Weekly Brief #49
Weekly Brief #49
Big tech's push into nuclear energy, explained... Plus, Sphere expands to Abu Dhabi, ASML leaks earnings early, Apple to expand smart home, Uber in-talks to acquire Expedia, Israel kills Hamas leader.
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Good morning investors 👋,
Happy Friday and welcome or welcome back to the 49th Weekly Brief.
Featured: This week, the remaining two of the top three cloud computing giants, Google and Amazon, followed Microsoft’s footsteps by partnering with energy companies to fund nuclear power plants for sustainably powering their data centre capabilities. It’s absolutely incredible how powerful these three names are in our world right now, and in today’s issue, we’ll be discussing the full meaning behind this surge of interest from big tech cloud giants into nuclear energy, and more.
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(Make sure to check out this week’s ‘Book of the Week!’)
Today’s a short one. Let’s get into it. (10 min read)
In this issue:
⚡️ Big tech’s push into nuclear, explained
🔬 ASML accidentally leaks earnings
🇮🇱 Israeli forces kill leader of Hamas
FEATURED STORY
⚡️ Big tech’s push into nuclear, explained
This week, two big tech companies—more specifically, two of the largest cloud computing companies in big tech—announced partnerships to build out nuclear power plants, joining companies like Microsoft, which had already announced a similar partnership last month.
But why nuclear power?
It’s because of data.
Basic’s of AI infrastructure
Cloud computing (or simply cloud) is the most important industry in our current civilization. Cloud (colloquialism for the internet, not a literal cloud) is the technology powering online streaming, financial institution networks, and every single website on the web. If something runs over the internet, it’s most likely powered by cloud computing either directly or indirectly. And with the start of the generative artificial intelligence (GenAI) era, cloud will only continue to become a more important part of the global technological world.
Of this GenAI revolution, there’s a simple but simultaneously complex infrastructure system that lays the groundwork for the development of generative artificial intelligence. This infrastructure includes a few important things:
Hardware
Powerful AI hardware (GPUs) to support large amounts of data: Nvidia, AMD.
Cloud Computing
Providers like AWS, Google Cloud, Microsoft Azure offer
Frameworks
Tools to build out, train, and deploy AI models: TensorFlow, PyTorch, Keras, and Scikit-learn.
Data Storage
Storage options for large datasets and models: Amazon S3, Google Cloud Storage, Azure Blob Storage.
… and out of this infrastructure, cloud computing takes up a significant portion of the overall process. Without cloud, there’s no GenAI. Cloud is the foundation of the internet and now GenAI, and because of this, I believe cloud computing is the most important industry in the technology sector (potentially even the world).
Now, sure, saying cloud is the best sector is ironic coming from the guy who has allocated a majority of his stock portfolio toward key players in the cloud market, but I assure you, it’s not biased (at least, not too biased). Not many people know what cloud is or how beneficial or important it is to our current digitalized world; as such, not many people understand the importance of the players in the industry and the investment opportunities they will provide.
Think about it: when you visit a website, stream a video, or use an app, the data you see is usually coming from the cloud, where all the heavy lifting is done behind the scenes by AWS, Azure and Google Cloud. That is an incredibly valuable business.
Why nuclear energy?
Amazon, Microsoft, and Google are the main players in the cloud market, with practically no other major competition at all.
Together, they control about 75% of the cloud computing market.
Each of these companies are trying to out-GPU-purchase one another at the moment, investing in making their data centres the best on the market so they can control a larger slice of this future GenAI growth in cloud computing. For an industry projected to be worth $2.3 trillion by 2032, these three companies alone will account for approximately $1.73 trillion in revenue, which quite clearly shows the significant importance of cloud computing in the AI infrastructure process.
It turns out, though, that as GenAI develops and businesses flock to cloud computing services for their large data centres, these cloud giants are starting to realize they need more energy to power the enormous amounts of data. As these companies continue to build out their data centres and purchase more and more GPUs, the demand for energy grows.
So, what better way to secure more electrical energy than to literally purchase nuclear power plants (and partner with nuclear energy businesses)? Says the cloud giants. AWS, Azure and Google Cloud need to host those trillions of gibibytes of data after all.
To close things off, simply put as of now, I’m bullish on cloud computing, and I’m extremely bullish on Amazon. These partnerships and investments in nuclear contribute nicely to that bullish-ness, and further support the argument that cloud is the most important part of the AI revolution. Enjoy the rest of today’s issue!
More on cloud:
FINANCE
a. 🔬 ASML accidentally leaks earnings
ASML shares fell over 16% this Tuesday leading into Wednesday, their largest one-day decline ever, after the company’s Q3 2024 earnings were accidentally released a day early (whoops). The results revealed a revised 2025 sales outlook of €30 billion to €35 billion, down from €30 billion to €40 billion, due to customer caution and a slower recovery in chip demand.
CEO Christophe Fouquet said that while AI development remains strong, delays in their extreme ultraviolet (EUV) equipment has impacted growth. (Although, even with this sales revision, it gives ASML year-over-year revenue growth of 17%. So not disappointing all that much on the surface, in my opinion.)
Related articles:
b. 🏠 Apple to expand smart home segment
After giving up its EV plans back in February, Apple is now officially walking a different path, gearing up to compete in the smart home market and aiming to catch up with Amazon and Google, the current undisputed leaders. The company plans to enhance its home product strategy over the next two years, focusing on developing a new homeOS and smart displays…
Apple aims to create a seamless end-to-end experience by supporting a wide range of accessories through the Matter protocol (the open standard for smart home technology) and leveraging artificial intelligence for enhanced home automation. While no products have been officially announced in typical Apple fashion, some are rumoured to be released over the coming years.
BUSINESS
c. ✈️ Uber in-talks to acquire Expedia
Uber is in the very early stages of talks to acquire travel booking company Expedia, expanding beyond ride-hailing and food delivery while inching closer towards its goal of creating a “super app,” as reported by the Financial Times earlier this week.
While the discussions are confidential and may not lead to a deal, Uber’s current CEO, Dara Khosrowshahi—former longtime CEO of Expedia—still sits on Expedia’s board. The potential deal, valued at $20 billion or more, would be Uber’s largest acquisition in its history. (With the rise of autonomous driving, I personally believe diversifying beyond ride-sharing is a crucial step for Uber’s long-term survival.)
Related articles:
d. 🔮 Sphere expands to Abu Dhabi
Sphere Entertainment, the company behind the 20,000-capacity rightly named “Sphere” in Las Vegas, is now coming to an Abu Dhabi near you! (Sorry, couldn’t miss the opportunity.) Sphere operates under a global franchise model (and is also publicly traded, believe it or not), meaning DCT Abu Dhabi pays fees for Sphere’s designs, technology, and creative content.
The Sphere will be modeled after its Las Vegas counterpart and, like the Las Vegas one, will offer events, concerts, and shows to provide “a unique visitor experience.” UAE officials expect it to be a year-round tourist attraction for the city, supporting the country’s Tourism Strategy 2030, which aims to make Abu Dhabi a hub for culture and innovation on the global stage.
POLITICS
e. 🇮🇱 Israeli forces kill leader of Hamas
Hamas leader Yahya Sinwar has been killed by Israeli forces in southern Gaza, as confirmed by the Israel Armed Forces this Thursday. Sinwar led Hamas in Gaza since 2017 and was allegedly the mastermind behind the October 7 attacks killing 1,200 Israelis and taking 251 hostages. Sinwar was killed with two other militants in Rafah.
Israel’s Prime Minister Benjamin Netanyahu called this the “beginning of the end” of the Gaza war. Hamas has yet to comment.
The latest death toll stands at 43,165 Palestinians and 1,139 people killed in Israel since October 7, 2023, per Al Jazeera.
Related articles:
📚 Book of the Week
⭐️ For every book purchased using the links below, 80% of affiliate commissions are donated to The Princess Margaret Cancer Foundation (official charitable partner organization of J. Nicholas).
Total donated to date: $30.00
Note: I don’t recommend books that I haven’t read or that I would never read. The books I recommend are books I have already read or that I will eventually read.
Warren Buffett and the Interpretation of Financial Statements — Mary Buffett and David Clark
Book Description:
[Mary] Buffett and Clark clearly outline Warren Buffett’s strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett’s mentor, Benjamin Graham (The Interpretation of Financial Statements, 1937), this book presents Buffett’s interpretation of financial statements with anecdotes and quotes from the master investor himself.
Potential investors will discover:
Buffett’s time-tested dos and don’ts for interpreting an income statement and balance sheet.
Why high research and development costs can kill a great business.
How much debt Buffett thinks a company can carry before it becomes too dangerous to touch.
The financial ratios and calculations that Buffett uses to identify the company with a durable competitive advantage—which he believes makes for the winning long-term investment.
How Buffett uses financial statements to value a company.
What kinds of companies Warren stays away from no matter how cheap their selling price.
Once readers complete and master Buffett’s simple financial calculations and methods for interpreting a company’s financial statement, they’ll be well on their way to identifying which companies are going to be tomorrow's winners—and which will be the losers they should avoid at all costs.
Destined to become a classic in the world of investment books, Warren Buffett and the Interpretation of Financial Statements is the perfect companion volume to The New Buffettology and The Tao of Warren Buffett.
Thank you for reading today’s Weekly Brief! If you enjoyed or learned anything, please spread the word. (Remember, none of this is financial advice, please do your own research.)
— Jacob xx