Technology Sector Ideas

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>>> Nvidia stock extends gains as Saudi Arabia set to spend billions on AI chips, US moves to rescind Biden's chip curbs


Yahoo Finance

by Laura Bratton

May 14, 2025


https://finance.yahoo.com/news/nvidia-stock-extends-gains-as-saudi-arabia-set-to-spend-billions-on-ai-chips-us-moves-to-rescind-bidens-chip-curbs-132859592.html


Nvidia (NVDA) stock jumped 3.6% early Wednesday, extending its gain from the prior day, when shares rose nearly 6% and the AI chipmaker’s market cap surpassed $3 trillion for the first time since February.

The gains come as US chipmakers, including Nvidia, announced billions of dollars' worth of deals with Saudi Arabia during an investment forum attended by President Trump on Tuesday.

Nvidia said it will supply several hundred thousand of its AI chips to Saudi Arabia’s AI venture Humain over the next five years, beginning with the sale of one of its latest Grace Blackwell AI supercomputers using 18,000 of its advanced GB300 chips. Humain is a new AI venture owned by Saudi Arabia’s $925 billion Public Investment Fund and chaired by Crown Prince Mohammed bin Salman. It was launched just a day ahead of Trump’s visit to the country.

Bank of America (BAC) analysts estimated the total value of the deal at $7 billion and raised its price target on Nvidia stock to $160 from $150 in a note to investors Wednesday morning.

Also bolstering Nvidia shares, a report from Bloomberg on Tuesday indicated the Trump administration may cut a deal to allow the United Arab Emirates to purchase "more than a million" of Nvidia's AI chips.

Fellow US chipmakers Advanced Micro Devices (AMD) and Qualcomm (QCOM) also unveiled deals to supply chips to Humain for its ambitious AI data center plans over the coming years. AMD’s deal was valued at $10 billion.

Bernstein analyst Stacy Rasgon said the news is a good sign of demand for AI hardware.

“For investors worried about AI capex sustainability, we now have another deep pocketed customer willing and capable to spend large amounts of money on a clearly strategic push as Saudi Arabia attempts to position itself as a regional and global AI hub,” he wrote in a note to investors early Wednesday.

“While we shall see how much of the announced programs actually come to pass, Tuesday’s actions have the potential to act as support against fears of a capex peak.”

Investors have scrutinized whether US Big Tech companies can sustain unprecedented levels of spending on AI infrastructure while companies are still figuring out how to fully monetize their AI products.

Separately, Super Micro Computer (SMCI), a server maker that uses Nvidia’s AI chips and server designs, announced a $20 billion deal with Saudi Arabian data center company DataVolt. That stock, which closely tracks with Nvidia’s moves, rose 16% on Tuesday and another 18% in early trading Wednesday.

The news came as Saudi Arabia and President Trump touted a $600 billion deal for the kingdom and companies based there to purchase US technology, weapons, and infrastructure. But so far, the investments unveiled Tuesday total much less than $600 billion.

Nvidia stock’s jump on Wednesday helped inch shares closer toward positive territory for 2025 after a rocky several months. Shares were down 3% year to date at Tuesday’s close.

The AI chipmaker’s Saudi Arabia deal helped brighten Wall Street’s outlook for the company's sales abroad just after Trump banned exports of its chips for China. However, his administration looked to ease Biden-era restrictions on Nvidia’s exports to the rest of the world (including the Middle East).

The Department of Commerce on Tuesday announced that it had initiated the rescission of Biden’s so-called AI diffusion rule, which was meant to halt the smuggling of US AI chips, namely Nvidia’s, to China.

The department also said that “using Huawei Ascend chips anywhere in the world violates US export controls.” Huawei’s latest Ascend chips are reportedly competitive with Nvidia’s prior-generation Hopper chips.

Bernstein’s Rasgon said, “Huawei chips are not made in the US nor exported from there, and (purportedly at least) are manufactured without using US technology (so it is not clear how customers using them would be in violation of US export restrictions).”

“Nevertheless, such an interpretation of the rules would clearly make it more difficult for Huawei to sell Ascend chips to customers outside of China, as well as seemingly open up Chinese users of the parts to more of the US’s regulatory hammers,” he added. “This is probably a positive for NVDA and other US AI names, though it remains to be seen how China might respond.”

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>>> The Descartes Systems Group Inc.(DSGX) provides global logistics technology solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as retailers, manufacturers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.

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>>> Mtron Awarded Over $12 Million Production Contract from a Major Supplier to Boeing and Airbus


Business Wire

April 2, 2025


https://finance.yahoo.com/news/mtron-awarded-over-12-million-125500457.html


ORLANDO, Fla., April 02, 2025--(BUSINESS WIRE)--Mtron (NYSEAM: MPTI), a leading supplier of highly engineered electronic components and solutions used to control the frequency and timing of signals in electronic circuits, today announced a multi-year agreement valued at more than $12 million from a top supplier to the avionics and aerospace industries. The contract includes over 45 different products, including high-performance radio frequency filters, crystal resonators, TCXOs, OCXOs, and precision clock oscillators.

The contract supports the recovering avionics industry and the various Boeing and Airbus aircraft anticipated to be in production past 2030. This contract highlights Mtron’s continued leadership in the avionics market, with an average of 16 design wins per commercial aircraft, ranging from collision avoidance radar to communications to engine control. Mtron’s precision RF components and solutions focus on performance in the most extreme conditions, which these critical applications demand. Mtron supplies several Tier One avionics suppliers and continues to secure design wins on these large airframes.

"This award is a testament to Mtron’s ability to design and produce in high volume, superior custom products that meet the demanding needs of our customers. We are proud to be a critical supplier to the avionics industry," said Cameron Pforr, CEO of Mtron.

Work under this contract will take place at Mtron facilities in Orlando, Florida; Yankton, South Dakota; and Noida, India, with production continuing through mid-2028.

About Mtron

M-tron Industries, Inc. (NYSE American: MPTI), originally founded in 1965, designs, manufactures, and markets highly engineered, high-reliability frequency and spectrum control products and solutions. As an engineering-centric company, Mtron supports customers across the entire product life cycle, including product design, prototyping, production, and subsequent product upgrades. Mtron has design and manufacturing facilities in Orlando, Florida, Yankton, South Dakota; a sales office in Hong Kong; and a manufacturing facility in Noida, India. Mtron is an AS9100D and ISO 9001:2015 certified organization. For more information, visit www.mtron.com or email [e-mail].

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>>> Apple, Nvidia Score Relief From US Tariffs With Exemptions


Bloomberg

by Debby Wu, Josh Wingrove and Shawn Donnan

April 12, 2025


https://finance.yahoo.com/news/trump-exempts-phones-computers-chips-124707368.html


(Bloomberg) -- President Donald Trump’s administration exempted smartphones, computers and other electronics from its so-called reciprocal tariffs, representing a major reprieve for global technology manufacturers including Apple Inc. and Nvidia Corp. even if it proves a temporary one.

The exclusions, published late Friday by US Customs and Border Protection, narrow the scope of the levies by excluding the products from Trump’s 125% China tariff and his baseline 10% global tariff on nearly all other countries.

The exclusions apply to smartphones, laptop computers, hard drives and computer processors and memory chips as well as flat-screen displays. Those popular consumer electronics items generally aren’t made in the US.

The pause will be welcome news to consumers, some of whom rushed to buy new iPhones and other devices amid fears that the tariffs would send prices soaring. It’s also a big win for major technology companies that have presented massive US spending pledges for Trump in recent months. Trump’s tariffs upended global markets, triggered a selloff in stocks and ignited a rapidly escalating trade war with China.

The move is the first significant softening of any kind in Trump’s conflict with China. It was backdated to April 5.

The exemptions cover almost $390 billion in US imports based on official US 2024 trade statistics, including more than $101 billion from China, according to data compiled by Gerard DiPippo, associate director of the Rand China Research Center.

The biggest category related to China is smartphones. The US imported smartphones valued at more than $41 billion from China in 2024, or about 9% of total imports from China. Also covered are computers and similar devices, of which the US imported more than $36 billion in 2024.

Altogether the exemptions cover consumer electronics and semiconductors that accounted for about 22% of US imports from China in 2024, DiPippo said.

“This is a large hole in the US tariff wall that will spare key firms like Apple and consumers of laptops and phones from sticker shock,” he said. “But many other consumer, intermediate, and capital goods from China still face prohibitively high US tariffs. This exemption only covers one segment of the US economy.”

The White House also released a corresponding memo indicating that the exemptions also extend to changes in small-parcel shipping duties. Trump had moved to end the so-called “de minimis” exemption, beginning with China, that generally means parcels worth $800 or below don’t face duties.

“President Trump has made it clear America cannot rely on China to manufacturing critical technologies such as semiconductors, chips, smartphones, and laptops,” White House Press Secretary Karoline Leavitt said in a statement. “That’s why the president has secured trillions of dollars in US investments from the largest tech companies in the world.” She said those companies are “hustling to onshore” their manufacturing to the US.

The tariff reprieve may prove fleeting. The exclusions stem from the initial order, which prevented extra tariffs on certain sectors from stacking cumulatively on top of the country-wide rates. The exclusion is a sign that the products may soon be subject to a different tariff, albeit almost surely a lower one for China.

The products that won’t be subject to Trump’s new tariffs include machines used to make semiconductors. That would be important for Taiwan Semiconductor Manufacturing Co., which has announced a major new investment in the US, as well as other chipmakers.

“All products that are properly classified in these listed provisions will be excluded from the reciprocal tariffs,” the notice said.

The move appeared to exclude the products from the 10% global baseline tariff on other countries, including Samsung Electronics Co.’s home of South Korea.

The tariff reprieve does not extend to a separate Trump levy on China — a 20% duty applied to pressure Beijing to crack down on fentanyl, including the shipment of precursor materials. Other previously existing levies, including those that predate Trump’s current term, also appear unaffected.

“The US tech industry has a loud voice and despite initial strong pushback against exemptions within the White House the reality of the situation was finally recognized in the Beltway,” Wedbush Securities analyst Daniel Ives said in a research note on Saturday. “There is still clear uncertainty and volatility ahead with these China negotiations.”

The original list of tariff exemptions included some semiconductor products — including central processing units konwn as CPUs. But those measures did not carve out tech products crucial to AI development including graphics processing units, or GPUs, and the servers that they power. Servers powered by AI chips from companies such as Nvidia and their critical components are primarily manufactured and assembled in Taiwan and Mexico.

Friday’s announcement would cover both Taiwanese and Mexican production, in a significant reprieve for companies seeking to build AI infrastructure in the US.

Semiconductor Equipment Exemptions

Also crucial are new exemptions on semiconductor manufacturing equipment, made by companies such as ASML Holding NV in the Netherlands and Tokyo Electron Ltd. in Japan. Those tools are essential for building chip factories, and comprise the lion’s share of the multi-billion dollar price tag for such plants. Companies including TSMC, Samsung, and Intel Corp. are building new US facilities with support from the 2022 Chips and Science Act.

Trump’s initial “reciprocal” tariff announcement included exemptions for semiconductors and other sectors, to which Trump has regularly pledged to apply a specific tariff. He hasn’t yet done so but the latest exclusions are related to that exemption.

The move excludes most of Apple’s core products from the escalating tariffs on China, including iPhones, iPads and Apple watches. Apple shares have slid since Trump announced the tariffs.

Discussions gained additional urgency in recent days after Trump increased the tariffs on China, putting companies like Apple in a more difficult position than competitors like Samsung, who are less reliant on China. Companies and tech industry lobbyists have also argued that reshoring the final assembly of smartphones and other products is impossible, one person familiar with the discussions said.

But the move also is aimed at laying the groundwork for new targeted sectoral tariffs that are likely to hit the industry.

The administration is expected to soon launch a new investigation into imports of semiconductors. That would eventually lead to the imposition of tariffs on chips within weeks or months. Those duties, like ones imposed recently on steel and aluminum, are likely to impose duties on products that include semiconductors as well as the chips themselves.

Trump’s sectoral tariffs have so far been set at 25%, though it’s not clear what his rate on semiconductors and related products would be. It’s also not clear how widely he would apply that tariff.

Representatives from Nvidia and ASML declined comment. Spokesmen for Tokyo Electron didn’t immediately respond to a request for comment. The US International Trade Commission, the US Trade Representative and the Department of Commerce didn’t immediately respond to requests for comment.

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>>> Cadence Design Systems, Inc. (NASDAQ:CDNS)

https://finance.yahoo.com/news/cadence-design-systems-inc-cdns-220153503.html

Number of Hedge Fund Holders: 53

Cadence Design Systems, Inc. (NASDAQ:CDNS) is an American multinational technology and computational software company that delivers hardware, software, and IP for electronic design. On January 22, the leading EDA and Intelligent System Design provider announced that MediaTek, a Taiwanese semiconductor company, has adopted Cadence’s AI-driven tools Cadence® Virtuoso® Studio and Spectre® X Simulator on the NVIDIA accelerated computing platform for its 2nm development. MediaTek will be leveraging Cadence’s AI-driven custom/analog design solutions to achieve a 30% productivity gain, resulting in faster and more accurate chip design processes.

“MediaTek’s validation of our latest Virtuoso Studio release and Spectre X Simulator on NVIDIA’s accelerated computing platform demonstrates that Cadence’s continued investment in enhancing our industry-leading custom design solutions and AI tools is a game changer for our customers’ most challenging 2nm designs. Bringing the power of AI and GPUs to Spectre X enables MediaTek to solve its large-scale verification simulation challenges even more quickly, without sacrificing accuracy”.

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>>> RELX PLC (RELX), together with its subsidiaries, provides information-based analytics and decision tools for professional and business customers in North America, Europe, and internationally. It operates through four segments: Risk; Scientific, Technical & Medical; Legal; and Exhibitions.

The Risk segment offers information-based analytics and decision tools that combine public and industry specific content with technology and algorithms to assist clients in evaluating and predicting risk.

The Scientific, Technical & Medical segment provides information and data sets that help researchers and healthcare professionals to advance science and health outcomes.

The Legal segment provides legal, regulatory, and business information and analytics that help customers in decision-making, as well as increases the productivity.

The Exhibitions segment is involved in the business that combines face-to-face with data and digital tools to help customers learn about markets, source products, and complete transactions.

The company was formerly known as Reed Elsevier PLC and changed its name to RELX PLC in July 2015. RELX PLC was incorporated in 1903 and is headquartered in London, the United Kingdom.

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https://finance.yahoo.com/quote/RELX/profile/

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Palo Alto Networks - >>> Nancy Pelosi's Stock Pick Palo Alto Networks Gets A Downgrade From Top Investment Bank As Sector-Wide Consolidation Down-Cycle Weighs on Sentiment


Benzinga

by Rishabh Mishra

January 9, 2025


https://finance.yahoo.com/news/nancy-pelosis-stock-pick-palo-193012254.html


Palo Alto Networks Inc. (NASDAQ:PANW) was downgraded to ‘hold’ by Deutsche Bank because the cybersecurity stock owned by Nancy Pelosi could be affected by a sector-wide “consolidation down-cycle”. This follows Pelosi’s February 2024 purchase of nearly $1.25 million in call options of PANW, which expire on Jan. 17.

What Happened: In its 2025 Software Outlook, Deutsche Bank predicts that the cybersecurity sector will underperform broader software this year after a strong 2024. The bank believes that the market overestimated the impact of consolidation in 2024. “We expect 2025 will remain in a consolidation down-cycle,” stated Deutsche’s research note dated Jan. 7.

Ahead of its expiry on Jan. 17, Nancy Pelosi’s call options have a strike price of $200 apiece and the current share price of $172.83, as of Wednesday’s close, is still below the strike price.

Cybersecurity consolidation is the process of centralizing and streamlining cybersecurity tools, technologies, and processes to improve an organization’s security posture. The goal is to create a unified, more efficient, and cost-effective security infrastructure.

“Consolidation is no doubt a powerful force, but it’s subject to cyclical peaks and troughs,” the report said. The bank also said that it struggles to see fundamentals living up to last year’s expansion. “We expect market preference in 2025 will tilt in favor of best-of-breed vs. best-of-suite platforms,” it added.

“After a year where Security stocks outperformed Apps and Infrastructure, the overall category is more likely to underperform broader Software in 2025, in our view,” the note added.

Why It Matters: Deutsche Bank cited four factors contributing to this consolidation slowdown, which include easing IT spending, a surge in AI innovation, a temporary pause in mergers and acquisitions following a July 19 outage, and increased competition in pricing.

The disruption on July 19 resulted in flight cancellations globally and impacted sectors such as banking, healthcare, and hospitality.

Despite the downgrade, Deutsche Bank acknowledged the strength of Palo Alto Networks and CrowdStrike as leading cybersecurity companies. However, the bank believes that the current market conditions favor smaller, more innovative players.

According to Benzinga, Palo Alto has a consensus price target of $373.63 apiece based on the ratings of 42 analysts.

The high is $450 per share issued by RBC Capital on Nov. 21, 2024, and the low is $130 apiece issued by Guggenheim on Jan. 7, 2025.

The average price target of $150 between Deutsche Bank and Guggenheim implies a 13.14% downside for PANW.

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>>> The Descartes Systems Group Inc. (DSGX) provides cloud-based logistics and supply chain management solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as manufacturers, retailers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.

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https://finance.yahoo.com/quote/DSGX/profile/


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>>> Nvidia dominated 2024 big-time. Next year? Plenty of challenges.


Yahoo Finance

by Daniel Howley

December 26, 2024


https://finance.yahoo.com/news/nvidia-dominated-2024-big-time-next-year-plenty-of-challenges-110047391.html


Nvidia (NVDA) has had the kind of year most companies can only dream of.

Its revenue and stock price soared thanks to prescient investments in artificial intelligence technologies that are paying off handsomely on the back of the generative AI wave.

That’s not all. It’s repeatedly swapped places with Apple (AAPL) as the largest publicly traded company in the world by market cap, topping the $3 trillion mark. CEO Jensen Huang has become one of the most in-demand executives in Silicon Valley, meeting with everyone from fellow tech luminaries to world leaders and then some.

And there’s more to come. The company is ramping up production of its high-powered Blackwell chip for AI applications and expects to ship several billion dollars worth of the hardware in the fourth quarter alone, with far more expected throughout the year ahead.

“Nvidia really has the [hardware and software] for the AI computing era,” Futurum Group CEO Daniel Newman told Yahoo Finance. “It's all connected inside the [server] rack, outside the [server] rack, and then the software is very well … liked within the developer communities.”

But the competition isn’t sitting idly by.

Companies like AMD (AMD) are angling to poach Nvidia’s customers and slice into its estimated 80% to 90% market share. Even Nvidia’s own customers are working on chips meant to cut down on their reliance on the graphics giant’s semiconductors.

And Wall Street is getting on board.

Shares of Broadcom (AVGO), which works with companies like Google (GOOG, GOOGL) to design AI chips, are up 113% year to date and rocketed 44% in just the last month after CEO Hock Tan said AI could represent a $60 billion to $90 billion opportunity for the company in 2027 alone.

Still, taking on Nvidia will be a tough task for any company. And dethroning it as the AI king, at least in 2025, will be all but impossible.

The dominator

Nvidia grabbed a first-mover advantage in the AI market on the back of early investments in AI software that unlocked its graphics chips to be used as high-powered processors. And it’s managed to hold onto that lead in the space thanks to continued advances in its hardware, as well as its Cuda software that allows developers to build apps for its chips.

Because of that, so-called hyperscalers, massive cloud computing providers including Microsoft (MSFT), Alphabet’s Google, Amazon (AMZN), Meta (META), and others continue to plow cash into buying up as many Nvidia chips as possible. In its most recent quarter, Nvidia reported total revenue of $35.1 billion. Of that, $30.8 billion, or 87% came from its data center business.

“Everybody wants to build and train these huge models, and the most efficient way to do it is with CUDA software and Nvidia hardware,” TECHnalysis Research president and chief analyst Bob O’Donnell told Yahoo Finance.

Nvidia is expected to continue to power the bulk of the AI industry in 2025 as well. The company’s Blackwell chip, the successor to its popular Hopper line of processors needed to power AI applications, is in production — and its customers, like Amazon, are already adding new cooling capabilities to their data centers to handle the immense heat the processors generate.

“I don't know what the current backlog [for Nvidia’s chips is], but if it's not a year, it's close to a year,” O’Donnell said. “So, they're pretty much sold out for most of everything they're probably going to make next year already.”

With hyperscalers calling for increased or at least the same level of capital expenditures in 2025 as in 2024, you can expect a chunk of that will end up going to the purchase of Blackwell chips.

Nvidia still faces risks

While Nvidia will retain control of the AI crown, there’s no shortage of challengers looking to take its throne. AMD and Intel (INTC) are the top contenders among chipmakers, and both have products on the market. AMD’s MI300X line of chips is designed to tackle Nvidia’s H100 Hopper chips, while Intel has its Gaudi 3 processor.

AMD is better positioned to steal market share from Nvidia, though, as Intel continues to struggle amid its turnaround efforts and hunt for a new CEO. But even AMD is having a difficult time cracking Nvidia’s lead.

“What AMD needs to do is make software really usable, build the systems where there's more demand …with developers, and ultimately, that could create more sell through,” Newman said. “Because these cloud providers are going to sell what their customers ask for.”

It’s not just AMD and Intel, though. Nvidia’s customers are increasingly developing and pushing their own AI chips. Google has its Broadcom-based tensor processing unit chips (TPUs), while Amazon (AMZN) has its Trainium 2 processor and Microsoft (MSFT) has its Maia 100 accelerator.

There’s also concern that the shift to "inferencing AI models" will reduce the need for high-powered Nvidia chips.

Tech companies develop AI models by training them on huge amounts of data, otherwise referred to as the training process. Training requires incredibly powerful chips and lots of energy. Inferencing, or actually putting those AI models to work, is less resource- and power-intensive. As inferencing becomes a larger part of AI workloads, the thinking goes, companies will back away from needing to purchase so many Nvidia chips.

Huang has said he is prepared for this, explaining at various events that Nvidia’s chips are just as good at inferencing as they are at training.

Even if Nvidia’s market share slides, it doesn’t necessarily mean its business will be doing any worse than before.

“This is definitely a case of raising all boats,” Newman said. “So even with much stronger competition, which I think they certainly will have, that doesn't mean they're going to fail. This is people building a bigger pie.”

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>>> Quantum-computing stocks are soaring as investors place bets on ‘the next big thing’ in tech


MarketWatch

by Joseph Adinolfi

December 11, 2024


https://finance.yahoo.com/news/quantum-computing-stocks-soaring-investors-200100154.html


A trio of quantum-computing stocks has seen huge gains over the past few months, bolstered by a wave of hype from retail investors looking to cash in on what could be the “next big thing” in tech.

Shares of Rigetti Computing Inc. RGTI, D-Wave Quantum Inc. QBTS and IonQ Inc. IONQ — all small-capitalization stocks closely associated with quantum computing — have gained 843%, 455% and 398% in the three months through Tuesday’s close, FactSet data showed.

Quantum-computing stocks are soaring as investors place bets on ‘the next big thing’ in tech

The Defiance Quantum ETF QTUM — which invests in a number of mature and developing companies involved in quantum computing and machine learning — has gained more than 30% over the same period.

For shareholders of these companies, the gains amount to only a few billion dollars’ worth of value creation. Still, a steady drumbeat of new developments, coupled with their strong performance in the market, appears to have piqued investors’ interest.

The latest market-moving announcement landed shortly before the closing bell on Monday, when Alphabet Inc.’s Google Quantum AI unit published what some experts characterized as a potential breakthrough in the field that could accelerate the development of a commercially viable product.

Shares of all three of the small-cap companies named above briefly rallied on the news on Tuesday, although only one — Rigetti — managed to hang on to its gains by the time the closing bell rang. Shares of both IonQ and D-Wave Quantum continued to slide on Wednesday.

But setting these latest moves aside, their recent spurt of gains still represents a notable turnaround since the bursting of the SPAC bubble had saddled their shareholders with major losses. All three companies were taken public via mergers with shell companies during the so-called SPAC boom, and D-Wave Quantum and Rigetti have continued to trade well below their peaks from 2020 and 2021.

Over the past two weeks, users have flocked to posts on Reddit and other social-media platforms to share their hopes, questions and concerns about a technology that some feel could be the next big development in tech.

To longtime market watchers, it is just the latest example of retail investors’ affinity for speculative technology bets.

“This market loves a sexy technology theme; we certainly know that’s the case with AI,” said Steve Sosnick, chief strategist at Interactive Brokers. “It wouldn’t surprise me in the least if people move on to quantum computing.”

But there is one important distinction between quantum computing and AI that investors should keep in mind. Although there is hope that there could be synergies between the two technologies, quantum computing is still years away from producing a commercially viable product.

For now, investors seem to be brushing off these concerns, as these stocks have been swept up in the frenzied trading activity that has increasingly dominated the U.S. market — a dynamic that appears to have shifted into overdrive following President-elect Donald Trump’s victory in the Nov. 5 U.S. election.

Given their focus on a still-unproven technology, these companies remain extremely speculative investments.

“It’s hype on hype,” said Daniel O’Regan, a managing director at Mizuho Securities USA, in response to a question about what’s driving these companies higher. “They don’t really have any revenue. People who are gravitating toward some of the [quantum-computing] pure plays are trying to dream the dream. They’re betting that this could be the next, next big thing.”

A few other factors have contributed to their meteoric rise, according to O’Regan, including the fact that shares of all three had been heavily shorted, leaving them vulnerable to a short squeeze.

IonQ, the most mature company in the group, is expected to report sales of just $41.4 million during the 2024 calendar year. During the brief period that these companies have been publicly traded, none has produced a quarterly profit, according to FactSet data.

Name

Market Cap

Projected 2024 sales

Rigetti Computing

$1.6 billion

$16.2 million

D-Wave Quantum

$1.4 billion

$9.1 million

IonQ

$7.1 billion

$41.4 million

Furthermore, their quest for commercial viability faces another potentially enormous obstacle: entrenched competition from companies with far more resources. Alphabet and IBM Corp. IBM have already invested heavily in their own quantum-computing technology, O’Regan noted.

But as more Big Tech names scramble to gain a foothold, one or more of these three small-cap companies could potentially find itself the target of a takeover bid.

To some, that could be reason enough to keep plowing capital into their shares.

A breakthrough

In November, Amazon.com Inc.’s AMZN Amazon Web Services segment unveiled a new advisory service focused on quantum computing.

Then on Monday, Google published the results of a breakthrough involving its quantum-computing chip, Willow, in the scientific journal Nature. The paper confirmed that Willow had performed a computation that would have taken a classical supercomputer 10 septillion — that is, 10 to the 25th power — years to complete. It also demonstrated a level of error control that Google said represented a breakthrough that the field has been working toward for decades.

By the time the closing bell rang on Tuesday, Alphabet was sitting on a 5.6% gain, boosting its market capitalization by nearly $120 billion. Shares were up another 4% in recent trading on Wednesday.

Rigetti also managed to hang on to a sizable double-digit advance after announcing a quantum-computing breakthrough of its own. The company’s shares finished 45% higher, and were continuing to climb another 16% on Wednesday, recently trading at $7.55 a share, according to FactSet data.

Those moves were big on a percentage-point basis. But to help put things in perspective, the increase in Google’s market cap on Tuesday alone dwarfed the size of all three of the small-cap companies put together.

What is quantum computing?

Quantum computing has been studied for about three decades now, according to William Oliver, the Henry Ellis Warren (1894) professor of electrical engineering and computer science and a professor of physics at the Massachusetts Institute of Technology.

It aims to replace conventional classical computers in tackling certain types of complex problems. Although there are a couple of different methods for putting the technology into practice, Google’s new chip uses superconducting materials and electrical circuits to create qubits, the fundamental logical unit that powers these quantum processes.

In theory, the computing power of these units should dramatically eclipse their classical counterparts. Drug development and other types of complicated research have been cited as potential applications.

But there is one critical problem that engineers still need to untangle: The qubits used to carry out quantum computations are inherently unstable, forcing engineers to employ special algorithms to correct the errors that will inevitably occur.

For years, adding more qubits to a quantum computer didn’t seem to have much of an impact on the accuracy of these computations. If anything, it made them less reliable.

That is what made the latest demonstration from Google so notable. The company’s chip managed to show that the addition of more qubits helped bolster its error-correcting abilities.

“It’s a very important demonstration. We’re still at a very early stage of the technology,” Oliver told MarketWatch on Tuesday. “They showed that you can take qubits that are faulty, add more of them to the system, and the system gets better. This is exactly what we need to have happen if we’re going to commercialize quantum technology.”

Since Google’s Monday announcement, people have had plenty of questions about the long-term impact of quantum computing. One concern that has surfaced repeatedly on platforms like X: could quantum computing potentially threaten the encryption that secures cryptocurrencies like bitcoin?

Oliver said the answer is yes, although such capabilities are likely still 10 years away, if not more. Still, he said it is imperative that cryptocurrencies switch to post-quantum encryption as soon as possible. The National Institute of Standards and Technology has already released its postquantum encryption standards, he pointed out.

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>>> Google says it has cracked a quantum computing challenge with new chip


Reuters

by Stephen Nellis

December 9, 2024


https://www.yahoo.com/tech/google-says-cracked-quantum-computing-160249632.html


SANTA BARBARA, California (Reuters) - Google on Monday said that it has overcome a key challenge in quantum computing with a new generation of chip, solving a computing problem in five minutes that would take a classical computer more time than the history of the universe.

Like other tech giants such as Microsoft and International Business Machines, Alphabet's Google is chasing quantum computing because it promises computing speeds far faster than today's fastest systems. While the math problem solved by the company's Santa Barbara, California quantum lab does not have commercial applications, Google hopes quantum computers will one day solve problems in medicine, battery chemistry and artificial intelligence that are out of reach for today's computers.

The results released Monday came from a new chip called Willow that has 105 "qubits" , which are the building blocks of quantum computers. Qubits are fast but error-prone, because they can be jostled by something as small as a subatomic particle from events in outer space.

As more qubits are packed onto a chip, those errors can add up to make the chip no better than a conventional computer chip. So since the 1990s, scientists have been working on quantum error-correction.

In a paper published in the journal Nature on Monday, Google said that it has found a way to string together the Willow chip's qubits so that error rates go down as the number of qubits goes up. The company also says it can correct errors in real time, a key step toward making its quantum machines practical.

"We are past the break even point," Hartmut Neven, who leads the Google Quantum AI unit, said in an interview.

In 2019, IBM challenged Google's claim that Google's quantum chip solved a problem that would take a classical computer 10,000 years, saying the problem could be solved in two-and-a-half days using different technical assumptions about a classical system.

In a blog post Monday, Google said it took some of those concerns into account in its newest estimates. Even under the most idealistic conditions, Google said a classical computer would still take a billion years to get the same results as its newest chip.

Some of Google's rivals are producing chips with a larger number of qubits than Google, but Google is focused on making the most reliable qubits it can, Anthony Megrant, chief architect for Google Quantum AI, said in an interview.

Google fabricated its previous chips in a shared facility at the University of California, Santa Barbara, but built its own dedicated fabrication facility to produce its Willow chips. Megrant said that new facility will speed up how fast Google can make future chips, which are chilled in huge refrigerators called cryostats to run experiments.

"If we have a good idea, we want somebody on the team to be able to ... get that into the clean room and into one of these cryostats as fast as possible, so we can get lots of cycles of learning," Megrant said.

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>>> Trump’s pick to run FCC is an ominous sign for Big Tech


Yahoo Finance

by Alexis Keenan

December 2, 2024


https://finance.yahoo.com/news/trumps-pick-to-run-fcc-is-an-ominous-sign-for-big-tech-090037028.html


The country’s tech titans might need to start fortifying defenses against the agenda of incoming Federal Communications Commission chair Brendan Carr.

Carr made that clear in the hour after President-elect Donald Trump announced his ascension to the FCC chairmanship seat last month.

"We must dismantle the censorship cartel and restore free speech rights for everyday Americans," Carr said on social media platform X.

Just days before he got that chairmanship appointment, Carr sent letters to Google CEO Sundar Pichai, Microsoft CEO Satya Nadella, Meta CEO Mark Zuckerberg, and Apple CEO Tim Cook predicting "broad ranging actions to restore Americans’ First Amendment rights" once Trump takes office.

That might include "a review of your companies’ activities as well as third-party organizations and groups that have acted to curtail those rights," according to a copy of the letter Carr posted to X.

Many tech CEOs are trying to establish a good relationship with the incoming Trump administration, hoping to improve their standing in the nation's capital after years of aggressive oversight and antitrust lawsuits. Last week, for example, Zuckerberg met face-to-face with Trump at his Florida hotel and club Mar-a-Lago.

Carr has long called for a focus on reining in Big Tech. He has accused Alphabet-owned Google (GOOG, GOOGL) of manipulating search results and demonizing YouTube users, Meta-owned Facebook (META) of inconsistently tinkering with user content, and Chinese-owned TikTok of jeopardizing national security.

Carr has also outlined his vision for remaking the FCC in a right-of-center policy proposal known as Project 2025. Trump distanced himself from that document during the 2024 presidential campaign.

One specific focus for a new Republican-oriented FCC, Carr said in Project 2025, should be to do away with legal immunity known as the Section 230 protection that insulates social media companies from liability when they police third-party content.

Carr said dominant technology corporations abuse their dominant market position and Section 230’s legal protection to "drive diverse political viewpoints from the digital town square."

"Today, a handful of corporations can shape everything from the information we consume to the places we shop," Carr wrote in the chapter he authored on the FCC.

"They are not simply prevailing in the free market; they are taking advantage of a landscape that has been skewed — in many cases by the government — to favor their business models."

As a remedy, Carr said Congress should not only remove "carte blanche" Section 230 immunity but also impose transparency rules similar to those imposed on broadband providers.

That would require social media platforms to publish more specific terms of service and operate an appeals process for content creators to challenge companies that take down their posts.

Fight for the Future, a nonprofit group that advocates for online privacy, expressed concerns in an email to Yahoo Finance that Carr would upend net neutrality rules, which require internet service providers (ISPs) to treat all data on the internet equally.

Carr voted to end net neutrality rules in 2017.

Carr, in Project 2025, also said the FCC should do more to protect Americans against already identified national and personal security threats posed by the social media app TikTok and telecommunication equipment manufacturers, Huawei and ZTE.

TikTok’s platform, Carr said, provides Beijing "with an opportunity to run a foreign influence campaign" by curating news and information seen by millions of Americans.

Congress and President Joe Biden agreed months ago to outlaw TikTok from operating in the US under Chinese ownership.

However, Trump’s statements on the campaign trail suggested he may at least try to lessen the impact of a law signed by Biden in April that makes Chinese ownership of the app illegal.

Carr also has called for the FCC to do a better job at updating its "covered list" of telecommunications equipment manufactures that pose a risk to US national security.

Huawei and ZTE are included in that list. And a loophole, he said, should be closed so that companies such as China Telecom cannot operate unregulated data centers in the US.

Carr has said Big Tech should pay its "fair share" to the FCC’s $9 billion universal service fund that subsidizes affordable internet and rural connectivity programs.

Instead of relying on telecommunications consumers for the bulk of its funding, he said, Big Tech should pay because the federally supported networks are used to deliver the companies' products and services.

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>>> Intel awarded $7.9 billion from the CHIPS Act ahead of Trump's 2nd term


Business Insider

by Jyoti Mann

11-25-24


https://www.msn.com/en-us/money/markets/intel-awarded-79-billion-from-the-chips-act-ahead-of-trumps-second-term/ar-AA1uMrm1?ocid=TobArticle


Intel is set to get $7.9 billion in federal grants from the Biden administration.

The US Department of Commerce announced the grant, part of the CHIPS Act, on Tuesday.

President-elect Donald Trump has criticized the CHIPS Act in favor of tariffs.

Intel will receive about $7.9 billion in federal grants, the US Department of Commerce said Tuesday, as the Biden administration finalizes CHIPS Act agreements before Donald Trump takes office.

That's $600 million less than President Joe Biden's $8.5 billion preliminary grant, announced in March. The Commerce Department told The New York Times that Intel was receiving less than what was initially promised because it also received a separate grant of $3 billion to produce chips for the military.

A senior administration official told Bloomberg that the chip giant was on track to receive at least $1 billion of the total grant award before the end of the year.

Trump has criticized the CHIPS Act and suggested he'd prefer tariffs to incentivize semiconductor manufacturing on US soil. This has caused the Biden administration to scramble to finalize billions of dollars in payments before the end of the year.

The CHIPS Act cash would help Intel boost its semiconductor production in the US. It's expected to invest nearly $90 billion in the US by the end of the decade.

Secretary of Commerce Gina Raimondo said in a press release that Intel's investments across Arizona, New Mexico, Ohio, and Oregon would "supercharge American innovation" and that the company was playing an important part in the "revitalization" of the US's semiconductor industry.

Pat Gelsinger, Intel's CEO, added, "Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country's long-term economic growth and national security."

Intel's share price is down by almost 50% this year. It has racked up billions of dollars in losses and faced challenges including layoffs.

The Wall Street Journal reported in September that Qualcomm was interested in acquiring Intel. But Bloomberg reported this week, citing people familiar with the matter, that Qualcomm's takeover interest had cooled as a result of some complications related to acquiring the entire company.

Intel didn't immediately respond to a request for comment from Business Insider made outside normal working hour

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>>> Nvidia's Latest Move Just Gave Supermicro Investors Some Epically Bad News


Motley Fool

by Adam Spatacco

November 10, 2024


https://finance.yahoo.com/news/nvidias-latest-move-just-gave-171500728.html


There has been no other company in the artificial intelligence (AI) realm that's been watched as closely as Nvidia (NASDAQ: NVDA) over the last couple of years. Nvidia's role in the AI narrative is so prominent that any announcement the company makes has the power to swing the capital markets at this point.

As the company's upcoming launch of its new Blackwell graphics processing unit architecture (GPU) looms, all eyes are on Nvidia and its partner network. Super Micro Computer is one player that's been a direct beneficiary of Nvidia's booming GPU business over the last two years.

However, some recent reporting suggests that Nvidia may be migrating away from its reliance on Supermicro's IT infrastructure and looking for partnerships elsewhere.

Let's break down the situation and assess what could be influencing Nvidia's decisions. Moreover, I'll explore how this news has been impacting Supermicro stock and what it could mean for investors in both the near and long term.

What did Nvidia just do?

The launch of the Blackwell chips may be the most hyped-up AI event of 2024. Nvidia CEO Jensen Huang has boasted that demand for the new chipsets is "insane." Meanwhile, Morgan Stanley's research team is forecasting $10 billion in sales from Blackwell just in the fourth quarter. While all of this is good news on the surface, there are some wrinkles unfolding in the background that smart investors should be keen on watching.

According to an article posted on Digitimes, Nvidia is said to be routing Blackwell orders away from Supermicro in favor of other IT architecture specialists.

Why is Nvidia moving away from Supermicro?

The last couple of months have been brutal for Supermicro.

Back in August, Supermicro became the subject of a short report published by Hindenburg Research. Hindenburg alleges that Supermicro's accounting controls are weak — essentially implying that something fishy could be going on with its bookkeeping and potentially the financial outlook of the company.

To be honest, I didn't think much of Hindenburg's allegations at the time. After all, short-sellers have a vested interest in seeing a stock price decline — which is exactly what happened following the short report.

However, Supermicro ended up delaying its annual report following the Hindenburg report. While this wasn't the best look, I remained cautiously optimistic about Supermicro. But then, in late October, Supermicro filed an 8-K to notify investors that its auditor, big four accounting firm Ernst & Young, had resigned.

Considering how much is on the line with anything related to Blackwell, it's not surprising to learn that Nvidia is reorganizing its supply chain protocols. For now, Supermicro's top priorities should be to mitigate any further drama and get its audit and annual filing under control. Unfortunately, I think any work related to Blackwell just adds additional pressure on Supermicro right now, and a failure to execute would only result in more drama surrounding the company.

What should investors look at from here?

It's hard to know the exact magnitude that Nvidia's Blackwell orders were for Supermicro. Supermicro operates in a highly intensive environment and is far from the only company specializing in storage clusters and server rack designs for data centers.

Since the Hindenburg report was published, shares of Supermicro are down 58% (at the time of this writing). So, while migrating Blackwell orders away from Supermicro will decelerate the company's growth and signal an extra kernel of unwanted news, there's an argument to be made that its impact is already baked into the company's share price to some degree.

Conversely, shares of Nvidia have been experiencing quite a bit of momentum as of late. In fact, as of the time of this article, Nvidia is the most valuable company in the world by market cap, eclipsing Apple by roughly $200 billion.

I think this price action speaks volumes about how excited investors are for Blackwell and what management may reveal later this month when Nvidia reports third-quarter earnings on Nov. 20. I'm curious to learn if moving orders away from Supermicro will have any material impact on shipments of Blackwell, and if so, how that will impact Nvidia's growth in the near term.

For now, shares of both Supermicro and Nvidia are experiencing outsized volatility, and I think it's in the best interest of investors to sit on the sidelines and let the near-term narratives surrounding Blackwell continue to unfold. AI is a long-term theme, and investors will have ample opportunities to invest in either Nvidia or Supermicro at more prudent times and reasonable price ranges.

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>>> New York semiconductor site picked for $825 million in funding


10-31-24

by MICHAEL HILL

Associated Press


ALBANY, N.Y. (AP) — A semiconductor research facility in upstate New York was selected as one of three national technology centers and will receive up to $825 million in funding as part of a broader federal effort to boost the United States' competitiveness in the industry.

U.S. Sen. Chuck Schumer made the announcement Thursday.

The Albany NanoTech complex was selected by federal officials as the national headquarters for research into a cutting-edge semiconductor technology known as extreme ultraviolet, or EUV, lithography. The lab will have the most advanced chip-making machinery in the world and allow researchers from the semiconductor industry to collaborate with their university counterparts, according to Schumer, the Senate's Democratic majority leader.

“When you do the high-end research, which will be done here, and you can make the most advanced chips in the world, it makes sure that our military has the edge," Schumer said in a telephone interview. "It makes sure our economy and our companies have the cutting edge, as well,”

The National Semiconductor Technology Center Extreme Ultraviolet Accelerator is scheduled to begin operating next year. The contract for it stems from the 2022 CHIPS and Science Act, which was designed to create more high-tech jobs and help the United States compete with international rivals like China. The Biden administration has set a goal for the U.S. to make 20% of the world’s advanced chips.

The Albany lab's selection also advances longstanding efforts by Schumer and other government officials to make upstate New York a global center of semiconductor research and manufacturing.

Gov. Kathy Hochul late last year announced a partnership with the semiconductor industry to fund construction of the EUV Center.

The Biden administration announced in February that the government would provide $1.5 billion to the computer chip company GlobalFoundries to expand its domestic production north of Albany and in Vermont. And in April, the administration announced an agreement to provide $6.1 billion in government support for Micron Technology to produce advanced memory computer chips near Syracuse, New York; and in Boise, Idaho.

“This is going to make upstate New York the center of semiconductor research, not just for America, but for the world,” Schumer said.

The Department of Commerce has not yet announced where the other two national technology centers will be.

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>>> Super Micro shares tumble following disturbing news


The Street

by Rob Lenihan

October 30, 2024


https://finance.yahoo.com/news/super-micro-shares-tumble-following-223300660.html


Analysts at Needham had seen enough.

The investment firm said on Oct. 30 that it was suspending its buy rating of Super Micro Computer (SMCI) shares after the maker of liquid-cooled artificial-intelligence servers said its auditing firm, Ernst & Young, had resigned.

Super Micro said in a Securities and Exchange Commission filing that the auditor had delivered its decision in a letter to the company's audit committee.

"We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations," Ernst & Young said.

The Big 4 accounting firm said it was "unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the audit services in accordance with applicable law or professional obligations.”

Shares of the San Jose, Calif., company, which hit a record $122.90 in March, plummeted 34% to $32.42 at last check.

Analysts concerned about Super Micro's financial statements

Ernst & Young had been engaged last year to perform an audit for the fiscal year ending June 30, and it did not issue any report on the company’s financial statements or its internal control over financial reporting.

The accounting firm told the audit committee in late July about concerns about several matters “relating to governance, transparency and completeness of communications to EY, and other matters pertaining to the company’s internal control over financial reporting, and that the timely filing of the Company’s annual report was at significant risk."

EY expressed concerns about the Super Micro’s board independence from the president and CEO of Super Micro and other members of management

In response, the filing said, the board appointed an independent special committee to review EY’s concerns. The review continues and final findings and recommendations have not yet been communicated to EY or the board.

While Super Micro said it did not agree with EY's decision to resign, the company said it took EY's concerns seriously and would "carefully consider" the special committee's findings.

Needham suspended its rating on the company following news of Ernst & Young's resignation, according to The Fly.

The investment firm said that not only did the accounting firm's action “raise considerable questions about the validity of Super Micro's current and past financial statements but it also raises significant questions about Super Micro's corporate governance and management's commitment to integrity and ethical values.”

Needham had initiated coverage of Super Micro on Sept. 18 with a price target of $600 a share.

Super Micro said it did not currently expect that resolution of any of the matters raised by EY, or under consideration by the special committee, would result in restatements of its quarterly reports for fiscal 2024 ended June 30 or for prior fiscal years.

EY earlier this year said it was cutting ties with many U.S. public companies in a move to revamp its auditing practice and improve the quality of its work, the Journal said.

EY has dropped dozens of clients since the start of last year, including drugmaker Catalent and hydrogen truck maker Nikola.

Short-seller found 'glaring accounting red flags'
The filing is the latest chapter in the Super Micro saga.

Last month, The Wall Street Journal reported that the U.S. Department of Justice was investigating the company after short-seller Hindenburg Research alleged "accounting manipulation" at the AI-server maker.

Needham says Ernst & Young's resignation is likely to bolster the DoJ's investigation into Super Micro, which carries its own risk, and it sees increased default risk associated with the company's term loan agreement with Bank of America.

In August, Hindenburg released a scathing report on SMCI, saying that it had “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.”

After Hindenburg Research announced its findings, Super Micro delayed the filing of its annual report.

Super Micro's shares soared on Oct. 7 after the company said it had deployed more than 100,000 graphics-processing units with liquid cooling solutions “for some of the largest AI factories ever built, as well as other [cloud-service providers]."

“Early this year, Super Micro Computer was one of the AI craze darlings, running a rough 345% from early January to early March,” TheStreet Pro’s Stephen Guilfoyle wrote on Oct. 8. "Was that nuts? Sure. Things really got nuts after the apex of the share price, though."

The veteran analyst, whose career stretches back to the 1980s on the floor of the New York Stock Exchange, said the stock was added to the S&P 500 and the Nasdaq 100 and the company declared a 10-for-1 stock split when it reported its June-quarter financial results in early August.

Guilfoyle noted that "this is a whole lot of baggage where the outcomes remain uncertain."

"That is quite a bit to overlook when putting valuable capital to work," he said.

Super Micro did not immediately respond to a request for comment.

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>>> Palantir Stock: Buy at the High?


Motley Fool

by Adria Cimino

10-13-24


https://www.msn.com/en-us/money/companies/palantir-stock-buy-at-the-high/ar-AA1sbkRG?ocid=BingHp01&cvid=c84ba7cc72cb49af892e18afa2a58939&ei=93


Palantir Technologies (NYSE: PLTR) has become one of the latest companies to stand out in the high-growth area of artificial intelligence (AI). Even though this technology player has been around for about 20 years, earnings have truly taken off in recent times. This is thanks to Palantir's Artificial Intelligence Platform (AIP), launched just last year, along with a surge in interest from commercial customers -- in the past Palantir was most associated with government contracts.

And all of this has helped Palantir stock to soar 150% so far this year. In fact, the stock has reached its highest level ever, trading at valuations many would call expensive and well surpassing Wall Street's average price estimate of about $28. At this point, is it a good idea to hold off on buying this high-momentum stock, or should you buy Palantir at the high? Let's find out.

Helping make data a game-changer for customers

First, a little background on Palantir's path so far. The software company helps governments, companies, and organizations aggregate their data in order to make the best use of it. While this many not sound exciting, it actually is -- and often delivers results that are game-changing and/or help a customer register enormous savings in costs and gains in efficiency.

For example, Palantir's systems for Cleveland Clinic help optimize patient placement, forecast bed availability, and boost overall efficiency at the hospital. United Airlines is using Palantir to help it manage equipment issues -- to ensure maximum uptime. Since the launch of this predictive maintenance system, Palantir has helped United save millions of dollars through the avoidance of flight delays and cancellations.

In Palantir's earlier days, government contracts drove growth, and the company steadily but slowly increased revenue. But in more recent times, and with the launch of AIP, Palantir has posted double-digit revenue growth and has seen a massive gain in its commercial business -- so that U.S. commercial growth now surpasses that of government revenue growth.

In the most recent quarter, U.S. commercial revenue advanced 55% to $159 million and U.S. commercial customer count jumped 83% to nearly 300. It's important to remember that Palantir had only 14 U.S. commercial customers four years ago -- so growth here truly has surged. Government revenue also continues to make impressive gains, climbing 23% in the quarter, so the company can count on both its traditional revenue driver as well as the new source of gains found in the commercial business.

"Unbridled demand"

Considering AIP launched rather recently, we're in the early stages of this platform's growth story, and this is reinforced by demand so far. The "persistent and unbridled demand... shows no sign of relenting," chief executive officer Alex Karp wrote in a recent shareholder letter.

Palantir has devised a genius way of getting new customers on board. The company has created AIP boot camps to introduce the platform and help potential users spin up a use case in mere hours. In Palantir's latest earnings call, the company said it closed a seven-figure deal with a big wholesale insurance broker about two weeks after a boot camp -- and this isn't an isolated event. So, the bootcamp system is working and driving significant growth.

Finally, in the latest quarter, Palantir brought in $134 million in net income -- its highest quarterly profit ever.

Should you buy Palantir now?

All of this paints a bright picture for Palantir today and offers us reason for optimism about the future. But should you really buy Palantir at the high? The stock today looks expensive, trading at more than 122x forward earnings estimates. That makes it pricier than any of the Magnificent Seven stocks, the technology players that drove stock market gains earlier this year.

The answer to our question has to do with your investment style. If you're a value investor, Palantir isn't the right stock for you, and if you're a growth investor focused on bargains, you probably wouldn't choose Palantir at these levels. But if you're a growth investor who doesn't mind paying more for a stock today -- with the idea that the earnings picture could change greatly, in a positive way, in the years to come -- then Palantir may be a good choice for you.

Palantir is in the early days of this new growth story, led by AIP and new demand from commercial customers, and the AI market is in its early days of growth too. Today's $200 billion AI market may reach $1 trillion by the end of the decade. All of these elements together suggest that even if you buy Palantir right now at the high, you could still have a lot to gain over the long term.

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>>> Super Micro Computer stock surges 15% on big AI demand


Quartz

by Britney Nguyen

October 7, 2024


https://www.yahoo.com/tech/super-micro-computer-stock-surges-190536426.html


Server company Super Micro Computer (SMCI) unveiled a new liquid cooling solution for AI data centers on Monday, while also revealing it’s shipping over 100,000 graphics processing units (GPUs) quarterly — news that sent its stock climbing more than 15% in midday trading.

Based on current market prices for high-end AI GPUs, which can range from $10,000 to $40,000 each, Super Micro’s quarterly GPU shipments could represent a potential revenue stream of $1 billion to $4 billion. The server company’s shares are up 65.43% so far this year.

This significant GPU shipment volume dovetails with Super Micro’s advancements in cooling technologies for AI infrastructure. The company’s cooling solutions are “reducing costs and improving performance” at “state-of-the-art AI factories,” Charles Liang, chief executive of Super Micro, said in a statement. The company also said it has “recently deployed” over 100,000 GPUs with its liquid cooling solution to “some of the largest AI factories ever built.”

“The combination of Supermicro deployment experience and delivering innovative technology is resulting in data center operators coming to Supermicro to meet their technical and financial goals for both the construction of greenfield sites and the modernization of existing data centers,” Liang said.

In August, Super Micro’s shares fell 22% after it was accused of accounting manipulation and other questionable business deals by short-seller Hindenburg Research. The three month investigation found “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues,” the report said.

Super Micro saw its shares fall over 13% in May after it missed analysts’ expectations for revenue in the third quarter. The company reported revenue of $3.85 billion in the fiscal third quarter, falling below Wall Street’s expectations of $3.95 billion. However, its revenue was more than double revenue of $1.28 billion from the previous year.

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>>> TSMC’s Arizona Trials Put Plant Productivity on Par with Taiwan


Bloomberg

by Debby Wu

September 6, 2024


https://finance.yahoo.com/news/tsmc-arizona-trials-put-plant-125235880.html


(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. achieved production yields at its Arizona facility on par with established plants back home, an early indicator that its marquee US project is on track to achieve its targets.

The Taiwanese chipmaker’s yield rate in trial production at its first advanced US plant is similar to comparable facilities in the southern Taiwanese city of Tainan, according to a person familiar with the company, who asked not to be identified discussing private corporate matters. TSMC had said it started engineering wafer production in April with advanced 4-nanometer process technology.

Yield rate, or how many usable chips a company can produce during a single manufacturing process, is a key factor that impacts profitability. While TSMC doesn’t disclose its yield rate, investors are counting on the company’s ability to maintain steady margins. The company has said it can maintain gross margin rates at 53% or higher in the long run, and has kept its net profit steady at above 36% over the past four years.

TSMC said in an email that its Arizona project is “proceeding as planned with good progression,” without commenting on the yield.

The go-to chipmaker for Apple Inc. and Nvidia Corp. originally planned to have its first Arizona plant start full production in 2024, but pushed back the target to 2025 due to a lack of skilled workers. The delay fueled concerns that the company might not be able to make chips in the US as efficiently as in Taiwan.

The US plans to award TSMC $6.6 billion in grants and as much as $5 billion in loans to support the chipmaker’s $65 billion in investments at three plants in Arizona.

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Spruce Pine NC - >>> The world's semiconductor industry hinges on a single quartz factory in North Carolina


Tom's Hardware

by Mark Tyson

March 23, 2024


https://www.tomshardware.com/tech-industry/semiconductors/the-worlds-semiconductor-industry-hinges-on-a-quartz-factory-in-north-carolina


The deposits formed 380 million years ago when Africa collided with North America.

Spruce Pine mining facility, North Carolina



A Wharton professor who studies AI, innovation, and start-ups dramatically claims that "the modern economy rests on a single road in Spruce Pine, North Carolina." Ethan Mollick explains that this unremarkable road leads to a Sibelco North America Inc. facility where ultra-high-purity quartz is mined. This location is vitally important as it is claimed to be "the sole supplier of the quartz required to make the crucibles needed to refine silicon wafers."

The modern economy rests on a single road in Spruce Pine, North Carolina. The road runs to the two mines that is the sole supplier of the quartz required to make the crucibles needed to refine silicon wafers.

There are no alternative sources known.

Mollick provides an excerpt from Conway's Material World, which discusses the probable "end of computer chip manufacture as we know it," should something untoward happen at Spruce Pine or in the skies above it.



For further insight into why the Spruce Pine location is so unique, the official Sibelco pages do a pretty good job of encapsulating the story of this particular mine. It is the world’s leading high-purity quartz (HPQ) provider, and the firm claims it produces “the world’s highest quality quartz” at this mine.

Geologically speaking, the uniquely pure minerals at Spruce Mine were created about 380 million years ago when Africa collided with North America. This momentous collision, however slow, caused intense friction and heat miles below the Earth’s surface. According to Sibelco, the Spruce Mine minerals were created by a rich mineral-forming liquid that cooled and crystallized over time. A standout feature of these minerals is that they were made in their purest forms due to a lack of water, which caused all the friction.

In more recent history, it is claimed that the Spruce Pine site has been mined for centuries, with Native American peoples known to have mined Mica. In addition to Mica and the headlining HPQ, the mine is a rich source of kaolin and feldspar.

Spruce pine-sourced minerals were first used for electronics by Thomas Edison, who used Mica as an insulator in some of his inventions as far back as 1879.

The fused quartz from Spruce Pine HPQ offers “unparalleled optical, mechanical, and thermal properties” for semiconductors, solar photovoltaic cells, optical fiber, and quartz lighting.



Returning to the question of Spruce Pine's particular importance, Mollick makes it clear in his social media thread that, yes, fully synthetic techniques are available to create similarly pure quartz. However, any sudden closure or interruption of the mining at Spruce Pine would likely cause "pretty catastrophic" disruption (and extra expense) for a few years as the industry scales up manufacturing.

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>>> Intel launches new AI chips as takeover rumors swirl


Yahoo Finance

by Daniel Howley

September 24, 2024


https://finance.yahoo.com/news/intel-launches-new-ai-chips-as-takeover-rumors-swirl-153749461.html


Intel (INTC) revealed a pair of artificial intelligence chips on Tuesday as it seeks to improve its data center business and steal market share from rivals AMD (AMD) and Nvidia (NVDA). The new chips, the Xeon 6 CPU and Gaudi 3 AI accelerator, promise improved performance and power efficiency and come at a time when Intel is trying to prove it has what it takes to be a major player in the AI space.

The announcement follows a Wall Street Journal report that Qualcomm (QCOM) is looking into a potential takeover of Intel to bolster its own chip business. Bloomberg, meanwhile, reported that Apollo Global Management is interested in making a multibillion-dollar investment in the chipmaker that would back Intel CEO Pat Gelsinger’s massive turnaround plan. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

Intel says the new Xeon 6 chip offers P-cores, or performance cores, and says it features twice the performance of its predecessor. The chip, according to the company, is built for AI and high-performance compute scenarios including edge and cloud systems.

The Gaudi 3 processor, on the other hand, is purpose-built for generative AI applications and will compete directly with Nvidia’s H100 and AMD’s MI300X line of chips. Intel says IBM (IBM) is using its Gaudi 3 accelerators as part of its IBM Cloud with the goal of offering a lower overall total cost of ownership.

“Demand for AI is leading to a massive transformation in the data center, and the industry is asking for choice in hardware, software, and developer tools,” Justin Hotard, Intel's executive vice president and general manager of its Data Center Artificial Intelligence Group, said in a statement.

“With our launch of Xeon 6 with P-cores and Gaudi 3 AI accelerators, Intel is enabling an open ecosystem that allows our customers to implement all of their workloads with greater performance, efficiency, and security.”

Intel was also quick to point out that 73% of GPU-accelerated servers, servers designed to power AI applications, use Xeon chips as the host CPUs they need to function properly. But Intel’s chips aren’t the hot tickets they once were. Companies instead are trying to get their hands on Nvidia’s line of AI chips, sending that company’s stock price soaring.

Nvidia’s stock price is up a staggering 142% year to date, while Intel shares have fallen a whopping 52%. AMD shares are up 12% in the same time period.

During its latest quarterly earnings report in August, Intel reported worse-than-anticipated revenue and earnings per share and provided a disappointing outlook for its current quarter. The company also said it would cut 15% of its workforce and suspended its dividend payments.

Gelsinger is attempting to return Intel to its former glory by pushing its teams to build more advanced chips for the data center and consumer PCs while simultaneously building out its manufacturing capabilities.

Intel hopes to dramatically expand its chip fabs, the facilities where it produces chips, both in the US and abroad. But the company announced last week that it will put construction of planned plants in Europe on hold and that it won’t start up its advanced packaging plant in Malaysia until demand for chips picks up.

Intel offered some good news last week as well, saying that it will build custom chips for Amazon (AMZN), joining Microsoft (MSFT) as another marquee client for the company’s nascent third-party chip manufacturing business.

The firm also said it is separating its foundry segment from its design business to provide a clearer separation between the two entities, giving potential customers greater peace of mind that Intel’s design team wouldn’t have access to their own chip designs.

But Intel’s struggles amid the turnaround have made it a takeover target for the likes of Qualcomm, which could use the company to significantly expand its chip business into the data center and PC businesses.

Qualcomm relies heavily on its smartphone segment. But smartphone sales have slowed over the years as customers have begun holding on to their handsets longer, leading Qualcomm to look for new growth opportunities.

One such opportunity includes building laptop chips meant to rival Intel’s own line of processors. It will, however, take a good deal of time for Qualcomm to chip away at Intel’s PC market share if it manages to do so at all.

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Intel - >>> Did Amazon Just Save Intel Stock?


by Brett Schafer

Motley Fool

September 21, 2024


https://finance.yahoo.com/news/did-amazon-just-save-intel-113300961.html


It can pay to have rich friends.

This is especially true when that friend runs the largest cloud computing business in the world and you are a manufacturer of computer chips. That is why Intel (NASDAQ: INTC) stock soared after the company announced a new partnership with Amazon (NASDAQ: AMZN) for custom chip designs for its Amazon Web Services (AWS) subsidiary.

Intel stock shot up from around $19 to $21 on this news, stemming painful losses that shareholders have incurred for the last few years. Intel shares are down 70% from its five-year high as the company struggles to build its new foundry business and compete in the age of artificial intelligence (AI). Today, Amazon is stepping up to the plate and saying it will invest in Intel's computer chip business for the long haul.

Does this make Intel stock a buy after falling 70% from recent highs?

Partnerships for chip design

On Sept. 16, Amazon and Intel announced a co-investment in custom chip design intended to cost billions of dollars. In other words, both companies have agreed to pool resources to design computer chips together. Amazon will also be spending $7.8 billion in central Ohio on data center development. This is close to where Intel is building a $20 billion semiconductor manufacturing plant.

The relationship between Amazon and Intel is tightening. This makes sense for two key reasons. First, Intel is one of the largest suppliers of computer chips for AWS data centers. Amazon spends billions of dollars with Intel each year, so if they can improve chip designs, both companies will make money. Second, Intel has lost market share during the AI boom of the last few years to Nvidia and Advanced Micro Devices.

Nvidia specifically is pulling far ahead in AI and has increased its pricing to customers such as Amazon. Amazon likely sees this chip design partnership with Intel as a way to increase competition with Nvidia, which will hopefully lower its computer chip costs. Intel can win by stealing market share back from Nvidia.

An independent foundry

Intel's business has suffered in recent years due to its vertically integrated chip manufacturing business. Nvidia and AMD do not make computer chips, they simply design them using software. They are made by Taiwan Semiconductor Manufacturing (TSMC), which operates what is known as a foundry business model. This company serves as a manufacturer of semiconductors for multiple parties, but never competes directly with its chip-designing customers. TSMC has aggregated a huge portion of the semiconductor manufacturing market and has taken the crown from Intel as the most advanced developer in the entire sector.

A few years ago, Intel began planning to build its own foundry business to compete with TSMC. So far, the business has not done well. Last quarter, revenue was $4.3 billion, not growing, and the segment had a $2.8 billion operating loss. Intel is playing the long game with the foundry business. It has plans to invest tens of billions of dollars in the United States for manufacturing in places such as its Ohio facility. With the CHIPS Act from the U.S. government, it should be eligible for subsidies on this spending.

This bet needs to work out, because these capital investments in new manufacturing facilities are burning a hole in Intel's pocket. Free cash flow was negative $12.6 billion in the last 12 months and has turned sharply negative after being positive for decades. In order to revert to positive free cash flow, Intel will need to procure spending on chips from its partners, such as Amazon (a current customer of TSMC) for its foundry business.

At current prices, it is hard to value Intel stock. The company is going through a heavy investment cycle and is currently unprofitable. It trades at a market cap of $88.6 billion, which looks cheap compared to its historical cash-flow generation of over $10 billion per year before its competitive struggles.

I think this Amazon partnership is a positive development, but it doesn't save Intel's business and/or stock. The company has been a laggard in the semiconductor market for several years now. It is making a risky bet to transition its business over to the foundry model in the middle of that market-share slump. It is not clear whether this will be successful. In the meantime, it is burning over $10 billion a year in free cash flow.

However, if Intel is successful and becomes the American version of TSMC, there is a lot of upside for the stock. TSMC is closing in on a $900 billion market cap, which is 10 times the size of Intel today. It is not implausible for Intel to reach this valuation if the business model transition is successful.

Investors looking to bet on Intel should make it a small position in their portfolios, given the high upside and large downside potential of the stock.

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NVDA, SMCI, AVGO - >>> Step Aside, Nvidia: Billionaires Are Selling It in Favor of 2 Other High-Growth Stock-Split Stocks


by Sean Williams

Motley Fool

September 13, 2024


https://finance.yahoo.com/news/step-aside-nvidia-billionaires-selling-085100760.html


Although artificial intelligence (AI) has been all the rage on Wall Street since 2023 began, excitement surrounding stock splits has given AI a run for its money this year.

A stock split gives publicly traded companies the ability to superficially alter their share price and outstanding share count by the same magnitude. Splits are surface-scratching in the sense that they don't change a company's market cap or in any way affect underlying operating performance.

Although there are two types of stock splits -- forward and reverse -- investors usually gravitate to companies conducting forward splits. This type of split is designed to lower a company's share price to make it more nominally affordable for investors who are unable to purchase fractional shares through their broker. Companies enacting forward splits are usually outpacing their competition from an execution and innovation standpoint.

Since 2024 began, a little over a dozen leading businesses have announced or completed a stock split -- all but one of which was of the forward-split variety.

However, the outlook for some of these premier stock-split stocks is mixed among Wall Street's brightest and richest investors. Based on the latest round of form 13F filings with the Securities and Exchange Commission, billionaires were decisive sellers of cutting-edge AI stock Nvidia (NASDAQ: NVDA) in the second quarter, but were avid buyers of two other high-growth stock-split stocks.

Billionaires continue to reduce their stakes in Wall Street's AI darling

For three consecutive quarters, dating back to the start of October 2023, no fewer than seven billionaire money managers have reduced their respective stakes in Nvidia. The June-ended quarter featured seven billionaire sellers, including (total shares sold in parenthesis):

Ken Griffin of Citadel (9,282,018 shares)

David Tepper of Appaloosa Management (3,730,000 shares)

Stanley Druckenmiller of Duquesne Family Office (1,545,370 shares)

Cliff Asness of AQR Capital Management (1,360,215 shares)

Israel Englander of Millennium Management (676,242 shares)

Steven Cohen of Point72 Asset Management (409,042 shares)

Philippe Laffont of Coatue Management (96,963 shares)

With Nvidia completing its largest-ever forward split (10 for 1) in June, these billionaires might have chosen to ring the register and diversify their respective portfolios. But there looks to be more to this story than simple profit taking.

Although Nvidia has undeniably benefited from its first-mover advantages as the standout supplier of AI graphics processing units (GPUs), competition is now coming at it from all angles.

With the debut of Nvidia's Blackwell chip delayed by at least three months due to reported design flaws and supply chain issues, and the company's prized H100 GPU backlogged, it should be relatively easy for external competitors like Advanced Micro Devices to find strong demand for their AI GPUs.

Moreover, Nvidia's top customers are signaling an eventual reduced reliance on the AI kingpin. Its four largest clients by net sales are all developing AI GPUs that they plan to use in their data centers. Even with Nvidia's chips maintaining their computing advantage, the writing is on the wall that these customers intend to use their cheaper internally developed hardware.

Billionaires might also be spooked by the persistent insider selling at Nvidia. While not all insider selling is necessarily nefarious (e.g., insiders sometimes sell stock to pay their tax bill), it is noteworthy that not one executive or board member has purchased shares on the open market since December 2020.

Lastly, billionaire asset managers might be concerned about what history tells us. Since the advent of the internet roughly three decades ago, every next-big-thing trend has worked its way through an early-stage bubble. It's unlikely that AI is going to be the exception.

But while billionaires were showing Nvidia to the door, they were busy scooping up shares of two other high-growth stock-split stocks.


Super Micro Computer

The first stock-split stock that struck the fancy of six billionaire money managers during the second quarter is Super Micro Computer (NASDAQ: SMCI), a specialist in customizable rack server and storage solutions. These billionaire buyers were:

Israel Englander of Millennium Management (553,323 shares)

Jeff Yass of Susquehanna International Group (508,814 shares)

Ken Griffin of Citadel (98,752 shares)

Steven Cohen of Point72 Asset Management (45,066 shares)

Ray Dalio of Bridgewater Associates (15,777 shares)

Cliff Asness of AQR Capital Management (1,040 shares)

With the stock catapulting to north of $1,200 during the first quarter, it's not in the least bit surprising to see Supermicro's board approving a 10-for-1 forward split, to take effect after trading ends on Sept. 30.

However, the prospect of a stock split isn't the primary draw for billionaires to Supermicro. The lure is the seemingly insatiable demand from businesses wanting to be among the first to capitalize on the AI revolution by training large language models and running generative Ai solutions. To do so, they'll need the necessary infrastructure in place, which Supermicro can provide.

The company's operating results have also given billionaires reason to be excited. Net sales jumped 110% to $14.9 billion in fiscal 2024 (the company's fiscal year ends on June 30), and the midpoint of its guidance calls for $28 billion in net revenue for the current year. This forecast screams that demand is exceptional at the moment.

But it won't be an easy ride. With its use of Nvidia's H100 GPUs in its customizable data-center rack servers, and the H100 backlogged, Supermicro finds itself at the mercy of its suppliers.

Furthermore, the company is the target of a short-seller report from Hindenburg Research, which has alleged accounting manipulation. Despite denying these allegations, management did delay the annual filing of its operating results, which did little to soothe investor concerns.

Despite its relatively inexpensive valuation, Super Micro Computer has a lot to prove to Wall Street and investors.


Broadcom

The other stock-split stock that billionaires very clearly favored over Nvidia in the June-ended quarter is AI networking solutions and services providers Broadcom (NASDAQ: AVGO). Seven billionaire investors took the plunge in the second quarter, including:

Ole Andreas Halvorsen of Viking Global Investors (2,930,970 shares)

Jeff Yass of Susquehanna International Group (2,347,500 shares)

Israel Englander of Millennium Management (2,096,440 shares)

Ken Griffin of Citadel (1,880,740 shares)

John Overdeck and David Siegel of Two Sigma Investments (1,332,230 shares)

Ken Fisher of Fisher Investments (865,090 shares)

Keeping with the theme of this list, Broadcom also announced a 10-for-1 forward split (the first in the company's history), which was completed in mid-July.

Broadcom's AI ties have certainly been the fuel behind its recent uptick in growth. In particular, the company's networking solutions are responsible for connecting large numbers of AI GPUs in order to reduce tail latency and maximize the computing potential of AI-accelerating hardware. Presumably, demand for its AI networking solutions will remain robust as long as businesses keep gobbling up AI GPUs.

However, billionaires might be equally excited about Broadcom having a solid foundation that extends well beyond artificial intelligence. It generates a significant amount of revenue and profits from the wireless chips and accessories it provides for next-generation smartphones. And it's a key provider of optical components used in automated industrial equipment, as well as networking solutions for next-gen vehicles.

Lastly, billionaires might be impressed with the company's track record of earnings-accretive acquisitions. For example, the $69 billion purchase of cloud-based virtualization software company VMware in November 2023 perfectly positions Broadcom to be an important player in helping businesses with their private- and hybrid-cloud needs.

With a more diverse revenue stream than Nvidia or Super Micro Computer, Broadcom would be best-positioned to navigate an AI bubble-bursting event, should one occur.

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>>> Palantir’s Addition to the S&P 500 Is ‘Validation’ for Stock. So Is This Deal.


Barron's

by Emily Dattilo

Sept 09, 2024


https://www.barrons.com/articles/palantir-stock-price-s-and-p-500-0dffec41?siteid=yhoof2


Palantir Technologies stock divides opinion on Wall Street, but its promotion to the S&P 500 has given the bulls ammunition.

After markets closed Friday, S&P Dow Jones Indices announced that Palantir would replace American Airlines, Dell Technologies would replace Etsy, and Erie Indemnity would replace Bio-Rad Laboratories in the index before the start of trading on Sept. 23.

Being added to the S&P 500 is a heavier lift than the Russell 1000, which relies mostly on large market capitalization. To join the S&P 500, companies need to be profitable under generally accepted accounting principles for four quarters based on the sum of their profits over that span—as well as being GAAP profitable in the most recent quarter— Barron’s Associate Editor Andrew Bary wrote in June, musing that Palantir could be a likely candidate.

Wall Street has been divided on the software and data-integration company, with bulls championing the company’s AI platform and its ability to drive profits higher as demand soars and bears wondering if the stock is overvalued.

Wedbush analyst Dan Ives, who rates Palantir at Outperform with a price target of $38, called the S&P 500 addition a “validation moment.”

“We believe this is the start of a multi-year cycle for PLTR to continue generating significant deal flow on the back of AIP [artificial intelligence platform] as more organizations look to add AI capabilities that provide value and innovation in real time across operations that are unique to each enterprise,” he wrote.

A prime example of this is Palantir and oil giant BP announcing on Monday a five-year enterprise agreement that will extend their strategic relationship and introduce new AI capabilities.

“Palantir’s AIP software will assist bp to safely and reliably harness large language models (LLMs) to improve and accelerate human decision-making with suggested courses of action based on automated analysis of the underlying data,” the company said in a press release.

Palantir shares gained 9.8% to $33.30, putting them on track for their highest close in more than three years, according to Dow Jones Market Data.

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>>> PC Connection (CNXN) Reports Second Quarter 2024 Results


Business Wire

Jul 31, 2024


https://finance.yahoo.com/news/connection-cnxn-reports-second-quarter-200500679.html


Record Quarter for Net Income and Earnings per Share

SECOND QUARTER SUMMARY:

Net sales: $736.5 million, increase of 0.4% y/y

Gross profit: $136.5 million, up 6.9% y/y

Gross margin: 18.5%, up 112 basis points y/y

Net income: $26.2 million, increase of 32.8% y/y

Diluted EPS: $0.99, compared to $0.75


MERRIMACK, N.H., July 31, 2024--(BUSINESS WIRE)--Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading information technology solutions provider to business, government, healthcare and education markets, today announced results for the second quarter June 30, 2024. The Company also announced that its Board of Directors declared a quarterly dividend of $0.10 per share of the Company’s common stock. Payment will be made on August 30, 2024, to shareholders of record on August 13, 2024.

"Connection achieved record net income and earnings per share of $0.99 cents for the second quarter of 2024. These results reflect the successful execution of our strategic priorities and our ability to adapt to the needs of our customers in this dynamic and rapidly evolving technology landscape," said Timothy McGrath, President and Chief Executive Officer of Connection.

Second Quarter of 2024 Results:

Net sales for the quarter ended June 30, 2024 increased by 0.4%, year over year. Gross profit increased 6.9% while gross margin expanded 112 basis points to 18.5%, compared to the prior year quarter. Net income for the quarter ended June 30, 2024 increased by 32.8% to $26.2 million, or $0.99 per diluted share, compared to net income of $19.7 million, or $0.75 per diluted share, for the prior year quarter. Adjusted Diluted Earnings per Share1 increased to $1.00 per share for the quarter ended June 30, 2024, compared to $0.80 per share for the quarter ended June 30, 2023.

Performance by Segment:

Net sales for the Business Solutions segment increased by 6.6% to $278.2 million in the second quarter of 2024, compared to $261.0 million in the prior year quarter. Gross profit increased by 8.1% to $66.3 million in the second quarter of 2024, compared to $61.4 million in the prior year quarter. Gross margin increased by 34 basis points to 23.8% for the second quarter of 2024.

Net sales for the Public Sector Solutions segment decreased by 14.0% to $159.5 million in the second quarter of 2024, compared to $185.4 million in the prior year quarter. Sales to state and local governments and educational institutions decreased by $17.6 million, while sales to the federal government decreased by $8.3 million, compared to the prior year quarter. Gross profit increased by 3.0% to $24.1 million in the second quarter of 2024, compared to $23.5 million in the prior year quarter. Gross margin increased by 250 basis points to 15.2% for the second quarter of 2024.

Net sales for the Enterprise Solutions segment increased by 4.1% to $298.8 million in the second quarter of 2024, compared to $287.1 million in the prior year quarter. Gross profit increased by 7.2% to $46.1 million in the second quarter of 2024, compared to $42.9 million in the prior year quarter. Gross margin increased by 45 basis points to 15.4% for the second quarter of 2024.

Sales by Product Mix:

Notebook/mobility and desktop sales increased by 7% year over year and accounted for 47% of net sales in the second quarter of 2024, compared to 44% of net sales in the second quarter of 2023.


Software sales increased by 7% year over year and accounted for 9% of net sales in the second quarter of 2024 and 2023.


Servers/storage sales increased by 19% year over year and accounted for 9% of net sales in the second quarter of 2024, compared to 7% of net sales in the second quarter of 2023.


Networking sales decreased by 33% year over year and accounted for 7% of net sales in the second quarter of 2024, compared to 11% of net sales in the second quarter of 2023.


Accessories sales decreased by 6% year over year and accounted for 11% of net sales in the second quarter of 2024 and 2023.

Selling, general and administrative ("SG&A") expenses increased in the second quarter of 2024 to $105.2 million from $101.0 million in the prior year quarter. SG&A as a percentage of net sales increased to 14.3%, compared to 13.8% in the prior year quarter. The increase in SG&A was primarily due to an increase in variable compensation due to higher levels of gross profit in the quarter.

Interest income in the second quarter of 2024 was $4.7 million, compared to $1.9 million in the second quarter of 2023.

Cash and cash equivalents and short-term investments were $385.8 million as of June 30, 2024, compared to $244.0 million as of June 30, 2023. During the second quarter of 2024, the Company repurchased 56,716 shares of stock at an aggregate purchase price of $3.6 million.

Six Months of 2024 Results:

Net sales for the six months ended June 30, 2024 decreased by 6.3%, compared to the six months ended June 30, 2023. Gross profit increased 1.8% while gross margin expanded 149 basis points to 18.6%, compared to the six months ended June 30, 2023. Net income for the six months ended June 30, 2024 increased by 16.0% to $39.3 million, or $1.48 per diluted share, compared to net income of $33.9 million, or $1.28 per diluted share, for the six months ended June 30, 2023. Adjusted Diluted Earnings per Share1 increased to $1.49 per share for the six months ended June 30, 2024, compared to $1.36 per share for the six months ended June 30, 2023.

Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense and restructuring and other charges ("Adjusted EBITDA")1 increased 4% to $125.4 million for the twelve months ended June 30, 2024, compared to $120.2 million for the twelve months ended June 30, 2023.

_________________

1 Adjusted EBITDA and Adjusted Diluted Earnings per Share are non-GAAP measures. See page 9 for definitions and reconciliations of these measures.

Conference Call and Webcast

Connection will host a conference call and live web cast today, July 31, 2024 at 4:30 p.m. EDT to discuss its second quarter financial results. For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. A web-cast of the conference call, which will be broadcast live via the Internet, and a copy of this press release, can be accessed on Connection’s website at ir.connection.com. For those unable to participate in the live call, a replay of the webcast will be available at ir.connection.com approximately 90 minutes after the completion of the call and will be accessible on the site for approximately one year.

Non-GAAP Financial Information

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP financial measures. These measures are included to provide additional information with respect to the Company’s operating performance and earnings. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Definitions for each Non-GAAP measure and a reconciliation to their most directly comparable GAAP measures are available in the tables at the end of this release.

About Connection

PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is a Fortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection delivers custom-configured computer systems overnight from its ISO 9001:2015 certified technical configuration lab at its distribution center in Wilmington, OH. In addition, the Company has over 2,500 technical certifications to ensure that it can solve the most complex issues of its customers. Connection also services international customers through its GlobalServe subsidiary, a global IT procurement and service management company. Investors and media can find more information about Connection at http://ir.connection.com.

Connection–Business Solutions (800.800.5555) is a rapid-response provider of IT products and services serving primarily the small-and medium-sized business sector. It offers more than 460,000 brand-name products through its staff of technically trained sales account managers, publications, and its website at www.connection.com.

Connection–Enterprise Solutions (561.237.3300), www.connection.com/enterprise, provides corporate technology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over 460,000 products and 2,500 vendors through MarkITplace®, a proprietary next-generation, cloud-based supply chain solution. The team’s engineers, software licensing specialists, and subject matter experts help reduce the cost and complexity of buying hardware, software, and services throughout the entire IT lifecycle.

Connection–Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, publications, and online at www.connection.com/publicsector.

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>>> Climb Global Solutions Reports Second Quarter 2024 Results and Announces Acquisition of Douglas Stewart Software & Services, LLC


Climb Global Solutions, Inc.

Aug 6, 2024


https://finance.yahoo.com/news/climb-global-solutions-reports-second-200500904.html


Net Sales up 13% to $92.1 Million; Net Income up more than 2x to $3.4 Million or $0.75 per Share; Adjusted EBITDA up 48% to $6.9 Million

Acquisition Establishes Climb as a Leader in the North America Education Sector While Expanding its Product Offerings

Transaction Expected to be Accretive to Earnings per Share and Adjusted EBITDA


EATONTOWN, N.J., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Climb Global Solutions, Inc. (NASDAQ:CLMB) (“Climb”, the “Company”, “we”, or “our”), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, is reporting results for the second quarter ended June 30, 2024. The Company is also announcing the acquisition of Douglas Stewart Software & Services, LLC (“DSS”), a leading specialist distributor of software to the education market in North America.

Second Quarter 2024 Summary vs. Same Year-Ago Quarter

Net sales increased 13% to $92.1 million.

Adjusted gross billings (a non-GAAP financial measure defined below) increased 31% to $359.8 million.

Net income increased more than 2x to $3.4 million or $0.75 per diluted share.

Adjusted net income (a non-GAAP financial measure defined below) increased 19% to $3.8 million or $0.83 per diluted share.

Adjusted EBITDA (a non-GAAP financial measure defined below) increased 48% to $6.9 million.

Management Commentary

“Our Q2 results were highlighted by another period of solid growth and improved profitability as we generated a double-digit increase in net sales and material increases in adjusted gross billings, net income and adjusted EBITDA,” said CEO Dale Foster. “This was driven by the continued execution of our core strategy – generating organic growth by deepening relationships with existing vendors, signing new cutting-edge technologies to our line card, and delivering on our acquisition objectives.

“Today, we are also announcing the acquisition of Wisconsin-based IT distributor DSS, adding scale and expertise to our N.A. operations along with 20 new vendor partners including Adobe, Go Guardian and Incident IQ. DSS has delivered consistent growth through a subscription-based software licensing model, built on an 85%+ retention rate for its strategic vendor partners’ offerings. DSS is a proven leader in the EdTech channel and provides services to more than 500 value-added resellers and 250 campus stores across N.A. in both the K-12 and higher education markets. We are pleased to welcome Chuck Hulan and his team to the Climb family and look forward to unlocking synergies and cross-selling opportunities while advancing shared cloud marketplace initiatives as we integrate DSS into our platform in the months ahead.

“As we enter the back half of the year, we have a solid foundation in place to continue driving strong organic growth while further improving operating leverage through the recent implementation of our new ERP. As we move into 2025, we anticipate the increased amortization expense associated with the ERP will be offset through planned operating synergies in our global platform. We will also continue to evaluate M&A opportunities that can enhance our service and solutions, in addition to our geographic footprint. These initiatives along with our robust balance sheet will enable us to deliver on both our organic and inorganic growth objectives in 2024 and beyond.”

Dividend

Subsequent to quarter end, on August 6, 2024, Climb’s Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable on August 22, 2024, to shareholders of record on August 16, 2024.

Second Quarter 2024 Financial Results

Net sales in the second quarter of 2024 increased 13% to $92.1 million compared to $81.7 million for the same period in 2023. This reflects organic growth from new and existing vendors, as well as contribution from the Company’s acquisition of DataSolutions Holdings Limited (“DataSolutions”) in October 2023. In addition, adjusted gross billings in the second quarter of 2024 increased 31% to $359.8 million compared to $274.7 million in the year-ago period.

Gross profit in the second quarter of 2024 increased 36% to $18.6 million compared to $13.7 million for the same period in 2023. The increase was driven by organic growth from new and existing vendors in both North America and Europe, as well as contribution from DataSolutions.

Selling, general, and administrative (“SG&A”) expenses in the second quarter of 2024 were $13.0 million compared to $11.6 million in the year-ago period. DataSolutions represented the majority of the increase at $1.3 million. SG&A as a percentage of adjusted gross billings decreased to 3.6% for the second quarter of 2024 compared to 4.2% in the year-ago period.

Net income in the second quarter of 2024 increased more than 2x to $3.4 million or $0.75 per diluted share, compared to $1.4 million or $0.31 per diluted share for the same period in 2023. Adjusted net income increased 19% to $3.8 million or $0.83 per diluted share, compared to $3.2 million or $0.72 per diluted share for the year-ago period. The Company’s earnings per diluted share in the second quarter of 2024 were negatively impacted by $0.03 in FX compared to the prior year quarter.

Adjusted EBITDA in the second quarter of 2024 increased 48% to $6.9 million compared to $4.7 million for the same period in 2023. The increase was primarily driven by organic growth from both new and existing vendors, as well as contribution from the Company’s acquisition of DataSolutions. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, increased 310 basis points to 37.3% compared to 34.2% for the same period in 2023.

On June 30, 2024, cash and cash equivalents were $48.4 million compared to $36.3 million on December 31, 2023, while working capital increased by $2.8 million during this period. The increase in cash was primarily attributed to DataSolutions cash balance and the timing of receivable collections and payables. Climb had $1.0 million of outstanding debt on June 30, 2024, with no borrowings outstanding under its $50 million revolving credit facility.

For more information on the non-GAAP financial measures discussed in this press release, please see the section titled, “Non-GAAP Financial Measures,” and the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.

Acquisition of Douglas Stewart Software & Services, LLC

Climb closed on the acquisition of DSS on July 31, 2024, for an aggregate purchase price of $20.3 million payable at closing (subject to working capital and other adjustments), plus a potential post-closing earn-out. Climb funded the acquisition of DSS utilizing cash from the Company’s balance sheet.

DSS is a Wisconsin-based, specialist IT distributor focused on SaaS solutions for education customers serving resellers in the North America reseller market and was a separate division of the privately-held Douglas Stewart Company. For the trailing twelve months ended June 30, 2024, DSS reported adjusted EBITDA of approximately $5.3 million, which was up 10% over the same period in the prior year.

Conference Call

The Company will conduct a conference call tomorrow, August 7, 2024, at 8:30 a.m. Eastern time to discuss its results for the second quarter ended June 30, 2024.

Climb management will host the conference call, followed by a question-and-answer period.

Date: Wednesday, August 7, 2024
Time: 8:30 a.m. Eastern time
Toll-free dial-in number: [phone]
International dial-in number: [phone]
Conference ID: CLIMB
Webcast: Climb’s Q2 2024 Conference Call

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at [phone].

The conference call will also be available for replay on the investor relations section of the Company’s website at www.climbglobalsolutions.com.

About Climb Global Solutions

Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies. Climb operates across the US, Canada and Europe through multiple business units, including Climb Channel Solutions, Grey Matter and Climb Global Services. The Company provides IT distribution and solutions for companies in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.

Additional information can be found by visiting www.climbglobalsolutions.com.

About Douglas Stewart Software & Services, LLC

DSS is a trusted expert in educational technology, spanning back over 37 years. With decades of experience and a commitment to innovation, DSS continues to lead the way in delivering cutting-edge solutions to empower educators and enhance learning experiences. DSS stands at the forefront of education technology distribution in North America.

Operating as a dynamic business unit of the Douglas Stewart Company, where education has been a focus since 1950, DSS works with top-tier Edtech providers to deliver solutions to K-12, Higher Ed, & Non-Profits through 800+ reseller partners. DSS was established in 2021 to cater to the distinct requirements of software subscription licensing (Software as a Service/SaaS) in North America.

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>>> M-tron Industries, Inc. Reports Strong Second Quarter 2024 Results with Further Margin Expansion


Business Wire

Aug 14, 2024


https://finance.yahoo.com/news/m-tron-industries-inc-reports-130100152.html


ORLANDO, Fla., August 14, 2024--(BUSINESS WIRE)--M-tron Industries, Inc. (NYSE American: MPTI) (the "Company" or "MPTI"), a designer and manufacturer of highly-engineered electronic components used to control the frequency or timing of signals in electronic circuits, announced strong financial results for the three and six months ended June 30, 2024 with net income increasing 36.6% to $1,744,000, or $0.63 per diluted share, in Q2 2024 compared to $1,277,000, or $0.47 per diluted share, in Q2 2023.

MPTI's Chief Executive Officer, Michael J. Ferrantino, said, "Our strategy is working; our business has been trending up since the Company’s listing in 2022, and are pleased to report results that continue to be very positive. We expect revenues, new orders and earnings to remain strong and trend higher. In addition, our order backlog trend since listing is positive and anticipated to continue to grow."

The Company will hold an Investor call on Thursday, August 15, 2024, to discuss the Company's second quarter 2024 results and to respond to investor questions (see details below). An archive of the call will be available on MPTI's website at https://ir.mtronpti.com/events-and-presentations.

Strong Results from Operations Continue Since 2022 Listing

Strategic investments in the defense sector, several new products moving into volume production, and operating efficiencies have resulted in the Company achieving significant improvements since its IPO in October 2022. Importantly, the company made a significant investment in its employees with a broad option incentive grant earlier this year aligning the strength of its platform with its team.

Since MPTI's October 2022 IPO, the business has grown significantly as highlighted below:

Revenues increased 67.2% to $11,808,000 in Q2 2024 compared to $7,064,000 in Q2 2022

Net income increased 258.8% to $1,744,000 in Q2 2024 compared to $486,000 in Q2 2022

Gross margin improved to 46.6% in Q2 2024 compared to 37.5% in Q2 2022

Adjusted EBITDA increased 200.0% to $2,523,000 in Q2 2024 compared to $841,000 in Q2 2022

The opportunities with new engineering and designs continues to drive future growth, while manufacturing throughput improvement is helping increase margin expansion. Further, we are pleased to have initiated a stock option program earlier this year allowing the professionals at MPTI an opportunity to share in the business’s growth.

Mr. Ferrantino added, "As we report strong results, our team's pursuit of excellence accelerates as reflected in the value creation since IPO. This continued growth and success are a testament to our dedicated professional staff and their unwavering commitment to delivering exceptional value to our customers. We remain steadfast in our mission to innovate, adapt, and lead in our industry, driving sustainable growth and creating long-term value for all stakeholders."

"MPTI is a uniquely positioned American-made Defense product platform and presents an improved outlook for the business moving forward," continued Mr. Ferrantino.

Second Quarter 2024

Net income was $1,744,000, or $0.63 per diluted share, for the three months ended June 30, 2024 compared with $1,277,000, or $0.47 per diluted share, for the three months ended June 30, 2023. The increase was primarily due to continued strong defense program product and solution shipments partially offset by higher Manufacturing cost of sales consistent with the growth in revenues as well as higher Engineering, selling and administrative expenses from increased investment in research and development, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross margin was 46.6% for the three months ended June 30, 2024 compared with 41.6% for the three months ended June 30, 2023. The increase was primarily due to higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.

Adjusted EBITDA was $2,523,000, or $0.91 per diluted share, for the three months ended June 30, 2024 compared with $1,931,000, or $0.71 per diluted share, for the three months ended June 30, 2023. The increase was primarily due to increased gross margins; continued containment of operating expenses other than strategic investments in research and development, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.

Results in Second Quarter 2024 and Since Second Quarter 2022

Revenues increased 16.4% to $11,808,000 in Q2 2024 compared to $10,140,000 in Q2 2023, driven by strong defense program shipments, and increased 67.2% from $7,064,000 in Q2 2022 as the mix shifts developed

Net income increased 36.6% to $1,744,000, or $0.63 per diluted share, in Q2 2024 compared to $1,277,000, or $0.47 per diluted share, in Q2 2023 and increased 258.8% from $486,000 in Q2 2022

Gross margin improved to 46.6% in Q2 2024, an increase of 12.0% from Q2 2023, and an increase of 24.3% from Q2 2022, reflecting improved production efficiencies and product mix

Adjusted EBITDA increased 30.7% to $2,523,000 in Q2 2024 compared to $1,931,000 in Q2 2023 and increased 200.0% from $841,000 in Q2 2022

Improved 2024 Outlook

With the continued momentum in defense-related sales, and the acceleration in production and shipments during the first half of 2024, MPTI management has raised the outlook for fiscal year 2024, increasing revenues to a range of $46.0 million to $48.0 million from a previous range of $43.0 million to $45.0 million. MPTI has good visibility for the remaining two quarters of 2024 and expects EBITDA to continue to be in the 19% to 21% range.

The foregoing statements represent the Company's current estimates of MPTI's 2024 consolidated revenues as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Concerning Forward Looking Statements included in this release. Management does not assume any obligation to these estimates.

Fiscal Year to Date 2024

Net income was $3,230,000, or $1.16 per diluted share, for the six months ended June 30, 2024 compared with $1,830,000, or $0.68 per diluted share, for the six months ended June 30, 2023. The increase was primarily due to higher sales related to strong defense program product shipments partially offset by higher Manufacturing cost of sales consistent with the growth in revenues as well as higher Engineering, selling and administrative expenses related to increased investment in research and development, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross margin was 44.7% for the six months ended June 30, 2024 compared with 38.0% for the six months ended June 30, 2023. The increase was primarily due to higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.

Adjusted EBITDA was $4,785,000, or $1.72 per diluted share, for the six months ended June 30, 2024 compared with $2,959,000, or $1.09 per diluted share, for the six months ended June 30, 2023. The increase was primarily due to increased gross margins; a continued containment of operating expenses other than strategic investments in research and development, resulting higher income before income taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.

Backlog

Backlog was $45,322,000 as of June 30, 2024 compared to $47,831,000 as of December 31, 2023 and $51,591,000 as of June 30, 2023. The decrease in Backlog from December 31, 2023 reflects the increase in revenues along with the variability of our order intake due to the size and timing of large program-related orders.

Strategic Direction Continues

"We delivered a solid performance in the quarter, with significant improvements in our financial results," said Bel Lazar, Chairman. "Our teams continue to execute well, driving both top-line growth and margin expansion across our businesses. Our commitment to achieving our Investor Day targets remains strong, with clear progress in our new products, pricing and efficiency initiatives. With this momentum we are confident in our continued success and growth."

Mr. Lazar continued regarding the Company’s strategy, "Our organic strategy continues to be providing complex, integrated assemblies. This will begin to surface in revenue growth. The dollar value of some of these projects can be substantial.

"As for our external strategy, we have increased our acquisition bandwidth to include companies that are inside and outside of our current space. We will look outside of our sub sector for undervalued companies much like ours where we can rapidly drive top and bottom-line growth. Our motivation continues to be increasing shareholder value as quickly as we can," added Mr. Lazar.

We see the ongoing development along several new and exciting growth verticals for the period ahead such as:

Space and Satellite: MPTI has over 125 design wins across satellite platforms and manned spacecraft. With expertise supporting LEO, MEO and GEO applications, the Company has a well-established team and a proven track record to meet demanding space requirements. With the evolving need for high-power space-level transmitters, high-power handling space-level RF components and sub-assemblies are instrumental for mission success. The performance of these devices used in orbiting satellites are significantly different compared to how they perform at sea level due to phenomena like multipaction. Some space-level applications require both continuous operation performance in outer space as well as performance during the assent to space while undergoing a pressure change.

Radar: Our latest line of timing solutions designed to meet the stringent requirements of modern radar applications is expect to further growth. For example, our e-Vibe™ series of Electronically Compensated OCXOs are designed to maintain exceptional phase-noise under dynamic conditions, meeting the rigorous demands of radar systems on the move or experiencing shock or vibration. Our radar integrated timing solutions: custom timing solutions integrating precision timing sources with additional components with maximum reliability and performance. Our systems offer excellent Phase-noise: output frequencies with extremely low phase-noise, guaranteeing reliable operation over extended periods, temperatures, and environments. Also, our systems offer Ruggedized Design and Flexible Configurations for durability and longevity, with both standard and custom output frequencies.

Electronic Warfare: As demand increased for frequencies above 2 GHz, we developed the ability to design and manufacture planar filters utilizing interdigital, combline, hairpin, edge coupled and end coupled topologies. MPTI introduced our new Planar Filter Product Line to complement our over 59 years MPTI of designing and manufacturing various topology filters for our Industrial, Commercial, Space, Aerospace and Defense customers. With Extremely Small Size and Low Height and Stable Over a Wide Temperature Range, MPTI’s planar filters support the demands of rugged, high-performance applications needs growing with the development of Electronic Warfare.

Investor Call

Management, including MPTI's CEO, Michael Ferrantino, will host a conference call with the investment community on Thursday, August 15, 2024, to discuss the Company's second quarter 2024 results and to respond to investor questions.

The call will begin at 10:30 a.m. Eastern Time (U.S. and Canada) on Thursday August 15, 2024, and can be accessed using the dial-in details below:

Toll-Free Dial-in Number:

[phone]

Toll Dial-in Number:

[phone]

Conference ID:

8891215

An archive of the call will be available after the call on Events and Presentations page on the Investor Relations section of MPTI’s website at https://ir.mtronpti.com/events-and-presentations, along with MPTI’s earnings release.

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>>> Why Fabrinet Stock Blasted Nearly 16% Higher Today


by Eric Volkman

Motley Fool

Aug 20, 2024


https://finance.yahoo.com/news/why-fabrinet-stock-blasted-nearly-210009685.html


Optics equipment supplier Fabrinet (NYSE: FN) was quite the double-digit outperformer on the second trading day of the week. Tuesday saw the company's share price skyrocket by nearly 16%, thanks to an earnings report that well outpaced expectations. Fabrinet stock's performance on the day was particularly impressive considering that the S&P 500 index ended in negative territory, closing the day down by 0.2%.

A good way to ring in the new fiscal year

Fabrinet closed out its fiscal 2024 in style, delivering fourth-quarter results that easily topped the average analyst estimates. For the period ended June 28, it took in more than $753 million in revenue, a figure that was 15% higher year over year. Non-GAAP (adjusted) net income leaped even higher, rising by 29% to hit $88 million, or $2.41 per share.

On average, analysts tracking the stock were expecting a notably more modest performance. Collectively, they were modeling less than $733 million on the top line, and only $2.24 per share for adjusted net profit.

In its earnings release, Fabrinet did not fail to mention that the quarter was the fourth frame in a row in which it notched record revenue and earnings-per-share figures.

Fabrinet also said that its board of directors has approved an expansion of the company's existing stock buyback program. The new authorization is for $139.5 million worth of its ordinary shares, which brings the total authorized amount to $434.3 million. Of this figure, $200 million is remaining for repurchases.

Crushing it on guidance, too

Fabrinet also proffered guidance for its current (first) quarter. The company is forecasting that it will earn $760 million to $780 million in revenue, with adjusted net income coming in at $2.33 to $2.40 per share. As with the fourth-quarter results these ranges topped the consensus analyst estimates, which called for nearly $752 million on the top line, and $2.25 for adjusted per-share profitability.

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>>> Palo Alto Networks Gains the Most in Six Months on Rosy Forecast


Bloomberg

by Redd Brown and Katrina Manson

Aug 20, 2024


https://finance.yahoo.com/news/palo-alto-jumps-strong-profit-205336645.html


(Bloomberg) -- Palo Alto Networks Inc. shares rose the most in nearly a year after the cybersecurity company gave a strong forecast and boosted its share buyback program.

The shares climbed as much as 9.3% in New York on Tuesday to $375.37, the biggest intraday gain since Feb. 26. Palo Alto had risen 16% through the close Monday.

In an earnings report on Monday, Palo Alto reported that earnings for the current fiscal quarter will be $1.47 per share to $1.49 per share. Analysts had expected $1.43.

The results come as a boon for Palo Alto, one of America’s leading cybersecurity companies, which hit a record market capitalization of $121 billion following the results, up from $91 billion at the start of the year. Chief Executive Officer Nikesh Arora had warned back in February that customers were suffering from “spending fatigue” in cybersecurity, as the company missed Wall Street expectations for annual sales, sending the value of the company plummeting by a record 27% at the time.

The company has attempted to refresh its sales strategy, with limited success, Bloomberg Intelligence said before the report.

Palo Alto managed to grow its sales 12% last quarter, faster than expected. The reported full-year sales of just over $8 billion was in line with consensus expectations that were moderated after it cut its outlook earlier this year.

Wall Street remained bullish overall on the stock of the Santa Clara, California-based company ahead of Monday’s earnings, which had 40 buys, 15 holds, and zero sell ratings among analysts tracked by Bloomberg.

Palo Alto also announced its board approved an additional $500 million to repurchase shares, increasing the total authorization to $1 billion.

Analysts have been watching to see any impact on the cybersecurity market from the mass outages last month triggered by a flawed update from CrowdStrike Holdings Inc. That includes whether CrowdStrike customers were switching to rivals or pushing back on cybersecurity vendors in general.

Arora said in an investor call on Monday the company was “delighted” with its results, adding cybersecurity has risen up the agenda in C-suites following “a recent broad outage involving security tools.”

Palo Alto creates its own updates in a “fundamentally different way” from CrowdStrike, Arora said. Since the outage, customers have been reaching out and asking how Palo Alto deploys its updates compared with its rival, he said.

On Tuesday, Arora told Bloomberg TV that the cybersecurity market remains fragmented and ripe for consolidation. Growth will likely come from taking market share from smaller players rather than from its rival, CrowdStrike, he said.

Dipak Golechha, chief financial officer, said the company would no longer issue guidance on billings forecasts to investors in the future. That follows Arora’s contention in May that billings represent “an artificial metric” after the figure missed analyst estimates and disappointed investors.

Golechha said the company will instead issue guidance for annualized recurring revenue for part of its product offering and remaining performance obligations, known for short as RPO, a measure of how much revenue is already contracted.

Wall Street firms such as Guggenheim Securities have previously warned of pitfalls associated with relying on RPO. In November 2022, Guggenheim argued that RPO lacked crucial information, such as the time frame in which contracted revenues will be spent.

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>>> PC Connection, Inc. (CNXN), together with its subsidiaries, provides various information technology (IT) solutions worldwide. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions.

It offers IT solutions, including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories; and portfolio of managed services and professional services, as well as provides services related to design, configuration, and implementation of IT solutions.

The company markets its products and services through its websites comprising connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses that include small office/home office customers; federal, state, and local government and educational institutions; enterprise sutomers; medium-to-large sorporations through outbound inside and field sales; digital, web, and print media advertising; and targeted marketing program to specific customer populations. The company was founded in 1982 and is headquartered in Merrimack, New Hampshire.

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https://finance.yahoo.com/quote/CNXN/profile/


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AVGO, SMCI, NVDA - >>> 3 Stock-Split Stocks to Buy Hand Over Fist Before They Soar as Much as 204% According to Select Wall Street Analysts


Motley Fool

by Danny Vena

Aug 12, 2024


https://finance.yahoo.com/news/3-stock-split-stocks-buy-220500617.html


One of the most intriguing developments for investors over the past few years is the return to popularity of stock splits. While the practice was commonplace in the late 1990s, it had fallen out of favor but has enjoyed a resurgence over the past several years. This corporate action is usually taken in response to years of strong operating and financial results, which ultimately drive a thriving stock price.

History suggests that top-performing businesses tend to continue firing on all cylinders. Companies that conduct forward stock splits generate share price increases of 25%, on average, in the year following the announcement, compared with average gains of 12% for the S&P 500, according to data compiled by Bank of America analyst Jared Woodard.

Here are three stock-split stocks with room to run, according to certain Wall Street analysts.

Broadcom: Implied upside 76%

The first stock-split stock with a lot of potential upside growth is Broadcom (NASDAQ: AVGO). The company occupies an enviable position in technology circles, supplying a wide range of software, semiconductor, and security offerings spanning the cable, broadband, mobile, and data center spaces. Broadcom says that "99% of all internet traffic crosses through some type of Broadcom technology," giving it a critical position in the ongoing artificial intelligence (AI) revolution.

Recent results show that business is booming. In the second quarter, revenue of $12.5 billion climbed 43% year over year, fueling adjusted earnings per share (EPS) of $10.96, which grew 6%. It's worth noting the recent acquisition of VMWare is weighing on the company's profit margin, which management expects to normalize by 2025. The company expects its strong growth to continue, raising its full-year revenue forecast to $51 billion, which would represent growth of 42%.

Its history of execution and robust growth led to Broadcom's 10-for-1 stock split, which took place in mid-July. Despite gains of 152% since early last year, many on Wall Street remain incredibly bullish. Just ahead of the split last month, Rosenblatt analyst Hans Mosesmann reiterated his buy rating and boosted his price target to a split-adjusted $240, which represents a potential upside for investors of 76% compared to Wednesday's closing price.

The analyst believes the accelerating adoption of generative AI will fuel greater sales of AI-related hardware, including application-specific integrated circuits (ASICs), networking, and switching chips. He also expects the integration of VMWare will begin to make a meaningful contribution.

He's not alone in his bullish take on Broadcom. Of the 38 analysts who offered an opinion on the stock in July, 33 rated the stock a buy or strong buy, and none recommended selling.

Nvidia: Implied upside 99%

The second stock-split stock with a boatload of potential is Nvidia (NASDAQ: NVDA). The company is the leading supplier of graphics processing units (GPUs) used in video games, cloud computing, and data center operations. This helped Nvidia quickly dominate the market for the chips used for generative AI, which supercharged its sales, as these GPUs provide the computational horsepower needed for AI.

For its fiscal 2025 first quarter (ended April 28), Nvidia generated record revenue of $26 billion, up a whopping 262% year over year, resulting in diluted EPS of $5.98, which surged 629%. The results were driven by the data center segment — which includes AI processors — as revenue for the segment soared 427% to $22.6 billion.

Nvidia's blockbuster results have propelled its stock price up 600% since the start of 2023, leading to its high-profile 10-for-1 stock split in June. However, some on Wall Street believe there's much more to come. Mosesmann has a buy rating on Nvidia and a Street-high price target of $200, which represents a potential upside of 99% compared to Wednesday's closing price.

The analyst believes that many of his colleagues fail to grasp the importance of the software integrated with Nvidia's AI processors, giving it a serious competitive edge. "We anticipate this software aspect will significantly increase in the next decade in terms of overall sales mix, with an upward bias to valuation due to sustainability," Mosesmann wrote in a note to clients.

He isn't the only one who believes there's much more to come. Of the 58 analysts who covered the stock in June, 53 rated the stock a buy or strong buy, and none recommended selling.

Super Micro Computer: Implied upside 204%

The last of our trio of stock split stocks with plenty of room to run is Super Micro Computer (NASDAQ: SMCI), also known as Supermicro. The company has been supplying custom servers to the tech industry for more than 30 years. Supermicro's building-block approach to rack-scale servers with direct liquid cooling technology is a perfect fit for the rigors of AI processing, as is the company's legendary focus on energy efficiency.

Supermicro has established strong working relationships with all the biggest chipmakers, ensuring it can get its hands on the most in-demand processors, including those from Nvidia, Advanced Micro Devices, and Intel.

In its fiscal 2024 fourth quarter (ended June 30), Supermicro generated record revenue of $5.3 billion, up 143% year over year and 38% quarter over quarter. This resulted in adjusted earnings per share (EPS) of $6.25, up 78%.

While some investors were concerned about the company's declining profit margin, CEO Charles Liang cited a bottleneck involving some server components, which pushed some deals into the next quarter. This, in turn, altered the product mix to include more lower-margin sales. He expects a rebound in the coming quarters.

Supermicro's robust results since early last year have driven stock price gains of 516%, leading the company to announce a 10-for-1 stock split just this week. Some on Wall Street believe this is just the beginning. Loop Capital analyst Ananda Baruah has a buy rating on the shares and a Street-high price target of $1,500. That represents a potential upside of 204% compared to Wednesday's closing price.

The analyst believes investors continue to underestimate Supermicro's sales potential, suggesting it can deliver a revenue run rate of $40 billion during fiscal 2026, up from less than $15 billion to close out fiscal 2024. Management is forecasting a similar performance, guiding for net sales of roughly $28 billion at the midpoint of its guidance for fiscal 2025.

Wall Street seems to agree. Of the 17 analysts who offered an opinion in July, 12 rated the stock a buy or strong buy, and none recommended selling.

A note on valuation

Each of these stock-split stocks has a long runway ahead, yet despite their prospects, remain attractively priced. Nvidia, Broadcom, and Supermicro are currently trading for 36 times, 29 times, and 14 times forward earnings, compared to a price-to-earnings (P/E) ratio of 27 for the S&P 500. While two of the three fetch a slight premium compared to the broader market, their track record of business and performance, blistering stock price gains, and solid future potential make them worth every penny.

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>>> Super Micro Computer Just Made a Game-Changing Move. Here's What You Need to Know.


Motley Fool

by Billy Duberstein

Aug 12, 2024


https://finance.yahoo.com/news/super-micro-computer-just-made-075100491.html


As this earnings season has shown, large companies continue to invest heavily in AI. But one problem has been the massive electricity needs of these power-hungry AI servers. And with even higher-powered AI chips coming next year, this problem is set to compound.

To alleviate AI's massive power needs, data center operators are just starting to adopt direct liquid cooling (DLC) for AI server racks, as opposed to the traditional air-cooled racks used in the vast majority of data centers today.

Liquid-cooled data centers made up only about 1% of the market heading into this year but are now set to take off, perhaps leading to a big upheaval in the fast-growing AI server industry. With its long history of leading in new energy-efficient technologies, it's no surprise that Super Micro Computer is positioning itself to dominate this industry disruption.

From 1% to 15% in the blink of an eye

Liquid cooling has been only 1% of the data center market until now because, traditionally, it takes a long time to deploy, costs more, and leaks can cause component failure. Moreover, managing liquid-cooling systems takes a different kind of expertise than managing air-cooled systems.

However, it appears as though Supermicro may have cracked some sort of code in deploying liquid-cooled racks at scale. And that could be a big deal.

While analysts squirmed over the decline in Supermicro's gross margins last quarter, the decline may actually be good news for long-term investors. According to management, since unveiling its new liquid-cooled solutions at Computex in early June, the company has seen stronger-than-expected demand for its liquid-cooled racks. Therefore, the company had to pay for expedited shipping for liquid-cooling components, which cost more and hurt gross margins last quarter.

However, stronger-than-expected demand is not a bad problem to have. On the recent earnings conference call, Supermicro CEO Charles Liang said the company had shipped about 1,000 liquid-cooled racks in June and July, which Liang said amounted to more than 15% of all new global data center deployments globally over those two months. Liang also noted that Supermicro is forecasting that 25% to 30% of all new data center deployments will use DLC solutions over the next 12 months, "with most deployments coming from Super Micro, we believe."

Supermicro is investing to dominate this market

In the pre-AI world of traditional servers, Supermicro's premium, customized servers tended to have a relatively low market share in the fragmented industry of enterprise servers, at around 5%. However, Liang thinks Supermicro accounts for "at least" 70% to 80% of all the DLC servers shipped over the last few months.

While it's unlikely that Supermicro will hang on to that much market share over time, the company is clearly making the investments today to maintain a leading market share in DLC.

That could turn the enterprise server industry on its head, given that DLC is very rapidly going from 1% to potentially 30% of the server market in just one year. The explosion of DLC revenue is why Supermicro projects $26 billion to $30 billion in revenue over the next 12 months, roughly a doubling relative to the $14.9 billion it just made in the 12 months ending in June.

Why Supermicro isn't charging more

When executed well without leaks, DLC's advantages include up to 40% lower power consumption, better computing performance, and a faster time-to-online due to not having to install large air conditioners, all while lowering a data center's carbon footprint.

Given that, analysts are wondering why Supermicro isn't charging more. The company saw its gross margins fall to 11.3% in the quarter, partly due to expedited shipping costs, but it is only targeting a return to its traditional 14% to 17% gross margin range by the end of this year.

But if you have a value-add solution, such as DLC, you have two options: Either charge a higher price or try to disrupt the industry with large volumes at a lower price. Supermicro is apparently taking the latter disruptive path, at least at this early stage of the liquid-cooling era.

That may prove to be the smart long-term strategy, as it could pave the way for more market share. AI is a revolutionary technology, but it is expensive. Therefore, Supermicro keeping prices low could open more overall spending on AI servers from its customers. And if DLC eventually costs only on par with air-cooled servers, it could potentially be deployed even in traditional data centers, too.

With Supermicro also deploying a new data center building block solution (DCBBS) later this year — which incorporates end-to-end data center construction, including maintenance software and services — the company may generate more recurring maintenance/software revenue attached to its deployments than it did in the past when it was just a hardware parts provider.


So, getting more high-volume customers up front could be a smart move. Furthermore, Supermicro's costs are likely to come down next year as its new Malaysian manufacturing plant comes online in November with dramatically lower costs.

While many Supermicro investors appear to want more profits now, the company's heavy investments in taking the lead in direct liquid cooling for AI data centers — perhaps a big lead — could prove to be a game-changer.

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Broadcom - >>> 1 Stock-Split Artificial Intelligence (AI) Stock to Buy Before It Skyrockets 67%, According to One Wall Street Analyst


by Adam Levy

Motley Fool

Aug 7, 2024


https://finance.yahoo.com/news/1-stock-split-artificial-intelligence-082800345.html


The growing demand for artificial intelligence (AI) has produced some massive stock gains for some companies and their investors. Several stocks have climbed so much in such a short period of time that management decided to split their shares.

While a stock split doesn't change the value of a company, it can make the stock more attractive to retail investors. Additionally, it can provide more precision for stock-based compensation packages, a common practice in the tech industry.

Recent high-profile stock splits in the AI industry include Nvidia and Lam Research, which both announced 10-for-1 stock splits earlier this year. But Broadcom (NASDAQ: AVGO), which recently underwent a 10-for-1 split, could be a better buy with the potential for its price to climb 67% within the next year, according to one Wall Street analyst.

Rosenblatt Securities slapped a $240 (split-adjusted) price target on the stock a few weeks ago. Here's why the analysts think the stock could climb 67% within a year.

The other AI chipmaker

While Nvidia gets all the headlines about the demand for its GPUs to help train large language models, Broadcom has also seen soaring demand for its AI-related chips. The chip designer provides two types of chips that are extremely useful in data centers focused on generative AI. Combined, AI-related revenue increased 280% year over year in the second quarter.

Broadcom's networking chips help data centers get the most out of the equipment they buy. Big tech is spending billions every quarter on Nvidia GPUs. However, those clusters of GPUs require the efficient routing of data in order to maximize their processing power. Broadcom's chips ensure data gets to where it needs to go as quickly as possible so that there's minimal time wasted without GPUs crunching data. As data centers bring more and larger clusters online, demand for networking chips can grow exponentially, and that's exactly what we've seen.

Broadcom also develops AI accelerators. AI accelerators are custom chips designed specifically for training and running generative AI algorithms. Broadcom works with Alphabet's Google and other hyperscale cloud platforms on custom solutions. These chips have proven very cost-efficient alternatives to Nvidia's GPUs. For example, Apple used Google's Tensor Processing Unit designs to train its Apple Intelligence foundation models.

Broadcom's management says cloud providers are accelerating their investments in accelerator designs. Not only does that mean more accelerator sales for Broadcom, but it should also support its networking chips. "Networking these AI accelerators is very challenging, but the technology does exist today in Broadcom," CEO Hock Tan told analysts during the company's second-quarter earnings call. In other words, when a customer uses its AI accelerator designs, it's also more likely to use its networking chips, too. That creates a strong cycle of growth for the business.

That trend is the primary reason Rosenblatt increased its Broadcom price target. But there's another reason as well.

AI chips are just one part of Broadcom's business

While AI chips might be the fastest-growing part of Broadcom's operations, it also has an excellent enterprise software business.

The most recent addition to its software solutions portfolio is VMWare, which the company acquired last year. It's since taken steps to transform the product into a simple subscription service. It's already signed 3,000 of its largest 10,000 customers to build self-service virtual private clouds, resulting in strong bookings growth. Management expects its annualized booking value to accelerate from $1.2 billion in the first quarter to reach a $4 billion quarterly run rate.

Importantly, the simplification of VMWare and the integration with its other software products and sales team should lead to strong synergies. Management has already incurred about $2 billion of restructuring costs related to the acquisition, but it's bringing down the costs of ongoing operations. Pre-acquisition VMWare had $2.3 billion in average quarterly operating expenses, management sees that falling to $1.3 billion by the end of the year by eliminating redundancies with its existing operations.

The improved synergies of the software segment with VMWare are another reason Rosenblatt is bullish on Broadcom. Ongoing progress in integrating VMWare should lead to strong margin expansion in the back half of the year.

Shares of Broadcom currently trade for a forward P/E of around 24. That's well below many other big AI companies. What's more, the company is well-positioned to support that valuation with strong earnings-per-share growth over the next few years from AI chip sales and improving software margin. While the stock might not climb another 67% from here by mid-year next year, it certainly looks like a good stock to buy at its current price.

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>>> Super Micro Computer Misses Earnings Estimates, Announces 10-for-1 Stock Split


Investopedia

by Naomi Buchanan

Aug 6, 2024


https://finance.yahoo.com/news/super-micro-computer-misses-earnings-225616849.html


Key Takeaways

Super Micro Computer reported fiscal fourth-quarter earnings that missed analysts' estimates and announced a 10-for-1 stock split.

Revenue more than doubled year-over-year and came in slightly ahead of analysts' expectations, but the company's margins fell as costs rose, holding back profits.

Super Micro Computer CEO Charles Liang said the company has benefited from "record" demand for artificial intelligence infrastructure.

Net income of $353 million or $5.51 per share surged from the year prior, but missed analysts' projections.

Record Demand for New AI Infrastructure

The CEO added the company could be "well positioned to become the largest IT infrastructure company, driven by our technology leadership including rack-scale DLC liquid cooling and business values of our new Datacenter Building Block Solutions."

Super Micro Computer said it expects revenue to be between $6 billion and $7 billion for the first quarter of fiscal 2025, while its full-year sales outlook was in the range of $26 billion and $30 billion, above analysts' projections.

The company also announced a 10-for-1 forward split, with split-adjusted trading expected to start on Oct. 1.

Super Micro Computer shares were down more than 12% at $540.02 in extended trading as of 6:50 p.m. ET Tuesday following the company's earnings release.

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>>> Palantir Technologies -- Shares of Palantir Technologies (NYSE: PLTR) are up 63% over the last year due to growing demand for its enterprise AI software platform. A growing number of U.S. companies are turning to Palantir to use AI models with their data, which could be the start of a long stretch of high growth.

https://finance.yahoo.com/news/2-monster-stocks-could-create-080500097.html

Palantir is used for a variety of use cases, including military operations, supply chain analysis, and investigating financial crimes. The U.S. government made up over half the company's revenue last quarter, which validates the capabilities of Palantir's technology, but government spending can also be a two-edged sword considering the potential for budget caps.

However, Palantir is starting to see momentum in diversifying away from the government. U.S. commercial revenue grew 40% year over year last quarter to $150 million and accounted for nearly a quarter of Palantir's business. Management expects U.S. commercial revenue to be up 45% in 2024 over 2023 and expects this segment to remain a significant growth driver over the long term.

Another positive indicator is that management is seeing a significant shortening in deal cycles. Some customers are signing deals just days after trying the product. To capitalize on the growing demand, management wants to broaden the market for its offering outside the U.S., in addition to state and local governments, researchers, and academic institutions.

It's clear Palantir has only just begun to tap its potential. The company reported a record net profit of $106 million in Q1 on $634 million of revenue, and Wall Street analysts currently expect the company to grow earnings at an annualized rate of 22% over the next several years.

As demand for AI software takes off over the next decade, Palantir shares should be a very rewarding holding for patient investors.

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>>> Gartner (NYSE: IT) is known for its research and consulting services, and the company works with businesses across 90 countries and territories around the globe. The company's Magic Quadrant report has become an industry standard for businesses in the tech space to look at competitors in a particular market and strategize their own growth approach.

https://finance.yahoo.com/news/2-unstoppable-growth-stocks-buy-084300768.html

Gartner makes money in several different ways. Its research segment is its largest source of revenue growth and is subscription-based. Most contracts are at least 12 months long, and roughly 70% are multiyear, giving the company predictable sources of recurring revenue. This segment delivers the research content and data-driven analysis that organizations of all sizes around the world use to align their business vision and streamline operations.

Gartner's second stream of revenue is from the conferences that it holds for information technology and business executives. Finally, Gartner makes money from consulting services provided to chief information officers and other senior executives at various companies.

Revenue from Gartner's research division is recognized over the term of the specific contract. Revenue from its conference division is recognized once the meeting or conference is completed. Consulting revenues often derive from fixed fees or are delivered as those specific services are provided.

To give readers an idea of the breakdown of Gartner's revenue sources as they translate to its overall balance sheet, in the full year 2023, the company reported just shy of $6 billion in total revenue. That was a nice 8% bump compared to the full year 2022. Of that total revenue amount, about $4.9 billion was derived from its subscription-based research segment, while conference revenue totaled $505.2 million and consulting revenue $514.7 million.

Gartner is a profitable company. Last year, the company brought in a total net income of about $883 million, up 9% from the prior 12-month period. Fast-forward to the first quarter of 2024, and the company brought in profits of $211 million on revenue of about $1.5 billion. That revenue figure was up about 5% one year ago, even though net income was down year over year.

The company is also consistently cash-flow positive. Gartner brought in an operating cash flow of $189 million in Q1 and a free cash flow of $166 million. Those two figures were up 15% and 16% from one year ago. Gartner's leadership in the technological research and consulting space has given it a considerable footprint in a vast total addressable market that management estimates is in the region of $200 billion. Shares are up about 30% from one year ago, and some investors might want to take a second look before they possibly edge higher.

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Broadcom - >>> Forget Nvidia: Billionaire Ken Griffin Raised His Position in This Rival AI Stock by More Than 500%


by Adria Cimino

Motley Fool

Jul 31, 2024


https://finance.yahoo.com/news/forget-nvidia-billionaire-ken-griffin-094000273.html


Nvidia (NASDAQ: NVDA) shares have soared, resulting in a major boost for investors that got in on the shares early. And many billionaire investors have benefited -- including Ken Griffin, chief executive of Citadel. Griffin initially bought Nvidia back in 2013, and as recently as late last year his fund held more than three million shares of the artificial intelligence (AI) chip giant.

But Griffin wasn't a buyer of Nvidia in recent months. In fact, in the first quarter of this year, he reduced his position in Nvidia by 68% to about 1.1 million shares. And at the same time, he increased his holding of another AI stock by more than 500%. Does this mean that, like Griffin, you should forget Nvidia and bet on this AI player? Let's find out.

Citadel's track record

First, it's important to note investors have a pretty good reason for following Griffin's path. Since launching Citadel back in 1990, Griffin has built the fund to $63 billion in investment capital today. And Citadel has scored recognition as the most profitable hedge fund ever. So, when Griffin makes a particular bet on a stock, it's worth taking note -- and in some instances, you may decide to follow.

Now let's consider the billionaire's latest move. The hedge fund giant increased his position in Broadcom (NASDAQ: AVGO) by more than 500% to about 295,000 shares, a clear sign of confidence in this AI company. Griffin has probably already started to win from this move since the stock has advanced about 35% so far this year.

And the company completed a 10-for-1 stock split earlier this month, offering current holders additional shares to lower the per-share price of its stock. This doesn't change the value of Griffin's holding -- or yours if you're a Broadcom shareholder -- but it does offer shareholders a greater number of shares. A stock split is generally positive for a stock over time as it allows a wider range of investors to more easily buy it.

We don't know the exact reason why Griffin decided to increase his holding of Broadcom in the triple digits, but there's a lot of evidence showing Broadcom could be an AI winner down the road. In the most recent quarter, the semiconductor and networking giant said AI revenue surged 280% to more than $3.1 billion. Demand from mega-scale data centers for AI networking and custom accelerators is driving this growth, the company says.

Broadcom's new wave of growth

As these data centers, or hyperscalers, continue to expand, Broadcom is seeing more and more growth in its networking business. The company doubled the number of switches it sold in the quarter year over year and now is developing next-generation switches and optics that should drive a new wave of growth.

Broadcom is optimistic about this growth continuing, and considering forecasts for the AI market, there's reason for investors to be confident about the company's future too. Today's $200 billion AI market is set to reach more than $1 trillion later this decade. It's important to remember that right now more than 99% of Internet traffic travels through a Broadcom technology -- so the company, as a leader, is well positioned to benefit from the AI boom.

On top of this, Broadcom also is seeing growth from its acquisition of cloud software company VMware. In fact, it predicts VMWare will help drive a 42% increase in annual revenue this year to about $51 billion.

Nvidia vs Broadcom

So, is it time to forget Nvidia and turn to Broadcom? It's important to note that the companies could be considered rivals or peers because they are both chipmakers. But, while Nvidia is more focused on serving data centers with chips and other related products and services, Broadcom's business covers a lot more territory. The company makes thousands of products used not only in data centers but also in home connectivity, smartphones, and telecommunications in general. So, while Broadcom is growing thanks to AI, it doesn't depend on this market as much as Nvidia does -- this could make Broadcom a safer bet over time.

Still, it's also key to remember Citadel's Griffin hasn't exited his Nvidia position. He holds a considerable number of shares. So, the billionaire clearly hasn't lost faith in Nvidia and continues to believe the stock could generate solid returns.

All of this means there are reasons to be optimistic about both of these AI stocks. That said, one thing right now supports the idea of forgetting Nvidia and following Griffin into Broadcom, and that's valuation. Broadcom trades for 31x forward earnings estimates compared to 41x for Nvidia.

This is a very reasonable price considering the company's track record of growth and potential for gains from AI and the VMware acquisition. And that's why, right now you may want to forget Nvidia, and follow billionaire investor Griffin into Broadcom.

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>>> Where Will Supermicro Stock Be in 5 Years?


by Will Healy

Motley Fool

Jul 31, 2024


https://finance.yahoo.com/news/where-supermicro-stock-5-years-091500517.html


Looking back on Super Micro Computer (NASDAQ: SMCI) five years ago, few likely envisioned it would reach the heights it has today. It has existed since 1993 and has traded as a stock since 2007. Despite building a large, successful business, the company was largely unknown outside its industry and drew little interest from stock investors.

Supermicro's fortunes changed dramatically when its partnership with Nvidia brought about exponentially higher sales of AI-capable servers. This helped lead to the AI stock rising by over 3,500% over the last five years. Admittedly, another 3,500% increase in the next five years is unlikely, but the stock can probably generate market-beating returns during that time. Here's why.

The state of Supermicro

The most surprising things about Supermicro are its longtime obscurity and meteoric rise to prominence. The company describes itself as a "rack-scale total IT solutions provider" that creates environmentally friendly and energy-saving machinery.

It produces first-to-market hardware for the edge, 5G, data centers, the cloud, and AI in approximately 6 million square feet of manufacturing space. Moreover, it operates in more than 100 countries, meaning it built an extensive footprint despite receiving little attention from investors until recently.

The company's growth has now become too significant for investors to ignore. In the first nine months of fiscal 2024 (ended March 31), it reported $9.6 billion in revenue, a 95% yearly increase. With that, net income surged to $855 million compared with $446 million in the same year-ago period.

Where Supermicro is going

Additionally, its rapid growth is on track to continue. Markets.us estimates the compound annual growth rate (CAGR) for the AI server industry will exceed 30% through 2033.

Fortunately for Supermicro's shareholders, company estimates far exceed that rapidly growing industry CAGR. In the most recent earnings report, the company raised its fiscal 2024 revenue guidance to $14.7 billion, which would mean a 107% growth rate if revenue levels match the company estimate.

As for the stock, it has risen by almost 130% over the last year. Still, nearly all of that growth occurred in the first three months of the calendar year, and the stock has pulled back by more than 40% since peaking in March.

However, that price correction could dramatically increase Supermicro's odds of outperforming the indexes. Its P/E ratio had reached 90 as its stock peaked. Now, with rising profits and falling stock prices, the earnings multiple has dropped to 39. Its PEG ratio of just 0.6 confirms that its P/E ratio is at a very low level, considering the rapid growth of its profits.

Furthermore, analysts forecast that Supermicro's net income will grow by an average of 62% per year for the next five years. Admittedly, this is a "way too early" estimate and will likely change significantly as more information becomes known. Still, if profits grow at an average close to this estimate, it is likely the rapid growth of Supermicro stock will continue.

Supermicro in five years

Although a lot can happen in five years, Supermicro stands a high likelihood of beating the market over that time. As stated before, investors should not expect another 3,500% gain over five years, nor should they expect the company to maintain revenue growth near the triple-digits over the long run.

Nonetheless, the AI servers produced by Supermicro are experiencing unprecedented demand, leading to massive gains in the stock price. Moreover, even if estimates for the future change significantly, both Supermicro and its industry should experience rapid growth rates for years to come.

Additionally, considering the growth rates of the recent past, the 39 P/E ratio and the PEG ratio under 1 arguably make Supermicro a bargain stock. Given its recent pullback, now might be a good time to add shares.

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>>> Meta's reality check: Inside the $45 billion cash burn at Reality Labs


Yahoo Finance

by Yasmin Khorram

Jul 28, 2024


https://finance.yahoo.com/news/metas-reality-check-inside-the-45-billion-cash-burn-at-reality-labs-125717347.html


Nearly $50 billion.

In just over four years, Meta’s Reality Labs division — focused mainly on its products in augmented reality (AR), virtual reality (VR), and the metaverse — has lost as much money as the market caps of Snap (SNAP) and Pinterest (PINS) combined.

Insiders tell Yahoo Finance that the staggering cash burn is not the price of innovation, but rather the result of a “chaotic” culture that features frequent reorganizations and installation of top leaders without AR or VR expertise.

With Meta CEO Mark Zuckerberg warning that operating losses in Reality Labs will only continue to “increase meaningfully,” Yahoo Finance spoke to a dozen former high-level employees (mostly executives or managers across multiple segments including engineering, research, product management, hardware, content, and operating systems) who say the lack of a clear vision and mismanagement are largely to blame for Reality Labs' financial pitfalls.

The former employees Yahoo Finance spoke with left within the last three years, with the earliest departing in February of 2021 and the most recent ones this year. The majority left on their own because of what they called discord within Reality Labs, but some left due to structural layoffs.

They asked not to be named because of nondisclosure agreements and a fear of jeopardizing future employment opportunities.

Meta did not respond to Yahoo Finance’s multiple requests for comment on this story.

The question for investors is how to reconcile Reality Labs' multibillion-dollar expenses within the context of Zuckerberg’s “year of efficiency” promise for Meta. Despite implementing cost-cutting measures and scaling back spending in Q1 of 2023, Meta saw its shares tank 20% after its most recent earnings report, thanks to a significant increase in AI investment.

With Zuckerberg back to breaking open the checkbook, is there enough room on the balance sheet for his AI pivot and Reality Labs' steep losses? Although analysts and investors have remained patient on the long-term potential of AR and VR, how long is that leash more than 10 years on?

Back in 2014, Meta (then Facebook) made its two largest acquisitions ever in just over a month. The first was its $16 billion purchase of WhatsApp. The second was of a smaller outfit out of Irvine, Calif., that had only developed a prototype of its revolutionary VR headset. The company’s name was Oculus and the promise of its technology was enough for Mark Zuckerberg to shell out $2 billion — only a fraction of what he’d spend on its development over the next decade.

In its first few years under the Facebook umbrella, Oculus's financials were grouped in with every other product in the business. But during the COVID-19 pandemic, Zuckerberg became enamored with the potential of the Metaverse — so much so that he changed the name of his company from Facebook to Meta.

Meta also began breaking out its revenue and expenses into two separate divisions: “Family of Apps” (which included Facebook, Instagram, and WhatsApp), and “Reality Labs” (a combination of Oculus and its other mixed-reality investments). In 2020, the former reported a profit of more than $39 billion, while Reality Labs lost just over $6 billion.

The numbers only became worse for Meta over the ensuing years: a $10 billion loss in 2021, $13 billion in 2022, and $16 billion in 2023. Furthermore, slumping sales and poor mainstream adoption caused Reality Labs’ revenue to decrease annually. Since 2021, Reality Labs' annual revenue has been falling despite significant increases in spend.

In just the first quarter of 2024, Meta has reported a loss of $3.8 billion, about equal to its total revenues in the last two years combined. Analysts Yahoo Finance surveyed projected Q2 losses for the division would be closer to $5 billion. The lowest forecast we received was $4.6 billion.

'Employee Bingo'

Several of the people interviewed blamed the dysfunction and cash burn at Reality Labs on chain of command reorganizations they say took place every three to six months. This included the promotion of “local heroes” — or individuals that had succeeded elsewhere within Meta, such as Instagram or Facebook — who were then asked to replicate those results inside of Reality Labs. The lack of understanding of the technology often led to tension between new managers and the existing staff.

“It was pretty chaotic,” said a former employee who worked on the research team and said leaders were often pulled from the apps division with little VR experience. "In software you can get away with that because you make mistakes and change things all the time. In hardware, you’re stuck with your mistakes for a long time.”

“If you’re a senior director, they forklift you into any position,” said a former executive in engineering. “You can lead an organization, set priorities, take on anything from Instagram ads to AR software design. It creates this really weird dynamic where the people in the trenches doing the work don’t have respect for the senior leaders and the senior leaders don’t really speak the language of the technology they’re building.”

“They play employee bingo,” said another employee responsible for AR/VR content. “They move people into AR that don’t really understand it. It’s hardware and experience, not a news feed in your hand.”

One former executive in product management told us, “There's an arrogance there that says, ‘Look how much money I was accountable for making because of this role I played in Facebook’s Family of Apps — therefore I can obviously be successful at this new thing.’"

"I think that’s probably the real story as to why there’s been so much money thrown at this thing with such limited success today,” they said.

Just last month, several senior managers and vice presidents were quietly let go from the company, according to two people familiar with the matter. Their positions at Reality Labs included head of AR glasses hardware, head of hardware partnerships, vice president of supply chain organization, vice president of technology engineering, and head of silicon partnerships.

Another challenge is the lack of traction AR and VR products have had in gaining a wider audience. Meta also competes in the segment with Snap, Tik Tok parent Bytedance, and now Apple (AAPL).

Circana Research analyst Ben Arnold says total AR and VR device sales in the US were just over $1 billion last year — a year in which Meta’s Reality Labs expenses alone topped $18 billion. According to IDC's analysis, global shipments of AR and VR headsets dropped 67.4% year over year in 2024 Q1.

Meta’s current product lineup includes two VR headsets (the Quest 3 and Quest Pro) and Ray-Ban Meta smart glasses. But Arnold says software gains will be critical to the industry, specifically “in content and applications that appeal to people beyond gamer."

"That’s always been the challenge for this category,” he said.

A former employee said that at one point, there were 24 hardware products on an 18-month roadmap. "You might be able to do that if you’re shipping software experiences, but highly unlikely for an organization that has never really shipped outside of the Oculus space."

The source said management did not realize until too late that shipping "a wrist [watch], sunglasses, new controller models, new VR experiences, new mixed-reality experiences" was unrealistic, leading to low morale among the workforce.

“I had severe doubts about leadership,” they said.

Emblematic of that lack of direction was the scrapped development of Meta’s in-house chips for its Ray-Ban smart glasses and other devices. In 2021, after over a year of design and build, Meta’s vice president of AR Alex Himel abruptly canceled the project, instead returning to using an external Qualcomm (QCOM) chip.

The team was incensed. “All of us in the room that were software and chip people were like, ‘You’re insane,’” said a former executive who was directly involved in the project. “People were livid over this. People left the company. This guy basically flushed millions of dollars down the toilet.”

The cost of the internal chip was cheaper than Qualcomm's chip, according to another executive involved. "It's illustrative of this mindset of not really taking the innovation piece seriously and not wanting to invest in long-term deep technology on the hardware side," they said. Himel did not respond to Yahoo Finance’s request for comment.

Another executive put Meta’s spontaneous decision making more succinctly: “I had anti-confidence in the roadmap. Zuck gets excited. Everyone rallies around what Zuck gets excited about. Boz [Reality Labs head Andrew Bosworth] gets a budget based on Zuck’s excitement, and then we go off and try to figure out what the product looks like. Over and over and over again.” Meta CTO Andrew Bosworth did not respond to a request for an interview.

As for Zuckerberg's vision for his multibillion-dollar bet, sources say he sees the metaverse as another community he can own, similar to how he revolutionized social media with Facebook. "He's really big on the notion of an immersive presence across boundaries," a former executive who worked closely with Zuckerberg said.

"When we were working on the Orion [AR] glasses, the top Zuck scenario was always immersive video calls. We did all the modeling on the heat and battery performance and we told him, 'Dude, we can do a call like this for five minutes and then the person's head catches on fire.' It's a power-hungry thing, but it's one of those goals he's chasing."

Another former executive said Zuckerberg is at the mercy of Apple — due to its anti-data-tracking efforts and Vision Pro development — so he's playing "a big chess game."

"His bet is that the next thing after phones will be augmented reality glasses. Apple is making moves and he's trying to protect by investing in the future and hoping to own the next platform."

Wall Street, meanwhile, has its own mixed reality on the stock. Gene Munster, co-founder of Deepwater Asset Management, called Reality Labs “a disaster from a financial perspective.” Munster told Yahoo Finance that the stock would be higher if not for the significant cash burn inside the division.

Wedbush analyst Dan Ives agreed, referring to Reality Labs as the “black eye of spending at Meta.” Yet, both remain bullish on the stock, despite Munster believing that Reality Labs won’t play a real role in Meta’s future for at least a decade.

Meta investor Dan Niles of Niles Investment Management called Reality Labs “a giant insurance policy,” saying Meta could always cut spending in the division if its other businesses falter.

For those insiders with “Reality Labs” on their resumes, it’s a different conclusion. “It just doesn’t seem responsible,” said a former executive. “If I was a shareholder, I would rather see Zuckerberg putting all their metaverse infrastructure on top of somebody else burning at those rates. Let Samsung or Apple build that hardware.”

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>>> Palantir Technologies (NYSE:PLTR) has finally broken free from its sub-$25 trading range and renewing its meme stock status in some cases. However, those following the company know that Palantir has always been a strong contender among tech stocks, despite its price volatility, which makes short-term trading challenging.

https://finance.yahoo.com/news/3-tech-stocks-could-grow-143000673.html

One of Palantir’s key strengths today is its rapid diversification beyond government contracts. While these contracts provide reliable revenue and long-term stability, relying heavily on a few clients is risky. Recognizing this, Palantir has successfully expanded its reach into the corporate sector. Its impressive client list now includes Tampa General Hospital, United Airlines , AARP, and Wendy’s, among others.

This expansion into the corporate world is creating a snowball effect for Palantir. As it delivers substantial value to diverse private firms, its reputation and client base continue to grow. The company’s operational model fosters a certain client stickiness that leads to high switching costs, making it difficult for customers to transition to competitors once they’ve integrated Palantir’s solutions.

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>>> Onto Innovation (NYSE:ONTO) is firmly within the hardware camp of tech stocks, often less desirable than the software-as-a-service (SaaS) superstars. Still, it plays a major supporting role in the semiconductor industry. Despite being a peripheral player, Onto benefits from the overall growth trends in the sector, as evidenced by its impressive 43% year-to-date increase.

https://finance.yahoo.com/news/3-tech-stocks-could-grow-143000673.html

Last August, Onto secured a substantial $100 million contract for its Dragonfly inspection system. This advanced technology is essential for detecting flaws in semiconductors produced by third parties, catering to major companies like Nvidia (NASDAQ:NVDA). Onto’s critical position in the semiconductor supply chain is due to the indispensable nature of its inspection services, making it a vital partner for a wide array of semiconductor manufacturers. As semiconductor demand grows, Onto’s customer base will expand, given the increasing reliance on semiconductors across all electronic systems — especially as geopolitical concerns surge.

The relentless demand for AI and GPUs is driving the market forward, with projections indicating the technology market could reach $25.5 billion by 2030. Onto Innovation’s current position sets it up to capitalize on this growth as the semiconductor industry continues to evolve, irrespective of which companies lead the charge.

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>>>Vertiv Holdings (VRT) -- Of course, all AI stocks need essential infrastructure to keep the lights on and GPUs running, and Vertiv Holdings (NYSE:VRT) is a standout in this segment. Vertiv owns and operates a range of key AI infrastructure, including power continuity, heat management and monitoring software services.

https://finance.yahoo.com/news/7-ai-stocks-overlooked-sectors-104200970.html

As with many AI stocks, Vertiv’s strength continues unabated. In the most recent report, order rates climbed 60% year over year, and net sales jumped 8%. Unlike many AI stocks, though, Vertiv is effectively agnostic to which hardware or software AI stocks come out on top. They’re selling picks and shovels to artificial intelligence gold miners and win no matter which companies ultimately dominate the industry.

Analysts widely see Vertiv as a top AI stock, with Oppenheimer saying shares are worth $100, more than 10% upside, and nearly every research firm or analyst covering the company affirming a buy rating. Shares may seem overvalued if you look at price-to-earnings ratio alone, it current sits at 44x. But, considering its growth trajectory and tailwinds, buying sooner rather than later may be the best move.

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>>> Why Super Micro Computer Stock Is Plummeting This Week


by Keith Noonan

Motley Fool

Jul 26, 2024


https://finance.yahoo.com/news/why-super-micro-computer-stock-104500369.html


Super Micro Computer (NASDAQ: SMCI) stock is sinking in this week's trading. The high-performance server specialist's share price was down 12.7% from last week's close heading into this Friday's market opening, according to data from S&P Global Market Intelligence.

Tech stocks continued to pull back this week as investors assessed risks related to geopolitical dynamics between the U.S., China, and Taiwan. Sell-offs intensified after Alphabet and Tesla published second-quarter reports that worried Wall Street.

While there wasn't any business-specific news dragging Supermicro lower, the company's valuation is getting hit in a pullback that's impacting the broader market and having a particularly pronounced impact on otherwise high-flying artificial intelligence (AI) stocks. The timing of the server specialist's addition to the Nasdaq-100 index also didn't help the stock this week.

Bearish ripple effects from earnings season hit Supermicro

In addition to geopolitical risk factors continuing to pressure growth stocks, earnings season has gotten off to a shaky start for the technology sector. Alphabet and Tesla reported Q2 earnings after the market closed on Tuesday, becoming the first of the highly influential "Magnificent Seven" companies to publish updated financial results. Unfortunately, Wall Street considered both reports to be duds -- and the disappointment created ripple effects that extended to Supermicro and other AI stocks.

Alphabet posted per-share earnings of $1.89 on revenue of $84.74 billion, which actually came in better than the average Wall Street target's call for per-share earnings of $$1.85 on sales of $84.29 billion. But the company guided for higher costs and weaker operating income margins in Q3, and investors adopted a more bearish stance in response.

Tesla's quarterly report was significantly more concerning. While Q2 revenue of $25.5 billion topped the average analyst estimate by $760 million, non-GAAP (adjusted) per-share earnings of $0.52 fell short of the market's target by $0.10 per share. Comments from management about the business's near-term outlook and spending plans also worried investors.

Joining the Nasdaq-100 index didn't boost Supermicro stock this week

Super Micro Computer was added to the Nasdaq-100 on July 22, and the timing of the addition may also be playing a role in this week's sell-offs. While being added to major indexes is often a bullish catalyst because it causes exchange-traded funds (ETFs) to buy the stock, it's actually a negative catalyst when the underlying index level and corresponding ETF prices are dropping. For reference, the Nasdaq-100 index has fallen roughly 4.5% over the last week of trading.

Investors who are eager for the next major, business-specific updates that could Supermicro's stock price won't have to wait long. The company is scheduled to report quarterly results after the market closes on Aug. 6.

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>>> Google scraps plan to remove cookies from Chrome


Reuters

7-22-24

https://www.msn.com/en-us/money/technology/google-scraps-plan-to-remove-cookies-from-chrome/ar-BB1qr9ml?OCID=ansmsnnews11


(Reuters) - Google is planning to keep third-party cookies in its Chrome browser, it said on Monday, after years of pledging to phase out the tiny packets of code meant to track users on the internet.


The major reversal follows concerns from advertisers - the company's biggest source of income - saying the loss of cookies in the world's most popular browser will limit their ability to collect information for personalizing ads, making them dependent on Google's user databases.

The UK's Competition and Markets Authority had also scrutinized Google's plan over concerns it would impede competition in digital advertising.

"Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they'd be able to adjust that choice at any time," Anthony Chavez, vice president of the Google-backed Privacy Sandbox initiative, said in a blog post.

Since 2019, the Alphabet unit has been working on the Privacy Sandbox initiative aimed at enhancing online privacy while supporting digital businesses, with a key goal being the phase-out of third-party cookies.

Cookies are packets of information that allow websites and advertisers to identify individual web surfers and track their browsing habits, but they can also be used for unwanted surveillance.

In the European Union, the use of cookies is governed by the General Data Protection Regulation (GDPR), which stipulates that publishers secure explicit consent from users to store their cookies. Major browsers also give the option to delete cookies on command.

Chavez said Google was working with regulators such as the UK's CMA and Information Commissioner's Office as well as publishers and privacy groups on the new approach, while continuing to invest in the Privacy Sandbox program.

The announcement drew mixed reactions.

"Advertising stakeholders will no longer have to prepare to quit third-party cookies cold turkey," eMarketer analyst Evelyn Mitchell-Wolf said in a statement.

Lena Cohen, staff technologist at the Electronic Frontier Foundation, said cookies can lead to consumer harm, for instance predatory ads that target vulnerable groups. "Google's decision to continue allowing third-party cookies, despite other major browsers blocking them for years, is a direct consequence of their advertising-driven business model," Cohen said in a statement.

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>>> Accenture (NYSE: ACN) offers consulting services to help its clients optimize their workplaces, improve productivity, and add value to their customers. The company reported strong and rising revenue, along with higher net income, during the past three fiscal years.

https://finance.yahoo.com/news/3-growth-stocks-buy-hold-104500181.html

Revenue increased from $50.5 billion for fiscal 2021 to $64.1 billion for fiscal 2023 (ended Aug. 31). Net income climbed from $5.9 billion to $6.9 billion over the same period. The free cash flow generated was healthy and averaged $8.7 billion per year from the consultancy firm. Because of this consistent free-cash-flow generation, dividends increased from $3.52 per share to $4.48 from fiscal 2021 through 2023.

Accenture's earnings momentum has carried over into the first nine months of fiscal 2024 (ended May 31). Revenue inched up 0.8% year over year to $48.5 billion, while net income rose 1.5% year over year to $5.6 billion. The business continued to generate copious amounts of free cash flow and raised its quarterly dividend to $1.29 from $1.12 a year earlier, giving the professional services company an annualized dividend of $5.16 and a dividend yield of about 1.6%.

Accenture has a track record of growing through acquisitions and carried out three such transactions in early July. The first was the purchase of Excelmax Technologies in India to boost its silicon design and engineering capabilities. The second involved the acquisition of True North Solutions, an industrial engineering solutions provider in Canada, to help the company's clients transport energy safely and more efficiently.

The third acquisition was Cientra, a company based in the U.S. with offices in Germany and India. Cientra can help Accenture with consulting expertise in the Internet of Things (IoT) and application-specific integrated circuit design. Accenture has more potential to grow in new and adjacent verticals through acquisitions, so investors should view the company as a long-term steady grower that dishes out a rising dividend.

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>>> Monolithic Power (NASDAQ: MPWR) isn't as well known as some other semiconductor companies, nor is it as big, with a recent market value near $41 billion. But it's been growing like gangbusters, taking market share from rivals with its data-center chips.

Its valuation seems steep, with a recent forward-looking price-to-earnings (P/E) ratio of 63, well above its five-year average of 43. So perhaps wait and hope for a pullback, buy in installments over time, or just jump in if you expect its amazing run to continue.

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https://finance.yahoo.com/news/7-semiconductor-stocks-could-millionaire-093800468.html



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>>> Semiconductor ETFs -- These companies are all intriguing, and many of them, but perhaps not all, will be outstanding performers in the years and decades ahead. (Much will also depend on the price at which you invest in them, if you do, so aim to buy when they appear undervalued or at least reasonably valued.)

One way to play it a bit safe — while also aiming for outsized returns — is to invest in semiconductors via ETFs that focus on them. Check out these that have solid track records:

iShares Semiconductor ETF (NASDAQ: SOXX)

VanEck Semiconductor ETF (NASDAQ: SMH)

SPDR S&P Semiconductor ETF (NYSEMKT: XSD)

Invesco Semiconductors ETF (NYSEMKT: PSI)

Consider keeping some of your assets in semiconductors — whether via individual stocks or ETFs. Or both!

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https://finance.yahoo.com/news/7-semiconductor-stocks-could-millionaire-093800468.html


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>>> Broadcom (NASDAQ: AVGO) has lots of fans because it specializes not only in chips but also software — and its operations are very diversified, too, including wireless and wired technology, optical products, mainframe software, cybersecurity, and storage, among many others. Its customers include Apple, Microsoft, AT&T, Intel, and many other big names. Broadcom is executing a 10-for-1 stock split on July 12.

https://finance.yahoo.com/news/7-semiconductor-stocks-could-millionaire-093800468.html

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>>> Nvidia (NASDAQ: NVDA) has grown at a torrential rate in recent years, with many expecting it to keep doing so. (Others see it as needing to take a breather.) The company made a name for itself with gaming chips, but now it's not only a leader in graphics processing units (GPUs) for games but also in chips for data centers. And data centers are booming, as much of our AI activity runs through them.

The stock's valuation is steep, but if it keeps growing like crazy, it can be warranted. Proceed with caution if you're risk-averse.

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https://finance.yahoo.com/news/7-semiconductor-stocks-could-millionaire-093800468.html


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>>> 1. Palo Alto Networks - With a market capitalization of $110 billion, Palo Alto is the world's largest cybersecurity provider. Companies continue to shift their operations online with technologies like cloud computing, which is making them more vulnerable to cyberthreats than ever before. Plus, artificial intelligence (AI) allows malicious actors to stage highly sophisticated attacks and strike with much greater frequency than they could in the past.

https://finance.yahoo.com/news/2-no-brainer-growth-stocks-091700076.html

In fact, over the past year, Palo Alto has observed a tenfold increase in the number of phishing emails, which are designed to trick corporate employees into clicking malicious links and handing over sensitive information.

Palo Alto's products are split across three platforms: Cloud security, network security, and security operations, which include dozens of individual modules. The company is leaning heavily on AI to automate threat detection and incident response, ensuring organizations receive appropriate protection against modern-day threats.

The company's research suggests that 93% of security operations centers still rely on human-led processes, which means 23% of security alerts are left uninvestigated due to the growing workload. The company's new Cortex XSIAM security operations solution uses AI-powered automation to solve that problem. For one oil and gas company, XSIAM led to a 75% reduction in the number of incidents requiring manual investigation.

"Platformization" is sweeping the cybersecurity industry right now. It means customers are consolidating their cybersecurity spending with one provider (rather than using various products from different vendors). Palo Alto is enticing customers by offering fee-free periods to give them time to wrap up old contracts with competitors, at which point they could use Palo Alto exclusively.

This has led to a slowdown in the company's revenue growth recently, but it should pay off in the long term because customers who use all three of Palo Alto's platforms have a lifetime value more than 40 times higher than those using just one. In fact, $4.1 billion of Palo Alto's estimated $8 billion in revenue for fiscal 2024 (ending July 31) is expected to come from those platformization customers.

By 2030, the company projects that figure to more than triple to $15 billion, so investors who buy the stock now might be getting in on the ground floor of Palo Alto's next growth phase.

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