CPUs For Agentic AI

Please click here for an enlarged chart of Intel Corp (NASDAQ:INTC).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of INTC stock is being used to illustrate the point.
  • The chart shows INTC stock is gapping up after good earnings.
  • In the early trade, the gap up in INTC stock has stopped the bleeding in semiconductor stocks and other tech stocks that occurred yesterday.
  • The chart shows INTC stock had pulled back going into earnings.
  • The chart shows that the our signal to take partial profits on INTC was given right near the top before the pullback.
  • We gave a signal to buy INTC stock when no one wanted it.  As full disclosure, we are long INTC from an average of $19.05.
  • Intel earnings were above consensus and whisper numbers.  Whisper numbers were lower than consensus.  Here are the details:
    • Intel reported Q2 EPS of $0.42 vs. $0.22 consensus.
    • Intel reported Q2 revenue of $16.1B  vs. $14.45B consensus.
    • Intel sees Q3 EPS of $0.38 vs. $0.28 consensus.
    • Intel sees Q3 revenue of $15.8B – $16.8B vs. $15.16B consensus.
  • Everyone talks about GPUs, and not CPUs, for a good reason.  Compared to CPUs, GPUs excel at training frontier models and for high-throughput inference.  The next phase of AI is extensive use of AI agents.  Most of the tasks AI agents do are better done on CPUs than GPUs.  Most agents do not need massive parallel processing of GPUs.  Agents spend most of their time browsing, interfacing with APIs, and calling databases.  These tasks are better done with CPUs.  Intel is a major provider of CPUs.  Advanced Micro Devices Inc (NASDAQ:AMD) is a big beneficiary because AMD provides both CPUs and GPUs.  As full disclosure, AMD is in our portfolio. 
  • Lately, the U.S. stock market has been following the South Korean stock market.  Prudent investors should be cognizant of a decision by South Korea’s regulators to implement increased margin on leveraged ETFs sooner than planned.  Leveraged ETFs have been very popular and, in part, responsible for the massive run up in memory stocks such as Micron Technology Inc (NASDAQ:MU), SK Hynix Inc – ADR (NASDAQ:SKHY), and SanDisk Corp (NASDAQ:SNDK).  Increased margin requirements on leveraged ETFs means a higher likelihood of margin calls and potentially sharper spikes to the downside.  As full disclosure, Ishares Msci South Korea ETF (NYSE:EWY) is in our portfolio.
  • Media headlines are that President Trump is preparing the biggest attack ever on Iran.  However, the stock market is dismissing it, and oil is pulling back this morning.
  • In spite of the U.S. providing protection and encouraging tankers to cross the Strait of Hormuz, only one tanker crossed the Strait of Hormuz on Thursday.  This is the lowest number since May 7.  In the early trade, the stock market is also dismissing this development.
  • On Thursday, President Trump announced tariffs of 10% – 12.5% on 60 countries.   Again, the stock market is dismissing the impact.  These tariffs use a law designed to punish forced labor.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Microsoft Corp (NASDAQ:MSFT) and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are neutral in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), and Apple Inc (NASDAQ:AAPL).

In the early trade, money flows are negative in Meta Platforms Inc (NASDAQ:META) and NVIDIA Corp (NASDAQ:NVDA).

In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO:BTC) is range bound.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.