What does market capitalization (or "market cap") mean?

Market capitalization is the total value of a company's outstanding shares of stock. It's calculated by multiplying the current share price by the total number of shares. When we talk about Nvidia and Microsoft racing to a $4 trillion valuation, we're referring to their market caps reaching that milestone. Market cap is a simple way to understand a company's total worth according to the stock market.

What are semiconductors and why are they important for AI?

Semiconductors are materials that conduct electricity under specific conditions, making them ideal for controlling electrical current in devices. In the context of AI, semiconductor chips (particularly GPUs from companies like Nvidia and AMD) provide the massive computing power needed to train and run artificial intelligence systems. They're essentially the "brains" that process the enormous calculations required for AI to function, which is why companies making these chips or the equipment to produce them are crucial to the AI revolution.

What is a data center and why do AI companies need them?

A data center is a facility that houses computer systems, servers, and related equipment. For AI companies, massive data centers are essential because training and running advanced AI models requires enormous computing power, data storage, and specialized hardware like GPUs. Companies like Microsoft need to continually expand their data center capacity to handle growing AI workloads, which benefits the suppliers of servers, power systems, cooling solutions, and networking equipment included in this stock group.

What is "high-bandwidth memory" (HBM) mentioned for Micron Technology?

High-bandwidth memory (HBM) is a type of computer memory with extremely fast data transfer rates. It's stacked vertically (like a tiny skyscraper of memory chips) rather than spread out, allowing for much quicker data access. This is critical for AI applications because artificial intelligence systems need to process massive amounts of data simultaneously. Companies like Micron that produce HBM are essential to the AI ecosystem because these memory components are used in Nvidia's advanced AI chips, allowing them to perform complex calculations much faster than traditional memory would allow.

What does "EUV lithography" mean in relation to ASML?

EUV (Extreme Ultraviolet) lithography is an advanced technology used to make the world's most sophisticated computer chips. It uses extremely short wavelength light to create incredibly tiny circuit patterns on silicon wafers, allowing manufacturers to pack billions of transistors onto a single chip. ASML is the only company in the world that makes these complex EUV machines, which cost hundreds of millions of dollars each. Without ASML's technology, companies like TSMC couldn't manufacture the cutting-edge chips that power Nvidia's and Microsoft's AI systems, making ASML a critical link in the AI supply chain.

15 handpicked stocks

The $4 Trillion Tech Race

Behind Nvidia and Microsoft's historic race to a $4 trillion valuation lies an entire ecosystem of essential suppliers. These carefully selected companies provide the critical infrastructure, semiconductors, and hardware that make the AI revolution possible.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 30