(A THANKSGIVING TAKE ON THE MARKETS)
November 24, 2023
Hello everyone,
The market has just closed 100 points higher today. Our year-end rally continues. You may ask “What’s next after the end of the year?” Short term, may be some volatility; long term, the market is looking good.
Retailers are hard at work endeavoring to attract customers to Thanksgiving sales. Some people will always part with their money for what they think is a bargain. Others are more conscious of their spending and where their money is going. With all that being said, some items are worth a look – especially electronic items.
Bitcoin rose to a new high for the year on Friday – above $38,000. As I have said before, if you hold it, think about taking half off the table. It could come down to $20,000 or even lower before eventually rallying to new highs.
Don’t rule out a retest of 1900 in Gold before moving higher. Certainly, we could well test the 1940 to 1960 area. Within the next five years, Gold could move to around 2,800.
Be mindful that we could get another retest of the higher levels in yields. If the yield on the 10-year Treasury note begins to move above 4.55%, that could put some pressure on the equity market.
“Edge AI” will be the trend going forward in artificial intelligence. This theme involves running AI algorithms directly on a user’s device, be it a smartphone, laptop, or wearable, among other things. Morgan Stanley argues that 2023 has been all about Generative AI, cloud, GPUs, and hyperscales, and they will remain core to the secular machine learning trend. Edge AI can help save costs and reduce latency (or lag time), among many other benefits. Everyday examples of Edge AI include facial recognition on smartphones and voice recognition in smart speakers. Morgan Stanley points out that with the advent of Generative AI, the impetus for device upgrades to enable greater computational power natively on consumer hardware is accelerating and spanning beyond often narrowly used smart speakers. The bank goes on to say that such AI-driven consumer use cases will become integrated into everyday devices – presenting several opportunities for investors.
The bank named four companies that are set to be key beneficiaries of this trend and likely to outperform in 2024 and 2025.
Apple – well-positioned to expand all facets of Edge AI. The consumer trust in Apple’s data gathering and large user base gives Apple another leg up in using Edge AI applications to harness and apply new data. Price target - $210 or a potential upside of around 10%.
Dell – best positioned to capitalize on both the cyclical rebound in hardware markets and the long-term growth of AI-related infrastructure (PCs, Servers, Storage) over the next two years. Dell is expected to launch new AI-enabled laptops and workstations in the next 12 months. The price target is $89 or a potential upside of nearly 21%. (Watch for some volatility in this stock in the next few months).
MediaTek – the largest chip design house in Asia is gearing up for Edge AI. Price target is 1,000 New Taiwan dollars ($31.70) or a potential upside of 6%
STMicroelectronics – The key attribute of this stock will be its energy-efficient computing. Long-term value in its efficiency in automotive, mobile, healthcare, and industrial IoT. Price target of 48 euros ($52) or potential upside of nearly 16%.
Enjoy your break.
Cheers,
Jacquie
