UBS Highlights Top AI Data-Center Power Semiconductor Stocks
UBS Highlights Top AI Data-Center Power Semiconductor Stocks. Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsAmazon was granted warrants to buy up to $340 million worth of Generac stock as part of a deal to supply backup power generators for its data centers.
What happened
FGGNRCAMZNFollow your favorite stocksCREATE FREE ACCOUNTAn aerial view of an Amazon Web Services Data Center known as US East 1 in Ashburn, Virginia, U. Generac will supply Amazon with backup power generators for its data centers, with initial deliveries expected to total $2. In this articleAPOFollow your favorite stocksCREATE FREE ACCOUNTAn aerial view of an Equinix data center in Ashburn, Virginia, on Aug. Amazon Web Services, the leader in cloud infrastructure, has been rapidly building out data center capacity to meet a surge in compute demand tied to the artificial intelligence boom.
Amazon frequently purchases warrants and takes stakes in its suppliers, including semiconductor firm Astera Labs, air cargo contractor ATSG, green hydrogen supplier Plug Power and grocery distributor Spartan Nash. Jonathan Ernst | ReutersAmazon was granted warrants to purchase up to $340 million worth of Generac stock, sending shares of the backup power provider soaring more than 40% in extended trading on Wednesday. Anna Moneymaker | Getty ImagesCorporate debt issued by the giant cloud computing players powering the artificial intelligence boom is getting riskier, private equity firm Apollo Global Management warned on Wednesday.
The wider picture
"The issue here is that CDS investors, who are the most sophisticated investors anywhere (possibly wrong, but definitely in the weeds), are attaching far greater risk to the debt of the most profitable companies in the world," Dean Baker, founder of the Center for Economic and Policy Research, said. Humans will have to compete with AI-powered virtual employees in the near future. Here are our tips for the last human holdoutsFutureproofing your career with an AI-resistant degree is a tough ask, says Charlie Ball, an expert on graduate employment for Jisc, the UK’s higher education digital, data and technology agency.
“The whole point of R&D is to find out new things, and AI can only really compare against stuff that it’s already got in its database. ”EngineeringWe may see AI increasingly embedded in design and modelling, but human engineers will still be required to operate in physical, real-world environments that will continue to require human oversight. As part of the agreement, Generac said in a securities filing that it issued warrants to Amazon to acquire up to 1.
93 a piece for a total investment that could be worth as much as $8 billion. About 308,000 warrant shares vested immediately and the remaining tranches vest contingent upon payments for the generators. The warrants are equivalent to almost 3% of outstanding shares in Generac, which has a market cap of about $10.
What has been reported
It marks the latest infrastructure deal for Amazon. Last week, Amazon struck a deal with Qualcomm to use its custom artificial intelligence chips, and got warrants to acquire as much as $4 billion in Qualcomm stock. It signed a $38 billion cloud deal with OpenAI last November, and last October, it opened a sprawling $11 billion campus for Anthropic. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsPrivate equity firm Apollo Global warned Wednesday that credit default swaps for hyperscaler debt show that the bonds have grown more risky. The warning follows calls from frontier model companies to slow down the rate of technical advancements amid safety concerns. Several hyperscalers are now reporting negative forward free cash flow, though tech investors say that profit margin increases are expected through the next few years. Risk insurance contracts, known as credit default swaps, or CDS, for bonds issued by hyperscalers are getting pricier, and it's not because banks are hedging more of their bets as bond issuance climbs, Apollo chief economist Torsten Slok wrote in a Wednesday note.
What happens next
"What the market is repricing is hyperscaler credit fundamentals, namely a debt-financed AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating assets," Slok wrote. If dealer hedging of new bonds were responsible for the rise in risk insurance prices, that widening would show up in the issuers of those bonds — the banks. Widening gapThe gap between hyperscaler CDS and bank CDS has widened to around 60 basis points from roughly 0 since October of 2025, implying that hyperscaler credit risk is increasing on its own terms, Slok's research shows.
The note from Apollo follows warnings from the leaders of frontier, large language models over the weekend, who said they want to slow the rate of advancements of their products due to safety concerns. That could have financial consequences for the cloud computing providers that run the LLMs. Many folks on Wall Street think the frontier model companies are seeking regulation from Washington that can protect them from competition from startups, and guard against legal liability for the actions of autonomous agents.
"What I believe they're really shooting for is the Communications Act treatment that protected the social media guys," Dan Alpert, founding managing partner of Westwood Capital, said.
The report has been compiled by The Daily Waves using information reported across cnbc.com, theguardian.com. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.