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Vested Shorts: EVs capture over 7% car market, TSMC’s 25% revenue growth, Cohere’s $1B AI funding, Samsung’s AI smartphones

by Parth Parikh
January 20, 2024
4 min read
Vested Shorts: EVs capture over 7% car market, TSMC’s 25% revenue growth, Cohere’s $1B AI funding, Samsung’s AI smartphones

In today’s edition

  • EV market growth in the US
  • TSMC’s revenue surge
  • Cohere’s funding leap
  • Samsung’s AI innovation

Market Snapshot

In the week ending Friday, major US stock market indices experienced notable gains, driven predominantly by the technology sector. The S&P 500 concluded the week with a 1.2% increase, closing at 4,839.81. The Dow Jones Industrial Average also witnessed growth, ending the week 0.7% higher at 37,863.80. Significantly, the Nasdaq Composite led the upward trajectory with a 2.3% weekly rise, reaching a two-year peak at 15,310.97.

This upward momentum was largely attributed to the strong performance in the technology sector, particularly in semiconductors. Nvidia, a key player, saw a 4.2% rise over the week, buoyed by positive market reactions to its role in AI infrastructure development. Advanced Micro Devices (AMD) also contributed to this trend with a 6% increase, aiding the Philadelphia Semiconductor Index (SOX) in reaching a record high with a 4% weekly growth.

These gains in the tech sector underscored the market’s robust end to the week, reflecting investor confidence and optimism in the technology and semiconductor industries.

Market closing data for the week from January 15 to 19th, 2024

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News Summaries

In 2023, the electric vehicle (EV) market in the US witnessed notable growth, albeit at a slower pace than previously anticipated. A record 1.2 million EVs were sold, accounting for 7.6% of the domestic car market, up from 5.9% in 2022. However, this growth, while still robust, showed signs of slowing down, with the fourth-quarter sales increase moderating to 40% compared to the same period in the previous year, a decrease from the 52% growth observed in the fourth quarter of 2022. This slowdown is attributed to factors like the high prices of EVs relative to their petrol counterparts, impacting the mass market’s buying decisions. Despite these challenges, the overall trend indicates a steady rise in EV adoption.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker, projects a significant rebound in its growth for 2024, expecting revenue increases of up to 25%. This figure notably surpasses the anticipated overall semiconductor market growth of 10%. This optimistic forecast is fueled by demand in areas like artificial intelligence. Despite a seasonal 6.2% revenue dip forecasted for the current quarter, TSMC anticipates consistent quarterly revenue growth after that. The company’s recent performance includes a 17% quarter-on-quarter rise in revenues from high-performance computing applications, notably generative AI, and increases in smartphone and automotive chip sales. While TSMC’s capital expenditure is stabilizing following extensive expansions, the company remains confident about its long-term profitability, maintaining a competitive edge despite rivals like Intel and Samsung advancing in chip manufacturing technology. This confidence is underpinned by TSMC’s successful volume production of its N3P technology, contrasting with Intel’s upcoming 18A technology.

Cohere, an AI start-up co-founded by former Google scientists, is in advanced discussions to raise between $500 million to $1 billion in new financing, a significant increase from its previous fundraising efforts. This potential influx of capital, which would notably exceed the $270 million raised in June 2023, reflects the company’s growth and its ambition to become a prominent player in the large language model sector, rivaling the likes of Microsoft-backed OpenAI and Anthropic. Cohere, known for its enterprise-focused AI applications, offers a more specialized approach compared to OpenAI’s general-purpose tools, which potentially lowers development costs. This fundraising round is crucial for Cohere to sustain its growth in a capital-intensive industry and to maintain its position as a neutral AI service provider, independent of major cloud providers. The success of this funding effort will be a significant indicator of the venture capital community’s willingness to invest in AI technology at elevated valuations, amidst growing interest in commercializing AI solutions.

Samsung Electronics has unveiled its 2024 Galaxy smartphone series, featuring advanced on-device generative artificial intelligence (AI) capabilities, marking a significant technological advancement over its main competitor, Apple. These new smartphones, powered by Qualcomm’s latest AI-capable Snapdragon processor and Samsung’s own AI software, are expected to revive the smartphone market, which experienced its worst year in a decade in 2023. The introduction of on-device AI in mobile phones, a trend also being pursued by other manufacturers like Google, Honor, Oppo, and Xiaomi, allows for more efficient and secure operations without relying on cloud services. This innovation, which includes features like live call translations and enhanced photo editing, positions Samsung at the forefront of the AI-powered phone market, expected to constitute 45% of the total smartphone market by 2027. Despite this, analysts remain cautious about the immediate impact of these features on driving a significant replacement cycle in the smartphone market.

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