00:00 Julie Hyman
watching Intel and AMD, Alcoa and Nysource. Jay Conley is joining me to chat about these Intel
00:05 Julie Hyman
and it’s highest level since 2000.
00:09 Julie Hyman
pretty amazing here.
00:10 Jay Conley
26 years.
00:11 Julie Hyman
And AMD was up for what, 12 straight days going into oh, um, going into today. Intel’s been on a streak too, but it it was down on Tuesday, so it’s not quite the same winning streak, but enough.
00:24 Jay Conley
12 straight. Now it’s barely trading up.
00:29 Jay Conley
Enough. You see chip stocks, semiconductors, that big tech rally really just taking back over.
00:35 Jay Conley
the market kind of feeling like, okay, we’re kind of in a state of normalcy.
00:41 Jay Conley
The things that were working can start working again. AI demand never went anywhere. Big tech demand never went anywhere. It was depressed for a bit, but it never went anywhere. You now see that rally coming back in semiconductors.
00:51 Jay Conley
Intel’s all-time high in August 2000 at $74.88. Stock’s right below 70 right now. So we’re not too far off its record.
01:00 Julie Hyman
Wow.
01:00 Julie Hyman
Yeah, it’s pretty amazing. I mean, and it feels like
01:03 Julie Hyman
the last few weeks, there’s been a lot of talk about um compute, that buzzword of compute, which effectively when we talk about compute, we’re talking about capacity, AI capacity. Like if I’m going to use AI, if all these enterprises are going to use AI, how much can, how much of that can the data centers handle that are existing and running out there. And the answer is, um, they’re starting to have a little bit of trouble handling all of it. So that the implication then is that demand for chips will continue. And if there is this,
01:25 Jay Conley
Yeah. Right.
01:31 Julie Hyman
again, you know, there has been sort of a government push, a big push behind Intel to have that homegrown manufacturing.
01:40 Julie Hyman
So, I guess that all of that optimism is back.
01:44 Jay Conley
Yeah, physical, physical limits for compute are not moving as fast as demand for compute. So you’re going to see these stocks keep doing well because the demand’s not going anywhere. And maybe a year from now, five years from now, we start to see that pull back.
01:53 Julie Hyman
Yeah.
01:54 Jay Conley
But right now, it’s on fire.
01:56 Julie Hyman
Right now it is. So we’ll see if that um indeed keeps going. Let’s talk about Alcoa as well. Now, Alcoa on the one hand, did benefit from um higher aluminum prices, right, which we have seen, but the stock is down, uh because the company did miss with its numbers, with its earnings and sales, I believe.
02:10 Jay Conley
Yeah, a lot of the problem here is that aluminum refining is so concentrated in the Middle East. There is so much refining capacity inside the Persian Gulf. Uh, 8 and a half, 8.8 million tons of alumina, 6 million tons of bauxite, the two
02:22 Jay Conley
phase metals that go into aluminum in the Middle East, they’re moving through the Strait of Hormuz every year. There’s a huge amount of smelting capacity. All of that has now been taken off the market. It can’t get out of the Persian Gulf. These refiners have been shut down or damaged. You can’t move supply. And so Alcoa’s had to really see its sales fall back, and that’s hurting the stock right now. The sales down, uh revenue fell 5% uh in the quarter, missing earnings. So investors are not going to like
02:47 Jay Conley
that. However, to your point, CEO comes out today and says, look, we understand this isn’t great, but we should be benefiting from higher prices. This also is a chip story, is a data center story. Aluminum, copper, all of these metals are crucial to that rally. They’ve been going higher and higher. I’ve been watching these metals move higher all year, all over the past year.
03:07 Jay Conley
Is this just a hiccup? How fast can this recover? I think is going to be the question for the metals market.
03:11 Julie Hyman
Right. I mean, that’s what’s really interesting is that even with these headlines today that things are starting to open up um through the Strait of Hormuz or that that we hope that they will, the stock didn’t get a pop on that. I mean, it did run into the, it it’s had a good year. So that’s also sort of the context here. Um and then finally, also sort of on the data center front. Let’s talk about Nysource, right? This is a utility company, power company, signed a new deal with Alphabet or a subsidiary of Alphabet, I guess.
03:22 Jay Conley
Mhm.
03:24 Jay Conley
Right.
03:33 Julie Hyman
Um and this has to do with the data center in Northern Indiana that Nysource is going to be supporting.
03:38 Jay Conley
Yeah, that’s right. This is the umpteenth deal you’ve seen. We, I mean, how many times have we had this conversation, Julie. This is Amazon signing with Talon Energy. This is AES signing with Google, Meta signing with Constellation, Vistra, Entergy,
03:45 Jay Conley
uh Talon, Oklo, TerraPower. These deals just keep going. Yeah. Because what is the other constraint alongside compute here? It’s power for the AI, for these data centers. They require enormous amounts of electricity. If these companies can’t get that, they’re going to run into real walls. So they’re doing everything they can. You’re seeing more and more of these long-term power deals.
04:02 Jay Conley
Let me build my data center, you come build a natural gas plant, or let’s turn back on a nuclear power plant that had been shut down. Let’s find ways to get power right now, quickly, because if I want to get on the grid, that could be 10 years and I can’t wait 10 years and my investors won’t wait 10 years.
04:13 Julie Hyman
Yeah, and this is going to be some um upgrades, I guess it looks like for some of their existing capacity to your point. The stock by the way is up more than 20% over the past year and it touched a 52 week high today, which may have also been a record high actually. So, these utilities continue to be up.
04:24 Jay Conley
It’s a great time to be a utility in demand.
04:27 Julie Hyman
Yeah, unfortunately for all of us and our electricity rates, but that’s a, we’ll talk about that in again another time. Jake, thanks so much. Appreciate it.
04:31 Jay Conley
Unfortunately for us.
04:32 Jay Conley
Thanks.
