Artificial intelligence (AI) is no longer just for tech behemoths — it’s sprinkling its magic dust across a myriad of industries, creating unexpected winners in the stock market.

Just as we need to eat to survive and function, advanced AI systems require substantial electricity to operate. From this background, the reliability of the electricity supply is increasingly highlighted as a critical vulnerability within the AI ecosystem.

One ASX-listed company that could benefit from this trend is IPD Group Ltd (ASX: IPG), a distributor of electronic and automation systems and solutions across Australia.

Could this under-the-radar ASX small-cap stock be the surprise superstar of the AI revolution? Let’s dive into the potential of IPD Group.

Power shortages

We often hear about semiconductor chip shortages driven by the AI boom and how it is benefitting the likes of Nvidia Corp, Taiwan Semiconductor Manufacturing Co Ltd, and equipment maker ASML Holding NV.

However, Tesla Inc (NASDAQ: TSLA) boss Elon Musk believes power shortages are likely to be the next wave ahead of us. In an interview in March 2024, as part of the Bosch Connected World conference, he said:

The constraints on AI compute are very predictable… A year ago, the shortage was chips, neural net chips. Then, it was very easy to predict that the next shortage will be voltage step-down transformers.

Then, the next shortage will be electricity. They won’t be able to find enough electricity to run all the chips. I think next year, you’ll see they just can’t find enough electricity to run all the chips.

To make things worse, the developed world is already suffering from an inadequate supply of electricity due to ever-increasing energy demand and a slow transition to environmentally friendly energy sources.

The Australian Energy Market Operator (AEMO) warned of the potential risk of blackouts in NSW and Victoria in its May 2024 report, as highlighted by The Australian.

How is IPD Group’s business going?

IPD Group — founded more than 70 years ago — specialises in distributing electrical and automation solutions in Australia. It leverages renowned global brands like ABB Ltd and General Electric Co.

Its services encompass power distribution, industrial control, renewable energy solutions, and testing. More recently, the company expanded into solar energy, aiming to become a one-stop shop for all photovoltaic (PV) system needs ranging from PV equipment and services through the acquisition of Addelec.

In May, IPD Group provided a bright outlook for FY24, as summarised by my colleague James.

The company expects to report earnings before interest, tax, depreciation, and amortisation (EBITDA) between $39 million and $39.5 million, implying a 42% growth from a year ago at the midpoint. These projections exclude costs from the acquisitions of EX engineering and CMI Operations.

IPD Group CEO Michael Sainsbury believes FY24 has been a transformative year for the company, including major acquisitions. He said:

It has been a transformative year for IPD with the completion of two strategic acquisitions, EX Engineering and CMI Operations.

Merging our Addelec and Gemtek businesses has significantly enhanced our EV infrastructure team and we are capitalising on the growth in the market by securing a number of major projects during the year, including the electrification of Australia’s largest bus depot.

How cheap is this ASX small-cap stock today?

The IPD Group share price dropped by approximately 20% from the 52-week high of $5.42 in February this year. As the chart below shows, the IPG Group share price has been hovering between $4 and $5 for the last 12 months after more than quadrupling since its initial public offering in December 2021.

IPD Group shares are trading at a price-to-earnings ratio of 21x based on its reported earnings for the last 12 months to December 2023.

I think IPD Group has the potential to benefit from anticipated power shortages caused by the ongoing AI revolution, as well as electric vehicles and green energy initiatives.

The post Is this ASX small-cap stock an overlooked beneficiary of the AI boom? appeared first on The Motley Fool Australia.

More reading

• Why Alligator Energy, Data#3, Fisher & Paykel, and IPD shares are storming higher
• 2 of the best ASX growth shares to buy right now

Motley Fool contributor Kate Lee has positions in ASML and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Ipd Group, Nvidia, and Tesla. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool Australia has recommended ASML and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This is a common question among homeowners, and according to Damien Klassen from Nucleus Wealth, the answer depends on your income level, age, and mortgage interest rates at the time of your decision.

In a blog, Klassen offers advice for people considering what’s best to do with a spare $10,000 in income.

Let’s look into his findings.

Superannuation or the home loan?

Let’s look at some obvious factors first.

The biggest benefit of using a spare $10,000 in income to pay down your home loan is the guaranteed annual interest savings. The downside is you’ll have to pay full tax on that income if you use it in this way.

The biggest benefit of contributing a spare $10,000 in income into superannuation is the substantial tax saving on the way in (as long as you’re under the concessional contributions cap) and the ongoing earnings on your investments (bearing in mind that investments sometimes result in losses, too).

Just to remind you, concessional superannuation contributions are taxed at 15%, which is lower than most individual income tax rates.

A case study…

Klassen has run the numbers using a fictitious case study of an Australian earning $100,000 per year.

They have a mortgage with an annual home loan interest rate of 6%. They also have a superannuation fund returning an average of 6% per year.

He looks at the different outcomes over a 10-year period of using that spare $10,000 to either pay down the home loan or bump up superannuation this year.

Here’s what he finds:

At $100k, your marginal tax rate (in 2025) is 30% + Medicare levy = 32%.

So, your $10k becomes $6,800 off your mortgage after tax or $8,500 invested in super. i.e., you are $1,700 better off on day 1 in super.

If you save 6% on your $6,800 mortgage reduction over 10 years = $5,378 in interest avoided, tax-free.

If you made 6% in your $8,500 in superannuation and then paid tax on it = $5,155 after tax = $223 worse off in superannuation.

Net effect = $1,477 better off in super.

Klassen emphasises that the outcomes can be different depending on income levels and interest rates.

He says higher interest rates make using the money to pay off your home loan more attractive. Conversely, lower interest rates may make investing the money into superannuation a better option.

Klassen says people on higher incomes will “almost always” come out in front by contributing to superannuation.

Those earning less than $50,000 would likely be worse off if they put their spare $10,000 into superannuation vs. paying down their property loan, he says.

A few caveats…

While putting money into superannuation makes sense for a lot of people, they generally can’t access the funds until they reach preservation age.

Klassen says having inaccessible savings helps some Australians keep their spending in check.

However, there is some risk involved because once your superannuation money is invested, there is no guarantee of positive returns every year.

Klassen comments:

Investment returns within super can fluctuate with market conditions.

While younger individuals have time to recover from downturns, older individuals, such as those around 65, face more immediate risks.

The post Should you pay down your mortgage or add to superannuation? appeared first on The Motley Fool Australia.

More reading

• Is this ASX small-cap stock an overlooked beneficiary of the AI boom?
• Prediction: This will be Nvidia’s next big move
• ASX 200 gives back some heady intraday gains amid Aussie jobs data
• 2 ASX 200 shares with ex-dividend dates next week
• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia‘s (NASDAQ: NVDA) performance has been nothing short of remarkable of late. I’m talking about Nvidia the stock and Nvidia the company. The stock’s performance speaks for itself. Shares have exploded higher by about 725% since January 2023. 

But that surge in price wasn’t just driven by overexuberant investors. Nvidia’s business itself has exploded — and its data center business, in particular. Revenue from that segment has more than quintupled in the past year, helping to drive Nvidia’s net income up by more than 600%. Growth from sales of the company’s artificial intelligence (AI) chips to data centers hasn’t yet peaked, but there are already indications of what could drive Nvidia stock’s next big move higher.

Explosive growth in data center sales

Nvidia’s recent good fortune didn’t come by chance. Many years of research and development allowed it to create the most technologically advanced graphics processing units (GPUs) in the industry, and have them available for customers just when the need for that type of computing power skyrocketed. Now, even as it works to accelerate its manufacturing to catch up with current demand, Nvidia already has its next-generation Blackwell chip series in production.

Beyond that, CEO Jensen Huang has also unveiled a new AI chip that it intends to bring to market in 2026. The Rubin platform will succeed the Blackwell, and will include GPUs as well as a new central processing unit (CPU). That will offer customers a more complete data center server system. The already-massive volume of data center spending is reflected in Nvidia’s quarterly segment revenue.

But while data center revenue has gone parabolic, another Nvidia business segment is operating under investors’ radar right now. After all, it wasn’t just Nvidia’s R&D advancements that led to the growing uses of generative AI and other artificial intelligence applications.

There are now multiple companies that are working to put self-driving cars on the road or use computing power to improve existing vehicles’ performance. And there are signs that Nvidia’s automotive business could be its next big revenue driver.

Nvidia’s next major catalyst

While its auto segment numbers pale in comparison to data center sales right now, there’s a trending increase in revenue there as well. Sales growth is already coming as automakers work to improve their vehicles’ performance. Electric vehicle (EV) maker Rivian Automotive just announced it would be using Nvidia chips to enhance computing power and improve the range and performance of its R1 platform vehicles.

Rivian says it will have 10 times more computing power using Nvidia’s DRIVE Orin processors. Nvidia calls its Orin system on a chip the central computer for intelligent vehicles. Other automotive companies partnering with Nvidia include Chinese EV makers BYD, Nio, and XPeng. In addition, Volvo, its subsidiary Polestar, and Mercedes-Benz are among the global automakers that use Nvidia’s autonomous driving system.

Self-driving cars could be Nvidia’s next bonanza

That helps explain the recent sales growth for Nvidia’s automotive segment. However, consider what might come next as more and more self-driving vehicles are being launched. Much attention is given to Tesla and its plans for robotaxi fleets. It has said it will update investors in August on the progress of its self-driving vehicle efforts. But other companies are a step ahead of the EV leader in autonomous driving, and already have vehicles on the road.

Alphabet‘s Waymo is expanding its operations as it trains its systems. In May, the company said it was performing 50,000 rides per week in San Francisco, Los Angeles, and Phoenix. Amazon owns self-driving car company Zoox, and it has plans to test vehicles in Austin and Miami.

To be sure, regulatory hurdles remain, and data will be needed to prove that the technology is safe and advantageous for consumers. But investors who can be patient for that data collection and process to play out could do well by being in Nvidia stock before that sector takes off. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Prediction: This will be Nvidia’s next big move appeared first on The Motley Fool Australia.

More reading

• Is Nvidia stock a buy after the 10-for-1 stock split?
• Will Apple stock be worth more than Nvidia by 2025?
• Is Nvidia going to $5 trillion after its 10-for-1 stock split?
• 4 top ASX 200 stocks to buy now for the AI revolution
• 25 reasons to buy Nvidia stock now

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Alphabet, Amazon, BYD Company, Nio, Nvidia, Rivian Automotive, Tesla, and XPeng. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, BYD Company, Nio, Nvidia, and Tesla. The Motley Fool Australia has recommended Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is up 0.5% at the time of writing, down from early morning gains of more than 0.7%.

The benchmark Aussie index is enjoying a strong run on the back of the latest US inflation figures and Federal Reserve meeting.

ASX investors also initially reacted positively to the latest unemployment data released by the Australian Bureau of Statistics (ABS) at 11.30am AEST.

But the ASX 200 has since slipped more than 0.1% since that announcement.

Here’s what we know.

ASX 200 dips on strong labour figures

In a classic case of good news for the economy equating to potentially bad news for stocks, the ASX 200 has retraced since the ABS reported that Australia’s seasonally adjusted unemployment rate decreased by 0.1% to 4.0% in May.

Investors may be feeling jittery as the strong labour market could usher in further pay rises, adding to inflationary pressures. This, in turn, could pressure the Reserve Bank of Australia to keep interest rates on hold for longer.

Commenting on the latest figures, Bjorn Jarvis, ABS head of labour statistics, said, “With employment rising by around 40,000 people and the number of unemployed falling by 9,000 people, the unemployment rate fell to 4.0%”

That’s an impressive feat, considering the rapid rate of immigration Australia is currently witnessing.

Jarvis noted that May’s decline wasn’t enough to offset the big unemployment spike in April.

In April, more unemployed people than usual were waiting to start work. Some of the fall in unemployment and rise in employment in May reflect these people starting or returning to their jobs.

While the total number of unemployed people fell by 9,000 in May, this followed a 33,000 increase in April. Unemployment was around 24,000 people more than in March, an average increase of around 12,000 people each month.

But in a sign of just how strong the Aussie economy is, Jarvis pointed out that, “There are now almost 600,000 unemployed people, however, that is still nearly 110,000 fewer people than in March 2020, just before the pandemic.”

The rather muted reaction to the strong labour data on the ASX 200 today comes as a number of analysts have been forecasting a dip in unemployment for May.

Among them was the economics team at National Australia Bank Ltd (ASX: NAB) which had forecast the unemployment rate would fall to 4.0%.

According to NAB (quoted by The Australian Financial Review):

The driver is that the prior month had an unusual amount of people who were classified as unemployed, but were waiting to start a new job, which we assessed then was worth around a 10th on the unemployment rate.

The post ASX 200 gives back some heady intraday gains amid Aussie jobs data appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares with ex-dividend dates next week
• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher
• Up 39% in a year, the NAB share price just hit a 9-year high!
• Why ASX, Brazilian Rare Earths, Liontown, and Sigma shares are sinking today
• Guess which A2 Milk rival’s shares just rocketed 21% on US news!

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s always big news on the Australian share market when an ASX 200 dividend stock trades ex-dividend. For one, a stock going ‘ex-div’ means that any investors who buy shares on that day forward miss out on the upcoming dividend payment that a company has scheduled for investors.

But whenever a company trades ex-dividend, we also tend to see a big share price drop for the company in question. This drop reflects the loss of that dividend‘s value for any ASX 200 investor who buys shares from that day onwards.

So ex-dividend dates are clearly events of note on our share market. And next week, we’ll see not one, but two ASX 200 shares go through this process.

2 ASX 200 shares scheduled to trade ex-dividend next week

First up, we have ASX 200 building products company CSR Ltd (ASX: CSR). CSR has been making waves in 2024 after the company agreed to a $9 per share takeover offer from the French company Saint-Gobain earlier this year.

Earlier this month, CSR confirmed that its shares would be removed from the ASX 200 Index (and the Australian share market) next Thursday, 20 June, as a result of this takeover. However, before the stage exit, CSR shares have one more trick up their sleeves.

The company will be forking out a swansong dividend on 1 July next month. This passive income payment will be worth a fully franked 12 cents per share and will come out of that $9 per share takeover offer. So eligible shareholders will now receive $8.88 in cash for every CSR share owned. That’s in addition to this 12 cents per share dividend payment.

However, if you want this cash in your bank account, you’ll have to own CSR shares before the company trades ex-dividend for this payment next Friday, 21 June.

CSR shares are currently trading on a dividend yield of 3.9%.

A retail share with a 4% dividend yield

Next, let’s talk about ASX 200 retail share Premier Investments Limited (ASX: PMV). Premier is the company behind famous Australian retail brands like Smiggle, Dotti and Peter Alexander.

Premier delivered its last earnings report back in March. As we covered at the time, this report was well-received, thanks in part to the ASX 200 share’s decision to pay an interim dividend of 63 cents per share, fully franked. That was a 16.7% increase over the ordinary interim dividend of 54 cents per share that investors enjoyed in 2023.

However, this dividend was only set to be paid out on 27 July next month. If ASX 200 investors wish to see this dividend in their bank accounts, they will need to own Premier shares before the ex-dividend date. This has been set for next Tuesday, 18 June.

Premier Investments stock is currently trading on a dividend yield of 4.24%.

The post 2 ASX 200 shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

More reading

• Why the ASX 200 is rocketing on the latest US inflation and Fed interest rate news
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• 7 ASX All Ords shares rocketing higher while the market sinks
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing, the benchmark index is up 0.5% to 7,755.7 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are charging higher:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up almost 17% to 14 cents. Investors have been buying the junior infant formula company’s shares following the release of an update on its US operations. Bubs advised that USA weekly scan revenue exceeds US$1 million per week with over 24,000 tins sold. This compares to its third quarter average of US$750,000 revenue per week. Management also notes that it was the number one, best-selling infant formula product on Amazon USA in May 2024. Bubs’ CEO, Reg Weine, commented: “We are continuing to see exceptionally strong demand for our products in the USA, and we have now reached a new weekly scan sales record in the USA with revenue exceeding US$1m.”

Codan Ltd (ASX: CDA)

The Codan share price is up 8% to $11.53. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has initiated coverage on the metal detector manufacturer’s shares with a buy rating and $13.10 price target. UBS is feeling positive about the company’s outlook and is expecting strong revenue growth and margin expansion to drive even stronger earnings per share growth. The broker also sees scope for value accretive acquisitions given its strong balance sheet and new debt facilities.

Life360 Inc (ASX: 360)

The Life360 share price is up over 3% to $14.23. As well as getting a boost from a booming tech sector, this location technology company was the subject of a bullish broker note out of Morgan Stanley this morning. According to the note, the broker has reaffirmed its overweight rating and $17.50 price target on Life360’s shares. It has been looking at the company’s expansion into advertising and sees a very big opportunity based on what it has seen from peers such as ride-sharing apps.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up 1.5% to 3.75 cents. This follows the release of drilling results from the Moblan Lithium Project in Canada. Management highlights that its recent drilling is demonstrating the potential of a single, large continuous orebody. Interim CEO, James Brown, commented: “Moblan continues to present outstanding high-grade drilling results over wide intersections. The deposit now extends over ~2.3km E-W, ~1.2km N-S and to depth of ~450m. Today’s announcement emphasises the continuation of known mineralisation and areas of in-fill between zones, suggesting considerable potential for uncovering additional extensions to this premium lithium deposit.”

The post Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Guess which A2 Milk rival’s shares just rocketed 21% on US news!
• Why are Sayona Mining shares down 80% in a year?
• Leading brokers name 3 ASX shares to buy today
• Why Life360 shares can rocket almost 25%
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The National Australia Bank Ltd (ASX: NAB) share price is up 1% today, outperforming the S&P/ASX 200 Index (ASX: XJO), which is up 0.5%. The ASX bank share just hit a nine-year high!

The local share market is getting a boost following news from the US that inflation is headed in the right direction, as reported by my colleague Bernd Struben.

The US core consumer price index (CPI), which excludes volatile items such as food and energy costs, increased by 0.2% in May 2024. The annual core CPI increase was 3.4%, compared to estimates of 0.3% for the month and 3.5% for the year, according to CNBC.

Following today’s rise, the NAB share price is up almost 40% in the last year, as we can see on the chart below. The ASX 200 is up more than 8% in the last 12 months.

Why is this boosting the NAB share price?

As a major ASX bank share, NAB’s performance is heavily linked to the economy. Interest rates play an important part in NAB’s operations because they affect how much the bank can charge on its loans, how much it pays to savers and how comfortably borrowers can afford their loans.

With US inflation moving in the right direction, this could suggest that interest rate cuts are getting closer in the world’s biggest economy. This could encourage other central banks, such as the Reserve Bank of Australia (RBA), to cut rates a little sooner.

Lower interest rates could improve the outlook for NAB’s arrears and bad debts. Additionally, if interest rates are somewhat reduced, investors may be willing to pay a higher price/earnings (P/E) ratio for NAB shares.

Recent profit performance

In the FY24 first-half result, NAB reported it generated $3.55 billion of cash earnings, which was down 12.8% year over year. While that represented a sizeable decline, the bank still generated a significant amount of profit.

The NAB net interest margin (NIM) declined from 1.77% in the HY23 result to 1.72%. This shows that NAB’s profitability reduced when considering its loan rate compared to the cost of its funding (such as savings accounts).

NAB said the home lending margin competition and term deposit cost headwinds were “moderating”, with the HY24 NIM of 1.72% actually higher than the 1.71% achieved in the second half of FY23.

However, lower interest rates may not assist NAB’s profitability. The bank is currently generating higher returns on transaction accounts, which don’t pay interest while lending against that cash at a relatively high loan rate. A lower RBA rate would likely mean a reduced return on transaction account balances.

NAB share price snapshot

Since the start of 2024, the NAB share price has risen 14%, outperforming the ASX 200, which has only risen by 1.7%.

The post Up 39% in a year, the NAB share price just hit a 9-year high! appeared first on The Motley Fool Australia.

More reading

• Big bank bargain: Are this week’s tumbling ASX 200 bank shares a good buy?
• Are ASX 200 bank shares a good investment right now?
• Forget NAB and buy these ASX dividend shares
• Here’s the average wealth of Aussies who manage their own superannuation
• Buying ASX 200 bank stocks? Here’s why they could keep outperforming

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.