Stock price when the opinion was issued
One of the things his team's looking at right now is that it seems some of the regulations surrounding the semiconductor industry will be reduced (specifically China, but other countries as well). That could mean an expanded market for the semi manufacturing equipment companies, such as KLAC. AVGO has also been a strong performer, and he owns some NVDA. Those two names have strong relative price performance, are economically sensitive, cyclical, and have pricing power.
Considers the US restrictions as short-term obstacles. Stock's starting to rebound quite nicely. The leader today in AI computing, and for the foreseeable future. Strong global thirst and demand for AI infrastructure. Unmatched advantages compared to other names in the space. Data centres are driving growth. Recent earnings beat.
AI adoption is still in very early stages. Still trading at 1x PEG ratio. Earnings growth is not reflected in the valuation. Sees EPS at 33% going forward. Yield is 0.03%.
Used to make 75% gross margins, but those have jumped to 90%. If it goes back to historic gross margins, even if sales continue, you'll see a huge degradation in profit. Sweet spot in terms of demand. Market thinks it can do no wrong. Worries that demand will abate or just normalize. Good news is baked in. Watch your position size.
High beta, not for everybody. 52-week high followed by a 6% decline yesterday. But makes sense as part of a portfolio for a growth investor.
(Analysts’ price target is $173.07)Denominator (PE multiple) keeps moving higher faster than the numerator (price). So it's actually fairly cheap. Looking at lots of free cashflow for 2025. Leader in AI and gaming technologies. Data centres, deep learning, breakthroughs in image and speech recognition.
90% market share in the AI GPU segment. Earnings growth rate a staggering 50%, giving it a 0.7x PEG ratio, probably the cheapest mega-cap tech name out there. Yield is 0.03%.