Do Semiconductor-Manufacturers' Stocks Really Mean that the Economic Future Is that Bright for Investment & Hence for Employment? Or Is It, This Time, Really, different? CHART OF THE DAY
Soaring semiconductor orders are supposed to signal a bright future for investment and jobs; but I cannot help but suspect the AI unicorns and those donning AI-unicorn clothing sprinting to IPOs...
Soaring semiconductor orders are supposed to signal a bright future for investment and jobs; but I cannot help but suspect the AI unicorns and those donning AI-unicorn clothing sprinting to IPOs are sending a very different message…
We have Apollo’s Torsten Slok:
Torsten Slok: The Economy Is Strong <https://www.apollo.com/wealth/the-daily-spark/the-economy-is-strong>: ‘Chips go into virtually everything manufactured, including cars, appliances, industrial equipment and phones. When manufacturers plan to ramp up production, they order semiconductors first, often 6-12 months in advance due to long lead times. Chip demand therefore anticipates broader manufacturing demand…
Umm. Maybe? The sudden race of Anthropic, probably OpenAI and SpaceXAITwitterTesla to IPOs that are highly premature from any accounting due-diligence technology-proof perspective is remarkable. It strongly suggests a bunch of well-informed people who think that now is as good as it gets, and that they have hit the wall. Normally, extending their runway in the private market while the technologies and market positions they believe in ripen would be a no brainer. And while Musk may have cooked his brain with drugs, the other principals here have not. That they do not want to bet until their situation ripens over the next five years is, in my view, a very interesting signal that the hot potato may be getting too hot to handle, and that buyer of the IPOs may be followed by no Greater Fools.
16 months ago I built a new workstation to replace my 6 year old PC. I bought a 2 x 32 GB kit of Crucial RAM. I paid $215 for the pair. Late in the year, Crucial announced it was exiting the consumer business because of heavy AI demand for RAM. Today the same 2 x 32 GB RAM kit costs $850, a little less than I paid for all the other components for the new workstation. It's doubtful that RAM prices will come down anytime soon and those of us who build workstations are seeing inflation in action. You don't even have to be an economist to figure out something is rotten!😉