General News
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Brilliant results all round and some spectacular, GOOG beat any and all expectations, proving that AI is being monetised at pace. Earnings grew 100%-due to a huge space x revaluation(we spoke about that) however operationally which matters most, their business grew 30%-hard to fathom something this mature and large growing 30%!
Meta results were great and they raised Capex even more which naturally the market didnt like-we are not concerned.
KLAC beat all guide and raised but the sheer momentum of late resulted in an after market sell off-again, no surprises.
Amazon had its best quarter ever. AWS grew 30% in fact they grew everywhere. ATH for the stock
I'll start breaking down the note worthy aspects.
Generally the message is, not enough compute, accelerated Capex on AI! And obviously memory. The whole stack.We have no complaints, many holdings are up nicely and this reporting window has validated the existing valuations with room for expansion.
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Starbucks surprised with a beat and raise-popping the stock 8%
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Cobens Tech hit an ATH last night:
YTD +21.3%
1 Year +81.6%Past performance is no indication of future returns. Returns quoted are all after fees.
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Our Tech portfolio nudged 25% YTD today. 1 Year +110%
Congratulations to all.
Past performance is no indication of future returns
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Good news , onwards and upwards.
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I think a better way to describe the situation is. We have been rewarded by spotting the AI theme early, whilst markets will remain volatile due to specific sector risks (concern/doubt) and the wider geo political back drop, we do consider we are still in the early innings in regards the AI story. :).
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April’s(US) payroll gain of 115,000 is materially stronger than the 63,000 expected, which signals that labour demand is holding up better than economists had assumed.
Even though the prior month was revised down to 185,000, the key point is that hiring is still positive and broadly stable rather than collapsing. A flat unemployment rate at 4.3% reinforces that the labour market remains tight enough to support incomes without showing signs of rapid deterioration.
Futures positive
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Hi Rodders,
If you allow 5 working days you will be fine. WBS if anything should be a bit more efficient than Seccl
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I’m away this week. We will resume various news/updates shortly. Nice to see a solid rebound in the key holdings. The main news stories coming in is even more acceleration in capital investment. Google making an 80b Equity raise-circa 2%, Meta rumoured to be in the process of doing the same. Talk of robotics about to explode-taking memory demand to new levels(we spoke about this months ago). Micron will report in a couple of weeks.
On AVGO their result (which blew the top off the market on Friday) was absolutely superb. Anyone interested can look up the numbers. 45% revenue growth plus 85% eps growth coupled with a sequential quarterly guide of 30%(quarterly!). Higher than anyone expected. We all knew the market was looking for an excuse to head for the door and what a poor excuse. But quality comes back hard and it’s no different this time. Very pleased with business operations. The market is simply adjusting to the sheer speed of the stocks ascending to new highs but valuations in many areas are absolutely warranted.
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Thanks for the update Adam and for confirming that the 'fundamentals' remain sound.
The term 'AI bubble' seems to be bandied around a lot in headlines at the moment with MSM and commentators assuming the inevitable 'pop'.
But given the levels of capital investment you refer to, what we are seeing surely isn't just a traditional bubble based on overwhelming demand for a limited amount of goods & services but more like the ground upwards construction of an entirely new economic entity. A bit like the development of the new fangled railways in the 19th century or the horseless carriage in the 20th century.
Well I hope so, anyway!
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Exactly-and with a twist. It’s carrying ‘everything’ with it in related fields when many high flyers are not worthy imo. As mentioned, Cerebras, huge losses, many software names, never made a profit. Palo Alto trading 80x, AMD 70x, CRWD 130x without the growth. Our average multiple is closer to 20x.
5 years ago Nvidia traded at 40x with a 20% growth rate. Today it trades at 20x with a growth rate of 80%.
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Deal signed by both Iran/US- Asian markets opened before 'us' +4.8% lead by memory heavy weights SK/Samsung. Micron today will be interesting. Nasdaq futures +500.
I can model the Tech returns irrespective on any Migration/KLAC pricing niggles.
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Juneteenth federal holiday today-markets closed but we will reprice for FX tonight
And yes we expect valuations this morning!
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Futures are very strong this morning, Nasdaq +470-no doubt due to Microns phenomenal result
