Newsletter and New Subscriber Update
Our 3X AMD Position up 104% in 2018--new target $$25
Quick update. We are finishing July/August newsletter and will do in two parts. Part 1 out this week.
We have a lot of new subscribers to welcome--I am sure as AMD hits $20 they wish they had the 3 positions we hold starting at $6.25.
New AMD Target: $25 Buy Under $20 on overbought pullbacks. The new GPUS chips are one year ahead of Intel and will start to sell in Q3. BOTH AMD and NVidia have 3-4 new chips that start to book sales starting early Q4/late Q/3. AMD is taking GPU market share from NVDA going from 2% in 2017 to 8-9% in 2019.
But NVDA has the software edge in gaming, Artificial Intelligence and Autonomous driving which is ramping to 2020 model year launch. Our favorite analyst the space Matt Ramsay of Cowen names Nvidia (NASDAQ:NVDA) a “top pick” because of its upcoming Turing gaming chips.
“We see a favorable setup as we expect well-documented choppiness in the gaming channel to be offset by continued robust datacenter demand and backlog. We see little risk to near-term numbers from crypto.”
Rating reiterated at Outperform with a $325 price target, a 28% upside to Friday’s close. Ramsay raises his adjusted EPS estimate for Nvidia’s Q2 from $1.82 to $1.85 (consensus: $1.82).
NVDA Buy Under: $265 Target $330 The new chips are the 100x faster than the last gen--they are the Ferrari of GPU chips and AMD is the Chevy Corvette at this point. AI in the hyper datacenters is growing 40-55% a year and the GPUs from Nvidia and Intel are killing Intel
NVD Earnings out Thursday night. IF they show any weakness we should get a 5-8% pullback which is a great entry point with all their new chips coming Q4.
XLNX Buy Under $72 New Target $90 Our third play on AI in the hyper-datacenter is X. Great earnings and guidance on July 25 earnings. Their new product line and new markets (neural networks, AI, Machine Learning) also are ramping. XLNX is a steady eddy that pays us 2% dividend waiting for the stock to wake-up and catch fire and blow past old $77 high. We need to see that move by year-end.
King Dollar: Why do we keep out of Emerging Markets in most cases? CURRENCY RISK. US Global companies in many industries will start to announce the pain of "currency risk" in Q3. But the fall of gold we forecast due to rise in the dollar (as the Fed raises short-term rates) and Japan and Euro Central banks keep money priced at ZERO (negative with inflation) makes the dollar the only game in town for now. NO AMOUNT of tweets is going to change this dynamic.
AMAT LRCX ACLS ASML: The WFE (wafer equipment) space was the first tech sector to correct. These stocks are up over 224% for us on average since we added in late 2015 and first quarter 2016. We are talking with all our chip equipment experts to get a handle on demand with some overcapacity in memory.
There is NO over capacity when it comes to ASML's and its EUV lithography equipment is sold out for the next 12-14 months. There IS no 7mm chipmaking without ASML and ACLS in smaller fabs. Bob Thompson aks DrRx has done a very good job of explaining the ASML story on Seeking Alpha...credit given were credit due. Check out his research if you are NOT an ASML owner but especially if you are!
The ongoing services sold for each of these $400 million machines is staggering--ASML estimates they will sell $6 billion a YEAR in upgrade and maintenance services in 2024 from $ billion today. That growth is locked-in...there is no repairman for a $400 million EUV machine--its the most complex machine in the WFE space. Here is the article.
Will update all semi-equipment in coming NL.
New Subscribers! and Memory Challenged Existing Subs
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It's August, trading is light, Turkey is a non-event and the market is used to the tweets and threats and has priced and discounted them to mean basically nothing. IF YOU are looking for a GREAT TRAVEL DEAL go to the Turkish Islands and maybe a few Greek Isles too. IF you buy your ticket in Turkish Lira (there are a few ways to do this---search it!) and then pay cash for most everything...oh my! Amazing beauty and food at 50% OFF!
You and I have made a boatload of money in the last year and 3 years--ever see a UHaul on the back of a hearse? SPEND SOME...you've earned it!
Cheers again to new subscribers!