Source: Wall Street News

Looking back at the year that is about to end, influential business events have left a special mark for 2024.

The AI craze continues, with various giants spending heavily on AI Chips, which boosts $nvidia (NVDA.US)$ its Market Cap surpassing historical records for the first time. $Microsoft (MSFT.US)$ It has risen to become the number one in the world.

$Tesla (TSLA.US)$After experiencing significant ups and downs, the stock price rebounded by 250% from its low point this year, driven by the substantial returns gained from the company's founder Elon Musk's all-in political gamble on Trump.

Musk's SpaceX has quietly made progress in rocket technology, achieving the remarkable feat of 'chopstick recovery,' marking an important milestone in making Starship a fully reusable rocket system, bringing humanity closer to landing on Mars.

$Alphabet-C(GOOG.US)$ / $Alphabet-A(GOOGL.US)$ At the end of the year, a heavy announcement about the quantum computing chip Willow was thrown to the market. Will today's quantum computing be like AI was ten years ago?

$Broadcom(AVGO.US)$It depicts a new competitive landscape for the AI Chip market: in the coming years, ASICs (Application-Specific Integrated Circuits) may gradually take market share from expensive GPUs in generative AI applications.

With winners, there are naturally also losers. Alongside the rise of new chip kings like NVIDIA and Broadcom, $Intel(INTC.US)$ this veteran semiconductor company seems to be abandoned by the times. With earnings reports failing to meet expectations, the CEO's departure, and the prospect of company split, an unavoidable fate may already be in sight.

As the end of the year approaches, Wall Street insights reviews the ten most representative global business events of 2024:

Tesla's stock price has rebounded 250% from its low this year, and Musk's gamble has yielded huge returns.

As a big stock that rebounded 250% from its low this year and rose nearly 70% throughout the year, Tesla's performance can truly be described as 'thrilling' and 'full of twists and turns.'

At the beginning of 2024, Tesla faced multiple bearish factors: global electric vehicle demand continues to slow down, price cuts again in the USA and China markets, and the rental giant Hertz has changed its attitude toward the electric vehicle market.

Under the continuous Bearish impact, $Tesla (TSLA.US)$ the stock price plummeted, with a drop of 25% in just January alone, and the maximum drawdown for the year reached 44%, nearly halving.

As the stock price fell, Wall Street Analysts began openly pessimistic, believing that Tesla's once strong growth ability was no longer there, and the high growth behind the company's high valuation might no longer be realized. Some analysts even started discussing kicking Tesla out of the tech stocks 'seven sisters' and replacing it with the communication chip giant Broadcom.

Musk himself is also in constant trouble, first a Delaware judge questioned the validity of Musk's $55 billion compensation plan, doubting that the plan did not sufficiently disclose the performance targets that needed to be met and did not consider the conflicts of interest among Board of Directors members.

The media then launched an attack on Musk's private life, claiming that Musk was suspected of abusing cocaine, ecstasy, hallucinogens, and other drugs, which caused concern among executives at SpaceX and Tesla.

In response to internal and external troubles, Musk did not 'sit idly by' but retaliated directly. On the Tesla front, it first stabilized company sales through continuous price cuts. Subsequently, it even 'frozen' the progress-leading Model 2, throwing the self-driving taxi (Robotaxi) 'pie' into the market, gambling on the self-driving market to stabilize market confidence in Tesla's future growth.

Regarding the exorbitant compensation issue, Musk directly mobilized retail shareholders, announcing at the shareholder meeting the approval of the $56 billion compensation plan while also declaring the relocation of the company's address to Texas, thereby avoiding interference from the Delaware judge.

But Musk's bigger bet is on the political side. As early as the early days of Trump's campaign, Musk provided a large amount of campaign funding. After Trump was assassinated, Musk directly expressed his support for Trump on social media. He frequently participated in Trump's campaign activities, live-streaming conversations with him on social media, going "All in" on Trump.

This "political gamble" ultimately yielded significant returns three months later: as Trump consistently led in polls, he was elected in November, and Tesla's stock price skyrocketed, doubling in two months and reaching a historic high for the first time in three years.

Compared to other Silicon Valley and tech tycoons who are "lining up" to please Trump, Musk appears to be an "insider," deeply involved in Trump's various personnel appointments while directly joining Trump's "Department of Government Efficiency" (DOGE), participating in the government's spending reduction plan.

As the "number one contributor" to Trump's victory, Musk's political resources have rapidly escalated, opening up all possibilities for Tesla's future growth.

Musk's other company, SpaceX's dream of Mars, has also come a step closer. Musk has stated that under Democratic rule, the likelihood of SpaceX achieving the "Mars dream" is low, while under Republican rule, the support that SpaceX may receive from government departments could be greater.

Did SpaceX achieve the "chopstick recovery" feat, bringing Musk's Mars dream one step closer?

While Musk is acquiring political resources, SpaceX's rocket technology is also quietly making progress.

In four test flights in early June this year, SpaceX's giant starship achieved its first soft landing on the sea, with performance in all key areas being perfect. The giant starship rocket was launched from the interstellar base in Boca Chica, Texas, USA.

The subsequently newly added thermal separation ring ejection task was successfully completed, and the Super Heavy booster successfully splashed down in the Gulf of Mexico about 10 minutes after launch, marking the first controlled return of a Super Heavy booster.

After 66 minutes of flight, the Starship re-entered the atmosphere. Although at least one flap suffered severe damage and some heat shield tiles fell off while passing through the blackout zone, it ultimately splashed down successfully in the Indian Ocean, achieving the main goal of this test.

By October, SpaceX had achieved the feat of "Chopstick Recovery" during the fifth test flight, achieving a historic success.

As the fifth test flight, the main purpose of this test was to attempt the first recovery of the booster. Live footage showed that after burning most of the fuel and separating from the first stage spacecraft, this Super Heavy booster, approximately 232 feet (71 meters) long and equipped with 33 engines, descended from high altitude and slowly approached the launch Tower.

After multiple decelerations, the slightly tilted "Super Heavy" booster was precisely "embraced" in mid-air by two robotic arms extending from the launch tower, completing this high-difficulty aerial recovery with what can only be described as "silky" precision. The robotic arms of the launch tower successfully captured the returning Super Heavy booster, marking an important milestone towards the goal of making Starship a fully reusable rocket system.

Due to its elongated shape compared to other aerospace equipment, SpaceX named the recovery mechanism's mechanical arm 'Chopsticks', so the scene of mid-air recovery has also been vividly described by major media as 'chopsticks catching the rocket'.

Currently, SpaceX's Falcon 9 rocket booster has adopted the technology of landing leg recovery, which is very mature and has a high success rate. However, the drawback is that subsequent reuse is relatively cumbersome, requiring long-distance transportation from the landing site, which cannot meet SpaceX's demand for high-frequency launches.

While the "chopstick-clamping rocket" has a high technological difficulty, after rocket recovery, it can directly dock with the launch tower, allowing subsequent checks, refueling, and other steps to be carried out directly, greatly reducing launch preparation time.

With the success of the experiments, Musk is one step closer to fulfilling his promise of a "Mars Self-Driving Spaceship."

For the first time in history! NVIDIA's market cap surpasses Microsoft, becoming number one globally.

Accompanied by investors' hype around AI Stocks, American tech giants also welcome a "new king."

On June 17, Tuesday, Eastern Time, $nvidia (NVDA.US)$ the stock price has easily surpassed the previous market cap leader. $Microsoft (MSFT.US)$ For the first time in history, it has ascended to the throne of the company with the highest Market Cap globally.

Since 2020, NVIDIA's stock price has increased more than 22 times. This growth is attributed to its dominance in the AI Chip market, especially in the market for AI Chips used in Datacenters, where NVIDIA holds approximately 80% share.

With companies like OpenAI, Microsoft, Alphabet, $amazon(AMZN.US)$、 $Meta Platforms (META.US)$ and others having a huge demand for processors, NVIDIA's Business has rapidly grown. Due to the high demand, the delivery cycle for the H100 ranges from 36 to 52 weeks.

From Wall Street's perspective, GPU investment is just beginning, and the growth of investment in the AI supply chain will have a multiplier effect: every $100 of cloud capital expenditure will translate into $30-40 of AI revenue, meaning that investment in GPUs will increase exponentially.

Given the complexity of GPU development technology, such as a Grace Hopper 100 chip containing 35,000 components and weighing 35 kilograms, NVIDIA has a relatively wide technology "moat" in this field thanks to long-term accumulation.

Therefore, despite an increasing number of peers venturing into independent R&D of AI chips, NVIDIA's position as the "number one" in computing power will not be shaken for a long period.

Quantum chips have emerged, what about AI from ten years ago?

At the end of the year, Google dropped heavyweight news to the market: the quantum computing chip Willow.

According to official information from Google, Willow achieved astonishing results in benchmark tests: it completed a standard calculation in less than 5 minutes, a task that would take the top supercomputers over 10^25 years—longer than the age of the universe!

Unlike its previous claim that its quantum computer Sycamore achieved "quantum supremacy," Google does not claim that Willow achieved "quantum supremacy," but instead emphasizes its achievements in "beyond classical computing."

In 2019, Google publicly showcased its previous generation quantum computer Sycamore, and promoted that it completed a calculation in just 200 seconds, while this calculation theoretically would take the world's fastest supercomputer 10,000 years to complete.

The Willow chip has 105 quantum bits, which gives it the best performance in its class for quantum error correction and random circuit sampling (RCS).

In the RCS benchmark test, the Willow chip completed a standard computation in less than 5 minutes, while this computation would take the fastest supercomputer over 10^25 years — far exceeding the age of the universe and vastly surpassing our understanding of traditional computing capabilities.

The progress of Quantum Computing at Alphabet has directly triggered a surge in the stock prices of quantum computing companies. $D-Wave Quantum (QBTS.US)$ A week increase of 74%, $Rigetti Computing(RGTI.US)$ An increase of 78%, $Quantum Computing (QUBT.US)$ The stock price has more than doubled.$Quantum (QMCO.US)$It has soared by 523%.

For the investment community, quantum computing is equivalent to AI ten years ago. After the investment boom in artificial intelligence, investors are now looking for the next potential technology frontier that could yield substantial returns. This is especially important.

Although quantum computing has sparked widespread discussion, its actual development is still in a relatively early stage. Investor attention on quantum computing has increased, but it remains far below that of the artificial intelligence sector. Public search interest in quantum computing has also increased, but it is still at a lower level compared to artificial intelligence. The frequency of companies mentioning quantum computing in their earnings reports and documents has risen, yet the base remains relatively low.

A major transformation from training to reasoning in AI, with the rise of ASIC and Broadcom.

As the year-end approaches, the AI market has also experienced significant changes, with NVIDIA receding and Broadcom emerging.

On December 12, Broadcom released its fourth quarter earnings report for the period ending November 3. Driven by AI demand, the company's total revenue, profits, and semiconductor revenue for fiscal year 2024 all reached new highs.

The company's CEO Hock Tan even 'sent a satellite' during the analyst conference call, stating that the market demand for custom AI Chips (ASIC) is expected to reach between 60 billion and 90 billion dollars by 2027. In terms of AI Chips, Broadcom has two additional super (computing) customers, and it is expected that new clients will generate revenue before 2027.

Hock Tan stated:

“Currently, we have three hyperscale customers who have already established their multi-generation AI XPU roadmap, planning to deploy at different speeds over the next three years. We believe that by 2027, each of them plans to deploy a 1 million XPU cluster on a single architecture.”

Market analysis believes that the prediction by the Broadcom CEO actually tells a grand narrative about ASIC: the AI revenue is projected to be between 60-90 billion dollars SAM (serviceable addressable market) by 2027, which means that from this year to 2027, AI revenue (AISC + networking) will nearly double each year. This indicates that Broadcom 'believes' or 'hopes to achieve' a split of the market between ASICs and GPUs at least, or even a replacement.

$Broadcom(AVGO.US)$ The Earnings Reports shook the market, with the stock price surging 38% in two trading days, and the Market Cap surpassing 1.2 trillion dollars. ASIC (Application-Specific Integrated Circuit) AI Chips have become the market focus.

The surge of Broadcom inevitably reminds people of NVIDIA in 2023, when NVIDIA's Earnings Reports exceeded expectations, leading to an explosive increase in its stock price.

Accompanying the surge of Broadcom, NVIDIA fell in response. Analysts suggest that Wall Street is focusing on the demand for ASICs (Application-Specific Integrated Circuits) from large technology companies, which may be one reason for the decline in NVIDIA's stock.

In the coming years, custom chips will gradually take market share away from expensive GPUs in the application of generative AI. Although GPUs will continue to dominate in AI training, the rise of ASICs has led investors to question whether companies like Meta and Alphabet will shift towards ASICs.

Apple Vision Pro, despite its high pricing, has not convinced fans.

After the iPhone, $apple (AAPL.US)$ where will the next blockbuster hardware be?

In early February this year, Apple Vision Pro was officially released. Within five minutes of launch, the servers were overwhelmed. In just half an hour of pre-sale, physical stores sold out immediately. The last time Apple captured global attention like this was in 2007, when the first iPhone was launched.

For seventeen years, Apple has been searching for the 'next iPhone,' but based on current market feedback, Vision Pro clearly cannot bear the burden.

After experiencing initial market excitement, the popularity of Vision Pro has rapidly declined. The high price, sluggish market demand, and slow growth in the number of platform applications have all contributed to this.

By the end of October, news emerged that Apple decided to cease production of the first-generation Vision Pro. As an alternative, Apple may release a cheaper headset in 2025.

For Apple, the Vision Pro is its biggest bet in new product categories in many years. However, Apple has already fallen behind competitors like Meta in this field, as Meta has been selling headsets for several years and at a lower price.

As analyzed by Tianfeng International Analyst Ming-Chi Kuo before the official launch of the Vision Pro, after the hype and novelty of this new computing terminal fade, whether the Vision Pro can maintain demand based on its practicality will depend on whether its product positioning and key applications are clear and correct.

Is it too late for Apple to shift to AI after a decade of dreaming about building cars?

Not just the Vision Pro, Apple has quietly abandoned its electric vehicle project that had been in preparation for 10 years in 2024.

According to media reports, Apple has internally canceled its electric vehicle plan, and nearly 2,000 employees from the project will transition to AI. This means Apple's efforts that cost billions of dollars in building cars have come to a sudden halt.

Apple's history in car manufacturing dates back to 2014, when the Titan project was initiated with the approval of Tim Cook. They heavily recruited talent from companies like Google, Mercedes-Benz, and Tesla, forming a core team with genes from Silicon Valley and the automotive industry.

Later, due to repeated vacillation in Apple’s car manufacturing direction and the lack of partners and viable forms, many executives involved in the Titan project left, leading the project to stall multiple times.

By December 2022, the Titan project faced a significant change. Media reported at the time that Apple postponed its target date for launching electric vehicles by about a year, to 2026, stating that Apple's Titan project had been in limbo for months as executives faced the reality that, given the current technological environment, creating a fully self-driving car without a steering wheel and pedals was unfeasible.

However, the rapid spread of the AI boom in 2023 caught Apple off guard, as generative AI became an increasingly important area for Apple, ultimately making the electric car project, which had been in preparation for 10 years, the biggest casualty.

A $7 trillion chip plan, is OpenAI's first step in reshaping the global semiconductor industry?

While leading the global development of generative AI, OpenAI's CEO Altman has another grand goal: to reshape the global semiconductor industry.

According to media disclosures, Altman is negotiating with investors, including those from the UAE, to raise trillions of dollars to boost global chip manufacturing capacity. The project may require raising up to $5 trillion to $7 trillion.

Insiders pointed out that Altman suggested that OpenAI, various investors, chip manufacturers, and electrical suppliers form partnerships to co-fund the establishment of chip foundries, which would then be operated by existing chip manufacturers, with OpenAI becoming an important customer of the new facilities.

Regarding the media reports, Altman did not deny them, only stating that "$7 trillion" is inaccurate, but AI does require significant investment, and the AI field indeed needs global large-scale funding and energy investments to build AI chips and the infrastructure stack surrounding it, ultimately providing extensive services to the world, allowing everyone to gain tremendous value.

Such a scale even dwarfs the entire global semiconductor industry's scale. It is worth noting that in 2023, global chip sales amounted to only $527 billion, and this figure is expected to grow to only $1 trillion annually by 2030. According to industry organization SEMI's estimates, the global semiconductor manufacturing equipment sales last year were $100 billion.

7 trillion USD, which is 10% of the global GDP, can buy Nvidia, AMD,$Taiwan Semiconductor (TSM.US)$, Broadcom, $ASML Holding (ASML.US)$ , Samsung, Intel,Qualcomm (QCOM.US)、 $Arm Holdings(ARM.US)$ With the remaining funds, the company can package Meta again and bring home 300 billion USD.

A netizen made a piercing comment, stating, "Unless OpenAI is confident that its technology fundamentally reshapes the entire world, AI is in a huge bubble."

Turning point for Digital Currency, SEC first approves spot ETF.

After experiencing consolidation in 2023, Digital Currency including Bitcoin welcomes a key turning point in 2024.

On the capital side, after several years of back and forth, the US SEC made a rare compromise at the beginning of this year, approving the first Bitcoin spot ETF and authorizing the listing of 11 ETFs.

The Bitcoin spot ETF was proposed as early as 2013, but for the next decade, the current SEC Chair Gary Gensler and his predecessor Jay Clayton both refused to allow such products to launch, citing concerns over Bitcoin's price volatility, investor protection, and the possibility of market manipulation.

However, in August last year, Grayscale Investments won a key lawsuit against the US SEC. The ruling by the judge of the District of Columbia Circuit Court determined that the SEC's decision to approve Bitcoin futures ETFs while rejecting Grayscale's request to convert GBTC to a spot Bitcoin ETF was "arbitrary and capricious."

The court's ruling ultimately forced the SEC to make a rare compromise, approving the listing of the spot Bitcoin ETF through an expedited process.

But for the entire Cryptos world, the real support comes from Trump.

To attract cryptocurrency investors, Trump threw out a series of eye-catching promises during his campaign, including listing Bitcoin as a strategic reserve Asset of the USA, firing the current SEC chairman, establishing a Bitcoin presidential committee, encouraging power plants to strengthen electrical supply for Bitcoin mining, and exploring the synergy between the crypto industry and the electric vehicle industry.

Pro-crypto lawmakers within the Republican Party proposed a more radical bill: selling Gold reserves to buy 1 million Bitcoins. The bill requires the USA to purchase 1 million Bitcoins, which at current market prices would cost about 90 billion USD.

With Trump's victory, the entire crypto world fell into a frenzy, and the price of Bitcoin broke through 100,000 USD for the first time in history.

However, compared to the FOMO frenzy in the crypto world, Ray Dalio, the founder of Bridgewater, provided reasons for investing in Gold and Bitcoin as 'hard currency' from the debt perspective.

In Dalio's view, the debt levels of major countries have reached 'unprecedented levels,' and this situation is unsustainable. In the future, these countries will inevitably face debt crises, leading to a significant decline in currency value. Against the backdrop of worsening debt issues in most major economies, he prefers to invest in hard currencies like Gold and Bitcoin, while avoiding debt-type assets.

Intel's decline: This year, the scale of layoffs reached an all-time high for Technology companies, with stock prices dropping by 60% throughout the year.

With the rise of new Semiconductor kings like NVIDIA and Broadcom, Intel, an old semiconductor company, seems to be left behind by the era, experiencing unprecedented turmoil in 2024.

The company first faced a disaster in the August earnings reports: second-quarter revenue decreased year-on-year instead of increasing, with guidance for the third quarter down a maximum of 11%; the third-quarter EPS guidance unexpectedly turned from profit to loss; and it paused dividend payments for the first time since 1992.

After the Q2 earnings report, $Intel(INTC.US)$ the stock price plummeted 26% in a single day, which is nearly the worst decline the company has seen in 50 years, second only to the 31% drop in July 1974. The intense sell-off caused the Nasdaq Index to fall by 2.4% and dragged down global semiconductor stocks.

To salvage its performance decline, Intel announced in August this year that it would lay off more than 15% of its employees starting from the fourth quarter, at least 16,000 people. According to data from the independent layoff tracking organization Layoffs.fyi, Intel's layoff scale is the highest among technology companies this year.

Analysts believe that Intel's main problem lies in the company's failure to keep pace with product development, especially in the datacenter business. In contrast, Intel's strongest competitor, AMD, has captured most of the market share, with revenue in the datacenter division growing more than double. New Street Research estimates that by the end of the year, AMD's x86 server processor business market share will reach 40%, up from less than 5% four years ago.

However, the company's troubles are far from over. As the end of the year approaches, Intel CEO Pat Gelsinger was forced to resign after three years in office, further exacerbating the turmoil Intel faces.

According to insiders, Gelsinger had discussed with the Board of Directors the progress of Intel regaining market share and narrowing the gap with NVIDIA, during which tensions reached a peak. Gelsinger was faced with the choice of retirement or being fired, and he ultimately chose to end his career at Intel.

The 63-year-old Gelsinger was once viewed as the savior of this chip giant. After taking office three years ago, he openly expressed his love for Intel and vowed to regain the company's leading position in the semiconductor industry. Gelsinger joined Intel as a teenager but left the company in 2009 to become the CEO of VMware. Since returning in 2021, he promised to re-establish Intel's leading position in manufacturing, a position that has been taken by competitors like Taiwan Semiconductor.

Analysts believe that Gelsinger's departure may bring significant strategic changes, with "advanced processes" being halted and "product priority" becoming the focus. Next, Intel is more likely to split its internal chip manufacturing business from its external foundry business, as the soon-to-depart Gelsinger had advocated for their merger and strongly promoted Intel's foundry business (Intel Foundry).

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编辑/jayden