- A Major Milestone for Small Modular Reactors…
- We’re just months away from Apple’s new product launch…
- Apple’s shift to India is bigger than expected…
Dear Reader,
Before we get to today’s edition of The Bleeding Edge, I wanted to let you know about a special event happening tomorrow.
As we know, this year has started off just like last year ended, with a lot of market volatility. I still believe we’ll see healthier market conditions in the second half of this year. But while we work through the market volatility, it presents an interesting opportunity for traders.
Volatile markets are ideal for options traders. Outsized moves – up or down – can mean profitable trading opportunities in weeks or days. And for anyone who is a more active trader, or interested in becoming one, I’d recommend checking out my colleague, Jeff Clark.
Jeff has been a professional trader for more than three decades. And back when I was actively trading, I was a subscriber to Jeff’s work. I always appreciated his disciplined, analytical style of trading. And I would recommend his research to any investor looking for shorter-term trading opportunities.
Jeff is holding a special event tonight at 8 p.m. ET. Tonight, he’ll reveal the market event that will open up the next window for traders. And he’ll also share the names of three stocks he’s targeting right now.
If you’d like to learn more, you can hear from Jeff Clark himself by going right here.
NuScale is the first SMR to get certified…
The U.S. Nuclear Regulatory Commission (NRC) just certified NuScale’s small modular reactor (SMR) design. This allows for power generation companies to apply for permits to construct power plants utilizing this new SMR design.
This is a huge step towards the deployment of next-generation nuclear fission technology. It’s also a huge milestone for NuScale.
Regular readers may remember this company. We highlighted NuScale last August. That’s when the company received an earlier certification from the NRC for its reactor design.
That milestone paved the way for NuScale to deploy its own small modular reactors for testing. And this most recent certification will allow utility companies to name NuScale’s SMR technology in their applications to build their own small modular nuclear power plants.
So this is certainly an exciting development. And one that’s been a long time coming. NuScale was founded in 2007 and based on work spun out of Oregon State University. These kinds of certifications are rare… In fact, there have only been six other kinds of nuclear reactors that have ever received this certification. And this is the only SMR design to have ever been certified.
That said, it’s still going to take years before we see the first SMR deployment. NuScale is on track to turn on its first small modular reactor at a power generation plant in 2029. It will be in Utah. So we’re still six years away.
And we can bet that utilities will want to see extensive data from NuScale’s own testing before they build out any new power plants using this design. Given the safety concerns around nuclear fission, this process is time consuming.
Still, NuScale’s SMR technology is quite promising.
If we remember, the reactors – the heart of the power plant – are small enough to fit on the back of a large semitrailer. That means they can be centrally manufactured and then shipped to their final destination for installation. This reduces costs and accelerates construction times significantly.
Here’s a look at what a power generation plant using SMRs could look like:
Source: NuScale
Here we can see that the SMR design is much different from the nuclear power plants we are used to seeing. Everything is sleek, compact, and relatively low to the ground.
And notice that we don’t see any large cooling towers. That’s because this design can produce electricity with far less heat. Therefore, they require less cooling capacity.
And think about this – each module can produce about 50 megawatts (mw) of electricity. That’s enough to power about 45,000 homes.
But power plants can consist of as many modules as necessary. So to increase power production, plants can simply add as many modules as they need.
So SMR technology represents a massive upgrade over existing nuclear fission designs. This dynamic will make NuScale a potential investment target one day… but not today.
When we look at a company like this, it’s going to take years before NuScale generates any significant revenues… let alone profits.
In fact, NuScale will most certainly have to go back to the capital markets and raise a lot more capital between now and then. That means existing shareholders will be diluted.
As such, I would not recommend investing in NuScale today. It’s too early.
But we’ll be tracking this company closely going forward. It represents a pure play on the future of nuclear fission technology.
Apple is about to set the standard for mixed reality…
We looked at how the tech industry is buzzing about Apple’s upcoming extended reality (XR) headset just a few weeks ago. This will be Apple’s first major augmented reality (AR)/virtual reality (VR) product launch.
As a reminder, augmented reality overlays data or graphics onto our view of the real world. For instance, we would be able to read The Bleeding Edge right in our field of view. The text would appear to be “floating” right in front of our eyes.
This kind of tech has been in the realm of science fiction for years, but we won’t have to wait much longer for it to become a reality. Apple’s new Reality One mixed reality (MR) headsets go into production in February. We’re just weeks away.
That means Apple is gearing up for its first VR/AR/MR product launch. This will be Apple’s first new category-defining launch since it rolled out the Apple Watch.
We see this kind of cadence from Apple every year with Apple’s new iPhones.
The new device is always revealed in the Fall. But the new iPhones typically go into production in the summer – about three to four months ahead of the launch.
So we can deduce that Apple plans to launch the first XR headsets this summer. It will be the hottest consumer electronics launch of the year by far.
And additional details around the XR headsets are starting to leak out…
One of the most interesting features is that the headsets will come with both eye and hand tracking capabilities. This tells us that the device will work without any hand controllers. Unlike Meta’s Oculus products, users will be able to interact with the software simply using hand gestures and motions.
This is a major competitive advantage over Meta’s Oculus VR headsets. The Oculus require users to hold a controller in each hand to engage in the virtual world.
Then there’s Apple’s eye tracking technology. That serves two purposes.
First, it will allow users to interact with what’s on the screen using their eye motions. And perhaps more interesting, Apple will integrate the device with its FaceTime video calls.
This will allow users to experience virtual FaceTimes with each other… and their digital avatars will reflect their eye movements in real time. That’s going to make these calls a lot more lifelike.
Another interesting fact is that Apple did not build the battery into the headset. Instead, the battery will connect to the headset via a cable.
Apple made this decision because the battery is about the size of two iPhone Max Pro smartphone batteries (which make up most of the phone). It’s just too big to go into the headset. This allows Apple to keep the device as sleek as possible. I suspect the battery pack will attach to a belt or fit into a pocket.
So I’m very excited to say we can look for Apple’s first XR headset launch within the coming months. Given the importance of the launch, I suspect Apple will have a dedicated event, which could happen as early as May.
The initial product launch will reveal a high-end device. It will retail for about $3,000.
From there we can expect Apple to release less expensive, mass-market versions of the XR headset into 2024/2025. That’s when augmented reality will go mainstream.
Apple sees the writing on the wall. The company understands that an advanced pair of augmented reality glasses will one day replace our smartphones. After all, we could do everything on a pair of AR glasses that we can now do with our smartphones.
The benefit is that it will be a more immersive experience. No more squinting at tiny screens and hammering at little icons with our fingers.
Sometime in the near future, smartphones will begin to disappear.
And that means Apple – which still derives roughly half its revenue from iPhone sales – will need to adapt. That’s what this initiative is all about. It’s a play for the next major computing interface.
Apple will not be left behind. And I expect that Apple will set consumer expectations for the product category, just as it has done in the past for laptops, tablets, smartphones, and smart watches.
Apple is anxious to diversify away from China…
Speaking of Apple…
Back in October we reviewed how Apple has been working to strengthen its own supply chain.
The crux of it involves shifting 5% of Apple’s global production out of China and into India. This is part of the Great Recalibration taking place worldwide.
And it turns out Apple’s plans are even bigger than the company initially let on.
Apple is now targeting a shift up to 25% of total iPhone production into India. And it is collaborating with contract manufacturer Foxconn to make this a reality.
Clearly, Apple must see an urgent need to get production out of Taiwan and mainland China. The risk of geopolitical conflict in the region is just too great and is increasing.
This makes perfect sense. And we should applaud Apple for having the foresight to make this move.
That said, there’s a lot more nuance to this story…
As I was digging into Apple’s plans, I discovered that the planned manufacturing locations in India are just the final assembly plants. They are where the final product is assembled, tested, and packaged for shipping.
And that means these plants are just the final destination for all the iPhone’s components. Many of those components are still being made in Taiwan and mainland China.
So it became quite obvious to me that Apple and its partners still have a lot of work to do to de-risk their supply chain. After all, just like manufacturing a car, if you’re missing a single electrical component, production grounds to a halt.
Shifting final assembly to India is a great step. But it’s not enough if the goal is to reduce dependence on components made in China.
And this speaks to the fact that the Great Recalibration isn’t a quick process. It’s going to take the rest of this decade and the next to completely restructure global manufacturing and distribution.
The good news here is that we’re just at the very beginning of this trend. We already have exposure to several companies benefiting from this trend using machine learning, computer vision, and automation technologies. This will be an explosive area for growth for the next few years, with plenty more opportunities to come.
Regards,
Jeff Brown
Editor, The Bleeding Edge