On Wednesday, the trading volume of some short-term options contracts surged. Some market participants believed that Keith Gill, known as Roaring Kitty, the leading retail investor, may have sold some of the company's recently disclosed options positions.$NVIDIA (NVDA.US)$The stock prices of AI giants have plummeted. In the future, Wall Street is still bullish on the AI boom, but has shifted its focus to laggards who haven't performed as well as Nvidia this year. $Intel (INTC.US)$with$Advanced Micro Devices (AMD.US)$such 'AI laggards'. Compared to Nvidia and other popular chip giants with annual gains of over 60% this year, the stock prices of Intel and AMD, these two chip giants, appear much weaker. $Micron Technology (MU.US)$and $Broadcom (AVGO.US)$Multinational asset management giants such as BlackRock Inc. and BNP Paribas Asset Management in France believe that the unprecedented investment frenzy surrounding the AI industry in global stock markets is far from over. A new round of 'AI investment frenzy' will continue to drive the 'long bull trend' of global stock markets, constantly setting new historical highs. Some economists even predict that the optimistic expectations of multiple expansions based on the development of AI technology will drive the benchmark index of US stocks -

Magnificent 7, the high-weight US seven technology giants, including Apple, Microsoft, Google, $Microsoft (MSFT.US)$Global investors are flocking to these seven technology giants throughout 2023 and the first half of 2024, betting heavily on the wave of frenzy for generative AI being deployed throughout the business world. Due to the massive market scale and financial strength of tech giants like Apple and Google, they are in the best position to leverage AI tech to expand their revenues.

"Laggards" here does not refer to them being developmentally behind in AI technology, but rather means they have started to lay out their efforts in a specific field relatively late, have a far lower market share than the industry leader, or their stock price rise lags behind that of the leaders. For example, Nvidia, the global leader in AI chips, has a market share of nearly 90% in the data center AI chip field, while AMD's share is far less than Nvidia's. However, Nvidia's dominant position will undoubtedly face a huge threat from AMD. Although Intel is insignificant in the data center AI chip market, its participation in the layout of AI PCs based on its x86 ecosystem advantage may boost Intel's valuation.

Compared with the AI field model leaders such as OpenAI, Microsoft, and Google, IBM's market share is undoubtedly at a relative disadvantage, but with a deep layout of AI developer ecology platforms and relying on a powerful open-source alliance, IBM, one of the "AI laggards", is expected to carve out a slice of the lucrative AI large model market. Whether Apple belongs to the "AI laggards" is controversial. On the one hand, it belongs to the "Seven Big Tech Giants" and there is a possibility of excessive price overshoot at the stock price level, while on the other hand, its layout of AI large models came very late. However, with the help of the powerful iOS ecosystem, it is expected to achieve a "level playing field" with OpenAI in terms of market share of AI smart phones.

Baird also specifically mentioned other stocks that he thinks will benefit from this trade, including software company F5 Inc, electronic measurement instrument company Keysight Technologies, and semiconductor-related companies such as Diodes and Lumentum. $S&P 500 Index (.SPX.US)$Please use your Futubull account to access the feature.

It is conceivable that if the 'know-it-all' who embraces trade protectionism and is eager to bring high-end manufacturing back to the United States succeeds in taking office, the support for Intel subsidies may continue to increase. Perhaps, the 'king of chip outsourcing' will soon face a truly strong competitor in the form of Intel.

The seven big US technology giants with high weightings in the S&P 500 index, called the "Magnificent 7," include: Apple, Microsoft, Google, $Tesla (TSLA.US)$, Nvidia, and meta platforms.$Amazon (AMZN.US)$and $Meta Platforms (META.US)$Global investors will flock to the seven major technology giants throughout 2023 and the first half of 2024. They are betting that, due to the large market size and financial strength of tech giants such as Apple and Google, they are in the best position to use artificial intelligence technology to expand their revenue in the midst of the frenzy of investing in generative AI by global companies.

Melius Research emphasized that tech companies such as Intel, AMD, IBM, and even Apple, all have extensive involvement in the AI field, but they have failed to catch up with the biggest winners in the AI field, such as Nvidia, regarding the stock price surge in 2023 and the first half of this year.

In the past month, the stock performance of the three companies Intel, AMD, and IBM has clearly outperformed the tech giants, while the stock prices of AI representative leaders such as Nvidia have slightly declined during the same period.

Intel may be the biggest AI winner in the new round of "AI investment frenzy". Trump's victory has become a basic consensus among most investors, and according to the latest news, Trump, who has the title of "Tariff King," may have a more fierce trade protectionism policy than when he took office in 2016 and during the Biden administration. It can be imagined that if the "Tariff King," who pursues trade protection policies and desperately wants to bring high-end manufacturing back to the United States, successfully takes office, the subsidy support for Intel in the future may be upgraded continuously.

"AI laggards" welcome this powerful trend support: U.S. stock investment styles switch.

It is crucially important that not only are they in an advantageous position regarding stock price gains, market sentiment and profit projections, but the performance expectations for the "AI laggards" are also very low, which means that overperforming in terms of performance is much easier for them compared to giants like Nvidia whose stock prices have skyrocketed. This indicates that they may be in a very favorable position for the rest of 2024.

The switch in investment style in the US stock market will also help the stock price surge of these "AI laggards". Recently, the strong performance of small-cap stocks in the US stock market far outstripped the seven major technology giants. As the market's expectations for Fed interest rate cuts soar, funds start shifting to those companies with great potential for price increases outside of these seven technology giants. After all, the valuations of these giants are already very high, making the market favor stocks that are cheaper and have some investment appeal. The likes of Intel are undoubtedly representative of this trend. Not only do they have the label of AI, but they also have strong fundamental support.

The index that tracks small-cap technology stocks rose by 3% on Tuesday, marking the biggest single-day gain since December last year, while the large-cap technology stock index fell by 0.4%. Although large-cap stocks have still been the decisive factor in outperforming the market this year, small-cap stocks have been favored in the past month. The index for small-cap technology stocks has risen by more than 10%, while the increase in large-cap stocks has been only 3.8%.

Ben Reitzes, an analyst at Melius, recently wrote in a report, "We believe that there will be a 'catch-up' trading trend for companies in the semiconductor, hardware, and software industries that have lower market expectations, that is, the rising trend of their stock prices catching up with those high-valued industry leaders." He added that a similar situation had occurred in 2023, where the "weak companies" performed well in the second half of the year.

It is worth noting that Reitzes included Apple, one of the seven technology giants, on the "AI laggards" list. Since April, the stock price of this consumer electronics giant has been steadily rising, especially since Apple showcased the highly anticipated AI functionality of its smart phones, making its stock price particularly robust.

The technology sector strategy team at Baird said that investors are starting to shift towards stocks with strong fundamentals but very low performance expectations, especially stocks related to AI, leaving a lot of room for price increases. He said, "The AI leaders have doubled in the past year and may face a slowdown in the future." "Even non-rocket scientists would think that these stocks are over-owned, and those that are overlooked may continue to catch up."

Baird also specifically mentioned other stocks that he thinks will benefit from this trade, including software company Microsoft.$F5 Inc (FFIV.US)$, electronic measurement instrument company $Keysight Technologies (KEYS.US)$, and semiconductor-related companies $Diodes (DIOD.US)$,$Coherent (COHR.US)$N/A.$Lumentum (LITE.US)$And$Aehr Test Systems (AEHR.US)$.

In the first half of this year, large-cap technology stocks such as Nvidia, Microsoft and Google pushed up the entire US stock market, and their valuations reached historic highs, making their stock price surges more difficult to achieve in the remaining time of 2024. The strategy team at Citigroup recently advised investors to take profit from these technology giants and "rebalance to a broader range of AI-related stocks throughout the value chain."

Bloomberg Intelligence's forecast data shows that the profit growth of the seven technology giants will slow significantly. At the same time, there is a significant premium on the stock prices of AI big winners such as Nvidia and Microsoft relative to their long-term price-to-earnings ratio. By contrast, the valuations of laggards such as IBM and Intel appear to be much cheaper.

If "the king of understanding" returns, Intel will be the biggest AI winner in the second half of the year?

Investors generally believe that the attack on Trump may be one of the most important turning points in the US presidential election, which could strengthen Trump's political leadership, especially in the hearts of his supporters. He is considered one of the heroic figures in American history, and even some media outlets have compared him to Roosevelt. Even in the eyes of some Republican supporters, Trump's dodge of bullets under the protection of God means that he is the only one who can be the next president. By contrast, weaknesses in on-the-spot reaction, speech logic, and party support rates make current President Biden more vulnerable.

Polymarket, a US 2024 election prediction platform, shows that Trump's chances of winning in the November election have soared by about 10 percentage points after the shooting incident, reaching 70%. By contrast, the winning probability of his opponent Biden has dropped further to 18%.

Therefore, Trump's victory has become a basic consensus among most investors, and it seems that he may be more forceful in his trade protectionism policy compared to when he took office in 2016 and the period of the Biden administration.

It is imaginable that if the "understanding king" who pursues trade protection policies and urgently hopes that high-end manufacturing will return to the United States is successful in the future, the subsidy support strength of Intel may continue to increase, and perhaps the "king of chip foundries" will soon have a truly powerful competitor in Intel.$Taiwan Semiconductor (TSM.US)$ Judging from the trend of Intel's stock price in the early US stock market on Wednesday, Intel's stock price is weaker than that of Taiwan Semiconductor,

From the stock price movement of Intel during early trading on Wednesday, it seems that if the 'know-it-all' who embraces trade protectionism and is eager to bring high-end manufacturing back to the United States succeeds in taking office, the support for Intel subsidies may continue to increase. Perhaps, the 'king of chip outsourcing' will soon face a truly strong competitor in the form of Intel.$ASML Holding (ASML.US)$At the same time as many chip stocks, including Nvidia, experienced a sudden drop in stock prices of over 5%, it rose unexpectedly by over 6% at the opening bell!

Perhaps the market has already begun to price in Intel as one of the potential biggest winners if the "understandable king" takes office, and also as one of the "latecomers in AI" priced in to attract more funds with its cheap stock price, low valuation and AI label in the second half of the year. Its rising stock price trend is expected to lead the entire US chip sector.

Melius pointed out in the research report that AMD and Intel are expected to benefit from the AI PC wave, as the two x86 architecture chip giants integrate CPU+NPU+GPU processor hardware for new AI PC terminal devices that run the Microsoft Windows OS. At the same time, Microsoft is about to launch the "Recall" function in its "Copilot+ PC," which Melius believes may be the closest upgrade reason to the killer application.

In Melius's view, AI PCs may be an important catalyst for Intel's continued stock price growth. For decades, Intel has deeply cultivated the x86 CPU architecture field on the PC side, already possessing a strong software, hardware and supply chain cooperation system as well as a huge loyal user group in the PC field.

The brand-new Core Ultra processor introduced by Intel integrates the AI dedicated neural processing unit (NPU) and Arc GPU into the CPU. The NPU is specially designed for accelerating AI inference tasks. This integrated CPU + NPU + GPU central processor is designed as the "most efficient processor" of the company, marking the official arrival of the AI PC era. The Lunar Lake processor aimed at notebook computers is scheduled to be released in the second half of 2024. This chip has a "brand-new low-power architecture and significant IPC improvement," and the AI data processing performance of the GPU and NPU modules is three times higher than that of Meteor Lake.

According to the latest forecast data from Canalys research firm, 2024 can be called the "first year of AI PCs." It is expected that the global AI PC shipment in 2024 will reach 51 million units, accounting for 19% of the total PC shipment. But this is only the beginning of the market transformation. It is estimated that by 2028, the AI PC shipment will reach 208 million units, accounting for more than 70% of the total PC shipment market share. The compound annual growth rate (CAGR) between 2024 and 2028 is expected to reach an astonishing 42%.

Edited by Jeffrey