| WEEKLY ROUNDUP Hello, Reader. If there’s one thing that we Americans appreciate, it’s a good deal. According to data gathered by Capital One’s Shopping Research updated in December 2024… - 94% of Americans redeem at least one discount each year.
- Over 80% of U.S. consumers sign up for email offers specifically to receive discounts.
- And 67% of U.S. consumers have made a purchase they weren’t planning on after being offered a discount.
Today is a perfect example. Many restaurants are offering deals on food and drinks in celebration of Cinco de Mayo, a day that marks an important battle in Mexico's conflict against the French. Although I don’t have any deals on delicious dishes to share with you today, I have found a deal on a company that has become a major player in many facets of AI technologies. But shares of this company could skyrocket starting as soon as tomorrow, so I wanted to share a little bit about this company today. Let’s take a look… This company is a leading supplier of cutting-edge computer processors… and one of my recommendations at Fry’s Investment Report. Generally speaking, business is booming, but the company’s share price is not. It is trading for about 19 times estimated adjusted 2025 earnings, which is about 20% below the valuation of the Nasdaq Composite index. This disconnect is creating a great investment opportunity. This company has been so successful at generating strong profit growth, and at expanding its market share in key markets, that it has become what I call a “brown bag” buy. If we pulled a brown bag over its logo, so that we did not know the company’s identity, nor had any idea what products it produces, the company’s raw financial performance would strongly tempt us to buy the stock. This “brown bag” buy competes directly against Nvidia Corp. (NVDA) in an industry that is brutally competitive and deeply cyclical. Because of factors like these, investors have been dumping the stock for months, despite the company’s superb operating performance and bulletproof balance sheet. The company’s core operations are making rapid gains, especially its fledgling data center division. This critical division is growing at a blistering pace. Last year, its revenues nearly doubled and accounted for half of total company revenue. The data center division is just one of this company’s four main business segments, broken down as follows… - Data Center – Provides data center customers with server-class CPUs, GPUs, and related computing platforms.
- Client – Provides CPUs, APUs, and chipsets to the companies that build desktops and notebooks for both the consumer and enterprise markets
- Gaming – Focuses on designing and developing computer processors and graphics technologies for PC, handheld, and console gaming devices
- Embedded – Provides CPUs, GPUs, and other processing solutions that become embedded in a vast range of products and applications like consumer electronics, automotive, industrial automation, healthcare, and telecommunications
The company’s GPU’s are a cost-effective alternative to Nvidia’s market-leading H100 and H200 GPUs. As of December 2024, the company had shipped more than 300,000 of its professional GPUs designed for AI and high-performance computing applications to Meta Platforms Inc. (META), Microsoft Corp. (MSFT), and Oracle Corp. (ORCL). It also inked a fascinating forward-looking deal late last year: It teamed up with Nvidia as strategic investors in funding round for xAI. Here’s where the opportunity lies… The artificial intelligence firm co-founded by Elon Musk – xAI – has been operating a supercomputer in Memphis, Tennessee, since September 2024. It is the world’s largest supercomputer, and it currently has 100,000 graphics processing units (GPUs). Back in December 2024, xAI laid out plans for expansion that will allow the supercomputer to hold at least 1 million GPUs. For comparison, the fastest operational supercomputer as of June 2024, called Frontier, only had 37,888 GPUs. GPUs allow supercomputers – or any AI technology – to, simply put, achieve faster overall processing. So, the more GPUs, the quicker a supercomputer can process data and perform computational calculations. And so, “Colossus” is now widely considered the world’s largest and fastest AI supercomputer, and what xAI calls “the most powerful AI training system yet.” This is paramount in the AI race, as a superintelligent AI computer could power all sorts of autonomous robots, discover the cure for many deadly diseases, find new, unlimited clean sources of energy, make breakthrough scientific discoveries… the list goes on. So, this company has gained a seat at the table of what could become a multidimensional AI powerhouse. As I said, the clock is ticking on this deal: The company is hosting a conference call with Wall Street analysts tomorrow… where they could give an update on this Elon Musk project and the next generation of AI. Additionally, analysts expect about a 50% year-over-year earnings per share increase, and about a 30% year-over-year revenue increase. And despite 2025 headwinds, the company has beaten consensus estimates in seven out of the last nine quarters. So, the time to get in on this one-stop AI play is now. You can learn all about this company, beyond just its name and ticker symbol, at Fry’s Investment Report. Click here to access all of the details. Now, let’s look at what we covered here at Smart Money this past week… | 
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