General News
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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
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I would expect down a bit, not much maybe 40-50bps. I havent looked at it. Today will be a monster for technology stocks, well ours anyway
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Kimi K3 open source China model hailed as 'awesome'-naysayers cite as evidence China catching up 'boo bad/sell' however just like Deepseek, it's nothing more than theft.
Moonshot built Kimi K3 through theft of Anthropic's Fable-distilling some else's work is nothing but cheating and not only that they didn't train them on China chips as they claimed-they used Blackwell B300s via a foreign cloud.
As always don't believe the FUD.
In other news an also ran Chinese DRAM manufacturer is apparently taking on the big boys-only problem with that is they are 4 years behind (the node) and can't produce any HBM nor will they-and even if they managed to do so their chips won't be allowed anywhere near a western data centre. The market doesn't seem to grasp that it's bleeding edge state of the art enterprise memory that is the gold. Not the sort you find in a memory stick from Argos. Beggars belief. Alas some fall for it.
