King – Digitex Solutions

We’re buying the dip in an AI data center play still under pressure post-DeepSeek

digitex — Fri, 21 Feb 2025 20:36:13 +0000

We’re buying 25 shares of Eaton just below $300 each. Following Friday’s trade, Jim Cramer’s Charitable Trust will own 325 shares of ETN, increasing its weighting to about 2.7% from about 2.5%. Friday’s market losses picked up steam in the afternoon with momentum stocks continuing to roll over and cyclical stocks falling on weakening economic data. Fortunately, we have limited the impact of these losses by building up a huge war chest of cash. It’s no secret that the economy has slowed over the past few weeks. Using the Atlanta Fed GDPNow forecast as a guide, the latest estimate of first-quarter economic growth is 2.3%, down from a 3.9% estimate on Feb. 3. We’re not surprised to see consumer discretionary and industrials as two of the worst-performing sectors this month. However, we do expect the economic slowdown to be short-lived. So, we’re dipping into our cash hoard to beef up one of those beaten-down industrial names, which makes electrical components and power management systems used to run energy-intensive AI data centers. With Eaton shares trading below their DeepSeek freakout levels, we see this as an opportunity to buy more. ETN 1Y mountain Eaton 1 year The first instinct when the Chinese startup claimed that it made a more efficient, lower-cost large language model was that the world wouldn’t need as many data centers to power artificial intelligence. Since data centers are one of Eaton’s largest end markets and one of the company’s fastest-growing, the DeepSeek news on Jan. 27 caused shares to fall 15% to about $311 each. Unlike Club AI chip king Nvidia , whose stock has recovered most of its DeepSeek losses, Eaton shares have a longer road to recovery. However, as we’ve learned in recent weeks, there has been zero change in the spending habits of the big tech hyperscalers building out these data centers. In fact, these titans plan to invest more money in their AI infrastructure in 2025 versus last year Club names Amazon , Microsoft , Meta Platforms , and Alphabet all raised their capital expenditure outlooks for this year, erasing concerns that one would break ranks and slow down their investments. We also heard Eaton’s thoughts on the subject when the company reported strong earnings on Jan. 31. During the quarterly conference call, management explained that a shift toward more inferencing data centers and away from training specialized data centers would be a positive development for the business because it would speed up construction times without a change in the amount of electrical needed. In short, DeepSeek’s impact on the pace of AI infrastructure investment has been overblown. And, that’s why we are buyers of Eaton, a stock we believe in for the long haul. (Jim Cramer’s Charitable Trust is long ENT, AMZN, MSFT, META, GOOGL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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AI Overviews Data Shows Massive Changes In Search Results

digitex — Sat, 01 Feb 2025 10:19:32 +0000

Enterprise SEO platform BrightEdge published results on current AI Search trends, showing that Google AI Overviews (AIO) has expanded its presence by up to 100% in increasingly complex search queries. The changes suggest growing confidence in AI for search, with indications that Google is relying on authoritativeness and greater precision in context awareness for matching queries to answers, particularly in relation to content modality.
The data shows that AI Overviews (AIO) has evolved from showing featured snippet style answers to being capable of handling multi-turn, complex search queries. The takeaway is that Google is increasingly comfortable with AI’s ability to surface precise answers for longer queries and this is a trend that may continue to rise.
Google AIO Presence Is Growing
Google continues to show confidence in their AI Overviews (AIO) search feature as BrightEdge has discovered that more keyword phrases are triggering AI answers now than at any point since the feature was rolled out last year.
25% of search queries using 8 words or more are displaying AI Overviews (AIO), which is a clear upward trend indicating that Google continues to refine the accuracy of AIO and is better able to handle increasingly complex search queries.
A graph shows how the keywords with 8, 9, and 10 words continued to increasingly show AI Overviews
Graph Representation Of AI Overviews Growth

Keyword phrases with less than four words continue to show an increasing amount of AIO but the growth in longer more precise keywords is growing significantly faster.
Screenshot Showing Percentage Of Keywords With Google AI Overviews

Change In AIO Patterns: Gains For Authoritative Brands
BrightEdge provided additional data that looks at specific topic categories, showing how queries for some topics consolidating to answers from big brand sites.
For example, in the healthcare category where accuracy and trustworthiness are paramount Google is increasingly showing search results from just a handful of websites. Content from authoritative medical research centers account for 72% of AI Overview answers, which is an increase from 54% of all queries at the start of January.
15-22% of B2B technology search queries are derived from the top five technology companies such as Amazon, IBM, and Microsoft.
Qualities Of AIO Answers
BrightEdge data reveals that AIO answers follow certain patterns that reveal qualities that Google feels make content more relevant.

Excels at step by step and how to answers (structured hierarchical information)
Shows precise real-time relevance
Answers lean toward general guidance

Educational Search Queries
For educational queries AIO shows a preference toward concise answers with a clean visual presentation. In the below example Google is hiding content that has additional information that answers additional questions beyond the main query. This may relate to Google’s information gain patent which is about anticipating additional information that a user will be interested in after receiving the answer to their original search query.
AIO Showing Information Gain Ranked Content

Change In YouTube Citations
An interesting pattern picked up by BrightEdge is that YouTube technical tutorials have increased by 40% in AIO while health related queries that show YouTube videos are trending downward by 31%.
Of particular interest is that the high volume search queries (100k+ search volume) that trigger YouTube content have decreased by 18.7%. This may reflect a change in user needs and Google’s ability to identify that context and understand that it’s not served well by video content.
What all of this means is that it’s increasingly important to think about context awareness, the appropriateness of the content to the query. The question to ask is what kind of content best serves the context and to expand that answer across modalities like images, sound, video, and text, then within those formats think in terms of how-to, data dump, informative, etc.
BrightEdge observes:
“Most Interesting Pattern:AI Overviews are developing sophisticated, context-aware citation models. While YouTube citations are declining for health queries (e.g., “symptoms,” “diet”), they’re increasing for technical how-to content, jumping from 2.0% to 2.8% of citations in this category.
Pay Attention:
1. Context is King – Focus video content where it’s gaining traction (technical tutorials, DIY) and pivot to text for topics where traditional authority is preferred (health, finance)2. Match Your Industry’s Pattern – In sectors with distributed authority (like B2B tech at 15-22% per source), focus on direct citations; in consolidated spaces (like healthcare at 72% institutional),
partner with established authorities
3. Monitor Actively – With citation patterns shifting dramatically in just one month, weekly monitoring of your space is crucial to spot new opportunities before competitors”
Takeaway
A way to make sense of the data is that it Google AI Overviews appear to be increasingly relying on the authoritativeness of the content as the stakes go higher with more complex search queries.
Authoritativeness isn’t just about being a big brand but it may have to do with simply being meaningful to the Internet audience as a go-to source for a particular topic. Trustworthiness and other related factors are important and this has nothing to do with superficial SEO activities like author bios and so on.
Read the data:How AI Giants Are Carving Distinct Territory in the Search Landscape

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DeepSeek, Stargate, and the new AI arms race

digitex — Thu, 30 Jan 2025 16:10:38 +0000

On today’s episode of Decoder, we’re talking about the only thing the AI industry — and pretty much the entire tech world — has been able to talk about for the last week: that is, of course, DeepSeek, and how the open-source AI model built by a Chinese startup has completely upended the conventional wisdom around chatbots, what they can do, and how much they should cost to develop. DeepSeek, for those unaware, is a lot like ChatGPT — there’s a website and a mobile app, and you can type into a little text box and have it talk back to you. What makes it special is how it was built. On January 20th, the startup’s most recent major release, a reasoning model called R1, dropped just weeks after the company’s last model V3, both of which began showing some very impressive AI benchmark performance. It quickly became clear that DeepSeek’s models perform at the same level, or in some cases even better, as competing ones from OpenAI, Meta, and Google. Also: they’re totally free to use.But here’s the real catch: while OpenAI’s GPT-4 reported training cost was as high as $100 million, DeepSeek’s R1 cost less than $6 million to train, at least according to the company’s claims. In a matter of days, DeepSeek went viral, becoming the No. 1 app in the US, and on Monday morning, it punched a hole in the stock market. Panicked investors wiped more than $1 trillion off of tech stocks in a frenzied selloff earlier this week. Nvidia, in particular, suffered a record stock market decline of nearly $600 billion when it dropped 17 percent on Monday. For more than two years now, tech executives have been telling us that the path to unlocking the full potential of AI was to throw GPUs at the problem. Since then, scale has been king. And scale was certainly top of mind less than two weeks ago, when Sam Altman went to the White House and announced a new $500 billion data center venture called Stargate that will supposedly supercharge OpenAI’s ability to train and deploy new models. The aftermath has been a bloodbath, to put it lightly. Venture capitalist Marc Andreessen sounded the alarm, calling DeepSeek “AI’s Sputnik moment” — and that does appear to be how the AI industry and global financial markets are treating it. In DeepSeek and Stargate, we have a perfect encapsulation of the two competing visions for the future of AI. One is closed and expensive, and it requires placing an ever-increasing amount of money and faith into the hands of OpenAI and its partners. The other is scrappy and open source, but with major questions around the censorship of information, data privacy practices, and whether it’s truly as low-cost as we’re being told. What is clear is that we’ve entered a new phase in the AI arms race, and DeepSeek and Stargate represent more than just two distinct paths toward superintelligence: they also represent a new, escalating front in the US-China relationship and the geopolitics of AI. This is becoming especially fraught, as President Donald Trump continues to wreak havoc on foreign relations with a new threat of tariffs on foreign semiconductors. There is a whole lot going on here — and the news cycle is moving very fast. So to break it all down, I invited Verge senior AI reporter Kylie Robison on the show to discuss all the events of the past couple weeks and to figure out where the AI industry is headed next.If you’d like to read more about what we talked about in this episode, check out the links below:

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