A few charts worth discussing
“There isn't a lot of data tracking how GLP-1s are impacting consumer behaviour yet, but the survey work is starting to show some persistence in trends like more exercise and more nutritional support.”
“We’re losing our best and our brightest. Canada needs to find a way to stop the brain drain. Taxes and incentive structures for businesses are levers we should be considering.”
“Fundraising for private alternatives has slowed significantly over the past year as alternative managers have increased their focus on retail investors to fill their funding gaps.”
Other charts worth pointing out
Top 10 U.S. companies by decade – % of market concentration over time
Top 10 U.S. companies by decade – market share retention
S&P 500 Index – P/E vs. P/FCF
Historical U.S. IPOs
Short interest by sector – current vs. historical
# of trading days to go from $500 billion to $1 trillion in market value by company
30-day trailing return percentile by factor
Global equity and debt securities outstanding
Global bond market by sector
U.S. equity sector weights since 1790
Cross-asset total returns by decade
Asset class inflows since 2008
Chip stocks race towards biggest gains since dotcom era on AI demand
A roughly 75 per cent gain since the start of the year has left the Philadelphia Semiconductor Index, which tracks 30 of the world’s biggest US-listed chip manufacturers, on track for its largest annual return since 1999, according to Bloomberg data.
The index has gained more than $5tn in market value over the past two months — about 1.5 times the value of the UK’s flagship FTSE 100 index — on the back of increasingly optimistic bets on chip manufacturers’ future earnings.
Prices for the chips that underpin AI, as well as the manufacturing equipment required to fill new chip factories around the world, have surged as suppliers struggle to match soaring demand from Silicon Valley giants.
Meta, Alphabet, Amazon and Microsoft have together set aside $725bn to spend on the data centres and physical equipment needed to power the AI era this year.
Bank of America strategists this week reiterated their “high conviction in continued AI [infrastructure] strength”, writing in a note to clients that tight supply and “under-appreciated sovereign, enterprise and industrial demand” were likely to propel further growth.
AI labs OpenAI and Anthropic, both of which operate at a loss as they spend heavily on data centres, are expected to fetch valuations in excess of $1tn when they go public later this year.
“It’s gung ho, folks,” JPMorgan chief Jamie Dimon told a conference on Tuesday. “There’s a lot of exuberance out there. Right now it’s good.”
But he noted similar periods of exuberance before the market downturns in 1972, 1986, 2000 and 2007. “That doesn’t give me comfort,” Dimon said.
This year’s rally has been driven by a handful of stocks beyond the Magnificent Seven — Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla — which accounted for the bulk of the US stock market’s gains in the years after the release of OpenAI’s ChatGPT in 2022.
Nvidia remains the world’s biggest public company, with a market capitalisation of $5.1tn.
Yet a trio of the chip giant’s competitors — Intel, AMD and Arm — have massively outpaced Nvidia’s stock market gains this year. Their performance has been driven in part by the anticipation that the AI infrastructure market is diversifying away from Nvidia’s graphics processing units towards central processing units.
Intel’s shares smashed an all-time high set during the dotcom bubble after it gave a bullish outlook for CPU demand in April’s earnings. Its fortunes reversed after the US government stepped in to take a 10 per cent stake in the company last year, as well as an injection of billions of dollars in investments from Nvidia and SoftBank.
Shares of AMD, Nvidia’s chief competitor, have meanwhile risen more than 120 per cent in the year to date after it struck major chip supply deals with Meta and OpenAI.
SoftBank-backed Arm has surged more than 160 per cent on a bold strategic shift into offering its own chips to compete with Nvidia’s, rather than designing the underpinnings of other vendors’ hardware. Memory chip stocks have also been big beneficiaries, as demand from data centres creates a global shortage. Two high-bandwidth memory chipmakers, Micron and SK Hynix, joined the small group of companies valued above $1tn on successive days this week.
This week’s fun finds
UK’s Oldest Candy Shop Has the Same Bestselling Sweets After Nearly 200 Years
Calling all candy lovers: Have you ever tried pear drops or humbugs? The 1820s-era treats aren’t staples at the average U.S. candy store, but at The Oldest Sweet Shop in Pateley Bridge, England, they’ve been bestsellers for nearly 200 years.
Founded in 1827 and located in a 400-year-old building, the establishment is the size of an average living room, Ben noted. In 2014, it was named the oldest candy store in the world by Guinness World Records, although in 2020 it was dethroned by Japan’s Ichimonjiya Wasuke, which dates back to about AD 1,000.
The shop has remained virtually unchanged since it first opened, boasting large glass jars on dark wooden shelves and the original cash register — which was rescued by the previous owner, Keith Tordof, after he recognized it in an antique store.
