London South East | The UK's favourite investor portal.

Dab,

A 15p spread does sometimes happen here, though I don't recall it being wider than that, it it can sometimes be considerably less.

But the fact that there are only two market makers in NWT clearly doesn't help liquidity: and I note that twenty years ago it was double this number:-

"NEWMARK SECURITY (NWT)

... Published on January 14, 2005

by IC staff

... Market makers: 4 ..."

https://www.investorschronicle.co.uk/content/8f99c266-5c3c-5fc7-a200-dfd6f2b9ad5a

So perhaps this is something that could be addressed?

TIMECLOCKS APPRECIATION DAY (TAD)

Third Friday in January (17.1.25)

Welcome to the inaugural Timeclocks Appreciation Day (TAD)!

Created by myself, an independent Newmark Security shareholder, on my own initiative.

As far as I can tell, there has been no 'special day' for timeclocks until now, or indeed for clocks, or time.

Unlike for automatic doors (19th. March, since 2021):

https://www.daysoftheyear.com/days/national-automatic-door-day/

So it's about time ... perhaps a TAD late, but better late than never.

And though currently just a TADpole of an event, in time it could potentially become a 'Blog Prince' ...

(Note that "timeclocks" can also correctly be written as two words, but I think that the 'tighter' version works best in this context.

https://www.answers.com/english-language-arts/Should_time_clock_be_written_as_one_word_two_words_or_hyphenated )

Like the term 'mobile phone', the term 'timeclock' can be a bit of a misnomer, as GT themselves point out; but it's a term that people seem happy to run with:-

"Experience Meets Innovation

For nearly 50 years, GT Clocks has been providing Human Capital Management (HCM) solutions. Our success has relied on our continuous innovation, which is driven by our extensive industry experience. GT Clocks is committed to delivering quality solutions and services to our clients.

While our products and services have evolved over time, our core philosophy remains unchanged: to provide our HCM partners with dependable and technologically advanced devices, data-entry terminals, or what many of our valued partners still affectionately refer to as ‘timeclocks.’ We don’t mind; we’re proud to be known as the ‘clock guys.’

At GT Clocks, we take immense pride in our exceptional team. Whether it’s in Operations, Sales, or Development, we foster a collaborative approach to deliver more than just secure, intelligent solutions."

https://gtclocks.com/about/

The term 'technologically advanced edge computing data-entry terminal devices' would probably be more accurate for GT's solutions ... but it doesn't have quite the same ring to it!

So timeclocks it is then ... and the market opportunity is huge.

"Thalassa Holdings Ltd – 9.92%"

https://newmarksecurity.com/investor-relations/shareholder-information/

NWT's fourth largest shareholder, Thalassa Holdings, has just recently raised £2.1775M.: to invest in excellent undervalued UK shares like NWT:-

11th Dec 2024 7:30 am EQS Thalassa Holdings Ltd: Proposed Equity Placing

"Introduction

Thalassa is a diversified holding company with investments in a range of public and private businesses in the FinTech/RegTech, MedTech, Deep Tech/Robotics & Real Estate sectors.

Thalassa aims to target a limited number of acquisition opportunities in both the public and private markets. Thalassa is an opportunistic, fundamental value investor willing to back excellent management teams over the long term. Professional Integrity, honesty and accountability are the pillars of our business.

Thalassa’s goal is to deliver long term shareholder value from a limited number of holdings. We actively engage with the management and boards of our holdings and contribute experience and expertise to support growth plans, encourage operational transformation or facilitate product extension and market expansion.

The board of Thalassa (the ‘Board’) believes that the US markets are currently significantly overvalued and long overdue for a correction, whilst the UK and European markets are likely to suffer further headwinds due to increased political turmoil (France, Germany) exacerbated by the war in Ukraine, increased global competition, and the increasing risk of trade wars and punitive tariffs. The Board sees the aforementioned problems as opportunities to benefit from coming price dislocation and has decided to seek further equity capital by way of a placing, described further below, in order that it is in a position to maximise its ability to participate in such opportunities.

Placing

Thalassa is pleased to announce that it has entered into a placing agreement with Peterhouse Capital Limited (“Peterhouse”) to carry out a placing which will be targeted at selected financial institutions and existing Thalassa shareholders (“Placing”).

... Mr Soukup, and parties associated with him, have indicated their intention to participate in the placing up to £2 million at a price to be determined independently of each other and by the outcome of the 'Dutch Auction' process. ..."

https://www.lse.co.uk/rns/THAL/thalassa-holdings-ltd-proposed-equity-placing-2byd6uml83w19jw.html

THAL's existing large shareholding in NWT would doubtless have been a strong attraction for these investors: including a very large new investment from THAL's Chairman Duncan Soukup.

And it will be interesting to see where THAL invests these monies.

"'Martyn’s Law' introduced in Parliament to better protect the public from terrorism

The Terrorism (Protection of Premises) Bill will increase preparedness for, and protection from, terrorist attacks at public venues.

From: Home Office, Dan Jarvis MBE MP and The Rt Hon Yvette Cooper MP

Published 12 September 2024"

https://www.gov.uk/government/news/martyns-law-introduced-to-parliament-to-better-protect-the-public-from-terrorism

So its now over fours months since Martyn's Law (Protect Duty legislation) was introduced to Parliament.

And it's been making great progress: the Bill has passed the House of Commons, and completed its first & second readings in the House of Lords.

So at this rate it could be expected to receive Royal Assent in March.

"The Terrorism (Protection of Premises) Bill 2024-25

Published Thursday, 05 December, 2024

Joanna Dawson

... Progress of the bill

The bill had its second reading on 14 October 2024 and received cross party support.

It was considered by a Public Bill Committee over four sessions on 29 and 31 October.

A number of government amendments were made to the bill in committee, which were largely technical or clarificatory.

The opposition tabled amendments aimed at ensuring that the bill would not overburden individuals or businesses, and at reviewing the role of the SIA. None were pressed to a division. ..."

https://commonslibrary.parliament.uk/research-briefings/cbp-10111/

"Bill passage

Bill started in the House of Commons

✔ 1st reading

✔ 2nd reading

✔ Committee stage

✔ Report stage

✔ 3rd reading

Bill in the House of Lords

✔ 1st reading

✔ 2nd reading

Committee stage

Report stage

3rd reading

Final stages

Consideration of amendments

Royal Assent"

https://bills.parliament.uk/bills/3765

With Newmark Security ideally placed with very valuable products, services, and expertise to help businesses meet their Protect Duty obligations:-

"Martyn’s Law: Safeguarding public spaces with comprehensive security"

https://newmarksecurity.com/insights/martyns-law-safeguarding-public-spaces-with-comprehensive-security/

"Martyn’s Law and Access Control – Being Ready for The Terrorism (Protection of Premises) Bill"

https://www.grosvenortechnology.com/insights/martyns-law-and-access-control-being-ready-for-the-terrorism-protection-of-premises-bill/

"The Impact of Martyn’s Law/Protect Duty on UK Businesses

28 June, 2023"

https://www.safetell.co.uk/insights/the-impact-of-martyns-law-protect-duty-on-uk-businesses/

A huge market, and businesses should also see the logic of combining their Protect Duty obligations with more general crime prevention measures.

This is clearly a major business and investment opportunity, and I'm not aware of a better play on it than NWT.

So I would expect to see NWT highlighted as a/the pre-eminent listed share beneficiary.

Sorry, the previous post linked to yesterday's NWT article; this is the correct link for today's NWTarticle:-

https://newmarksecurity.com/insights/future-of-physical-security-2024-2025-market-trends-and-strategic-insights/

"Future of Physical Security: 2024-2025 Market Trends and Strategic Insights

... but the real story isn’t in the numbers; it’s in how these systems are evolving. When 50% of end users rank access control as their top security priority, it signals a broader understanding of its critical role in comprehensive protection strategies. Modern access control goes beyond who comes in and out, offering intelligent, responsive security environments that adapt to changing needs.

Investment patterns tell another compelling story. Seven in 10 organisations plan to increase their security spending this year. This goes beyond routine budget allocation, recognising that robust physical security is fundamental to organisational resilience. The planned transition to cloud-based security solutions by 90% of security leaders within the next year further underscores this strategic shift.

Looking ahead, we’re seeing the emergence of more sophisticated integration between physical security and building management systems. This convergence is creating smarter, more efficient security environments that can respond dynamically to changing conditions while optimising resource use.

Strategic Physical Security Recommendations for 2025

For organisations looking to strengthen their security posture in 2025, there are several key considerations.

1. Embrace Strategic Integration

Move beyond basic system connectivity to create truly unified security operations. This means choosing solutions that can communicate seamlessly across platforms while delivering actionable insights.

2. Commit to the Cloud

The shift to cloud-based security creates more agile and responsive security operations. Cloud solutions offer unprecedented flexibility and scalability while reducing the complexity of security infrastructure.

3. Future-proof Investments

Select adaptable security solutions that can scale alongside your organisation. This includes considering modular systems that support upgrades and expansion as security needs change.

4. Prioritise Intelligent Access Control

Modern access control systems should do more than manage entry points. They should integrate seamlessly with other security systems and provide valuable data for security planning and operations.

5. Harness Your Data

Implement solutions that transform security data into actionable insights. This capability is crucial for optimising security operations and making informed decisions about resource allocation. ..."

https://newmarksecurity.com/insights/future-of-physical-security-2024-2025-market-trends-and-strategic-insights/

And now a splendid new Safetell article, just added to the website of 'Newmark SecurAIty':-

"Insights

Future of Physical Security: 2024-2025 Market Trends and Strategic Insights

Physical security is evolving faster than ever, driven by increasingly complex threats both online and in the real world. The era of standalone solutions is over. Modern security demands intelligent, interconnected systems designed to simultaneously anticipate threats and enhance efficiency.

The numbers tell a compelling story. In 2024, the physical security sector demonstrated its resilience and innovation, with technology integration reaching new heights and investment continuing to grow. This momentum shows no signs of slowing in 2025.

Key Physical Security Developments in 2024

Perhaps the most striking shift in 2024 was the widespread adoption of converged security systems. With 60% of organisations now operating either fully or partially converged security solutions, it’s clear that the traditional divide between physical and digital security is disappearing. This convergence shows organisations are fundamentally changing how they approach protection, creating more robust and responsive security operations.

Cloud technology has moved from an option to a necessity. 92% of security leaders recognise cloud-based solutions as the future of facility protection. This consensus reflects a deeper understanding of cloud capabilities: instant scalability, sophisticated threat detection, and seamless updates that keep security measures current against present-day and future risks.

The access control market reached £7.4 billion ($9.29 billion) in 2024, highlighting its importance in modern security. This growth reflects more than just market expansion – it signals a fundamental shift in how organisations think about entry management. Modern access control systems are advanced security hubs, delivering insights that help organisations make smarter operational decisions.

Real-time monitoring, predictive analytics, and automated response systems are no longer future concepts – they’re becoming standard features of comprehensive security solutions. This progress is creating more intelligent and proactive security environments, where potential threats can be identified and addressed before they escalate.

Strategic Physical Security Outlook for 2025

As we kick off 2025, artificial intelligence (AI) stands out as a game-changing force in physical security. With 42% of security professionals planning to implement AI-enhanced operations, we’re seeing a clear shift from traditional reactive security measures to proactive threat prevention, enhancing how organisations detect, assess, and respond to security risks.

The access control market is set to reach £7.8 billion ($9.77 billion) in 2025, ..."

https://newmarksecurity.com/insights/workplace-security-key-lessons-from-2024-and-strategic-priorities-for-2025/

"PM plans to 'unleash AI' across UK to boost growth

Liv McMahon, Zoe Kleinman & Charlotte Edwards

BBC News

12 January 2025 3692 Comments

Updated 13 January 2025

Artificial intelligence presents a "vast potential" for rejuvenating UK public services, Prime Minister Sir Keir Starmer said on Monday.

In a speech setting out the government's plans to use AI across the UK to boost growth and deliver services more efficiently, Sir Keir said the government had a responsibility to make AI "work for working people".

The AI Opportunities Action Plan is backed by leading tech firms, some of which have committed £14bn towards various projects, creating 13,250 jobs, the government said.

... Sir Keir said AI "will drive incredible change" in the country and "has the potential to transform the lives of working people".

"We're going to make AI work for everyone in our country," he added, saying the "battle for the jobs of tomorrow is happening today".

Sir Keir said the UK would become one of the AI "superpowers" - mirroring former Prime Minister Rishi Sunak's drive to boost the UK sector so it could rival that of the US and China.

... How the AI plan could affect you

Among the government's proposals are:

• AI will be used by the public sector to enable its workers to spend less time doing admin and more time delivering services.

• Several "AI Growth Zones" around the UK will be created, involving big building projects and new jobs.

• AI will be fed through cameras around the country to inspect roads and spot potholes that need fixing

• Teachers and small business owners were highlighted as two groups that could start using AI for things like faster planning and record-keeping.

• AI is already being used in UK hospitals for important tasks such as diagnosing cancer more quickly and it will continue to be used to support the NHS.

The government has also proposed a boost to UK infrastructure as part of the plan, with tech firms committing £14bn towards large data centres or tech hubs.

... Science and Technology Secretary Peter Kyle told the BBC there was no reason why the UK could not create tech companies on the same scale as Google, Amazon, and Apple.

"At the moment, we don't have any frontier conceptual, cutting-edge companies that are British-owned."

He highlighted DeepMind, which created technology enabling computers to play video and board games, as an example of a former British-born company that was now US-owned.

It was founded by three University College London students before its acquisition by Google.

Tim Flagg, chief operating officer of UKAI - a trade body representing British AI businesses - said the proposals take a "narrow view" of the sector's contributors and focus too much on big tech.

"AI innovation spans industries, from small enterprises to non-tech sectors, all driving the new industrial revolution," he said. ..."

https://www.bbc.co.uk/news/articles/crr05jykzkxo

"Workplace Security: Key Lessons from 2024 and Strategic Priorities for 2025

... Data privacy regulations will continue to evolve, requiring organisations to implement more sophisticated data protection measures. Balancing security requirements with privacy concerns will become more complex, particularly in the context of biometric data and employee monitoring.

Cross-functional integration of security systems will accelerate, creating more comprehensive security ecosystems. This includes integrating physical security, IT security, and business systems, providing a more holistic approach to organisational security.

Strategic Recommendations for Businesses

When evaluating and upgrading current systems, organisations should:

• Begin with a comprehensive assessment

Start by identifying integration capabilities, scalability limitations, and potential security vulnerabilities. Understanding these factors ensures informed decisions about system upgrades and replacements.

• Focus on scalability and flexibility

Build a system that can grow and adapt with your organisation. Modern workforce management needs to respond quickly to changing business requirements, whether that’s handling seasonal peaks, expanding to new locations, or adapting to new ways of working. When evaluating systems, consider how easily they can scale up or down, their ability to handle increased data volumes, and whether they can adapt to new requirements without significant reconstruction.

• Future-proof investments

Prioritise solutions that are scalable and adaptable to growth and technological advancements. Organisations should consider systems that offer cloud capabilities, mobile support, and strong integration potential to maintain flexibility.

• Prepare for compliance changes

Take a proactive approach to evolving regulatory requirements, including data privacy, labour laws, and security standards. Implement robust data governance frameworks and maintain detailed audit trails to ensure seamless compliance across jurisdictions.

To thrive in 2025, organisations should:

Leverage AI and advanced analytics

Optimise workforce management and security with predictive analytics, anomaly detection, and smarter decision-making tools.

Prioritise integrated, user-friendly systems

Enhance security and employee experience with solutions that streamline processes, simplify access, and reduce friction in daily operations.

Adopt scalable, sustainable solutions

Invest in technologies that support business growth while maintaining energy efficiency and adaptability to future advancements.

Contact Grosvenor Technology to learn how our innovative HCM and Access Control systems can future-proof your organisation, enhance employee experience, and ensure robust, scalable solutions that position you for success in 2025 and beyond."

https://newmarksecurity.com/insights/workplace-security-key-lessons-from-2024-and-strategic-priorities-for-2025/

"Workplace Security: Key Lessons from 2024 and Strategic Priorities for 2025

... Physical Security Evolution in 2024

Integrating biometric solutions with traditional access control systems marked a significant advancement in physical security during 2024. Facial recognition, fingerprint scanning, and other biometric technologies have become more sophisticated and cost-effective, enabling organisations of all sizes to implement enhanced security measures. These solutions offer improved accuracy and security while reducing the risk of credential sharing or theft.

Mobile credentials have moved from an emerging technology to a mainstream solution, with two-thirds (64%) of US companies reporting some level of mobile ID deployment and an expectation that figure will rise to 79% over the next five years. The widespread adoption of smartphone-based access credentials has transformed how organisations manage facility access. This shift has simplified credential management, reduced administrative overhead, and improved security through features like multi-factor authentication and real-time access control.

Zero-trust security architecture has expanded from IT security into physical access control, with almost two-thirds (63%) of organisations worldwide adopting the strategy. This approach, requiring continuous verification rather than assuming trust based on network location or credentials, has become increasingly important in physical security systems. Organisations now implement more granular access controls and continuous monitoring to protect their facilities and assets.

Cloud-based access control solutions have gained significant traction, offering improved scalability and flexibility. These systems provide real-time monitoring, simplified management, and enhanced integration capabilities while reducing the need for extensive on-premises infrastructure.

What to Expect in 2025

Artificial Intelligence, machine learning and automation are set to reshape workforce analytics in 2025. These technologies will enable more sophisticated pattern recognition, anomaly detection, and predictive analytics, helping organisations optimise workforce management and security operations. From predicting staffing needs to identifying potential security risks, AI will play an increasingly important role.

Advanced authentication methods will continue to evolve, combining multiple factors for enhanced security. Integrating biometrics, mobile credentials, and behavioural analytics will provide more robust security while maintaining user convenience. These systems will become more contextually aware, adapting security requirements based on factors like location, time, and user behaviour. ..."

https://newmarksecurity.com/insights/workplace-security-key-lessons-from-2024-and-strategic-priorities-for-2025/

A Great new Grosvenor Technology article, just added to the website of Newmark Security ... or perhaps I should say Newmark SecurAIty:-

"Insights

Workplace Security: Key Lessons from 2024 and Strategic Priorities for 2025

In 2024, businesses had to adapt to major shifts in both workforce management and security needs. Cost pressures, changing employee expectations and increasing security threats pushed organisations to look for better ways to manage their staff and protect their premises.

The response has been significant. Businesses of all sizes have moved away from traditional systems, seeking solutions that offer better efficiency, reduced costs and improved security. This shift has been particularly notable in two key areas: how organisations manage their workforce and how they control access to their facilities.

These changes have created new opportunities and challenges. As we move into 2025, organisations must carefully consider how they can best support their employees while maintaining robust security measures.

Key Workforce Management Developments in 2024

The cloud revolution has fundamentally transformed how organisations approach workforce management. More than nine in ten companies in leading sectors now utilise cloud technology, with Gartner predicting it will become a “business necessity” by 2028.

This transformation is particularly evident in Human Capital Management (HCM), where investment in cloud-based solutions continues to surge. The global Cloud HCM market, valued at $17 billion in 2022, continues to grow and is projected to reach $30 billion by 2027, This significant growth underscores the increasing confidence organisations place in cloud-based workforce management solutions.

While initial cloud adoption was often driven by immediate business needs, organisations are now tapping into these environments for their powerful capabilities in data analytics and artificial intelligence. AI-driven analytics are changing how businesses approach workforce management, offering data-driven insights into employee engagement, talent acquisition, and retention strategies. By automating routine administrative tasks, HCM solutions are freeing HR teams to focus on strategic initiatives that drive business value.

Away from the cloud, employee experience has taken centre stage in workforce management strategies. Organisations increasingly recognise that security measures must balance robust protection with user-friendly interfaces. This shift has led to the development of more intuitive systems that streamline daily processes while maintaining high security standards. From simplified check-in procedures to automated time tracking, the focus has been on reducing friction in everyday workplace interactions. ..."

https://newmarksecurity.com/insights/workplace-security-key-lessons-from-2024-and-strategic-priorities-for-2025/

13th Jan 2025 7:00 am RNS Notice of Interim Results

"Newmark Security plc (AIM: NWT), a leading provider of electronic and physical security systems, announces that the Company's interim results for the six months ended 31 October 2024 will be announced on 31 January 2025.

Newmark Security plc

Marie-Claire Dwek, Chief Executive Officer

Paul Campbell-White, Chief Financial Officer

Tel: +44 (0) 20 7355 0070

www.newmarksecurity.com

Allenby Capital Limited

(Nominated Adviser and Broker)

James Reeve / Liz Kirchner / Lauren Wright (Corporate Finance)

Amrit Nahal, Tony Quirke (Sales & Corporate Broking)

Tel: +44 (0) 20 3328 5656

About Newmark Security plc

Newmark is a leading provider of electronic, software and physical security systems that helps organisations protect human capital and provide safe spaces seamlessly and securely.

From our locations in the UK and US, we operate through subsidiary businesses positioned in specialist, high-growth markets.

We foster an open and inclusive work environment amongst our c.100 employees, serving hundreds of blue-chip customers.

Our product portfolio consists of Human Capital Management and Access Control Systems providing both hardware and software and Physical security installations to various sectors.

Newmark Security plc is admitted to trading on AIM (AIM:NWT).

For more information, please visit: www.newmarksecurity.com

Safe. Seamless. Secure"

https://www.lse.co.uk/rns/NWT/notice-of-interim-results-0j3f8a5mg8wpgdf.html

So NWT's interim results will be announced on a Friday: the perfect day of the week to attract good weekend press coverage.

And as NWT's period end isn't that common, there should be relatively little competing news of this type.

And interestingly, the date of 31st. January will be the same as the interims two years ago, which were above expectations.

The signs are that those results should be improved upon this time, and should trigger a strong rerating back upwards.

The results statement should also give a good indication of Q3 trading (quarter ending 31.1.25), and of the outlook for Q4.

31st Jan 2023 7:00 am RNS Half-year Report

" ... Newmark Security plc (AIM: NWT) ... is pleased to announce its unaudited interim results for the six months ended 31 October 2022 ("H1 FY23"). The Board of Newmark is pleased to reiterate positive momentum and the Group returning to profitability.

Financial highlights:

-- Revenue up 10% to GBP10.6m (H1 FY22: GBP9.7m)

-- Gross profit margin increased by 5.7% pts to 38.9% (H1 FY22: 33.2%)

-- EBITDA of GBP1.1m (H1 FY22 EBITDA loss: GBP0.03m)

-- Operating profit of GBP0.5m (H1 FY22 loss: GBP0.6m)

-- Profit after tax of GBP0.5m (H1 FY22 loss: GBP0.8m)

-- Earnings per share of 4.89 pence (H1 FY22: loss per share 0.17 pence) ..."

https://www.lse.co.uk/rns/NWT/half-year-report-22phs4l5im1fv8m.html

"What You're Proposing" - Status Quo

https://www.youtube.com/watch?v=_b0WCJKX0xg

"A fund manager's view on how to invest in the AI revolution

... Taiwan Semiconductor Manufacturing Company (TSMC)

The chips used for AI models are massively complex compared to the average piece of silicon that leaves chip plants around the world.

A technology called Extreme UV (EUV) is needed to take the circuitry down to previously impossible levels of miniaturisation.

Taiwan Semiconductor Manufacturing Company (TSMC) is currently one of the only companies able to deploy this technology commercially and that's why we hold it in the HL Select Global Growth Fund.

In a world where control of key technologies is ever more crucial, we see TSMC's leadership of the advanced semiconductor production sector as an extraordinarily critical advantage.

To understand this, you only have to look at the difference between TSMC and Intel, which didn't take the chance to attempt to develop EUV capabilities.

TSMC's share price has soared over the last year, while Intel's has struggled - remember though, this doesn't mean this trend will continue.

Of course, sooner or later rivals will catch up. But by then TSMC are likely to be several years ahead of them when it comes to developing the next generation of technology.

Investors in TSMC have to keep in mind the possibility of increased tension between China and Taiwan as this could well impact sentiment toward the stock.

BE Semiconductor of the Netherlands (BESI)

Chips were getting more complex before AI came along to change the game even further and faster.

One of the greatest challenges that chipmakers have always faced is the need to shrink the circuitry to ever greater extremes to allow for more capable chips to be produced.

We're currently flirting with the limits of known science when we look at technologies like EUV.

One solution to the challenges of shrinking circuitry horizontally is to produce chips that contain multiple layers of silicon. It's the semiconductor equivalent to using skyscrapers to get more property into a fixed parcel of land.

This solution is one of those things that sounds simple but isn't. We're not talking about putting a drop of glue onto a semiconductor and sticking another one on top.

BESI is one of the world's leading creators of chip assembly equipment and a recent addition to HL Select Global Growth Fund's holdings.

Their technologies will allow the creators of alternate AI solutions compared to NVIDIA's premium and bespoke 'Rolls Royce' offerings. And we think the rising demand for semiconductors will inevitably feed through to rising demand for the semiconductor assembly equipment that BESI provides."

From Hargreaves Lansdown "Investment Times", Issue 159 - winter 2024:-

"A fund manager's view on how to invest in the AI revolution

Steve Clayton

Head of Equity Funds and leads the HL Select team

Artificial intelligence (AI) technology is poised to revolutionise how societies operate. It's not a perfect technology, but the pace of development is fast.

Companies that don't adopt AI where it can make real improvements to business efficiencies and capabilities will be at risk from competitors that do.

Because the technology is evolving so quickly, even successful adopters might find their returns are soon pressured because they've already become outdated.

The range of potential applications is vast.

Controlling production lines, automating the management of stock rooms and supply chains are obvious examples.

Lawyers could use AI tools to search for evidence of intellectual property infringements, even as the technology occasionally commits the infringement itself.

The world of medicine will also have many applications, from aiding the interpretation of radiology scans to controlling the delivery of drugs to patients.

So which companies look well placed to use the emergence of AI to drive their businesses forward?

At this stage, the winners are hard to pick.

We're currently in the phase when developers of AI technology are spending vast sums to build their capabilities, but not yet generating meaningful returns from deploying new AI-powered products and services.

Here are three shares I think are well placed to benefit from the AI revolution.

... NVIDIA

NVIDIA's chips have become synonymous with the AI revolution and demand for the company's solutions has powered revenue growth to unprecedented rates.

NVIDIA was already a large company, the dominant provider of graphics processing units (GPUs) into games consoles and smartphones.

Revenues in 2020, before the ability of GPU chips to power AI development was well understood, were approaching $17bn.

NVIDIA's current financial year, which ends of 30 January 2025, are currently estimated by analysts to top $125bn and to grow by over 40% the following year.

That growth has powered NVIDIA's market value into the stratosphere. The business is valued at $3.4tn, which clearly requires that the group keeps delivering the goods. No other company currently matches its prevalence in the emerging AI industry. However, this considerable pressure to perform means that any hiccups could potentially hurt the share price. ..."

"Looking past the AI mega caps

... This treasure trove of data is ideal for AI-driven insights, and because it's embedded across Salesforce's suite of cloud products, it's become a critical tool for many businesses. As companies prioritise efficiency and personalisation, Salesforce's AI offerings become even more relevant. Salesforce's ability to deploy AI at scale helps businesses pull actionable insights from their data, enhancing both decision-making and customer engagement. The sheer amount of data within Salesforce's ecosystem gives it a real advantage here.

There are challenges though, as businesses remain selective in their software spending.

The 8-9% revenue growth expected this year is down from the mid-20s we saw a few years ago, and investors will want to see improvement in this area.

The added value AI brings could be the catalyst for renewed top-line growth. Its recent focus on cost control has improved profitability and cash flows, setting Salesforce up well for its next phase.

With new products in AI and data-management, Salesforce seems well-positioned for the AI revolution. But it won't be a one-way street. Expectations are high, and execution risks remain.

Taiwan Semiconductor Manufacturing Company (TSMC) - picks and shovels

TSMC's cutting-edge manufacturing capabilities are crucial for creating the high-performance, energy-efficient chips needed to power AI workloads.

Companies like Apple and NVIDIA rely heavily on TSMC's expertise to bring their products to life, especially as AI becomes a bigger part of their offerings.

While companies like NVIDIA are celebrated for designing the powerful chips behind AI technology, it's important to recognise that it doesn't actually manufacture them.

Chip production is incredibly complex, so designers like NVIDIA often outsource this to TSMC, which dominates the global foundry market with a market share of over 60%.

The surge in AI demand is already boosting TSMC's performance, with recent third-quarter results showing revenue and profit growth of over 35%. Demand has been so intense that TSMC has had to relocate equipment and open new facilities to keep up. However, supply likely won't catch up until next year.

Financially, TSMC is in a solid position, with high-quality earnings backed by robust cash flows and a healthy balance sheet. Although recent expansion efforts have led to some new debt, it remains manageable.

Ultimately, you can't have an AI transition without chips, and you can't have chips without a manufacturer like TSMC. That puts it in a strong position, and investors can get exposure to the AI revolution without having to worry too much about which designer ends up on top.

Given its location in Taiwan, TSMC's key risks are around geopolitics and potential supply chain disruptions.

Investors will need to keep an eye on global relations between Taiwan, China and the US. ..."

From Hargreaves Lansdown "Investment Times", Issue 159 - winter 2024:-

"Looking past the AI mega caps

3 share ideas

Aarin Chiekrie

Equity Analyst

Companies like NVIDIA, Microsoft, Alphabet and the other mega-cap US names dominate the narrative around artificial intelligence (AI).

But new AI technology will benefit many more businesses outside this small cohort that usually grabs headlines.

Here are three shares that could benefit from the global AI transition.

... Remember, before you can trade US shares, you need to complete and return a W-8BEN form - the easiest way to do this is on our website.

Palantir Technologies - the data king

Palantir helps government agencies and companies make sense of large, complex data sets, which in turn supports smarter decision-making.

In our increasingly data-driven world, these solutions have become incredibly valuable.

Palantir's platforms are already well-established in industries like national security, healthcare, and financial services.

In the AI landscape, data reigns supreme. The more data you have, the more powerful AI can be.

Demand for palantir's AI-powered solutions is rising as more businesses seek to tap into its capabilities - a trend we expect to continue.

Palantir's growth potential is closely tied to expanding its customer base, while navigating the regulatory challenges of data use.

As a software name, its earnings are high quality. There's plenty of cash to back up its accounting profits and it doesn't need to spend loads to generate revenue.

From an accounting perspective the company turned its first profit in 2023, though it's been free cash flow positive since 2021. We don't think the lack of long-term profit history is a major issue - it's a relatively young business and investment in expanding the product range and market reach has been a priority. However, this focus does add extra risk if current investments don't pan out. Perhaps the biggest risk to short-term performance is around expectations.

The valuation is lofty, and analysts have been upgrading profit estimates after a run of good results recently, leaving little room for missteps.

Salesforce - on the front end

Salesforce - on the front end

Salesforce might not be the first name that springs to mind when you think of AI, nor does it usually grab headlines like some mega-cap tech giants. But with a market cap of around $280bn, it's certainly making waves in the AI space.

Salesforce is best known for its cloud-based software, which helps businesses manage customer relationships. It's essentially a one-stop platform where companies track customer interactions, sales, marketing, and now, data.

With years of client relationship management (CRM) experience, Salesforce has built up a massive catalogue of customer data. ..."

Latest Share Chat

Member Info for Hedgehog100

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for Hedgehog100

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending