‘Data is the new currency’- is the message you get from everyone like the comments provided by Nvidia’s CEO, to Salesforce, all basically Ai-themed. What’s missing for all the enthusiasm -largely priced into share prices before now for that matter- is the ebb-and-flow of demand for the underlying product. Pixabay What’s missing for all the enthusiasm -largely priced into share prices before now for that matter- is the ebb-and-flow of demand for the underlying product. I believe you saw that with ARMS Holdings giving tepid forward guidance, as I don’t know what analysts are looking for beyond already-ramped-up levels of orders and projects. A little side-item: in Germany this week there was the opposite: recognition of the contracting demand for chips…. not all chips, but most ‘fabs’ depend on a myriad of chips, not merely the highest performance processors useful for AI.  I’m unsure how the foregoing changes prospects, but I’m pretty sure that if we get a shakeout in the weeks ahead in Semiconductors unrelated to Ai alone, it is likely the ‘after-the-fact’ analysts will trot-out the comments shared about it.Basically, there is slowing economic growth with higher prices, and at a point it starts to impact ‘chip demand’ and that’s why the Semiconductor Industry in an interesting review inferred the 3-month moving average data suggests lots more limited growth in 2024, using the Q1 proxies. I’ll add consumer / automotive demand, which certainly includes the slower EV and PC demand deferred or sidestepped. Perhaps it’s ‘military / defense’ demand that masks this, give lots of the chips (such as from our Texas Instruments) goes into defense ‘gear’.So, most analysts still expect double-digit growth, but not phenomenal gains. It simply means that a lot of what people talk about this year is for 2025-’26. In terms of ‘anticipation or discounting’ most big techs seemingly have done that.  Market X-ray: I don’t mean to sound negative on Ai at all, just saying ‘price’ has matured for hardware stocks, so focus remains on Application Software. I’m a bit under the weather and so is the market. Even keeled and very calm.Speaking of calm, S&P finished Wednesday a ‘triple goose-eggs’ …no change at all. That’s about right, as rare as goose eggs are in the Index. We started a bit soft and my morning ‘tweet’ (post on ‘X’) called for rebound into midsession and that’s what we got, with action bobbling, but generally later thereafter.It’s hard to say if there’s a phantom decline, or crisis, in the wings. War with a crazed Russia would be a factor to say the least (Putin sort of threatened NATO yet again), Israel having to take-on Hezbollah in a serious way is a real worry.  Bottom-line: Today reminds me of the late Louis Rukeyser. Once at a conference, Louis spoke loudly in front of the small crowd and said: “Hey Inger, are you still telling people the market will go up, down, or sideways”. I responded, “Lou, I assure you stocks will fluctuate often… and you heard it here first”. There is nothing happening but the Arms tepid outlook, warnings we hear from Intel, and general seasonality, continue to this looking almost more like a ledge, than a valley.More By This Author:Market Briefing For Wednesday, May 8
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