Themes we teased out from earnings season:
1) End-markets matter. Consumer bad, industrial good.
2) Everyone is putting a lot of faith in a 2H recovery
3) Inventories are still high, but fab utilization is holding steady
Intel is in a very bad place. It needs to admit that, especially internally. We are not forecasting Doomsday, but we do think it is time to recognize that Intel will never be the force it once was, and probably has not been for a long time.
This downturn in semis is different from past cycles in that each segment seems to be taking a beating at different times. This cycle is serial, not parallel, and we probably need to see all of that play out before the sector starts to recover.
Optical stocks are volatile even in the best market conditions. Someday they will find their value, but it is going to be hard to determine when that will be.
AMD is a good proxy for the rest of the semis industry – beset by cyclical challenges but also increasingly well-positioned for the changing shape of the industry.
Growth stocks are a good place to be at point of maximum market fear. However, this time around, we think the decades long trend will reverse and when we come out of this downturn hardware will outperform software.
Our readership is split, roughly evenly, between finance people and technology people. We are reminded of this whenever the topic of Broadcom comes up. Broadcom was once a leading semiconductor […]
Fifty years ago the Street fell in love with diverse conglomerates like Gulf + Western. How different are the sprawling operations of the major Internet companies today?
Intel’s new direction appears to be as much tactical as strategic, propping up the business long enough to support a better valuation for a future split.
If Nvidia cannot buy Arm – the company is probably an IPO candidate, or possibly the target of a consortium of competing buyers with a private equity company providing arms length governance.