🥽 Google drops out of the VR/AR headset race

Plus, China export ban spells trouble for Nvidia

🥽 Google drops out of the AR/VR headset race

With the recent announcement of Apple’s Vision Pro and Meta’s Quest 3, a lot has happened in the VR/AR space this year, but despite Apple and Meta’s massive investments into the technology, one company is giving up on the headset fight - Google.

This week, Google announced that it’s shutting down Project Iris, a secretive AR headset that was reported in January 2022 and was expected to begin shipments in 2024.

While this marks a departure from the hardware, Google is continuing work on a ‘micro XPR’ platform that will license software to other headset manufacturers. This would likely take the form of a Samsung XR headset partnership, with Google focusing on the software (similar to how Google provides the Android operating system for Samsung and other phones).

AR Software currently makes up the largest portion of the AR/VR market’s revenue, which overall is reported to reach over $31B in 2023 by Statista.

While Apple and Meta are the most prominent, they aren’t the only companies in the hardware race, with Microsoft developing the HoloLens and Lenovo launching its ThinkReality VRX headset for enterprise and business use cases.

This also isn’t the first AR/VR project Google has shut down, closing up its Daydream platform in 2019 which offered a casual VR experience that leveraged the smartphone.

Google’s Daydream project, launched in 2016 and shut down in 2019

📊 Google is down -0.93% this week and up 34.31% YTD

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⛈️ Canadian Banks - Weathering the Storm

It’s no question that Canadian banks have had a tough run in both 2022 and the start of this year, but a leading expert in Canadian financials says this may present an opportunity for long-term investors. In this 15-minute video, watch Rob Wessel, Managing Partner & Co-Founder of Hamilton ETFs, provide his forward outlook on the sector.

In the video, Rob highlights three Hamilton ETFs available to investors looking to get exposure to the sector:

  • Top performing Canadian bank ETF with +14.57% total return since inception1

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  • Lowest-fee Canadian bank ETF2 , 0.19% management fee

  • Equal-weight exposure to Canada’s ‘Big-6’ banks

  • 5.44% yield*, monthly distributions

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  • Diversified exposure to Canada’s largest financials

  • 15.24% yield*, monthly distributions

For the latest updates on Canadian banks, sign-up to Hamilton ETF’s timely insights on the sector.

🇨🇳 Nvidia and AMD face a rocky week over worries of China export ban

Nvidia and AMD stocks have been flying this year amid the AI boom, rising 195% and 78% respectively. This week, however, both companies, (and the micro-chip sector as a whole) hit a roadblock, falling 5% at the start of the week after a WSJ report said that the Biden administration could tighten export rules for AI chips headed to China.

The restrictions are driven by worries that China could use AI chips for weapon development and hacking. More restrictions would complicate the global AI supply chain and spell bad news for Nvidia which generated 22% of its annual revenue from China.

Despite this, many analysts remain bullish - highlighting that the strong demand in the US would offset any potential restrictions in the Chinese markets, and that Nvidia already estimated and addressed the impact of restrictions in their forecasts.

🚫 Costco follows Netflix in crackdown on shared memberships

Costco stock rose ~3% this week amid news that they are cracking down on shared membership cards - taking a page out of Netflix’s playbook whose crackdown on password sharing led to a surge in sign-ups (and their stock price).

Costco will now ask shoppers at its self-service checkout to show their membership card to a store associate.

While membership revenue only makes up ~2% of Costco’s total revenue, it accounts for the majority of Costco’s operating profits and enables Costco to maintain low prices by compensating lower profit margins on its merchandise through high-profit membership revenue.

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Footnotes from Hamilton ETF

*An estimate of the annualized yield an investor would receive if the most recent distribution remained unchanged for the next 12 months, stated as a percentage of the net asset value per unit on May 31, 2023.

1. Since inception on October 14, 2020, as at May 31, 2023. Based on a universe of seven Canadian bank ETFs that trade on the Toronto Stock Exchange. Effective April 14, 2023, the investment objective of the Hamilton Enhanced Canadian Bank ETF (HCAL) was changed following receipt of the required unitholder and regulatory approvals. For more information, please refer to the disclosure documents of HCAL at http://www.hamiltonetfs.com.

2. Based on a universe of 11 Canadian bank ETFs that trade on the Toronto Stock Exchange, as at May 23, 2023.