Daily Brief United States: NVIDIA Corp, Intel Corp, Advanced Micro Devices, Evolent Health Inc A, Solana, Bicara Therapeutics, Crude Oil, Tejon Ranch and more

• NVIDIA’s dominance in AI GPUs, with 80% market share, has driven data center revenue growth by 427% YoY, with analysts expecting a 112% YoY revenue increase to $28.68 billion.
• NVIDIA’s GPUs are crucial for AI workloads, with significant adoption by cloud giants like AWS and Microsoft Azure. AI-specific chips are expected to drive 40% of 2024 revenue.
• 47 out of 61 analysts rate NVIDIA a strong buy, with average 12-month price targets showing 13% upside, reflecting confidence in its AI leadership despite potential market volatility.

• Intel Corporation, once the undisputed leader in the semiconductor industry, is currently grappling with a series of challenges that have significantly impacted its market position and share price.
• Amidst these struggles, Intel is reportedly working with advisors like Morgan Stanley to prepare a defense against potential activist investors, a clear signal of the growing pressure the company faces.
• The need for such a defense highlights the precarious situation Intel finds itself in—a company in the throes of operational difficulties, financial underperformance, and strategic missteps.

• Advanced Micro Devices (AMD) has made headlines with its recent acquisition of ZT Systems for $4.9 billion, a move that signals the company’s intent to become a formidable force in the AI space.
• As the industry leader, NVIDIA has long dominated the AI hardware market, but AMD’s latest strategic acquisition could shift the competitive landscape.
• This acquisition is not just about expanding AMD’s capabilities; it’s about positioning the company as a viable alternative to NVIDIA in the rapidly growing AI infrastructure market.

• The SPX is back near YTD highs and testing resistance in the 5670-5783 range, and we view this as an ideal time to reduce risk and shift to defensives.
• We continue to believe that the SPX and Nasdaq 100 (QQQ) are going through a 1- to 4-month pullback/consolidation that could end up being a topping pattern.
• After laying out expectations in our 8/13/24 Compass report for a bounce and test of YTD highs, we now expect SPX to roll over near current levels 

• Evolent Health, a prominent player in the healthcare industry, has recently garnered significant acquisition interest, making it the focus of sale talks.
• As a company with both strengths and challenges, Evolent Health presents a complex investment thesis.
• On the positive side, Evolent has demonstrated consistent revenue growth, a strong pipeline, and a strategic focus on delivering clinical value through its Performance Suite and Specialty Technology and Services.

• Over the weekend, both Bitcoin and Ethereum reached their highest levels since the crash three weeks ago.
• As we have emphasized repeatedly in recent weeks, we continue to anticipate a gradual yet steady recovery of the crypto market, with prices to return to their pre-crash levels over the next month.
• Now, let us dive into this week’s top news.

• Bicara Therapeutics, a clinical-stage biotech company with focus on the treatment of patients with HPV-negative head and neck cancer, files for a $200M IPO.
• The biotech firm was backed by Biocon Limited, India’s largest biopharmaceutical company, venture capital and investment firms, among others.  
• I believe Bicara Therapeutics will succeed in its pivotal Phase 2/3 trial of their bifunctional antibody in combination with Keytruda (pembrolizumab) during 2025.

• ZT is a large server company focused on serving hyperscalers like Microsoft and AWS
• They design customized infrastructure products tailored to specific customer needs
• AMD sees ZT as an asset to drive competitive advantage in the data center and AI markets, enabling them to design systems that optimize performance and efficiency.

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• US oil and gas rig count fell by one to 585 for the week ending 23/Aug, marking a decline in rig count for the second straight week.
• US oil rig count was unchanged at 483, after falling by two the week prior. Gas rigs fell by one to 97, after rising by one the previous week.
• For the week ending 16/Aug, US crude oil production rose back to its record high of 13.4m bpd, after slipping down to 13.3m bpd the week prior.  

• We continue to believe TRC has an opportunity to strengthen its management team and improve its interaction with public shareholders with the upcoming retirement of the CEO and search for his replacement.
• The new CEO should steer the company on a path that creates sustainable value for shareholders.
• We believe the 2023 appointment of Brett Brown as TRC’s new CFO added strength to the C-suite and see another opportunity for the company to improve the senior management team.