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By Nell Mackenzie LONDON (Reuters) -Hedge funds' exposure to artificial intelligence-related tech hardware reached its highest in October since Goldman Sachs started tracking the data in 2016, the U.S. bank said in a client note. Hedge fund buying in semiconductor and related chip industry stocks, considered to be sensitive to economic and business cycles, suggests speculators believe rising markets have further to go, Goldman said in the note on Thursday, seen by Reuters on Friday. Hedge fund stock buying centred on long positions, betting these equities would rise, in Asia and U.S. companies, said Goldman.  BCA Research's Chief U.S. Investment Strategist Doug Peta said in a research note on Tuesday, that companies poised to benefit from prospective AI profits or investment are thriving while those without an AI link are lagging. Communications services .SPLRCL, technology .SPLRCT and utilities .SPLRCU are among the best performing S&P sub-sectors so far this year, far outperforming the benchmark S&P 500 .SPX. But for hedge funds, tech stock fervour has shifted, Goldman Sachs said. Speculators have downsized their trades in U.S. power companies, which are also considered part of the sector behind the servers that power artificial intelligence as well as its research and development.  The funds also moved on from a general focus in the biggest tech companies, the so-called Magnificent Seven, the note said.  The shift toward semiconductors and their related equipment began in September, Goldman Sachs said.  Buying in Asia tech companies drove overall inflows in emerging markets apart from China, where positioning has reached "fresh multi-year highs," the bank said.  (Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Jacqueline Wong)

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By Arsheeya Bajwa, Max A. Cherney and Stephen Nellis (Reuters) -Intel beat expectations for September-quarter profit as CEO Lip-Bu Tan's drastic cost-cutting measures helped the chipmaker shore up its finances amid a slew of high-profile investments in the company. Shares were up 7% in after-hours trading.   This marks the Santa Clara, California-based company's first earnings announcement after multibillion-dollar investments from Nvidia and Japan's SoftBank as well as an unprecedented U.S. government stake, with investors anticipating a major cash boost.  Intel received the SoftBank money in the third quarter but has not yet received Nvidia's cash, finance chief Dave Zinsner said in an interview with Reuters. The investments are expected to be a major lifeline for Intel, which has been struggling to maintain its dominance in the PC and server central processing unit markets as it competes with Advanced Micro Devices, while repeated attempts to break into the AI chip market commanded by Nvidia have not produced results.  After its share price dropped about 60% last year due to these concerns, Intel stock has risen nearly 90% so far in 2025 thanks to the new investments in the company, helping it outperform the stock of artificial-intelligence chip leader and Wall Street darling Nvidia.  "Shares popped after-hours based on better-than-feared guidance ex-Altera, visible cost and gross margin progress, AI-PC buzz, and $15B of fresh strategic funding that shores the balance sheet," said Michael Schulman, chief investment officer at Running Point Capital. Intel acquired Altera in 2015 for $16.7 billion but sold a 51% stake in the programmable chip designer to Silver Lake in September. Nvidia said last month it would invest $5 billion in Intel, giving it a stake of about 4% after new shares are issued. In August, Intel secured $2 billion from SoftBank. After U.S. President Donald Trump called for CEO Tan's resignation over China ties, a hastily arranged Washington meeting produced an unusual deal involving the U.S. government taking a 10% stake for $8.9 billion.  On a conference call with investors, Tan said that a newly formed central engineering group will streamline Intel's work on its own chip designs and will also offer custom-designed chips for external customers, a business where it will compete against Broadcom and Marvell Technologies. Those two companies are both helping customers such as Alphabet's Google and Amazon make their AI chips.  Demand for Intel's chips was strong enough during the third quarter that the company is tight on supply, CFO Zinsner said. One of the factors is that data center operators have realized that they need to upgrade the central processing unit in order to keep pace with the advanced AI chips, he said. Upgrading the CPU gives power and performance advantages that help build and run AI applications. "We're under-shipping demand at this point, which I guess is a high-class problem," Zinsner said. During the conference call, Zinsner said that Intel's yields – a measure of how many of the chips it makes come out functioning well – for its 18A manufacturing process "are not where we need them to be in order to drive the appropriate level of margins." Zinsner said yields would likely not hit "an industry-acceptable level" until 2027.  Reuters reported in August that Intel is struggling with yields on its 18A manufacturing technology. For the September quarter, it recorded adjusted gross margins of 40%, beating estimates of 35.7%, while adjusted profit of 23 cents per share also outperformed expectations of a profit of 1 cent per share, according to data compiled by LSEG.  The company will end the year with a workforce that is over one-fifth smaller than last year, it had said in July, while Tan has significantly pared back the expensive manufacturing ambitions of his ousted predecessor, Pat Gelsinger. Tan has aggressively cut costs and divested assets, after Gelsinger's ambitions of turning Intel into a contract manufacturer of chips that would compete against Taiwan's TSMC led to the company in 2024 recording its first annual loss since 1986. Intel forecast current-quarter revenue between $12.8 billion and $13.8 billion, with a midpoint of $13.3 billion, compared with analysts' average estimate of $13.37 billion. Zinsner said that Intel plans capital expenditures of $27 billion in 2025 versus $17 billion in 2024. (Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney and Stephen Nellis in San Francisco; Additional reporting by Aditya Soni in Bengaluru; Editing by Sayantani Ghosh and Matthew Lewis)

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LONDON (Reuters) -Intel shares rose nearly 10% in Frankfurt on Friday, a day after the company beat expectations for its third quarter profit helped by dramatic cost cutting measures. The results were the company's first earnings announcement after multibillion-dollar investments from Nvidia and Japan's SoftBank as well as an unprecedented U.S. government stake, with investors anticipating a major cash boost. Its shares rose around 7% in U.S. after hours trading on Thursday, and rose 9.7% in Frankfurt on Friday. (Reporting by Alun John, editing by Joice Alves)

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By Naomi Rovnick LONDON (Reuters) -Major investors, spooked by AI exuberance yet wary of betting against it, are shifting from hyped-up stocks into potential next-in-line winners, reviving a strategy from the 1990s dotcom era that helped some sidestep the crash. As U.S. stocks have hit successive records and AI chipmaker Nvidia's valuation has surged beyond $4 trillion, professional investors have been trying to find ways to make money from the bull market while avoiding excessive risk. Some are looking back to the 1990s internet boom, which spread from startups to telecoms and tech, and where hedge funds rode the wave by flipping out of highly-valued stocks before they peaked and picking others that had room to rise. "What we are doing is what worked from 1998 to 2000," said Francesco Sandrini, multi-asset head and Italy CIO at Europe’s largest asset manager Amundi. He highlighted signs of irrational exuberance on Wall Street, such as frenzied trading in risky options pegged to the share prices of big AI stocks. But he said he expected the new tech enthusiasm to continue and hoped to bank gains via bets on reasonably valued assets that might rally next. Sandrini said this involved trying to find "the highest growth opportunities that so far the market had failed to spot", with moves into software groups, robotics and Asian tech. Other investors also expected to edge out of Wall Street's Magnificent Seven stocks after shares in Nvidia more than tripled in two years, but want to keep their diversification within the AI sphere. ASSET MANAGERS NEED TO BE NIMBLE TO RIDE THE WAVE "The odds of this (AI boom) being a bust are very high because you've got companies spending trillions and all fighting for the same market that does not yet exist," said Goshawk Asset Management CIO Simon Edelsten, who worked on telecom IPOs at stockbroker Dresdner Kleinwort Benson in London in 1999. He expected the next phase of AI fever to spread from Nvidia and others like Microsoft and Alphabet into related sectors. Timing the phases of a bubble has historically been a way to play it without the risk of trying to call the peak too early. A study by economists Markus Brunnermeir and Stefan Nagel showed that hedge funds mostly did not bet against the dotcom bubble, but rode it skillfully enough to beat the market by about 4.5% per quarter from 1998-2000 and avoid the worst of the downturn. They shed high-priced internet stocks in time to recycle profits into others before they caught the attention of less sophisticated investors. "There were good profits to be made for the fleet of foot even during 2000 when the top came," Edelsten at Goshawk said, adding the current market environment was similar to 1999. He favoured IT consultants and Japanese robotics groups that can potentially pick up revenues from AI heavyweights, in what he said was the typical chronology of a market gold rush. "When someone strikes gold, (you) buy the local hardware store where the prospectors will buy all their shovels." INVESTORS TRY TO STAY IN AI WITHOUT EXCESSIVE RISK Investors are also attempting to benefit from the trillions of dollars so-called hyperscalers such as Amazon, Microsoft and Alphabet are committing to AI data centres and advanced chips without taking on more direct exposure to these companies. Fidelity International multi-asset manager Becky Qin said uranium was her favoured new AI trade because power-hungry AI data centres could gobble up nuclear energy. Kevin Thozet, investment committee member at asset manager Carmignac, was taking profits on Magnificent Seven stocks and building up a position in Taiwan's Gudeng Precision, which makes delivery boxes for AI chipmakers including TSMC. Asset managers are also concerned that the rush to build data centres could result in overcapacity, as in the fiber-optic cable boom in the telecoms industry. "In any new technological paradigm we don't get from A to B without excesses along the way," said Pictet Asset Management senior multi-asset strategist Arun Sai. Even though top AI stocks like Microsoft, Amazon, and Alphabet are being powered by strong earnings, he still sees "the building blocks of a bubble" and favours Chinese stocks as a hedge if rapid AI advancements in China sap Wall Street's AI enthusiasm. Some investors, though, do not favour this relative value approach to AI investing as a way to mitigate future losses. Oliver Blackbourn, portfolio manager at Janus Henderson, said he was hedging his U.S. tech positions with European and healthcare assets lest an AI stock crash takes the U.S. economy down with it. He said it was impossible to forecast how long the AI craze would roll on because calling the peak was usually only possible with hindsight. "We're in 1999 until the bubble pops." (Reporting by Naomi Rovnick; editing by Dhara Ranasinghe and Jane Merriman)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Che Pan and Brenda Goh BEIJING (Reuters) -Chinese smartphone manufacturer Xiaomi on Friday said surging memory chip prices have raised the cost of making handsets, after pricing of its new Redmi K90 series drew market disappointment. "Cost pressure has transferred to the pricing of our new products," President Lu Weibing wrote on Weibo. "Rising costs of memory chips are far beyond expectations and could intensify." Xiaomi launched its entry-level Redmi K90 on Thursday with the base model, equipped with 12 GB of memory and 256 GB of storage, priced from 2,599 yuan ($364). That compared with 2,499 yuan for the base model of predecessor K80 series launched in November 2024. Lu noted consumer disappointment about price gaps between configurations. He said Xiaomi will lower the price of the most in-demand K90 model – with 12 GB memory and 512 GB storage – by 300 yuan to 2,899 yuan for the first month of sales. A global rush for chips for use in artificial intelligence applications has tightened supply of conventional chips used in smartphones, personal computers and servers, sharply increasing their cost and boosting earnings for makers of NAND and DRAM such as South Korean duo Samsung Electronics and SK Hynix. ($1 = 7.1230 Chinese yuan renminbi) (Reporting by Che Pan and Brenda Goh; Editing by Christopher Cushing)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Che Pan and Brenda Goh BEIJING (Reuters) -Chinese smartphone manufacturer Xiaomi on Friday said surging memory chip prices have raised the cost of making handsets, after pricing of its new Redmi K90 series drew market disappointment. "Cost pressure has transferred to the pricing of our new products," President Lu Weibing wrote on Weibo. "Rising costs of memory chips are far beyond expectations and could intensify." Xiaomi launched its entry-level Redmi K90 on Thursday with the base model, equipped with 12 GB of memory and 256 GB of storage, priced from 2,599 yuan ($364). That compared with 2,499 yuan for the base model of predecessor K80 series launched in November 2024. Lu noted consumer disappointment about price gaps between configurations. He said Xiaomi will lower the price of the most in-demand K90 model – with 12 GB memory and 512 GB storage – by 300 yuan to 2,899 yuan for the first month of sales. A global rush for chips for use in artificial intelligence applications has tightened supply of conventional chips used in smartphones, personal computers and servers, sharply increasing their cost and boosting earnings for makers of NAND and DRAM such as South Korean duo Samsung Electronics and SK Hynix. ($1 = 7.1230 Chinese yuan renminbi) (Reporting by Che Pan and Brenda Goh; Editing by Christopher Cushing)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Che Pan and Brenda Goh BEIJING (Reuters) -Chinese smartphone manufacturer Xiaomi on Friday said surging memory chip prices have raised the cost of making handsets, after pricing of its new Redmi K90 series drew market disappointment. "Cost pressure has transferred to the pricing of our new products," President Lu Weibing wrote on Weibo. "Rising costs of memory chips are far beyond expectations and could intensify." Xiaomi launched its entry-level Redmi K90 on Thursday with the base model, equipped with 12 GB of memory and 256 GB of storage, priced from 2,599 yuan ($364). That compared with 2,499 yuan for the base model of predecessor K80 series launched in November 2024. Lu noted consumer disappointment about price gaps between configurations. He said Xiaomi will lower the price of the most in-demand K90 model – with 12 GB memory and 512 GB storage – by 300 yuan to 2,899 yuan for the first month of sales. A global rush for chips for use in artificial intelligence applications has tightened supply of conventional chips used in smartphones, personal computers and servers, sharply increasing their cost and boosting earnings for makers of NAND and DRAM such as South Korean duo Samsung Electronics and SK Hynix. ($1 = 7.1230 Chinese yuan renminbi) (Reporting by Che Pan and Brenda Goh; Editing by Christopher Cushing)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Naomi Rovnick LONDON (Reuters) -Major investors, spooked by AI exuberance yet wary of betting against it, are shifting from hyped-up stocks into potential next-in-line winners, reviving a strategy from the 1990s dotcom era that helped some sidestep the crash. As U.S. stocks have hit successive records and AI chipmaker Nvidia's valuation has surged beyond $4 trillion, professional investors have been trying to find ways to make money from the bull market while avoiding excessive risk. Some are looking back to the 1990s internet boom, which spread from startups to telecoms and tech, and where hedge funds rode the wave by flipping out of highly-valued stocks before they peaked and picking others that had room to rise. "What we are doing is what worked from 1998 to 2000," said Francesco Sandrini, multi-asset head and Italy CIO at Europe’s largest asset manager Amundi. He highlighted signs of irrational exuberance on Wall Street, such as frenzied trading in risky options pegged to the share prices of big AI stocks. But he said he expected the new tech enthusiasm to continue and hoped to bank gains via bets on reasonably valued assets that might rally next. Sandrini said this involved trying to find "the highest growth opportunities that so far the market had failed to spot", with moves into software groups, robotics and Asian tech. Other investors also expected to edge out of Wall Street's Magnificent Seven stocks after shares in Nvidia more than tripled in two years, but want to keep their diversification within the AI sphere. ASSET MANAGERS NEED TO BE NIMBLE TO RIDE THE WAVE "The odds of this (AI boom) being a bust are very high because you've got companies spending trillions and all fighting for the same market that does not yet exist," said Goshawk Asset Management CIO Simon Edelsten, who worked on telecom IPOs at stockbroker Dresdner Kleinwort Benson in London in 1999. He expected the next phase of AI fever to spread from Nvidia and others like Microsoft and Alphabet into related sectors. Timing the phases of a bubble has historically been a way to play it without the risk of trying to call the peak too early. A study by economists Markus Brunnermeir and Stefan Nagel showed that hedge funds mostly did not bet against the dotcom bubble, but rode it skillfully enough to beat the market by about 4.5% per quarter from 1998-2000 and avoid the worst of the downturn. They shed high-priced internet stocks in time to recycle profits into others before they caught the attention of less sophisticated investors. "There were good profits to be made for the fleet of foot even during 2000 when the top came," Edelsten at Goshawk said, adding the current market environment was similar to 1999. He favoured IT consultants and Japanese robotics groups that can potentially pick up revenues from AI heavyweights, in what he said was the typical chronology of a market gold rush. "When someone strikes gold, (you) buy the local hardware store where the prospectors will buy all their shovels." INVESTORS TRY TO STAY IN AI WITHOUT EXCESSIVE RISK Investors are also attempting to benefit from the trillions of dollars so-called hyperscalers such as Amazon, Microsoft and Alphabet are committing to AI data centres and advanced chips without taking on more direct exposure to these companies. Fidelity International multi-asset manager Becky Qin said uranium was her favoured new AI trade because power-hungry AI data centres could gobble up nuclear energy. Kevin Thozet, investment committee member at asset manager Carmignac, was taking profits on Magnificent Seven stocks and building up a position in Taiwan's Gudeng Precision, which makes delivery boxes for AI chipmakers including TSMC. Asset managers are also concerned that the rush to build data centres could result in overcapacity, as in the fiber-optic cable boom in the telecoms industry. "In any new technological paradigm we don't get from A to B without excesses along the way," said Pictet Asset Management senior multi-asset strategist Arun Sai. Even though top AI stocks like Microsoft, Amazon, and Alphabet are being powered by strong earnings, he still sees "the building blocks of a bubble" and favours Chinese stocks as a hedge if rapid AI advancements in China sap Wall Street's AI enthusiasm. Some investors, though, do not favour this relative value approach to AI investing as a way to mitigate future losses. Oliver Blackbourn, portfolio manager at Janus Henderson, said he was hedging his U.S. tech positions with European and healthcare assets lest an AI stock crash takes the U.S. economy down with it. He said it was impossible to forecast how long the AI craze would roll on because calling the peak was usually only possible with hindsight. "We're in 1999 until the bubble pops." (Reporting by Naomi Rovnick; editing by Dhara Ranasinghe and Jane Merriman)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)