We've Got the AI Sector Covered!

The hundreds of AI-related stocks trading on various exchanges around the world have been reduced to 31 pure-play stocks trading on Canadian or American exchanges in 7 categories by munKNEE.com and put into portfolios which are tracked on a weekly basis. What follows is a summary of these 7 portfolios' performances this week.

The 6 Stages Involved in the Production & Distribution of Semiconductors

There are 6 stages involved in the production and distribution of semiconductor devices such as microprocessors, memory chips, and sensors involving multiple companies, each with their own specialized contributions, and the 27 pure-play stocks in each of these stages are presented below.

1. electronic design automation (EDA) companies with sophisticated software that assist engineers in the custom design and development of complex chips;
2. equipment and material suppliers that provide essential equipment for manufacturing chips such as lithography machines, etching, test and packaging equipment, automation and inspection systems and production materials such as chemicals, gases, wafers and packaging;
3. factories (called foundries in semiconductor jargon) that concentrates all their efforts in the manufacturing of chips based on the designs provided by other semiconductor companies;
4. companies that outsource the fabrication (or fab) of chips to specialized foundries while designing and selling the chips;
5. companies that assemble chips into finished semiconductor components, tests for defects and do the very specialized packaging of the chips for shipping assembly.
6. In addition, there are Integrated Device Manufacturers (IDMs) that do all of the above elements themselves to control the entire production process.

The 6 semiconductor segments (portfolios) are presented below, in descending order, this week highlighting those pure-play constituents in each portfolio that had stock prices that are UP and DOWN 5%. Last week NO constituents in the above portfolios went down but this week 3 of the 6 did, albeit marginally..

1. The Fabless Portfolio: UP 2.3%
   • Constituents:
     • DOWN <5%: NVDA; MRVL; AVGO; AMD; MPWR; QCOM 
2. The Assembly, Test and Packaging Portfolio: UP 1.8%
   • Constituents:
     • UP <5%: AMKR; ASX
3. The IDM Portfolio: UP 1.1%
   • Constituents:
     • UP <5%: TXN; STM, MCHP, IFNNY, ADI
     • DOWN <5%: MU; NXPI; INTC
4. The Foundries Portfolio: DOWN 0.5%
   • Constituents:
     • UP <5%: GFS; UMC. TSEM
     • DOWN <5%: TSM
5. The Equipment and Material Suppliers Portfolio: DOWN 1.3%
   • Constituents:
     • UP <5%: ENTG
     • DOWN <5%: KLAC; AMAT; LRCX; ASML
6. The EDA Software Portfolio: DOWN 2.0%Constituents:
   • DOWN <5%: CDNS; SNPS

Summary: DOWN 0.1%, on average, this week vs. going UP 8.7% the previous week.

Pure-Play Quantum Computing Stocks

Building a quantum computer is extremely expensive, complex and massive, and needs to be kept in stable laboratory conditions, and cooled to nearly absolute zero (-459 degrees Fahrenheit) and, as such, are primarily confined to very few small, innovative companies developing and leveraging quantum computing.

There are only 4 pure-play quantum computing companies.  (The companies that are involved in the research and development of quantum computing but are also involved in other aspects of AI technology include Microsoft (MSFT), Nvidia (NVDA), Alphabet (GOOGL), Amazon (AMZN), Advanced Micro Devices (AMD), IBM, Intel (INTC), Honeywell Int'l (HON), and Baidu (BIDU), and are not included in the Pure-Play Quantum Computing Stocks Portfolio). The 4 constituents are presented below as to their performances this week and any news, analyses and/or commentary, where available.

The Pure-Play Quantum Computing Stocks Portfolio

• UP 3.8% on top of going UP 4.3% the previous week:
• Constituents:
  • UP >10%: QBTS (+15.1%)
  • UP >5%: QUBT (+9.5%); RGTI (+7.8%)
  • UP <5%: IONQ
• Pertinent news, analyses and commentary:
  • D-Wave (QBTS) Q2 Results Show "Traction on all Fronts"
  • Rigetti Introduces Novel Chip Fabrication Process For Scalable, High Performing QPUs

Summary

The above 31 constituents are DOWN 0.1%, on average, this week and, for the record, the Nasdaq was UP 1.0% and the S&P 500 was UP 1.4%, in comparison.

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