The Fast Lane and the Slow Burn of Global Investing

Archive edition · Market data and company circumstances reflect 30 August 2025, when this newsletter was sent.

The “AI Autumn” in Semiconductors

The semiconductor sector has been the backbone of the AI trade since late 2022. The explosion of generative AI and large language models (LLMs) created insatiable demand for GPUs, AI accelerators, and high-bandwidth networking gear.

This drove Nvidia (NVDA) to record-breaking valuations, lifted peers like Broadcom (AVGO), Advanced Micro Devices (AMD), and Marvell Technology (MRVL), and sparked a broader re-rating of anything related to AI infrastructure.

But as we move into late 2025, analysts caution we are in an “AI Autumn”, not a winter, but a period where momentum pauses, investors seek new catalysts, and stock moves become more tactical than trend-driven.

Nvidia Takes a Breather

Why investors love itNvidia (NVDA) remains the clear AI leader with a dominant GPU franchise. Its chips power nearly every major large language model (LLM), while its CUDA ecosystem creates a wide moat that competitors struggle to cross.

The near-term challengeMomentum often stalls without hard data points like CapEx guidance, product launches, or clarity on China demand. Analysts caution that the stock could trade sideways, much like it did in late 2023 and late 2024.

Three near-term triggers to watch

Goldman Sachs’ stance: Still Buy-rated with a $200 target, but traders should expect choppier action through year-end.

• Higher AI spending from AMZN, MSFT, META, or GOOGL in September/October could drive another rally.
• As the successor to Blackwell, its schedule will shape competitive dynamics for 2026. Any delay could hit sentiment.
• With ongoing U.S.-China tech tensions, clarity on this front will be crucial.

The Supporting Cast of AI

1.2.2 Advanced Micro Devices (AMD)

1.2.3 Marvell Technology (MRVL)

• Already provided FY26 AI revenue guidance and even outlined FY27’s Serviceable Addressable Market (SAM).
• Near-term upside depends on AI networking demand and new XPU customer wins.
• Buy-rated, with Goldman Sachs highlighting its dual exposure to custom compute and networking.
• Neutral-rated at current valuations.
• Stronger PC and Server CPU sales are mostly priced in.
• Watch November’s Investor Day, where management is expected to share details on Datacenter GPU growth. That could be the “make-or-break” moment for AMD sentiment.
• Neutral-rated and likely range-bound near term.
• Its future depends heavily on Amazon’s (AMZN) ramp in custom compute revenue and Microsoft’s (MSFT) 2026 expansion.
• Until there’s clarity, investors may not push the stock much higher.

Investor Takeaway

The “AI Autumn” is not bearish. It’s a breather before the next rally. Investors should:

• Long-term: Stay invested in leaders like NVDA and AVGO.
• Short-term traders: Focus on event-driven catalysts (earnings calls, Investor Days, CapEx announcements).
• Diversify: Use exposure to AMD and MRVL for tactical plays, but recognize their upside is more conditional.

Rise of the Care Economy in Australia

On the other side of the globe, a very different kind of growth story is unfolding: the care economy. While AI semiconductors ride waves of hype and capital cycles, healthcare and social assistance in Australia is expanding steadily, reshaping the labor market and inflation dynamics.

The Care Economy’s Rise

• Since 1996, healthcare’s share of Australian employment has doubled from 8% to 16%.
• It is now the largest industry by employment, surpassing construction, manufacturing, and retail.
• Post-COVID, growth has accelerated further, powered by programs like the National Disability Insurance Scheme (NDIS).

Why Healthcare Growth Hasn’t Sparked Inflation

Normally, when one industry booms (like mining in the 2000s), wages spike, labor gets crowded out, and inflation follows. But healthcare is different:

Analysts estimate that a 10% increase in healthcare labor costs only lifts healthcare prices by ~1% over two years, far weaker than in other industries.

• Crowded-out industries (retail, hospitality, admin services) did lose workers, but they were able to replace them with youths and recent migrants, keeping wages in check.
• Healthcare wages did rise, but the pass-through to consumer prices is weak. Why? Healthcare pricing is heavily regulated, with subsidies like the Pharmaceutical Benefits Scheme (PBS) capping out-of-pocket costs.

Impact on the Labor Market

Some economists now believe the rise of the care economy could push Australia’s sustainable unemployment rate lower. Here’s why:

Goldman Sachs currently pegs Australia’s NAIRU (the lowest unemployment rate possible without driving inflation up) at 4.25%. That’s below the RBA’s forecast of 4.4% unemployment by end-2025.

If unemployment runs lower, inflation could undershoot the 2.5% target, opening the door for more RBA rate cuts.

• More entry-level jobs: The care sector creates accessible roles for young people and new migrants, giving them a path into stable employment.
• Higher workforce participation: With more people able to work, the economy can support lower unemployment without sparking inflation.

Implications for the RBA and Markets

The Reserve Bank of Australia (RBA) is already easing policy, with analysts expecting two more 25bp cuts in November and February, which would take the cash rate down to 3.10%. If unemployment climbs further above NAIRU, the central bank may need to cut even more aggressively.

For investors, this backdrop supports healthcare providers such as CSL Ltd (CSL.AX), Ramsay Health Care (RHC.AX), and Healius (HLS.AX), which benefit from steady demand and government support.

At the same time, rate-sensitive sectors like housing, utilities, and infrastructure could see upside if monetary policy loosens further.

Archive note

This article preserves the analysis in our weekly newsletter sent 30 August 2025. Market prices, forecasts and company circumstances reflect the time of publication and may have changed.

This material is general information, not personal financial advice or a recommendation to trade. Investing and trading involve risk, including loss of capital.