AI is significantly shaping the future of technology and investment landscapes, marking a pivotal moment for investors and companies alike. Capable of creating new content from existing data, AI is not only enhancing efficiency and innovation across various industries but is also presenting unique growth opportunities and challenges. The recent surge in the adoption of generative AI technologies, underscored by substantial investments and strategic initiatives by leading tech firms, indicates a broader acceptance and reliance on AI technologies.

Stay up-to-date on the latest AI trends – here’s what’s new this week.

In the news this week:

• A critical development in the Generative AI space is the formation of the Artificial Intelligence Safety and Security Board by the U.S. government in April 2024. This board, comprising leaders from OpenAI, Microsoft, Nvidia, and Alphabet, signifies a robust government interest in managing AI’s integration into critical infrastructure like the power grid and transportation with an eye on safety and security. The inclusion of tech giants in the board underscores the collaborative effort between public and private sectors to harness AI’s potential while mitigating associated risks. This move mirrors the growing consensus on the importance of AI and its safe deployment across critical sectors to ensure national security and economic stability.
• OpenAI has introduced updated privacy features for ChatGPT, including a Transient Mode and enhanced memory controls for Plus users. These updates, highlighted in “Cryptopolitan” and “ZDNet”, aim to bolster user trust by addressing privacy concerns and allowing more control over personal data. The ability to engage in non-recorded, one-off conversations or to precisely manage how AI remembers user information reflects a growing awareness around the importance of privacy in AI interactions. These enhancements could significantly impact how users perceive and interact with AI technologies, potentially accelerating the adoption of generative AI by making it not only more user-friendly but also more secure.

ARTI Portfolio Highlights

Apple Inc.

Apple reported a record revenue of $90.8 billion for the March quarter, with significant growth in services revenue, marking an all-time high and indicating a successful diversification beyond hardware sales. However, iPhone revenue declined by 10% year-over-year, and both iPad revenue and wearables, home, and accessories category saw decreases. The launch of the new MacBook Air models contributed to a 4% increase in Mac revenue, showcasing strong consumer demand for Apple’s latest innovations. Apple’s environmental initiatives and a projection of low single-digit revenue growth for the June quarter, despite foreign exchange headwinds, reflect its commitment to sustainability and cautious optimism about future performance. The company also announced a $110 billion stock buyback plan – the largest in US history.

Apple’s services sector achieved an all-time revenue record, growing 14% over the past year. This growth in services revenue underscores the company’s successful strategy in diversifying its revenue streams beyond hardware sales, indicating a robust and growing ecosystem that continues to attract and retain customers.

Apple’s bullish stance on generative AI, backed by significant investments, highlights the company’s commitment to leading in the AI space. Leveraging its hardware, software, and services integration, along with a focus on privacy, Apple aims to differentiate itself in the rapidly evolving AI market, indicating potential for future innovation and growth.

The Apple Vision Pro has seen significant interest from the enterprise market, with over half of the Fortune 100 companies purchasing units for innovative uses. This early adoption by major corporations suggests a promising market for Apple’s spatial computing device, potentially opening new revenue streams and applications in the business sector.

Amazon.com, Inc.

Amazon reported a significant year-over-year revenue growth of 13% to $143.3 billion in Q1 2024, with operating income soaring 221% to $15.3 billion, indicating strong profitability. The company’s free cash flow saw a remarkable improvement, reaching $48.8 billion, up $53.2 billion from the previous year. Key innovations include the launch of a generative AI tool for sellers, achieving the fastest delivery speeds ever for Prime members, and a 24% growth in advertising sales. AWS’s revenue growth accelerated to 17.2%, highlighting robust demand for cloud services. Amazon anticipates a 7% to 11% growth in Q2 2024 net sales, reflecting confidence in continued growth.

Amazon expects a meaningful increase in year-over-year capital expenditures in 2024, primarily to support growth in AWS, including generative AI. This increase is a positive sign of future growth, as it reflects strong demand for AWS services and Amazon’s commitment to investing in its infrastructure to meet this demand.
Amazon launched a new generative AI tool that simplifies the process for third-party sellers to add their products to Amazon’s platform, with over 100,000 selling partners already utilizing it. This innovation not only enhances the selection available on Amazon but also strengthens the company’s relationship with third-party sellers by making it easier for them to sell on the platform.

Amazon sees considerable momentum in generative AI, with AWS accumulating a multi-billion dollar revenue run rate in this area. The company’s focus on adding capabilities across the Gen AI stack and the launch of Amazon Q, a generative AI-powered assistant, highlight Amazon’s leadership in AI innovation and its potential to drive future growth.

Advanced Micro Devices, Inc.

AMD’s Data Center Segment revenue soared by 80% year-over-year to $2.3 billion, driven by robust AMD Instinct MI300x GPU shipments and a significant increase in server CPU sales, marking a major win in the data center sector. The Client segment also saw a substantial revenue increase of 85% to $1.4 billion, thanks to strong demand for Ryzen mobile and desktop processors. However, the Gaming and Embedded segments faced downturns, with revenues declining by 48% and 46% respectively, indicating challenges in these markets. AMD is aggressively investing in AI software and hardware to capture growth opportunities, with a revised forecast expecting data center GPU revenue to exceed $4 billion in 2024. The company reported a Q1 2024 revenue of $5.5 billion, up 2% year-over-year, and anticipates Q2 2024 revenue to be around $5.7 billion, signaling continued optimism in its core business areas.

AMD’s Data Center Segment revenue grew 80% year-over-year to a record $2.3 billion, driven by strong AMD Instinct MI300x GPU shipments and a double-digit percentage increase in server CPU sales. This growth signifies AMD’s increasing market share and competitiveness in the data center sector, particularly in server CPUs and GPUs, which is crucial for the company’s financial health and growth trajectory.

AMD is expanding its investments in AI software and hardware, aiming to capture the significant growth opportunity presented by AI. The company’s efforts in developing the AI software stack and accelerating AI hardware roadmaps, including partnerships for co-optimizing solutions, indicate a strategic focus on becoming a key player in the AI infrastructure market.

QUALCOMM Incorporated

Qualcomm reported strong financial performance with non-GAAP revenues of $9.4 billion and EPS of $2.44, surpassing guidance due to demand in premium smartphones and automotive sectors. The company’s automotive revenue is on track to exceed $4 billion by fiscal 2026, with a design win pipeline now at $45 billion, highlighting its growing dominance in the automotive industry. Qualcomm also announced significant advancements in AI and IoT, launching the Qualcomm AI Hub and new IoT solutions, positioning itself strongly in these expanding markets. Additionally, a dividend increase to 85 cents per share reflects confidence in Qualcomm’s financial health. The company anticipates continued strong performance in Q3, with revenues expected between $8.8 to $9.6 billion.

Qualcomm’s IoT revenues grew by 9% sequentially to $1.2 billion, slightly exceeding expectations. This growth, coupled with the launch of new Snapdragon platforms for AI PCs, positions Qualcomm well in the IoT and PC markets as demand normalizes exiting fiscal 2024.

Qualcomm launched the Qualcomm AI Hub and introduced new IoT solutions, including the Qualcomm QCC 730 and RB3 Gen II platform, aimed at powering a wide range of devices with enhanced AI capabilities and lower power consumption. These initiatives are set to capitalize on the rapid expansion of AI from the cloud to devices, positioning Qualcomm favorably in the growing IoT and edge AI markets.

Investing in Artificial Intelligence with ARTI ETF

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Evolve Artificial Intelligence Fund (ARTI) is Canada’s first Artificial Intelligence Fund that uses generative AI in portfolio construction. ARTI is designed to provide investors with exposure to global securities from AI companies deemed to benefit from the increased global adoption of AI.

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