Innovation is rarely valued by investors, many of whom live with a 24 hour horizon. Apple introduced a revolutionary new form of computing this week with the Apple Vision Pro and lost $70 billion in stock market value. Amazon sold a lot of stuff in the fourth quarter (gosh) and Meta attracted a lot of advertisers and announced dividends; little innovative, but together they gained $270 billion in market cap. Maybe nice for investors, but totally uninteresting for fans of innovation.
Whirlwind tech week on Wall Street
It was another tumultuous week for Tesla, as growth stalls and hassles surround Elon Musk's compensation. It even led Tesla's lawyer to burst into tears, so unfair did the darling think it was that the court intended to force a $56 billion bonus through Musk's nose.
The funny thing is that, according to the judge, the teardown showed precisely that Musk is not surrounded by independents at Tesla who also have the best interests of the company and other shareholders at heart. It is not known whether Musk himself shed a tear over missing out on his $56 billion thirteenth month.
Furthermore, it was another special week on Wall Street for tech companies. Shares of Amazon and Meta jumped, while Apple, on the other hand, paid a hefty price for continued uncertainty over access to the Chinese market.
Google sold fewer ads than hoped and investors were shocked by Google's investments in AI, as servers for AI applications are screamingly expensive to buy and use. On the other hand, Google's AI assistant, Bard, is now making great strides against rival OpenAI's ChatGPT. But that apparently did not interest investors, who are focused on the short term.
Memorable week for Zuckerberg
Meta's Mark Zuckerberg experienced a bizarre week. On Wednesday, he testified with CEOs of other social media companies in the U.S. Congress and apologized for the horrific things that happened to children on his social media networks. Parents of children who committed suicide after the misery happened to them were not impressed.
Zuckerberg has a long history of apologizing for all the out-of-control incidents on his networks. I hold out hope that one day a bell will ring with him that a company can have more goals than just linking addictive algorithms to click-hungry advertisers.
Does such an embarrassing display in Congress matter to investors? No, because the next day Meta announced a 25% increase in profits, with a promise to pay dividends from now on, and so Meta could add $196 billion to its stock market value. Zuckerberg himself, who owns about $350 million in shares in Meta, will receive an additional $175 million in dividends and will be able to earn an additional $700 million annually.
SMCI stock is super, though, not micro
While Meta and Amazon attracted most of the attention, it almost went unnoticed that the engine behind all AI developments, chipmaker Nvidia, has nearly overtaken Amazon and Alphabet in market value. Almost silently, Nvidia has already risen as much this year as Meta, so beloved by investors this week: 37%. But Nvidia did so without putting minor customers over the top.
There's another fascinating stock from a much lesser-known chipmaker: Super Micro (SMCI). Do yourself a big favor today and click on that link: surely it's enjoyment from such a website, seemingly created by the CEO's nephew during a grade 6 homework assignment?
In the chart above, Super Micro is almost invisible among the tech giants with a market value of "only" $32 billion, but the company is rapidly emerging as a mini-Nvidia.
Super Micro (SMCI) Nvidia (NVDA)
last 5 years: 3.664% 1.686%
1 year: 587% 214%
year to date: 103% 37%
Super Micro is the cheaper alternative to Nvidia and doubled sales, driven by the global hunger for chips that can handle AI applications, combined with a 71% increase in profits. As a result, SMCI shares have already risen as much as 103% this year. On the stock market, Super Micro has been winning over Nvidia for five years.