Intel, 7% intraday plunge on Capex concerns... Axios "Trump ordered halt to Iran airstrike" [Wall Street Newsletter]
Speakers
Park Myung-seok
— Curator
Summary
Curator Park Myung-suk reviews a turbulent session where Intel reversed from +10% to -7% on AI capex worries, while CXMT's massive IPO sucked liquidity from tech. Axios reports Trump ordered a halt to an Iran airstrike, offering hope for oil stabilization, but new Ukraine-Iran maritime tension complicates the picture. The discussion highlights that despite long-term AI strength, short-term supply and credit fears are hurting chips, while existing data center owners and power utilities emerge as relative winners. AMD stands out with a doubled price target and resilience, and Amkor is spotlighted after Nvidia's $1.5B packaging investment.
- Intel surged 10% pre-market then plunged 7% on capex concerns, intensifying fears around AI spending sustainability.
- CXMT's IPO is seen as a liquidity drain, forcing selling in other tech stocks similar to past SpaceX-driven dislocations.
- Trump reportedly halted an Iran airstrike Friday night, raising hopes for reduced oil tension, but a Ukrainian attack on an Iranian ship adds fresh uncertainty.
- Hyper-scaler capex overhang and Moody's warnings on credit quality for Alphabet, Microsoft, Amazon, Meta, Oracle and others are weighing on sentiment.
- Existing data center owners like Digital Realty and Equinix, and power utilities like FirstEnergy, Xcel Energy, Duke Energy, Sempra, and Vistra are identified as beneficiaries of AI demand and supply constraints.
- AMD showed unusual relative strength with Baird doubling its target to $1,250, reinforcing the CPU and client computing bull case.
- Amkor Technology attracted upgrades after Nvidia announced a $1.5B packaging investment, underscoring the importance of advanced packaging in the AI value chain.
- The message for investors is to step back from daily swings and monitor long-term AI direction while flow-driven dislocations create noise.
Ideas
AMD strong on CPU, target doubled.
AMD is showing unusual relative strength amid the semiconductor selloff, not falling with peers. Baird just doubled its price target from $625 to $1,250, underpinned by a positive CPU cycle and market share gains, reinforcing that the CPU bull case remains intact.
Existing data center capacity owners outperform.
Data center owners that already hold physical assets benefit disproportionately because AI demand is strong but new builds face NIMBY opposition, expensive bond issuance, and capex skepticism. Digital Realty and Equinix, among others, saw stocks rise ~10% as the market prices scarcity of existing capacity.
Utilities benefit from AI power demand.
Goldman Sachs is expressing a preference for utility companies that will supply power for growing data center energy demand. FirstEnergy, Xcel Energy, Duke Energy, Sempra, and Vistra are named as favored names, making them a direct play on the AI infrastructure buildout without taking capex or chip inventory risk.
Amkor benefits from Nvidia packaging investment.
Amkor Technology is receiving significant attention after Nvidia announced a $1.5 billion investment in its packaging technologies for accelerated computing platforms, and UBS raised its investment rating on the stock. This signals strong demand for advanced packaging and makes Amkor a direct beneficiary.
