“The fastest selling servers in their range are the ones with the Nvidia GPU’s.” – 02:47
Steven Dickens, CEO & Principal Analyst at Hyperframe Research, joins Remy Blaire at the New York Stock Exchange to discuss the current state of the U.S. stock market, particularly in the tech sector, amidst ongoing government shutdown concerns.
Remy opens the segment by highlighting OpenAI’s remarkable $500 billion valuation and its recent partnerships with chipmakers Samsung and SK Hynix, which have positively impacted semiconductor stocks. Despite the government shutdown entering its third day, U.S. stock averages continue to reach new record highs, with a keen focus on the technology sector. Remy asks Stephen whether he believes tech is running ahead of its fundamentals.
Steven responds by likening the current AI boom to previous technological revolutions, such as the internet and mobile eras. He emphasizes that the market is still in the early stages of the AI explosion, with strong demand for GPUs from hyperscalers and cloud providers. He asserts that this demand is driving the market forward and is fundamentally different from the hype seen during the internet era.
The discussion then shifts to the topic of valuation in the tech sector. Remy inquires about how Steven approaches valuation given the numerous announcements and deals emerging in the AI space. Steven explains that he focuses on technology fundamentals rather than equity multiples, noting that companies like Lenovo, HPE, and Dell are experiencing robust sales of servers equipped with NVIDIA GPUs. He also mentions AMD’s recent announcements and their positive impact on IBM’s stock, indicating that the momentum extends beyond just the mega-cap tech companies.
As the conversation progresses, Steven addresses the challenges facing AI projects, referencing a recent MIT study that found 95% of AI initiatives are failing. He explains that many organizations are still in the experimentation phase, but there is a growing trend of successful deployments, particularly in companies like Logic Monitor, which is integrating AI into their solutions.