

   • $Intel(INTC)$ up nearly 5%.

   • $Qualcomm(QCOM)$ and $ARM Holdings Ltd(ARM)$ are modestly up about 1%.

4. $Taiwan Semiconductor Manufacturing(TSM)$ is up nearly 2%.

   • Benefiting from continued foundry demand for AI solutions, as well as recent ex-factory price increases that customers have accepted.

But the reasons for the rise in these companies may still be different

• AMD and SMCI, which previously didn't keep up with this rush around the NVDA stock split, now have some catch-up factor.

• QCOM and ARM fell sharply after their earnings reports, and it is clear that some investors are not in favor of them, preferring to chase up the strongest companies in the industry.

• TSM is at the very bottom of the supply chain, so its changes will have a much bigger impact, as will $ASML Holding NV(ASML)$ .

Demand for AI hardware continues to grow

1. Strong demand from data centers and cloud service providers

   • Surge in demand for AI servers and high-performance computing devices

2. Increased demand for device AI for PCs and smartphones

   • Research firms predicts annual AI PC shipments could more than triple by 2028

   • AI PCs are expected to increase from 19% of total PC shipments this year to 70%-80% by 2028

3. AI infrastructure investment accelerates

   • Microsoft, Google, Amazon, and other tech giants dramatically increase AI capital expenditures

   • North America's major cloud service providers' capital expenditure is expected to increase from $140 billion in 2023 to $200 billion in 2024

4. Industry Outlook:High Growth of AI Server Market

   • Global AI server shipments are expected to increase from 1,205,000 units in 2023 to 2,369,000 units in 2026 at a CAGR of 25

5. Surge in demand for high-speed connectors

   • Demand for high-speed backplane connectors and I/O connectors continues to grow in the AI era as data transfer rate requirements increase dramatically

6. Diversified computing power development

   • Accelerated iteration of product technologies such as AI servers and high-speed switches; market demand drives sustained business growth of related companies