Colin’s Note: Back in January, I spotlighted some of what I believed would be this year’s biggest investment trends.
I named two trends in particular as the top trends of 2024 – robotics and data center cooling technology… and I believe we’re about to see the two trends converge in a major way.
Today, I’ll talk about how a major performance upgrade in data centers will give robotics the push we’ve been waiting for to see the trend finally move forward.
These trends are quickly catching the attention of Wall Street. That means now is the time to get ahead of both trends… before all the big institutional investors catch on and pile in.
It’s all in today’s video. Click below to watch or read on for the transcript, edited for flow. And if you have any questions or comments for my team and me, you can reach us at [email protected].
Bleeding Edge subscribers, hopefully, you guys are doing well.
We just got confirmation yesterday on two very exciting investing trends that are coming.
One is already here in a major way… which means we need to start preparing for what’s coming next. So back in January, I was at the Consumer Electronics Show, CES, in Las Vegas. And after walking miles around the show floor, testing and trying all the new gadgets, I identified what I thought were the two biggest investment trends over the next year.
The first is still in its early stages. Most companies are still in the research and development – R&D – phase. That’s exciting because it means you still have time this year to establish positions in your portfolio around it… and that’s robotics.
I’ll certainly be guiding you as much as I can here in the newsletter. But one big catalyst will be Tesla’s RoboTaxi event later this year.
Soon, robotics and automation will quickly capture the attention of Wall Street in a similar way artificial intelligence (AI) has over the past year and a half.
But here’s where two investment trends are going to converge. For the robotics trend to really move forward, we need another technology trend to play out in the data center.
And that brings me to my second top investment trend of 2024. I talked about it back in January at CES and again in March here in the newsletter. I’m talking about data center cooling technology.
As you’ll likely recall, data centers rely almost exclusively on large amounts of water and power-thirsty air conditioners to keep them running at full capacity.
But the next generation of Nvidia AI supercomputer chips requires a new cooling method… one where the cooling occurs directly on the rack or near the chip, reducing the need for large amounts of air and water.
So if you follow the newsletter, you knew this trend was coming. And yesterday we got confirmation that it’s here in a major way.
Super Micro Computer has been one of the best-performing AI stocks of the year. The company buys data center components from companies like Nvidia, AMD, and others. Then they custom-build servers for some of the largest data center providers in the world.
And yesterday, company executives gave a forecast of what customers are buying. Here’s what they said…
This quarter alone, we are preparing more than 1,000 liquid cooling racks for those early bird customers. And I believe the demand will continue to grow very strong.
Super Micro is beginning to deliver direct liquid cooling servers to its customers. And I believe demand for direct liquid cooling (DLC) will remain high for two reasons.
For one, the newest generation of Nvidia chips requires direct liquid cooling to gain peak performance.
And two, data centers can reduce their energy usage by up to 40% using DLC… meaning the total cost of ownership is actually far lower than the previous generation of chips.
This is going to be huge.
Data centers are going to see a massive uplift in performance by shifting to the newest Nvidia chips, and at the same time be able to cut costs.
Some of you might be wondering what this has to do with the two investing trends – robotics and cooling of servers – converging.
Well, here’s the deal.
Robotics and automation are being held back in part by compute power. Current systems have limitations, particularly around latency or lag time, to pass information through one computer system to maybe the robotics device.
With the new generation of computer chips being installed, more advanced robotics software can be deployed, meaning we are inching closer and closer to this trend playing out in a major way.
And not only that… it will also come at a reduced cost given that DLC is more efficient and cheaper than traditional cooling methods. This will ultimately reduce R&D costs and potentially make robotic projects more profitable.
Because look, at the end of the day, we’re investors. And while robots and data centers are interesting, we need them to generate profits so we can benefit as investors.
Two major investing trends we identified back in January are playing out according to script, and it’s only a matter of time before the next big trend emerges.
Stay tuned to the newsletter for more. And as always, I appreciate you being a subscriber. I’ll see you again on Friday.