AI Hardware Back in Focus as Qualcomm-Amazon Mega-Deal Shifts the Landscape from Software
Qualcomm signed a data center infrastructure deal with Amazon worth up to $60 billion. The agreement supports AI infrastructure buildout across multiple generations, and Amazon offered Qualcomm warrants worth $4 billion to underpin trust in the partnership. The news lifted custom chip-related stocks including Qualcomm and Broadcom, with the effect spilling over into local semiconductor stocks as well.
Market attention has shifted from software back to hardware over the past several days. As ChatGPT's new model, Astra, was assessed as a general-purpose AI model that integrates multiple functions into a single model, concerns grew that individual software products could be absorbed into one massive model, weighing on the software sector. In contrast, the fact that running this model currently requires about 100,000 GPUs, potentially rising to as many as 400,000 in the future, drew attention and revived expectations for hardware demand. Views that competitors such as Anthropic, Meta, and Google will require infrastructure of a similar scale reinforced this trend.
At a Citi conference, AMD projected the AI market would expand to $2 trillion by 2030 and that data center revenue would more than double from current levels by 2027. Intel surged more than 10% intraday on news that it plans an approximately 10% additional price increase in early October to match rising CPU demand, and its share price has climbed from the $20s to the $100s over the past year amid US government investment and a change in CEO.
Domestically, strength in semiconductor equipment and materials stocks stood out. Jusung Engineering rose more than 5%, joined by gains in Wonik IPS, EO Technics, Leeno Industrial, Simmtech, HPSP, DB Hitek, and Isu Petasys. This was attributed to a string of recent reports on semiconductor equipment and materials names from brokerages including Shinhan, Daishin, and KB.
Apple's new product launch event is scheduled for tonight. Key points of interest include whether the new devices will feature foldable technology comparable to Samsung's, the launch pricing, and the specifications of the built-in chipset, with Counterpoint Research noting that demand could actually decline if the new models show little change from prior versions.