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
Qualcomm rounded up all the bad news to report this quarter. The bar will now be very low. This will give them breathing room next year, focusing on the Street on macro, which is better than letting them get impatient about autos.
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.
Private Equity funds have largely avoided technology, but a bit more pressure on semis stocks could change that.
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.
49% of crypto projects are science projects with no commercial prospects. Another 49% are outright frauds. Both are worthless. That being said, the remaining 2% will some day be worth a lot of money. It is a very challenging signals to noise ratio.
Arm is cutting jobs in advance of its IPO – we think their reasons for these cuts are likely misplaced, and probably creates more problems for them in the years ahead.
A Bridge Too Far: Financial Modeling – Bridging Actuals and Forecast financial models is not fun.
Spac-a-Mole – There seem to be more SPACs than targets, and these Bubble valuations can become a problem for companies that go down this path.
The SPAC Hangover – More fun with numbers – how a SPAC creates some very weird incentives to part like it’s 1999.