US AI Equities: Is Taiwan Semiconductor the Ultimate Winner in Energy Demand?

Demand for AI stocks explodes in the US

As of the beginning of September this year, the US stock market showed signs of an improvement in the demand for AI computing power. Due to the expansion of AI's product capabilities and responsiveness, another major reason is the market awareness that underestimates the development and operational power of the AI market by large Technology companies. Includes traditional Hyperscaler clients such as $Microsoft(MSFT.US)$ 、 $Alphabet-C(GOOG.US)$ und $Amazon(AMZN.US)$ Similarly, every year the city underestimates the real needs of the market. Signal majors will not forget that in 2024 the ROI of AI investments in financial markets has led some of the major Technology giants to reduce their capital base.

However, with this year's mid-term results showing the proliferation of AI applications and technologies in many companies, the consumption of tokens in different LLM models is far ahead of schedule, leading to significant operational problems. Different companies are in the process of planning how to scale up their production or scale up the computing power of their data centers to meet their needs. Industry has led to the emergence of non-competitive cooperation, large orders, or naturally high income/profit forecasts. eg

— Recently around OpenAI, $NVIDIA(NVDA.US)$ 、 $Advanced Micro Devices(AMD.US)$ und $Intel(INTC.US)$ Mutual investment

---- $CoreWeave(CRWV.US)$ either $NEBIUS(NBIS.US)$ Large Orders

---- $Oracle(ORCL.US)$ either $Dell Technologies(DELL.US)$ Business Guideline on the Adjustment of Natural Resources

The above news has caused different stocks to rise in the short term, while making investors more wary of the risks of a bubble in the Industry. Far from traditional economics, a large amount of strategic cooperation or resource exchange can only represent the life cycle of the AI Industry, which is beginning to grow from the beginning of its inception.

In traditional economic analysis, the industrial lifecycle, or industry cycle, the process of historical development of a given industry from birth to the exit of socioeconomic activity is usually divided into four stages: inception period, growth period, maturity, and payback period. Then it is possible to create bubble risks at the beginning of two stages, such as the Metaverse concept of a year ago. The use of AI Industry Chains, which has become more popular than ever before, represents a long period of growth since its inception, which means that the industry is entering a phase of rapid growth.

In investment terms, only income and profits support price increases, and this is a sign that it does not become a bubble. Over the past year, doctors have been heavily adjusting the entire AI Industry Chain to expect in the form of PEGs or PS, such as extreme cases $Palantir(PLTR.US)$ Even the market looks at backlog valuation.

In conclusion, the market is now looking forward to different valuation model calculations for different types of companies in the same AI Industry Chain. What practitioners are suggesting today is that, given the stage and future of industry development, the AI Industry Chain has the potential to play an important role in driving global GDP growth. Apart from US or Hong Kong stocks, AI Industry Chain investments are likely to continue to depend on high-BETA stocks, indicating that our natural risks are higher, but only a stable economic outlook is likely to continue to be a sector that will continue to win in the big markets. Here's the thing, you need to win on investing $S&P 500 Index(.SPX.US)$ und $Nasdaq Composite Index(.IXIC.US)$ The AI Industry Chain plays an important role.

Semiconductors are the source of computational power requirements

Investors across the AI Industry Chain may feel a lot of eyes, despite the resurgence of near-market AI and the need for interoperability. $PHLX Semiconductor Index(.SOX.US)$ Innovative high again. This also means the report mentioned in last year's author”Massive Report Changes Semiconductor Wind DirectionAt the same time, the stage of development of the entire Industry may be closer to the next.

Considering the operational power of AI in the market so far, different companies are increasingly investing and upgrading their data centers, and the demand for semiconductors is intensifying. Accelerate the entire gaming semiconductor industry with momentum. Moving on from the short term section, it is recommended to focus on Industry Taps Companies $ASML Holding(ASML.US)$ In the results published on October 15 (US East), the Company has lost a year of weak performance indicators, and the market's demand for Switzerland's highest SPE is likely to be influenced by the ASML performance guidelines.

SPE (SEMICONDUCTOR EQUIPMENT) IS UNCERTAIN, BUT SEMICONDUCTOR MANUFACTURING COMPANIES ARE LIKELY TO BENEFIT IN THE LONG TERM, ESPECIALLY THOSE LEADING IN PRODUCTION TECHNOLOGY $Taiwan Semiconductor(TSM.US)$ 。

US AI Final Winner: Taiwan Semiconductor?

Taiwan Semiconductor's latest production technology is expected to arrive at the A16 (1.6nm) grade point, with production expected to start in 2026, with N2 (2nm) due to the mid-year production in 2025. This technology utilizes an advanced GaA (gate-all-around) nanoscale fiber architecture, which is expected to increase 15% speed, reduce power consumption by 30%, and increase density by 20% for AI and high performance computing (HPC). This high level of Taiwan Semiconductor can continue to extend the life of existing EUV equipment. The A16 point does not require a new machine with a high NA EUV (about US$0.37 billion per Taiwan), but it actually requires resolution and production through design-technical mutual optimization (DTCO) and multiple patterning technologies.

These production technologies lead to steady growth in the company's income and profits. As soon as the share price is close to the $300 mark, the company's current market PE is around TTM 33bp, and the large semiconductor demand is supported, and the PEG angle is 10 percent less expensive to view. From the historical perspective of many years, companies are quite capable of increasing their cost of transfer, which is the main reason why gross margins and net returns have been stable over the years.

To put it simply, OpenAI's investment in AMD will take this discussion even further when discussing GPU and ASIC usage. Regardless of AI's hardware development, some of the most advanced semiconductors are tailored to the needs. The role of the company in semiconductor production is to be dynamic, but only the technical level is important, and equipment investment is advantageous throughout the Industry Chain.

US stock options strategystrategy

Stocks of Taiwan Semiconductor are Bullish for the long term. There is no significant comment on the options strategy, the company will publish its results on October 16 (Mid East) time, and the short-term due date, the company will publish its results on October 16 (Mid-East) time, in the short term. It is common for options traders to increase the risk of short lines in order to lower the risk of short lines coming at the end of the day, options traders are expected to move higher and options traders are expected to increase the risk of short lines coming at the end of the day.

Therefore, for investors who are looking at the short line, TaiwansEMiConductor can borrow from an investor perspective.Sell warrantsTaking options money can be boosted by the upside of the IV uplift ahead of earnings. The worst-case scenario is to only transfer long-line investments at Strike price (Core Price).

(The options chart above is for reference only and does not constitute an investment opinion)

For advanced investors, consider an investment strategy in the form of LEAP CALL. Long term bullish options with a maturity of more than one year, allowing investors to Buy Stock Stocks at a fixed price in the future. It is a high-leverage tool that allows investors to participate in the dipping profits of rising stock prices with the corresponding low share price. Such a strategy reduces the risk of dipping in the short term from the IV wave. At the same time, operational flexibility will be maintained after the announcement of the results, allowing you to adjust your investment strategy at the right time.

(The options chart above is for reference only and does not constitute an investment opinion)

Futu Securities, Chief Analyst, Hui Chi-Lok

(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the proposed issuer of shares)