Analog Devices (ADI-Q)

Was upgraded recently. You have to believe that they will trough in Q2 2024. They've done a great job managing in a tough environment. He's been buying it in past months as it's underperformed its peers.

It reports next week, which he expects to be strong. Will watch for their guidance to see if there will be a trough in Q2 2024.

If we think AI is going to continue in the way that it is, this is a very inexpensive way to get exposure to machines doing more on their own. Reasonable multiple.

Unique. Technology breakthrough is behind them. New growth is small, replacements are probably a major chunk of sales. Chips will continue to improve, with more stuff being put on them. Depends on chip commodity cycle. Not on leading edge of new technology.

Industrial-focused semiconductors. Great company. Not entirely focused on autos, but it's a blossoming and exciting part of the business. He added this year. Good technological advantage as products, once designed, stay in a system for the life of that system. Well diversified.

Provides converter products and analog signals. Designs and manufactures chips that go into the likes of fridges and sewing machines to do repetitive tasks. A crowded space. A way to participate in semiconductors by moving money from the high-valuation digital side over to the analog side. Price target of $212, decent runway. Yield is 1.90%.

New cars on the road these days are basically computers on wheels, and a GPU runs those cars. The GPU is the brain. Essential. ADI creates all the sensors in the GPU (outdoor temperature, battery level, speed). So, this is a sticky product that will be used in cars but anything product requiring automation. Such sensors will feed back data to the supercomputers that the users will want.

Better to own this than the semis for decent valuations, strong fundamentals and momentum as semis clearly bottom. The same with MCHP-Q and ON Semi.