SSR LLC

[SSR Utilities & Renewable Energy] Five Key Takeaways from Entergy’s Agreement to Supply Meta’s Largest AI Data Center 1️⃣ Meta has prioritized access to power at speed over considerations such as proximity to customers, robust digital infrastructure, or even low risk of natural disasters 2️⃣ Vertically integrated utilities, whose regulatory framework allows them to expedite access to their power grids and which have the heft to secure rapid regulatory approvals and command access to power generation equipment, stand to benefit from this thirst for speed 3️⃣ Data center capacity can be added in regions distant from traditional data center hubs and even major population centers 4️⃣ To expedite regulatory approvals, Meta has agreed to a tariff structure that will require it not only to pay for the cost of the new generation capacity required by the data center but also to bear a proportional share of existing system costs, thereby reducing rates for existing customers 5️⃣ The scale of capacity required for the Meta data center, however, points to the potential constraint on data center expansion imposed by the country's ability to add generation capacity If you want to receive the full report or discuss it with Hugh Wynne and Eric Selmon, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #Utilities #Power #PowerGeneration #GenerationCapacity #Entergy #Meta #Facebook #Datacenters #ArtificialIntelligence #AI

[SSR TMT] Cloud Platforms: Integrated AI Bundles for the Win GenAI is accelerating migration to public cloud datacenters, disrupting the equilibrium amongst platform competitors in the process. Cloud hosting is a $300B global market that has accelerated from <20% YoY growth to a 25%+ pace in less than 2 years with a long-term TAM that exceeds $3T. First mover advantage and scale economies form a substantial competitive moat for the leaders #AMZN, #MSFT, and #GOOGL, which collectively control more than 2/3rds of the market. The rapid growth of AI is strengthening the moat vs. would-be entrants but is also shifting the success formula for the existing leaders. We believe that the winners will use proprietary foundation models, rights-secured training data, leadership in AI science, efficient AI-tuned datacenter capacity, and deep enterprise IT relationships to gain advantage. #GOOGL is the best positioned on these factors and is delivering the fastest growth. #MSFT can lever its global IT relationships, but its reliance on OpenAI/unlicensed data/NVDA are real risks and its growth is constrained by scarce datacenter components. #AMZN is playing catch-up in AI and has leached market share to the other two. We see #GOOGL as the best investment of the group for its strength in AI hosting, its powerful franchises, and for its relatively soft valuation. If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #ArtificialIntelligence #AI #GenAI #Datacenters #CloudComputing #Technology #Tech #TMT #Alphabet #Google #Microsoft #Amazon

[SSR TMT] Portfolio Update: Stepping Back in Software Paul Sagawa published a quarterly update to his 15-stock long TMT model portfolio. The purpose of the report is to provide Paul’s highest conviction ideas for the next 12 to 24 months. Here are our key takeaways from the quarter: ◾ Enterprises are less certain of their IT spending priorities ◾ Investors are skittish about high-multiple cybersecurity stocks ◾ Only a handful of companies are reporting meaningful upside from GenAI Updated SSR TMT 15-Stock Long Model Portfolio: We are removing #NTNX to reduce our exposure to enterprise software and adding #MRVL, which we believe is on the verge of returning to robust YoY growth against increasingly easy comps ◾ AI/Cloud Leaders – #GOOGL, #MSFT ◾ Digital Services – #SHOP, #TTD, #LRN ◾ Enterprise Infrastructure – #PATH, #IBM, #CFLT ◾ Cybersecurity – #NET, #ZS, #CRWD ◾ Streaming Media – #NFLX, #SPOT ◾ Datacenter Semis – #AVGO, #MRVL If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information:   Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #Technology #Tech #Media #Telecom #ArtificialIntelligence #AI #CloudComputing #Cybersecurity #Semiconductors #EnterpriseSoftware #Software #DigitalMedia #Ecommerce #Hardware

[SSR TMT] GOOGL: Stop Worrying About Search Paul Sagawa believes that Search will prove far more resilient than expected and that GOOGL will be a substantial beneficiary of the rise of GenAI. We believe that GenAI is only applicable to about a third of all search queries and those queries are of relatively low value to advertisers. For the other types of queries, GenAI LLMs are burdened by their relatively poor accuracy, out-of-date datasets, slow speeds, and high processing costs. Hybrid search, augmenting traditional techniques with an LLM, plays to GOOGL’s strengths. This should also advantage GOOGL in the revitalization of digital assistants with further opportunity to embed the functionality into smartphones, wearables, and apps. In this context, we expect GOOGL to sustain comfortable double-digit earnings growth for years and see 30-50% upside to the current valuation. If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information:   Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #GenAI #AI #ArtificialIntelligence #GOOGL #Google #Alphabet #ChatGPT #MSFT #AAPL #AMZN

[SSR Utilities] PJM Hosts More than Half of America’s Data Centers; How Will Their Growth Affect PJM’s Generators? In this research report, Hugh Wynne and Eric Selmon assess how PJM’s markedly higher power demand growth forecast will affect the reliability of PJM’s power supply over the coming decade, as well as the mix of generation resources that will supply PJM’s power demand. We conclude that PJM generation capacity is likely sufficient to supply the growth in peak demand through at least 2028, although new dispatchable generation resources will be required thereafter and planning for them is needed now. Moreover, the rapid planned expansion of PJM’s solar and wind fleets should add substantially to the daytime supply of zero variable cost renewable energy, mitigating the impact of demand growth on-peak power prices. The absence of solar generation at night, however, implies that higher data center demand and EV charging load must be met through increased fossil generation, tending to raise off-peak power prices. The substantial increase in peak demand and electricity supplied in PJM’s growth forecast will require the continued operation of much of PJM’s coal fired fleet, precluding the substantial reduction in coal-fired generation and carbon emissions that would have been possible in a slower growth environment. If you want to receive the full report or discuss it with Hugh Wynne and Eric Selmon, please contact our Head of Sales for more information:   Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #datacenters #powerdemand #utilities #renewableenergy #powergrid #powergeneration #power #energy #pjm #artificialintelligence #ai #coal #solar #wind #gasturbine #gascombinedcycle #nuclear #hydro

[SSR TMT] GOOGL: Waymo Will Win but When? Most investors seem to have written off self-driving vehicles, but Waymo has quietly made significant progress while its rivals have stumbled. The total addressable market for autonomous transportation is worth multiple trillions of dollars. For 2024, we estimate that Waymo will achieve around $70-80 million in revenue while serving just parts of three cities with significant service restrictions. GOOGL has been playing it slow and safe but now appears primed for a bigger push. By 2030, we believe revenue could reach $4-6 billion, serving at least twenty major markets with significant further penetration into each, and it could be close to turning a profit. We estimate Waymo is worth more than $70 billion today and could be valued at hundreds of billions by the end of the decade. Meanwhile, GOOGL remains the cheapest among its mega-cap peers. If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com #Google #Alphabet #GOOGL #Waymo #AutonomousDriving #SelfDriving #RoboTaxis #Uber #Tesla #TSLA #GeneralMotors #GM #Ford #F #Apple #AAPL #Nissan #Lyft #Zoox

[SSR Utilities] Artificial Intelligence and the Madness of Crowds, or Why Data Centers Won’t Overwhelm the Grid Hugh Wynne and Eric Selmon’s analysis of the power grid’s ability to supply the rapidly growing demand from new data centers has garnered significant interest among investors. In it, we highlight the regional nature of the increase in demand and the large excess of generation capacity in the regions where the new data centers are being built. We find that the scale of U.S. capacity reserves is sufficient, even in the absence of net new capacity additions, to absorb the growth in data center power demand over the remainder of the decade. (See chart below) If you want to receive the full report or discuss it with Hugh Wynne and Eric Selmon, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com Themes: #datacenters #powerdemand #powergrid #power #artificialintelligence #ai #grid #reliability #utilities #generation #distribution #transmission #energy #energytransition #IPPs #PJM #WECC #SERC #NERC Companies: #Dominion #VEPCO #D #PortlandGeneralElectric #POR #ArizonaPublicService #PinnacleWest #PNW #GeorgiaPower #TheSouthernCompany #SO #CommonwealthEdison #Exelon #EXC #AEPOhio #AmericanElectricPower #AEP #PGE #PCG #Oncor #Sempra #SRE #Alphabet #Google #GOOGL #Amazon #AMZN #MetaPlatforms #Meta #Microsoft #MSFT #Apple #AAPL

[SSR TMT] GenAI: Smart Smartphones Paul Sagawa believes that the arrival of device-based AI in 4Q24 will drive new usage for cloud-based AI, reinvigorate digital assistants, spur a modest smartphone upgrade cycle, and generate new demand for component suppliers. Key Conclusions: ◾ Component suppliers (#QCOM, #MediaTek, #Samsung, #MU, #TSM, etc.) are poised to be the biggest winners as the adoption of onboard AI will increase the addressable footprint within each smartphone in addition to kicking off a modest market upcycle. ◾ Leading cloud AI platforms (#GOOGL, #META, etc.) should see meaningful growth driven by mobile developers utilizing APIs for AI functionality and/or training bespoke solutions for specific use cases. ◾ Device-based AI could drive an upside surprise to analyst growth expectations for smartphones in 2025 (#AAPL, #Samsung, etc.). If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com Themes: #artificialintelligence #ai #smartphones #technology #tmt #cloudcomputing #semiconductors

[SSR Utilities] When Will Allowed ROEs Increase and Where Will It Happen First? In this research report, Hugh Wynne and Eric Selmon analyze trends in states’ allowed ROEs for electric utilities. We identify which states have been the most and least generous, those where allowed ROEs have increased or decreased the most, and the utilities that are best and worst positioned as a result.   GA, FL, CA, IA, and FERC have granted the most generous ROEs over the past 10 years, while IL, SD, CT, VT, and NY have been the least generous. As a result, #SO, #NEE, #EIX and #PCG can expect the most generous allowed ROEs, while #BKH and #ED can expect the least generous.   DC, DE, MA, MD, NH, NJ, and OH have had the most consistent improvements in allowed ROEs compared to the national average over the past 10 years, while MN, ND, SC, and VT, have deteriorated the most. #AEP, #ES, #EXC, #FE and #PEG have the greatest exposure to states with improving ROEs, while #ALE, #D, #MDU, and #XEL are most exposed to states with deteriorating ROEs. If you want to receive the full report or discuss it with Hugh Wynne and Eric Selmon, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com Themes: #utilities #allowedROEs

[SSR TMT] Portfolio Update: Adding UiPath Paul Sagawa published an update to his 15-stock long TMT model portfolio: ◾ The purpose of the report is to provide Paul’s highest conviction ideas for the next 12 to 24 months ◾ We are adding #PATH in place of #DOCU ◾ Since our last update, the portfolio is up 16.2%, ahead of the S&P 500 by 740bp and beating the tech components of that index by 520bp While we still see opportunity in DOCU, we are replacing it with PATH, which offers a key AI-based tool to automate common and/or repetitive tasks for enterprises. It is accelerating its growth in an addressable market with a projected 30%+ CAGR and is partnered with the top cloud platforms and key enterprise IT consultants. While much of the market's attention is riveted on the emergence of powerful AI franchises, we see opportunities in other areas of the TMT landscape, such as cybersecurity and digital advertising. SSR TMT 15 Stock Model Portfolio: ◾ AI/Cloud Leaders – #GOOGL, #MSFT, #NTNX, #IBM ◾ Infra Services/Apps – #SHOP, #PATH, #CFLT, #NET, #LRN, #ZS, #CRWD ◾ Digital Media – #NFLX, #SPOT, #TTD ◾ Telecom – #AVGO If you want to receive the full report or discuss it with Paul Sagawa, please contact our Head of Sales for more information: Fernando Valdegas [email protected] 203.209.5227 www.ssrllc.com Themes: #artificialintelligence #technology #media #telecom #cloudcomputing #digitaladvertising #digitalmedia #cybersecurity #streaming #software #hardware #semiconductors