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Vested Shorts: Bitcoin is above $50,000, Microsoft’s Xbox expansion, race to manufacture EV batteries, and Nvidia’s chip innovation

by Parth Parikh
February 17, 2024
3 min read
Vested Shorts: Bitcoin is above $50,000, Microsoft’s Xbox expansion, race to manufacture EV batteries, and Nvidia’s chip innovation

In today’s edition


  • Growing interest in bitcoin ETFs
  • Strategic shift by Microsoft
  • Toyota, Volkswagen, Nissan, Honda and Microsoft: Race to make better EV batteries
  • Nvidia’s custom chip bet

Market Snapshot

The S&P 500 index concluded the week lower, snapping a five-week winning streak following an unexpectedly high Producer Price Index (PPI) report for January. This report, which showed a 0.3% rise in overall PPI and a 0.5% increase in core PPI, reignited inflation worries and tempered expectations for Federal Reserve rate cuts. 

Despite this week’s decline, the stock market remains near record highs, reflecting ongoing optimism about corporate earnings and economic prospects.

Stock market closing data for the week from February 12 to 16th, 2024

News Summaries

Bitcoin’s price soared above $50,000 for the first time since 2021, marking a significant rebound driven by the launch of mainstream bitcoin exchange-traded funds (ETFs) and reversing a decade-old policy by the US Securities and Exchange Commission. Despite an initial 15% drop post-approval, the industry has seen a resurgence, with newly issued bitcoin ETFs attracting around $3 billion in net flows. This influx of new capital, alongside a growing acceptance among traditional financial players and optimism surrounding regulatory challenges and monetary policy shifts, points to a broader acceptance and organic demand for bitcoin. However, opinions on bitcoin’s future remain mixed, with some analysts cautioning about its volatile nature and the speculative basis of its valuation.

Microsoft is diversifying its Xbox game distribution, moving beyond its traditional console exclusivity to introduce selected titles on rival platforms like Sony’s PlayStation and Nintendo’s Switch. This strategy adjustment comes as the tech giant seeks to counter a gaming industry slowdown by tapping into a broader audience beyond its Xbox console base, which has been trailing behind PlayStation 5 and Switch in sales. The move, which includes making Activision Blizzard games available on its Game Pass service, aims to increase profitability through software and services, reflecting a pivot to where Microsoft sees sustainable growth. Despite this expansion, certain games will remain Xbox exclusives, maintaining a balance between openness and platform uniqueness. This comes amid a challenging period for the gaming sector, with marginal revenue growth and layoffs, including at Microsoft, indicating a strategic adaptation to evolving market dynamics.

Toyota, aiming to revolutionize the electric vehicle (EV) market, plans to launch EVs with solid-state batteries by 2027 or 2028, promising a charging time under 10 minutes and a range of about 1,200 kilometres—double that of current lithium-ion batteries. This initiative places Toyota alongside Nissan, Honda, and global competitors like Volkswagen and Microsoft, the latter leveraging AI to expedite solid-state battery material discovery. Meanwhile, China is aggressively pursuing the same technology through a national consortium aimed at dominating the solid-state battery supply chain by 2030. This global race underscores a significant shift towards more efficient, faster-charging batteries amidst a broader industry trend of leveraging technology and AI to advance EV capabilities and sustainability, signalling a pivotal moment in automotive innovation and the push for cleaner transportation solutions.

Nvidia is aggressively expanding into the custom chip market, targeting major cloud computing and AI firms to offer bespoke AI processors tailored to their specific needs. By proposing to design specialized chips that optimize performance while reducing costs, Nvidia aims to challenge both traditional semiconductor competitors and the trend of tech giants like AWS, Meta, Microsoft, Google, and OpenAI developing their in-house chips. This strategy leverages Nvidia’s strengths in software and R&D to provide a competitive alternative to self-developed chips, promising lower total cost of ownership (TCO) despite the inherent trade-offs of increased dependency on Nvidia’s ecosystem. With discussions already underway with the industry’s largest compute users, Nvidia’s move represents a calculated bid to redefine its role and value proposition in the rapidly evolving tech landscape, where efficiency and customization are increasingly paramount.

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