AI-driven tech expansion

What happened: Key players in the AI sector are expanding and securing deals to capitalize on the growing demand. Broadcom agreed to produce AI chips for Google and Anthropic, while NVIDIA's CEO Jensen Huang claimed AI Generalization (AGI) has been achieved, signaling a potential productivity revolution. ASML, a semiconductor giant, is set to benefit from the AI hardware boom, with a huge backlog of orders. Meanwhile, AI-driven drug discovery is gaining traction, with Eli Lilly expanding its partnership with Insilico Medicine. Canada's Hut 8 plans a $7 billion AI data center expansion.

Market impact: Tech and semiconductor companies are driving growth in the AI supercycle. Broadcom, Arista Networks, AMD, and Arm Holdings are top picks for data center networking and CPU demand. ASML's role in semiconductor production is crucial, while AI software stocks like Palantir and Dell Technologies are also beneficiaries. Pharmaceutical companies like Eli Lilly are investing in AI drug discovery, and data center providers like Hut 8 are pivoting to AI.

What to watch next: NVIDIA's earnings call on May 24 will provide insights into AGI's impact on demand for its chips. ASML's Q2 2023 results on July 27 will reveal the extent of its AI hardware backlog. Eli Lilly's partnership with Insilico Medicine will bear fruit in late-stage clinical trials, with results expected in 2024. Additionally, keep an eye on Hut 8's progress in its $7 billion AI data center expansion.