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Palantir - >>> This Is an Underrated Growth Opportunity for Palantir
Motley Fool
By David Jagielski
Oct 4, 2023
https://www.fool.com/investing/2023/10/04/this-is-an-underrated-growth-opportunity-for-palan/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Healthcare is an industry that may not get attention from Palantir investors, but it should.
Palantir's technology can help hospitals drastically improve their operations by reducing wait times and managing workloads.
The company is in the running for a big contract involving England's National Health Service.
The U.S. spends trillions on healthcare every year, and Palantir can play an important role in making the industry more efficient.
Palantir Technologies (PLTR 5.57%) is experiencing terrific growth due to the emerging popularity of artificial intelligence (AI). Demand is on the rise as company has a plethora of opportunities out there for it to pursue.
There is a lot of potential for the business in the long run, but one area that doesn't get much hype is healthcare. And that's something that investors should be careful not to overlook.
Palantir can help hospitals while keeping data secure
Hospitals aren't known for being tech-savvy, and there's room to improve many of their processes. This is where Palantir's data analytics capabilities can come into play to help streamline workflows. The company has been working with hospitals, and the opportunity is there for it to provide some significant, long-term value in improving its operations.
A big challenge in the healthcare industry is trust and ensuring that patient information is adequately protected and safeguarded. And with Palantir being a trusted company that governments around the world rely on, it has already demonstrated its reliability, making it a safer tech company for hospitals to work with than most.
Healthcare is a small slice of Palantir's U.S. business
Currently, Palantir's hospital operations platform isn't making much of an impact on the overall business; it makes up only 10% of the company's U.S. commercial revenue. But with the country spending more than $4 trillion on healthcare annually, this can be a significant growth opportunity for the company in the future, and it's one that investors may be underestimating and overlooking.
Improving processes can help hospitals move away from spreadsheets and whiteboards while also having easier ways to schedule and manage workloads. At the Cleveland Clinic, for example, Palantir's software used AI to help predict discharges, enabling the hospital to efficiently plan and ensure there was enough space as patients came in and out of the hospital.
Palantir has a virtual command center that hospitals can use to plan schedules and manage workflows to balance loads and reduce wait times. Since it uses AI and machine learning, it can give hospitals more visibility into what their operations may look like in the future rather than just looking back at what has already happened.
Palantir is in the running for a major European contract
Right now, Palantir's hospital-related revenue is modest, and there is barely a mention of healthcare or hospitals on its quarterly filings. It's not an area that generates much excitement, but that can change as the company starts to bring on larger and more noteworthy clients. One particularly large contract it is working on involves England's National Health Service (NHS).
Palantir is hoping to help revolutionize the NHS England's operations through its software. It is in talks about a seven-year contract worth approximately $590 million. If Palantir wins the bid, it would be responsible for updating and enhancing the NHS England's outpatient data system. It may be as early as this month that a winning bid is announced.
Healthcare could revitalize Palantir's revenue growth
In the company's most recent quarterly results, Palantir reported revenue of $533.3 million, which was a year-over-year increase of 13%. This year, it projects its top line to reach at least $2.2 billion, up from $1.9 billion in 2022.
The launch of its AI platform should help accelerate Palantir's growth rate, but growing its presence in healthcare can lead to even more promising results for the business in the long run. If it can win the NHS England contract, that may encourage more healthcare systems and hospitals to consider Palantir's software.
In recent quarters, Palantir's top line has been increasing but at a decreasing rate.
Is Palantir stock a buy?
Palantir has been a scorching-hot buy in 2023 due to the excitement in AI and the company's potential opportunities there. Year to date, the stock is up more than 145%.
And now, with the business expecting consistent profits, its operations look more stable and reliable as well. Palantir's stock trades at a price-to-earnings-growth, or PEG, ratio of around 1, indicating that based on analyst growth projections, the stock could be a steal of a deal for long-term investors willing to hang on to the investment for multiple years.
Although the stock may seem expensive right now, trading at around 60 times its estimated future profits, it's not too late to buy shares of Palantir as its sales and profits could rise drastically in the years ahead.
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>>> Why Badger Meter Stock Slumped 5 Percent Today
Motley Fool
By Rich Smith
Sep 29, 2023
https://www.fool.com/investing/2023/09/29/why-badger-meter-stock-slumped-5-percent-today/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Badger Meter announced its earnings date yesterday.
This morning, investment bank Northcoast responded by downgrading the stock.
It's run up 68% in 52 weeks, but Northcoast says it's time to sell Badger Meter stock.
What happened
Badger Meter (BMI) stock slumped 5.6% through 10:25 a.m. ET this morning after receiving a downgrade to sell from investment bank Northcoast.
According to the analyst, Badger Meter stock, which cost more than $155 a share just last night, is likely to lose 23% of its value and fall to $120 per share within a year.
So what
So why exactly did Northcoast downgrade Badger Meter stock? That's hard to say. Although two separate ratings watchers -- StreetInsider and TheFly -- confirm that the downgrade happened, neither reporter gave any further details on Northcoast's reasoning. But I think we can guess.
It seems reasonable to assume that the catalyst sparking the downgrade came when Badger Meter announced yesterday that it will report third-quarter earnings on Thursday, Oct. 19 -- and that the analyst is worried Badger Meter might disappoint.
Now what
That's not an unreasonable fear. Over the past 52 weeks, shares of this provider of water metering equipment have rocketed 68%, lifted by strong sales and earnings growth (up 28% and 33%, respectively, in the most recent quarter).
That sounds like good news -- and it is. Furthermore, analysts who follow the stock are predicting even more good news in Q3, where the stock is expected to report 21% sales growth (to more than $179 million) and another quarter of 33% earnings growth (to $0.81) per share.
That being said, these are very optimistic targets being set for the company, and if Badger Meter fails to hit them, the stock could fall hard. At last report, Badger Meter shares were selling for nearly 60 times earnings. But with earnings growth projected to slow over time to average about 15% annually over the next five years, this leaves the stock trading for a rather optimistic price/earnings-to-growth (PEG) ratio of nearly 4 -- quite expensive for any manufacturer, even one as successful as Badger Meter has been lately.
Even if you think the risk of Badger Meter underperforming next month is small, Northcoast's sell rating serves as a reminder: Sometimes it's best to take your winnings and declare victory, rather than roll the dice one more time on a stock that has already gone up quite a lot.
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>>> Perion Network (PERI) may not be a household name, but the ad tech company already has strong returns, up nearly 400% over the last three years. And it was the only ad tech stock to post a positive return last year.
https://www.fool.com/investing/2023/09/29/have-1000-these-2-stocks-could-be-bargain-buys-for/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Perion occupies a unique position in the ad tech space through its intelligent hub, which connects ad buyers and sellers to optimize ad buys and placements. The technology is based on machine learning and is highly scalable, allowing the company to earn higher margins as it grows.
The company also offers premium features like in-game ads during live events and a "connected cart" that allows retailers to update the products being advertised according to conditions like inventory and weather.
Perion is also a preferred partner of Microsoft's Bing, which could be an especially valuable relationship if the ChatGPT-powered version of Bing gains traction in search.
Perion's results speak for themselves. Revenue in the second quarter rose 22% to $178.5 million, and it continues to gain leverage with adjusted earnings per share jumping from $0.51 to $0.84.
The company is seeing solid growth in both search advertising and display advertising, driven by the Bing partnership, and growth in connected TV, which jumped 104% to $7.2 million in the quarter.
However, the best reason to invest in Perion might be its discount valuation, trading at a price-to-earnings ratio of just 13.5. There's still a lot of room for growth in ad tech, and if Perion continues to execute its strategy, the stock could be a big winner.
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>>> Cadence to Acquire Intrinsix Corporation from CEVA
Business Wire
September 20, 2023
https://finance.yahoo.com/news/cadence-acquire-intrinsix-corporation-ceva-110000968.html
Transaction will bring Cadence a highly skilled team of engineers to expand company’s reach in the aerospace and defense industry, and strengthen CEVA’s focus on IP for high-growth technologies addressing wireless communications, sensing and edge AI
SAN JOSE, Calif. & ROCKVILLE, Md., September 20, 2023--(BUSINESS WIRE)--Cadence Design Systems, Inc. (Nasdaq: CDNS) and CEVA, Inc. (Nasdaq: CEVA), a leading licensor of wireless connectivity and smart sensing technologies, today announced that they have entered into a definitive agreement for Cadence to acquire Intrinsix Corporation, a wholly owned subsidiary of CEVA and a provider of design engineering solutions focused on the U.S. aerospace and defense industry. The purchase will bring Cadence a highly skilled engineering team that has expertise in advanced nodes, radio frequency, mixed-signal and security algorithms.
"CEVA’s strength over the years has been in developing and licensing semiconductor IP and software, which has powered more than 16 billion devices to date," said Amir Panush, CEO of CEVA. "With the sale of Intrinsix, we are focusing our efforts on this core expertise, which will allow us to reinforce our leadership position in wireless communications, sensing and edge AI technologies and support our long-term growth strategy."
"Cadence and Intrinsix are well-aligned in their missions to enable customers to achieve design excellence," said Neil Zaman, Senior Vice President and Chief Revenue Officer at Cadence. "Through the acquisition of Intrinsix, we will scale our system and IC design services team to support customers in key high-growth verticals like the aerospace and defense industry who are faced with meeting tight time-to-market deadlines and ever-increasing chip and system-level complexity."
The acquisition is expected to be immaterial to revenue and earnings this year for Cadence and is subject to certain closing conditions.
About Cadence
Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design™ strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence® customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For nine years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.
About CEVA
CEVA is the leading licensor of wireless connectivity and smart sensing technologies for a smarter, safer, connected world. We provide Digital Signal Processors, AI engines, wireless platforms, cryptography cores and complementary embedded software for sensor fusion, image enhancement, computer vision, spatial audio, voice input and artificial intelligence. Leveraging our technologies, many of the world’s leading semiconductors, system companies and OEMs create power-efficient, intelligent, secure and connected devices for a range of end markets, including mobile, consumer, automotive, robotics, industrial and IoT.
Our DSP and edge AI based solutions include platforms for 5G baseband processing in mobile, IoT and infrastructure, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low-power always-on/sensing applications for multiple IoT markets. For motion sensing solutions, our Hillcrest Labs sensor processing technologies provide a broad range of sensor fusion software and inertial measurement unit ("IMU") solutions for markets including hearables, wearables, AR/VR, PC, robotics, remote controls and IoT. For wireless IoT, our platforms for Bluetooth connectivity (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax), Ultra-wideband (UWB), NB-IoT and GNSS are the most broadly licensed connectivity platforms in the industry.
CEVA is a sustainable and environmentally conscious company, adhering to our Code of Business Conduct and Ethics. As such, we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At CEVA, we are committed to social responsibility, values of preservation and consciousness towards these purposes.
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'Magnificent Seven' - >>> Investors brace for earnings from ‘Magnificent Seven’ US growth giants
Reuters
July 14, 2023
By Lewis Krauskopf
https://finance.yahoo.com/news/investors-brace-earnings-magnificent-seven-211410065.html
NEW YORK (Reuters) - A handful of massive growth and technology names that have dominated the U.S. stock market in 2023 are set to report earnings in coming weeks, potentially determining the path for this year’s equity rally.
Lately dubbed the “Magnificent Seven” by investors, shares of the U.S. companies with the biggest market values soared between 40% and over 200% so far this year. Those moves have accounted for a lion's share of the S&P 500's 17% year-to-date rise and propelled the index to its highest level since April 2022.
The outsized gains have come with big earnings expectations for the seven companies: Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms. BofA Global Research projects they will increase earnings by an average of 19% over the next 12 months, more than double the an 8% estimated rise for the rest of the S&P 500.
They will need strong results to justify premium valuations. Those companies trade at an overall trailing price-to-earnings ratio of about 40 times, versus 15 times for the S&P 500 excluding those companies, according to BofA.
Their results may be crucial to the market as a whole. Fueled by their recent gains, megacap stocks have climbed to dominate benchmark indexes, causing headaches for some managers of active funds. In the S&P 500, the seven stocks comprise 27.9% of the index's weight.
Investors will look beyond second quarter results, said Bill Callahan, an investment strategist at Schroders.
“It’s also how do these big companies, which are carrying the market ... guide for the rest of the year and into 2024,” he said.
Overall, the seven companies account for 14.3% of overall S&P 500 estimated earnings for the second quarter, and 9.3% of estimated revenue, according to Tajinder Dhillon, senior research analyst at Refinitiv.
Among the reports in the previous quarter, Nvidia was one of the standouts. The semiconductor company's revenue forecast blew past estimates as it said it was boosting supply to meet surging demand for its artificial-intelligence chips, further fanning the market's excitement over AI. Nvidia shares are up well over 200% this year
Tesla is the first of the growth giants to report, with earnings expected on Wednesday. The Elon Musk-led company this month said it delivered a record number of vehicles in the second quarter.
Microsoft and Meta are among the companies due to report the following week, and investors are expected to focus on how companies are seeking to harness AI.
While AI benefits may not immediately materialize for every company, investors are eager to learn "more about how they are going to convert that into money, essentially," said Thomas Martin, senior portfolio manager at Globalt Investments.
"It’s going to take some time for that to work its way through and to show up," said Martin, who is overweight some of the megacap stocks. "Along the way, people are going to want to see some sort of progress."
There are signs market gains are broadening beyond the megacaps. The equal-weight S&P 500, a proxy for the average stock, is modestly beating the S&P 500 over the past month -- up 3.6% versus about 3% for its counterpart. The equal-weight version trailed badly for most of 2023. Strong U.S. data have driven confidence the economy can avoid a long-feared recession. A so-called "soft-landing" could lift cyclical stocks such as industrials and small-caps that are trading at cheaper valuations. But many investors say the corporate giants are nevertheless here to stay as critical holdings. Yung-Yu Ma, chief investment officer at BMO Wealth Management said that while “there is a lot priced in” to megacaps’ valuations, that did not mean they are overvalued.
"If you think about the megacaps broadly ... they have gone from a core holding of a portfolio to an almost absolute necessary major component of the portfolio once you factor in trends such as AI," he said.
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>>> Chip Leaders Head to Washington to Lobby for China Rules Relief
Bloomberg
by Jenny Leonard and Ian King
July 14, 2023
https://finance.yahoo.com/news/chip-leaders-head-washington-lobby-001528633.html
(Bloomberg) -- America’s largest semiconductor companies are embarking on a last-ditch effort to head off new curbs on their sales to China, with senior executives traveling to Washington next week for talks with administration officials and lawmakers.
The chief executive officers of Intel Corp., Qualcomm Inc. and Nvidia Corp. are planning to lobby against extending restrictions on the sale to China of certain chips and the equipment to manufacture the semiconductors that the Biden administration is set to roll out in the coming weeks, people familiar with the matter said.
While they don’t expect to stave off all the actions, the companies are sensing a window of opportunity to convince the Biden team that an escalation would hurt the current diplomatic efforts by the White House to engage Chinese officials and establish a more productive relationship, according to the people, who asked not to be identified because the trip isn’t yet public.
Chip companies are at the center of what has been an escalating row between Beijing and Washington. The US, where the majority of the technology originates, believes that restricting China’s access to it will bolster national security and hold back the Asian nation’s efforts to advance its military capabilities.
The companies have argued that being cut off from their largest market will harm their ability to spend on advancing their technology and ultimately undermine US leadership.
Representatives for the three companies declined to comment.
Qualcomm CEO Cristiano Amon gets more than 60% of his company’s revenue from the China region by supplying components to smartphone makers such as Xiaomi Corp. Intel’s Pat Gelsinger, who visited Beijing earlier this month to show off his company’s latest artificial intelligence chips, counts the nation as his biggest sales region. The country provides about a quarter of Intel’s sales. And for Nvidia, run by co-founder and CEO Jensen Huang, China provides about a fifth of revenue.
The Commerce Department in October issued rules that bar semiconductor equipment makers from selling certain tools to China, as well as prohibit the export of some chips used in artificial intelligence applications — an announcement that roiled the industry last October.
So far, chip equipment makers such as Applied Materials Inc. have taken the biggest hits to revenue, being forced to knock billions of dollars off their projections. But the restrictions, which companies fear will be extended to other classes of chips, are also affecting some makers of devices. Nvidia’s ability to ship its industry-leading artificial intelligence accelerators to China has been curbed by an approval process, costing it sales.
“I’m alarmed that some American CEOs continue to advocate for weaker export controls on sensitive technology,” Representative Mike Gallagher, a Wisconsin Republican and chairman of a House committee on competition with China, said in a statement on Friday. “The Biden administration needs to tighten our export controls on advanced chips”
The administration is planning to update and finalize the measures by strengthening what’s already been announced. Earlier this week, Bloomberg reported that the US is using some of its powers to influence overseas companies to further cut off China’s access. ASML Holding NV, one of the biggest providers of chipmaking equipment, is facing tighter restrictions from its home government in the Netherlands and new restrictions from the US, because some of its components are made in America.
In general, the US new rules will also reflect the outcome of negotiations with Japan and the Netherlands, people briefed on the plans said.
Reuters previously reported on the plan for some of the CEOs to meet with US officials.
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>>> IBM’s $4.6B Apptio deal marks another new era for Seattle-area cloud and IT management company
Geek Wire
by Todd Bishop
June 26, 2023
https://www.msn.com/en-us/money/companies/ibm-s-46b-apptio-deal-marks-another-new-era-for-seattle-area-cloud-and-it-management-company/ar-AA1d3FXH
IBM announced a deal Monday to buy Apptio for $4.6 billion from Vista Equity Partners, less than five years after the private equity firm acquired the Bellevue, Wash.-based cloud and IT management company for $1.9 billion, and seven years after Apptio went public at a valuation of $525 million.
“It’s the third exit in one company,” said Sunny Gupta, the Apptio founder and CEO, in an interview with GeekWire Monday morning. “It doesn’t happen that often — all the way from venture to public, to private equity, to now being part of one of the most iconic companies of all time in IBM.”
IBM says it expects the deal to close in the second half of this year.
Apptio has more than 1,400 employees, about a quarter of them in the Seattle area, and the company’s employee base is expected to “increase significantly” after the IBM deal closes, in locations including Bellevue, Gupta said.
The all-cash acquisition reflects Apptio’s growth via acquisitions and organic business expansion, its focus on corporate tech spending, and related trends in the economy and technology.
Apptio’s software-as-a-service technology helps corporate and IT leaders understand and manage their cloud and tech spending. That’s a key motivation, especially now, for many companies seeking to rein in expenses.
Its annual revenue has grown to more than $400 million through a combination of acquisitions and organic customer growth, roughly double its projected revenue at the time of the Vista Equity deal in 2018.
Apptio has grown to more than 1,500 corporate customers, including more than half of the Fortune 100. IBM said Apptio brings “$450 billion of anonymized IT spend data, unlocking new insights for clients and partners.”
“Technology is changing business at a rate and pace we’ve never seen before. To capitalize on these changes, it is essential to optimize investments which drive better business value, and Apptio does just that,” said IBM CEO Arvind Krishna in a news release announcing the deal. “Apptio’s offerings combined with IBM’s IT automation software and watsonx AI platform, gives clients the most comprehensive approach to optimize and manage all of their technology investments.”
Longer term, the deal also positions IBM well for the emerging dynamics of AI in the enterprise, said Matt McIlwain, managing director of Madrona Venture Group, which was a founding investor in Apptio in 2007.
The boom in generative AI, applied AI, machine learning, and intelligent applications promises to only increase the need for big companies to get a handle on their technology usage and spending, McIlwain said.
“This is about cost transparency for enterprises,” he said. “But I think there’s a more strategic thing that IBM is likely up to, which is around applied AI and intelligent applications and how enterprises are going to need to navigate that.”
The acquisition brings Gupta full circle. He started his career at IBM in 1992 as an engineer working on OS2, and will now rejoin the company more than three decades later as an executive leader.
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>>> Chip wars with China risk ‘enormous damage’ to US tech, says Nvidia chief
Jensen Huang tells lawmakers to be ‘thoughtful’ about imposing more export controls on Beijing
Financial Times
5-24-23
https://www.ft.com/content/ffbb39a8-2eb5-4239-a70e-2e73b9d15f3e?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev
The chief executive of Nvidia, the world’s most valuable semiconductor company, has warned that the US tech industry is at risk of “enormous damage” from the escalating battle over chips between Washington and Beijing.
Speaking to the Financial Times, Jensen Huang said US export controls introduced by the Biden administration to slow Chinese semiconductor manufacturing had left the Silicon Valley group with “our hands tied behind our back” and unable to sell advanced chips in one of the company’s biggest markets.
At the same time, he added, Chinese companies were starting to build their own chips to rival Nvidia’s market-leading processors for gaming, graphics and artificial intelligence.
“If [China] can’t buy from?.?.?.?the United States, they’ll just build it themselves,” he said. “So the US has to be careful. China is a very important market for the technology industry.”
The US’s efforts to prevent China buying or developing advanced chips has become the most aggressive front in a new cold war between the two powers.
Huang’s comments came just days before Chinese authorities announced a ban on US memory chipmaker Micron’s products from critical infrastructure, a move seen as the first significant retaliation against Washington’s export controls.
The Taiwanese-American executive warned US lawmakers to be “thoughtful” about imposing further rules restricting trade with China.
“If we are deprived of the Chinese market, we don’t have a contingency for that. There is no other China, there is only one China,” Huang said, adding that there would be “??enormous damage to American companies” if they were unable to trade with Beijing.
Huang added that blocking the US tech industry’s access to China would “cut the Chips Act off at the knee”, referring to the Biden administration’s $52bn funding package to encourage construction of more semiconductor manufacturing facilities — known as “fabs” — in the US.
“If the American tech industry requires one-third less capacity [due to the loss of the Chinese market], no one is going to need American fabs, we will be swimming in fabs,” he said. “If they’re not thoughtful on regulations, they will hurt the tech industry.”
Nvidia has embedded itself at the centre of a global race to develop a new generation of AI tools, becoming the primary source of chips that are used to train the “large language models” that power chatbots such as OpenAI’s ChatGPT.
As excitement has grown around AI, Nvidia’s market capitalisation has more than doubled so far this year to about $770bn, ahead of its latest earnings report on Wednesday. Its valuation now dwarfs US rivals such as Intel and Qualcomm, each worth close to $120bn. Despite a rally among some chip stocks, Nvidia is still far larger than its next nearest rival, Taiwanese chipmaker TSMC, which is worth about $450bn.
However, the California-based company has been blocked from selling its most advanced chips — the H100 and A100 series — to Chinese customers since August when the US imposed export controls on technology used for AI. Nvidia has been forced to reconfigure some of its chips to comply with US rules limiting the performance of products sold in China.
Huang said China made up roughly one-third of the US tech industry’s market, and would be impossible to replace as both a source of components and an end market for its products.
Most of the world’s advanced chips — including Nvidia’s — are made in Taiwan, which Beijing claims as part of its territory. President Joe Biden has said the US would intervene if China took unprovoked military action against Taiwan. Analysts fear such a conflict would lead to severe global disruption in production of everything from cars to computers.
“We can theoretically build chips outside of Taiwan, it’s possible [but] the China market cannot be replaced. That’s impossible,” Huang said. “So you’ve got to ask yourself which way do you want to push it.”
China, including Hong Kong, accounted for more than a fifth of Nvidia’s sales in its latest financial year ending January 2023, according to its annual report, while Taiwan represented more than a quarter.
The figures reflect the “billing location” of its customers, which could include contract manufacturers who then sell on to “end customers” in other markets. Based on last year’s figures, more than $12bn in Nvidia’s annual revenues — almost half its total — might be exposed to any potential conflict in the region.
Huang also reflected on his failed takeover of UK-based chip business Arm due to regulatory hurdles, saying he had been “deeply hurt” and it was no longer “easy for us to invest” in the UK. “I built the first implementation of the AI supercomputer in England, the Cambridge-1. I’m not going to build another,” he said. “I’m done.”
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>>> ON Semiconductor Seen Outpacing Rivals In Silicon Carbide Chips
Investor's Business Daily
by PATRICK SEITZ
05/19/2023
https://www.investors.com/news/technology/on-stock-onsemi-outpacing-rivals-in-silicon-carbide-chips/?src=A00220
ON Semiconductor (ON) is aiming to grow at three times the rate of the overall chip industry over the next five years thanks to its investments in silicon carbide chips. ON stock surged after the company announced its new growth forecasts this week.
Also known as Onsemi, ON Semiconductor held an analyst day briefing on Tuesday in New York City. At least six brokerage firms raised their price targets on ON stock after the presentation.
ON stock is near a buy point of 87.65 out of a 14-week consolidation period, according to IBD MarketSmith charts.
However, on the stock market today, ON stock dropped 2.5% to close at 84.36.
Several major semiconductor stocks have broken out of bases recently. They include Advanced Micro Devices (AMD), Broadcom (AVGO) and Rambus (RMBS).
ON Stock: Onsemi Ups Growth Targets
"We like Onsemi's strength in auto/industrial with SiC driving the next global energy transformation and a solid revenue/margin roadmap to 2027," Mizuho Securities analyst Vijay Rakesh said in a note to clients. He rates ON stock as buy with a price target of 93.
Silicon carbide, or SiC, chips can operate at much higher voltages, temperatures and frequencies than traditional silicon-based semiconductors. That makes them a better choice for electric vehicles, solar power conversion, 5G wireless, aerospace and other applications.
ON Semiconductor raised its top-line compound annual growth rate target to 10-12% through 2027. Its previous growth target was 8%. By comparison, the semiconductor industry growth rate is forecast at 4% over the same period. Onsemi also raised targets for profit margins.
Silicon carbide semiconductors are the fastest-growing product line at Onsemi. The company sees its sales of SiC chips growing at a compound annual rate of 70% through 2027. Onsemi expects to grab 35% to 40% of the SiC market by 2027, up from 14% now.
ON Semiconductor Is A Tech Leader
Other chipmakers pursuing the silicon carbide chip market include Infineon Technologies, STMicroelectronics (STM) and Wolfspeed (WOLF). STMicro currently leads the SiC market with 37% share, followed by Infineon with 19% and Wolfspeed at 16%, according to Mizuho.
However, ON Semiconductor has an edge over the competition in silicon carbide devices because it controls everything from wafers, chip fabrication and packaging, Piper Sandler analyst Harsh Kumar said in a note to clients. He rates ON stock as overweight with a price target of 100.
ON Semiconductor ranks fourth out of 30 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. ON stock has an IBD Composite Rating of 92 out of 99.
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Taiwan Semiconductor - >>> Warren Buffett’s Berkshire Hathaway sells entire stake in TSMC
CNN
By Michelle Toh
5-16-23
https://www.cnn.com/2023/05/16/investing/berkshire-hathaway-taiwan-tsmc-stock-exit-hnk-intl/index.html
Warren Buffett’s conglomerate has sold its remaining shares in the world’s largest chipmaker, TSMC, after the “Oracle of Omaha” sounded alarms about its home base of Taiwan.
In a Monday filing, Berkshire Hathaway (BRKA) disclosed that it was no longer holding a stake in Taiwan Semiconductor Manufacturing Company (TSM) as of the end of the first quarter.
In recent weeks, Buffett had repeatedly expressed concerns over the future of Taiwan, the self-governed democratic island where TSMC is based. China’s Communist leadership has long claimed Taiwan as part of its territory, despite having never ruled over it.
The move completes an exit from TSMC by one of the world’s most watched investors, which had already been winding down its stake in recent months.
In February, Berkshire revealed it had sold 86% of its shares in TSMC, which were purchased for $4.1 billion just months before. The quick sale was considered unusual because Buffett is known for making longer term bets.
Warren Buffett gives reason for surprise sale of stake in Taiwan's TSMC
Asked to explain his decision on an analyst call this month, the billionaire said: “I don’t like its location, and I’ve reevaluated that.”
“I feel better about the capital that we’ve got deployed in Japan than in Taiwan,” the Berkshire Hathaway chairman added. “I wish it weren’t sold, but I think that’s a reality.”
Despite the share sale, Buffett lauded TSMC as “one of the best-managed companies and [most] important companies in the world.”
“There’s no one in the chip industry that’s in their league, at least in my view,” he said.
“Marvelous people and marvelous competitive position and everything, [but] I’d rather find it in the United States.”
Buffett said his reassessment of the company was in “light of certain things that were going on.” He had previously pointed to geopolitical tensions as a concern.
TSMC declined to comment Tuesday on Berkshire Hathaway’s divestment.
‘Silicon shield’
TSMC is considered a national treasure in Taiwan, supplying semiconductors to global tech giants including Apple (AAPL) and Qualcomm (QCOM).
It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.
The firm is the world’s largest chip manufacturer, according to Gartner. It’s also one of the world’s most valuable listed companies, with a market capitalization of 12.8 trillion New Taiwan Dollars (approximately $415.3 billion) as of Tuesday.
As the world courts TSMC, Taiwan worries about losing its 'silicon shield'
TSMC’s presence is seen as providing a strong incentive to the West to defend Taiwan against any attempt by China to take it by force.
The company is perceived as being so valuable to the global economy, as well as to China, that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing.
While TSMC is expanding overseas in countries including the United States, it’s also growing its footprint back home in Taiwan, where it plans to add more than 6,000 jobs this year.
As Berkshire Hathaway revealed its withdrawal Monday, other prominent investors made bets on the stock. According to a regulatory filing, Macquarie has increased its stake in TSMC, while Tiger Global has also bought in.
TSMC stock rose 2% Tuesday in Taipei, while its US-listed shares slipped 0.5% in after-hours trading in New York.
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>>> Is Palantir Stock a Buy Now?
Motley Fool
By Leo Sun
May 17, 2023
https://www.fool.com/investing/2023/05/17/is-palantir-stock-a-buy-now/
KEY POINTS
Palantir’s stock trades about 75% below its all-time high.
Its sales growth is cooling off, but its GAAP profits are rising.
The company still doesn’t look like a bargain relative to its industry peers.
The analytics company still faces near-term headwinds.
Palantir (PLTR) has been a polarizing stock ever since its public debut in September 2020. The data analytics company initially dazzled the bulls with its high growth rates, its goal of becoming the "default operating system for data" across the U.S. government, and the expansion of its commercial business. Its stock started trading at $10 per share on the first day and then eventually rallied to an all-time high of $39 during the buying frenzy in meme and growth stocks in January 2021.
Yet Palantir's stock now trades at less than $10. It lost its luster as its growth cooled off and rising interest rates popped its bubbly valuations. At its peak, Palantir had an enterprise value of $68 billion -- a whopping 44 times the revenue it would actually generate in 2021. Its enterprise value has since dropped to $19 billion, but that still doesn't make it a screaming bargain at 9 times this year's sales.
Should investors buy this out-of-favor growth stock as a turnaround play?
Is Palantir's business finally stabilizing?
Palantir operates two main platforms: Gotham for its government clients, which include the U.S. military and other government agencies; and Foundry, a commercialized version that primarily serves large companies and organizations. Both platforms gather and analyze large amounts of data from disparate sources.
In the first quarter of 2023, Palantir generated 45% of its revenue from its government business and the other 55% from its commercial business. Here's how the revenue of those two core businesses fared over the past year.
Palantir's government business remained relatively stable since government contracts are usually well insulated from macro headwinds. But its commercial business -- which faces stiff competition from comparable platforms like Alteryx -- suffered a severe slowdown throughout 2022. That deceleration challenged the notion that Palantir could expand its commercial business to gradually reduce its dependence on rigid government contracts.
But in the first quarter, Palantir's commercial revenue growth accelerated again as its U.S. business (which accounted for 45% of its commercial revenue) recovered. During the conference call, Palantir's chief business affairs and legal officer Ryan Taylor attributed that reacceleration to its "robust pilot starts and promising conversions," as well as its "meaningful growth and upsell opportunities" among its newer customers. Taylor notably highlighted its recent deals with Hertz and Jacobs Solutions, along with the expansion of several existing deals in the healthcare and packing markets, as leading catalysts.
Palantir's management also mentioned AI more than a dozen times during the call and predicted the growth of "generative AI" platforms like ChatGPT would drive more organizations to deploy their services to crunch massive amounts of data.
Unfortunately, Palantir's outlook suggests its near-term slowdown will persist, with just 12% year-over-year revenue growth in the second quarter. For the full year, it anticipates 14% to 17% growth -- which would mark a deceleration from its 24% growth in 2022 and broadly miss its original target for "30% or greater" annual revenue growth through 2025.
Generating GAAP profits as its growth cools off
On a non-GAAP (generally accepted accounting principles) basis, which excludes stock-based compensation, Palantir's gross margin held steady year over year at 81% in the first quarter as its operating margin dipped two percentage points to 24%.
But on a GAAP basis, Palantir squeezed out a slim operating margin of 1% -- which marked a 1,000-basis-point jump from a year ago and its first-ever positive operating margin. It also stayed profitable on a GAAP basis for the second consecutive quarter, and CFO Dave Glazer predicted the company would remain "GAAP profitable in each quarter this year."
Palantir's GAAP profits are climbing because it laid off about 2% of its workforce earlier this year and is gradually reducing its stock-based compensation expenses. Glazer still expects its SBC expenses to "trend up through the remainder of the year" as it expands -- but he also said it would "remain focused on GAAP net income and operating profitability."
That outlook makes Palantir look more promising than Alteryx, which is growing at a faster rate but will likely remain unprofitable on a GAAP basis for the foreseeable future.
But is it the right time to buy Palantir?
Palantir's business might be stabilizing, but its stock still looks a bit too expensive relative to its peers at 9 times this year's sales, For reference, Alteryx trades at just 3 times this year's sales. Salesforce, which is growing at a slightly slower clip than Palantir, trades at 6 times this year's sales.
Palantir could keep growing, but its stock could be cut in half again in this rough market before it's considered a bargain. Investors should keep an eye on Palantir, but I don't think it will rally until its revenue growth consistently accelerates again.
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Palantir - >>> AIP in Action
An Update from the Chief Executive Officer
April 27, 2023
https://www.palantir.com/newsroom/letters/aip-in-action/en/
We will be making our Artificial Intelligence Platform (AIP) available to an initial group of customers in the coming weeks.
The platform allows companies and government agencies to harness the power of the latest large language models by adapting their natural language processing capabilities for use with privately held and structured datasets.
A first look at the platform in action in the government and commercial contexts can be found here.
AIP for Defense
AIP for Business
The demand that we are seeing from the market for this new platform reflects the depth of the unmet need within institutions for intelligent and effective enterprise software.
Every large organization in the world is currently attempting to understand how it can leverage the capabilities of large language models in a way that is consistent with the regulatory and legal regimes that govern their use as well as our collective values.
We are working towards a broader release of the software and will be accelerating our timelines significantly.
Sincerely,
Alexander C. Karp
Chief Executive Officer & Co-Founder
Palantir Technologies Inc.
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Palantir - >>> FedStart
https://www.palantir.com/offerings/fedstart/
Take your business where it’s never been before
Get Your Solution in the Hands of Government, Fast
Palantir FedStart is a SaaS offering for eligible companies and startups looking to deploy software to the federal government.
? The accreditation process for FedRAMP, IL5, or IL6 can take years and cost millions of dollars in consultant and engineering fees.
? FedStart can significantly accelerate time-to-market by eliminating the need for organizations to pursue accreditation on their own.
How It Works
FedStart enables innovators to run their products within Palantir’s secure, already-accredited environment.
How It Works Image
Getting started with FedStart is easy:
? Containerize your application and create a Helm chart
? Deploy your application using Apollo into the FedStart environment
? Complete security integration
Why FedStart?
? Seamless Integration
The FedStart Kubernetes infrastructure – which runs on top of AWS GovCloud and Azure Government – manages FIPS validated encryption, logging, authentication, vulnerability scanning, and more (so that you don’t have to).
? Accreditation-as-a-Service
Companies that are part of the FedStart program benefit from FedRAMP and IL5 compliance managed by Palantir, with Palantir responsible for government ATO conversations, compliance artifacts, continuous monitoring, and control assessments.
? Usage-based Pricing
Rather than being charged a fixed cost, FedStart fees are scaled according to business usage so that incurred costs are tied to value gained.
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>>> Verisk Reports First-Quarter 2023 Financial Results
Verisk Analytics, Inc.
May 3, 2023
https://finance.yahoo.com/news/verisk-reports-first-quarter-2023-111500248.html
Consolidated revenues were $651.6 million, up 1.2%, and up 9.8% on an organic constant currency (OCC) basis for the first quarter of 2023. The modest growth in our consolidated revenues was due to the sale of our environmental health and safety business (“3E”) and Financial Services segment, both of which did not qualify as discontinued operations. As such, results from 3E and our Financial Services segment are included in our prior year consolidated financials. The increase in our OCC revenue growth reflects strong growth in underwriting & rating and claims.
Income from continuing operations was $194.4 million, down 60.1% for the first quarter of 2023. Adjusted EBITDA, a non-GAAP measure, was $340.3 million, up 11.5%, and up 15.7% on an OCC basis. The decrease in income from continuing operations was primarily due to the sale of 3E and our Financial Services segment in the prior year, which resulted in a net gain in other operating income. Adjusted EBITDA growth reflects the contribution from strong revenue growth combined with cost discipline across our businesses.
Diluted GAAP earnings per share from continuing operations (diluted EPS) were $1.27 for the first quarter of 2023, down 57.8%. Diluted adjusted earnings per share (diluted adjusted EPS), a non-GAAP measure, were $1.29, up 16.2%.
Net cash provided by operating activities was $365.3 million, down 8.6% and free cash flow, a non-GAAP measure, was $304.1 million, down 10.5% for the first quarter of 2023. The decline in our operating cash flows and free cash flows was primarily due to the disposition of our Energy and Specialized Markets and Financial Services segments.
We paid a cash dividend of 34 cents per share on March 31, 2023. Our Board of Directors approved a cash dividend of 34 cents per share payable on June 30, 2023.
We entered into and fully funded a $2.5 billion accelerated share repurchase program in the first quarter of 2023.
On February 1, 2023, we sold our Energy business, Wood Mackenzie, to Veritas Capital for $3.1 billion in net cash consideration plus future additional contingent consideration of up to $200 million. As a result of this sale, we recognized a loss of $128.4 million that has been recorded within loss from discontinued operations.
JERSEY CITY, N.J., May 03, 2023 (GLOBE NEWSWIRE) -- Verisk (Nasdaq: VRSK), a leading global data analytics provider, today announced results for the first quarter ended March 31, 2023.
"We are pleased that 2023 is off to a very strong start at Verisk. Our first-quarter results are a demonstration of our sharpened focus, operating discipline, and results-oriented culture," said Lee Shavel, president and CEO, Verisk. "We are elevating the dialogue with our clients and leveraging our scale and centrality to solve the insurance industry's biggest problems and improve our client's performance. We have the right team and strategy in place to deliver value for our shareholders."
Elizabeth Mann, CFO, said, "Verisk delivered strong revenue and EBITDA growth, demonstrating broad-based growth across most of our businesses. That in turn generated solid operating leverage. We are focused on our commitments to deliver revenue growth and margin expansion and we remain confident in our ability to achieve our stated goals for 2023 and the longer term."
Summary of Results (GAAP and Non-GAAP)
(in millions, except per share amounts)
Note: Adjusted EBITDA, diluted adjusted EPS, and free cash flow are non-GAAP measures.
Revenues from Continuing Operations
Consolidated revenues increased a modest 1.2% primarily due to the sale of 3E and our Financial Services segment in the prior year. OCC revenues increased 9.8% primarily due to strong broad-based growth across underwriting & rating and claims.
Insurance segment revenues grew 11.1% in the first quarter and 9.8% on an OCC basis.
Underwriting & rating revenues increased 10.7% in the quarter and 9.1% on an OCC basis, resulting primarily from strong growth across our core underwriting solutions, extreme events solutions, and life solutions.
Claims revenues grew 12.1% in the quarter and 11.4% on an OCC basis. Growth was broad-based with strong results recorded in property estimating, anti-fraud and international solutions.
There was no Energy and Specialized Markets segment revenue in the quarter. We closed on the sale of the Energy business on February 1, 2023 and accounted for it as discontinued operations. We closed on the sale of 3E on March 11, 2022.
There was no Financial Services segment revenue in the quarter as we closed on its sale on April 8, 2022.
Net Income and Adjusted EBITDA from Continuing Operations
During first-quarter 2023, net income from continuing operations was $194.4 million, a decrease of 60.1%. The decrease was primarily due to the sale of 3E and our Financial Services segment in the prior year, which did not qualify as discontinued operations. As a result of these sales, we recognized a net gain within "Other operating income, net" of $377.1 million. Adjusted EBITDA increased 11.5%, and 15.7% on an OCC basis, primarily due to strong revenue growth and cost discipline.
EBITDA and Adjusted EBITDA by Segment
(in millions)
Note: EBITDA and Adjusted EBITDA are non-GAAP measures. Margin is calculated as a percentage of revenues. See "Non-GAAP Reconciliations" below for a reconciliation to the nearest GAAP measure. All OCC figures exclude results from recent dispositions, namely 3E, Energy, and Verisk Financial Services. Segment-level adjusted EBITDA margins for 2023 reflect a higher level of corporate allocations resulting from recent dispositions and the impact of foreign currency fluctuations.
Earnings Per Share and Diluted Adjusted Earnings Per Share
Diluted EPS attributable to Verisk decreased 57.8% to $1.27 for the first quarter of 2023.
Diluted adjusted EPS increased 16.2% to $1.29 for the first quarter of 2023.
Cash Flow and Free Cash Flow
Net cash provided by operating activities was $365.3 million for the first quarter of 2023, down 8.6%, and free cash flow was $304.1 million, down 10.5%. The decrease in operating cash flows was primarily related to the dispositions within our former Energy and Specialized Markets and Financial Services segments, including one-time transaction fees related to the sale of our Energy business, partially offset by an increase in operating profit in our Insurance segment.
Dividend
On March 31, 2023, we paid a cash dividend of 34 cents per share of common stock issued and outstanding to the holders of record as of March 15, 2023.
On April 25, 2023, our Board of Directors approved a cash dividend of 34 cents per share of common stock issued and outstanding, payable on June 30, 2023, to holders of record as of June 15, 2023.
Share Repurchases
In first-quarter 2023, we entered into and fully funded an accelerated share repurchase program of $2,500 million and received an initial delivery of 10.7 million shares at an average price of $187.70. As of March 31, 2023, we had $941.3 million remaining under our share repurchase authorization.
2023 Financial Guidance
Our guidance for 2023 remains unchanged with revenue in the range of $2.59-$2.63 billion, adjusted EBITDA between $1.37-$1.42 billion, adjusted EBITDA margin in the 53%-54% range and adjusted EPS in the range of $5.20-$5.50. A complete listing of all guidance measures can be found in the earnings slide deck, which has been posted to the investor section of our website verisk.com. The contents of our website shall not be deemed to be incorporated by reference herein.
Conference Call
Our management team will host a live audio webcast to discuss the financial results and business highlights on Wednesday, May 3, 2023, at 8:30 a.m. EST (5:30 a.m. PT, 1:30 p.m. GMT). All interested parties are invited to listen to the live event via webcast on our investor website at http://investor.verisk.com. The discussion will also be available through dial-in number 1-888-660-6191 for U.S./Canada participants or 929-203-1913 for international participants.
A replay of the webcast will be available for 30 days on our investor website and through the conference call number 1-888-660-6191 for U.S./Canada participants or 1-929-203-1913 for international participants using Conference ID #4026897.
About Verisk
Verisk is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong.
Verisk is traded on the Nasdaq exchange and is a part of the S&P 500 Index and the Nasdaq-100 Index.
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On Semiconductor - >>> Onsemi First Quarter 2023 Results Exceed Expectations
Business Wire
May 1, 2023
https://finance.yahoo.com/news/onsemi-first-quarter-2023-results-120000805.html
Automotive and Industrial end-markets contribute record 79% of revenue
SCOTTSDALE, Ariz., May 01, 2023--(BUSINESS WIRE)--onsemi (the "Company") (Nasdaq: ON) today announced results for the first quarter of 2023 with the following highlights:
Revenue of $1,959.7 million, an increase of 1 percent year-over-year
GAAP and non-GAAP gross margin of 46.8 percent
GAAP operating margin and non-GAAP operating margin of 28.8 percent and 32.2 percent respectively
GAAP diluted earnings per share of $1.03, Non-GAAP diluted earnings per share of $1.19 as compared to $1.22 in the quarter a year ago
Automotive revenue grew 38% year-over-year to record 50% of total revenue
Automotive and industrial end-markets together represented record 79% of revenue
"We continued our momentum with first quarter results exceeding expectations despite macroeconomic uncertainties. Our accelerating Silicon Carbide manufacturing output exceeded our internal plans and enabled us to nearly double our silicon carbide revenue quarter-over-quarter, and we grew both ADAS and energy infrastructure revenue by approximately 50% year-over-year. As secular tailwinds propel our business, we are prudently managing our operations to deliver consistent and predictable results in the current market environment," said Hassane El-Khoury, President and CEO of onsemi.
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>>> StoneCo (STNE) is a leading provider of payment-processing services in Brazil. Admittedly, it's also been a provider of lending services that have heavily underperformed. While it occupies a very small position in Berkshire's total stock portfolio, the company has the distinction of being one of the few fintech companies that the investment conglomerate is invested in.
https://www.fool.com/investing/2023/04/25/2-top-warren-buffett-stocks-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
In addition to macroeconomic pressures that have generally been quite hard on fintech stocks, StoneCo's valuation has been pressured due to bad debt held by its credit business. The company had been relying on Brazil's national registry system to guide its loan underwriting, and this created issues as the COVID-19 pandemic and other issues drove business failures and pushed the value of StoneCo's loan book into negative territory.
As a result of these challenges, the company's share price is down approximately 88% from its all-time high. But at current prices, the stock looks like a worthwhile buy for risk-tolerant investors.
At the end of the fourth quarter, StoneCo estimated that it still had 398.7 million Brazilian reals (roughly $79 million based on today's exchange rate) in bad debt on its books, but the company has discharged or sold off most of its bad debt. More importantly, its core payment-processing services segment continued to serve up strong results.
Primarily driven by its payments business, StoneCo managed to grow revenue 44% year over year in Q4. The company's non-GAAP (adjusted) net income also came in ahead of expectations at $46.4 million, up from a loss of $6.4 million in Q4 2021.
While the business has been growing at a rapid clip, it's still valued at roughly 18 times this year's expected earnings and 1.5 times expected sales. Based on its recent earnings trajectory, StoneCo's adjusted earnings could feasibly cover the remaining bad debt on its books this year, and the business still has plenty of room for growth ahead.
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>>> Why Aspen Technology Stock Crashed Today
Motley Fool
By Anders Bylund
Apr 27, 2023
https://www.fool.com/investing/2023/04/27/why-aspen-technology-stock-crashed-today/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
AspenTech fell short of Wall Street’s estimates across the board in the just-reported third quarter.
Customers in the bulk chemicals sector aren’t spending much on software licenses these days, which led to Aspen’s soft top and bottom lines.
CEO Antonio Pietri won’t expect much from that industry for the remainder of calendar year 2023.
What happened
Shares of Aspen Technology (AZPN) plunged as much as 30% on Thursday morning, as investors digested a disappointing third-quarter earnings report. The maker of enterprise asset-management tools and services recovered slightly from that dip, settling down roughly 24% below Wednesday's closing price for most of the day.
So what
Aspen's adjusted earnings fell 23% year over year to $1.06 per diluted share. The analyst consensus had called for earnings closer to $1.66 per share. The company delivered 22% growth on the top line as revenue came in at $230 million, but even here, your average analyst wanted more. Consensus estimates pointed to sales near $286 million.
Now what
Disappointment might not seem like the right reaction to a 22% revenue jump, especially in this challenging economy, but everyone wanted more. As it turns out, AspenTech hoped that the order volume from clients in bulk chemical production would bounce back after two consecutive weak quarters. Instead, the problem intensified and Aspen ended up missing its own and Wall Street's expectations as a result.
"We will remain cautious about the software spending outlook from this industry for the remainder of the calendar year," CEO Antonio Pietri said on the earnings call.
That being said, today's sharp price drop feels more like a correction than a punishment. At this point, AspenTech's stock is up 15% in 52 weeks -- in line with many other enterprise software specialists and far ahead of the broader market.
Aspen is building generative ChatGPT-like artificial intelligence (AI) smarts into its entire service portfolio.
"It is early days, but we have identified many use cases where this capability can help improve the workflow and time-to-value for our customers," Pietri said. "We will provide more details on this exciting area in future calls."
In other words, AspenTech is latching on to the generative AI opportunity with an eye toward significant business in the long haul. So if you were looking for a proven winner leaning into the AI space, Aspen's sudden price drop lets you start a position at a more reasonable valuation.
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RELX - >>> LexisNexis Risk Solutions Acquires Human API
PR Newswire
April 25, 2023
https://finance.yahoo.com/news/lexisnexis-risk-solutions-acquires-human-163000090.html
ATLANTA, April 25, 2023 /PRNewswire/ -- LexisNexis® Risk Solutions, part of RELX, today announced it has acquired Human API, a leading provider of a proprietary consumer-driven data platform. LexisNexis Risk Solutions and Human API will deliver a next-generation consumer consent management solution that enables more seamless delivery of data. This approach empowers consumers with better access to their healthcare data and insurance resources that can improve care coordination and automate life insurance underwriting.
"Together, we can put digitized healthcare information more quickly at the fingertips of the people who need it – whether that be consumers, healthcare organizations or life insurance carriers," said Bill Madison, CEO of Insurance, LexisNexis Risk Solutions. "Human API and LexisNexis Risk Solutions can create a more seamless method of delivering sensitive health records while maintaining the industry's data privacy standards and helping the healthcare and insurance communities improve and protect people's lives."
Innovative technology from LexisNexis Risk Solutions and Human API enables patients to easily provide their care teams with access to the critical health information they need to make more informed decisions to improve care and helps consumers provide the important healthcare data insurance companies need to more quickly and easily offer life insurance.
"We are incredibly excited about what our combined vision can deliver for the industries and partners we serve. LexisNexis Risk Solutions can help accelerate the path Human API has been on to solve deep and complex industry challenges and serve the foundational needs of consumers and enterprises," added Andrei Pop, CEO of Human API, part of LexisNexis Risk Solutions.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX, a global provider of information and analytics for professional and business customers across industries. For more information, please visit www.risk.lexisnexis.com, and www.relx.com.
About RELX
RELX is a global provider of information-based analytics and decision tools for professional and business customers. The Group serves customers in more than 180 countries and has offices in about 40 countries. It employs more than 35,000 people over 40% of whom are in North America. The shares of RELX PLC, the parent company, are traded on the London, Amsterdam and New York stock exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX. The market capitalization is approximately £51.7bn/€58.5bn/$64.4bn.
About Human API
Human API's Health Intelligence Platform connects and converts health data into actionable intelligence that accelerates underwriting, improves placement rates, and creates better customer experiences. The company's platform is powered by a robust and comprehensive data network which includes access to electronic health records (EHR) networks, health information exchanges (HIEs), patient portals, and traditional APS retrieval partners. Coupled with smart evidence orchestration capabilities that optimize for the best data retrieval paths and a reporting engine that presents useful information to underwriters at the right time, Human API's solution is helping leading carriers easily access and use health data to transform underwriting and customer experiences. To learn more, visit HumanAPI.co.
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Thanks for sharing this! I wasn't aware of how far the rabbit hole went in those regards. Especially in the user-engagement front, those use cases can indeed prove helpful for any eCommerce today.
>>> Microsoft Corporation (NASDAQ:MSFT) - Number of Hedge Fund Holders: 259
Generation Investment Management’s Stake Value: $967,881,866
https://www.insidermonkey.com/blog/5-best-environmental-dividend-stocks-to-buy-according-to-al-gore-1140071/5/
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech company, which has a dedicated sustainability science team that ensures that it is reducing its carbon footprint. The company currently pays a quarterly dividend of $0.68 per share for a dividend yield of 0.95%, as of April 15. It is one of the best dividend stocks on our list as it has been raising its dividends for 16 years.
At the end of Q4 2022, Generation Investment Management owned over 4 million shares in Microsoft Corporation (NASDAQ:MSFT), worth over $967.8 million. The company made up 5.58% of Al Gore’s portfolio.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter. Here is what the firm has to say:
“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) outperformed despite a mixed fiscal first quarter due to macro challenges that negatively impacted results and guidance, including foreign exchange headwinds, weakening PC demand, and a cyclical slowdown in advertising spending. Total revenue beat Street expectations at 16% constant-currency growth (vs. estimates of 14%), but its Azure cloud computing business missed analyst projections by 1% for the second straight quarter, though it still grew a robust 42% year-over-year, as Microsoft helped its customers optimize existing workloads due to the macro backdrop. While the optimization of workloads is a short-term headwind, we believe it is the right thing to do and should help drive more consumption with customers over time. Our research continues to indicate that the longer-term secular trend of cloud computing remains healthy and intact. For example, in its fourth quarter CIO survey report, Morgan Stanley showed, among other things, that cloud computing was the second highest CIO spending priority (behind only security software), that cloud application workloads were expected to increase from 27% of total workloads today to 46% by the end of 2025, and that Azure was listed as the preferred cloud vendor and likely to take share over the short and long term. Additionally, Microsoft is positioned to be a prime beneficiary of ChatGPT. Microsoft invested $1 billion in OpenAI in 2020 and is rumored to be considering investing an additional $10 billion for a 49% stake in the company. Moreover, ChatGPT runs on Microsoft’s Azure platform, and Microsoft recently announced the general availability of its Azure OpenAI Service enabling Azure customers to access advanced AI models, including ChatGPT itself soon. We remain bullish on Microsoft’s long-term opportunity in the cloud, and believe AI has the potential to be additive to growth for years to come.”
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>>> Microchip Technology Inc (MCHP) - Number of Hedge Fund Holders: 46
https://finance.yahoo.com/news/12-best-environmental-dividend-stocks-161122815.html
Generation Investment Management’s Stake Value: $82,367,633
Microchip Technology Incorporated (NASDAQ:MCHP) is an Arizona-based company that specializes in the manufacturing of integrated circuits and related products. At the end of Q4 2022, Generation Investment Management owned roughly 1.2 million shares in the company with a total value of $82.3 million. The company accounted for 0.47% of Al Gore's portfolio.
Microchip Technology Incorporated (NASDAQ:MCHP) has implemented a range of energy-efficient technologies in its facilities and has invested in renewable energy sources such as solar power.
On February 2, Microchip Technology Incorporated (NASDAQ:MCHP) declared a 9.1% hike in its quarterly dividend to $0.358 per share. The company started its dividend policy in 2003 and has raised its dividends 76 times since then. The stock's dividend yield on April 15 came in at 1.80%. It is among the best dividend stocks on our list.
As of the close of Q4 2022, 46 hedge funds in Insider Monkey's database owned stakes in Microchip Technology Incorporated (NASDAQ:MCHP), up from 45 in the previous quarter. These stakes have a consolidated value of nearly $1.3 billion.
TimesSquare Capital Management mentioned Microchip Technology Incorporated (NASDAQ:MCHP) in its Q4 2022 investor letter. Here is what the firm has to say:
“Microchip Technology Incorporated (NASDAQ:MCHP) is a semiconductor manufacturer offering smart, connected, and secure embedded control solutions. Revenues in the latest quarter exceeded the consensus and that lifted the stock by 16%. While the company acknowledges the weak macro environment, they are not seeing much of an impact on their business. They have a sizable business backlog, multi-year agreements with large customers, and secular growth trends in areas such as 5G and Data Centers. While there has been weakness in some consumer end markets, Microchip has little exposure in areas such as personal computers and smartphones.”
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>>> Should You Hold Agilysys (AGYS)?
Insider Monkey
by Soumya Eswaran
March 22, 2023
https://finance.yahoo.com/news/hold-agilysys-agys-090246187.html
Wasatch Global Investors, an asset management company, released its “Wasatch Micro Cap Growth—U.S. Strategy” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The strategy declined and underperformed its benchmark, the Russell Microcap Index in the fourth quarter, which gained 4.72%. The disappointing returns in industrials, financials, and consumer discretionary were the primary source of the strategy’s weakness relative to the benchmark while consumer staples positively contributed to the performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Wasatch Micro Cap Growth—U.S. Strategy highlighted stocks like Agilysys, Inc. (NASDAQ:AGYS) in its Q4 2022 investor letter. Headquartered in Alpharetta, Georgia, Agilysys, Inc. (NASDAQ:AGYS) is a hardware and software products and services developer and marketer. On March 21, 2023, Agilysys, Inc. (NASDAQ:AGYS) stock closed at $78.58 per share. One-month return of Agilysys, Inc. (NASDAQ:AGYS) was -1.73%, and its shares gained 89.58% of their value over the last 52 weeks. Agilysys, Inc. (NASDAQ:AGYS) has a market capitalization of $1.981 billion.
Wasatch Micro Cap Growth—U.S. Strategy made the following comment about Agilysys, Inc. (NASDAQ:AGYS) in its Q4 2022 investor letter:
"Agilysys, Inc. (NASDAQ:AGYS) was the top contributor to strategy performance during the fourth quarter. The company develops application software for point-of-sale, property-management, inventory and procurement applications. Agilysys specializes in the hospitality and retail industries world-wide, and its solutions can be implemented on wireless and mobile devices. The company recently modernized its software, which has proved fortuitous as post-pandemic consumer and business travel has accelerated. On December 15, Agilysys announced an agreement to deploy its cloud-based property-management system software across Marriott’s luxury, premium and select service hotels in the United States and Canada. Beyond the incremental earnings and cash flows related to Marriott, the agreement should help Agilysys win new customers on an ongoing basis.”
Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the fourth quarter which was 17 in the previous quarter.
We discussed Agilysys, Inc. (NASDAQ:AGYS) in another article and shared the list of high growth software stocks that are profitable. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Intuit Inc. (NASDAQ:INTU) - >>> Number of Hedge Fund Holders: 86
https://www.insidermonkey.com/blog/5-high-growth-software-stocks-that-are-profitable-1122092/5/
Business software company Intuit Inc. (NASDAQ:INTU) ranks 1st in our list of the 12 high growth software stocks that are profitable. In November Intuit Inc. (NASDAQ:INTU) posted its fiscal first quarter results. Revenue in the quarter increased by about 29.4% on a YoY basis to come in at $2.6 billion, beating estimates by $100 million. Adjusted EPS in the quarter was $1.66, beating estimates by $0.46. Intuit Inc. (NASDAQ:INTU) said that for full-year 2020 it expects revenue in the range of $14.035 billion to $14.250 billion, which will show growth of about 10%-12%. The consensus estimate for this figure was $14.54 billion.
As of the end of the third quarter of 2022, 86 hedge funds reported owning stakes in Intuit Inc. (NASDAQ:INTU), significantly up from 75 hedge funds in the previous quarter. This shows that hedge fund sentiment for Intuit Inc. (NASDAQ:INTU) is positive.
Fundsmith made the following comment about Intuit Inc. (NASDAQ:INTU) in its 2022 yearly investor letter:
“Take the example of Microsoft and Intuit Inc. (NASDAQ:INTU). Microsoft shares are currently being valued at a P/E ratio of 25.0 times the consensus EPS estimate for the fiscal year ending June 2023. Meanwhile, Intuit is being valued at 28.4 times the non-GAAP consensus estimate for the fiscal year ending July 2023. Many investors and analysts may accept that Intuit is trading at a higher multiple given expectations of greater growth potential. However, Intuit removes share-based compensation from their non-GAAP EPS whereas Microsoft does not. Given that Intuit’s GAAP EPS guidance for the year ending 31st July 2023 is $6.92–$7.22, its non-GAAP guidance is $13.59–$13.89, and the consensus estimate for 2023 EPS is at $13.69, it seems clear that most sell-side analysts are accepting the company’s non-GAAP adjustments, which includes the removal of some $1.8bn of share-based compensation, in their estimates. If we include the impact of share-based compensation in Intuit’s 2023 EPS to make a more apples-to-apples comparison with Microsoft based upon GAAP EPS, Intuit’s 2023 EPS would be closer to $9, meaning that the shares would be trading at a multiple of about 43 times. I think investors and analysts may find a premium of 14% for Intuit over Microsoft (28.4 times versus 25.0 times) to be reasonable. I’m not so sure they are fully aware that Intuit shares are actually trading at a premium of 73% if share-based compensation is treated in the same manner between the two companies.
Many investors and analysts, including us, look to cash flow metrics more than accrual profits. Unfortunately, share-based compensation may cause distortions in cash flow metrics as well, even when they follow GAAP. Under GAAP, share-based compensation is added back in the cash flow from operating activities, which in turn is used in the computation of free cash flow. ..”
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Cadence Design Systems, Inc. (NASDAQ:CDNS) - >>> Number of Hedge Fund Holders:
https://www.insidermonkey.com/blog/5-high-growth-software-stocks-that-are-profitable-1122092/3/
Computational software and hardware company Cadence Design Systems, Inc. (NASDAQ:CDNS) is in the spotlight after the company posted upbeat Q4 results earlier this month. Cadence Design Systems, Inc. (NASDAQ:CDNS)’s revenue during the fourth quarter of 2022 saw an increase of about 16.4% on a YoY basis to reach $899.88 million, beating estimates by $15.65 million.
Cadence Design Systems, Inc. (NASDAQ:CDNS)’s management expressed confidence in Cadence’s secular growth prospects stemming from AI, machine learning, 5G and hyperscale computing.
Hedge fund sentiment for Cadence Design Systems, Inc. (NASDAQ:CDNS) also ticked up in Q3 of 2022. At the end of the quarter, 46 hedge funds out of the 920 hedge funds tracked by Insider Monkey had stakes in Cadence Design Systems, Inc. (NASDAQ:CDNS), up from 39 hedge funds in the previous quarter. The most notable stakeholder of the company was Panayotis Takis Sparaggis’ Alkeon Capital Management which owns a $523.4 million stake in Cadence Design Systems, Inc. (NASDAQ:CDNS).
Renaissance Investment made the following comment about Cadence Design Systems, Inc. (NASDAQ:CDNS) in its Q3 2022 investor letter:
“Cadence Design Systems, Inc. (NASDAQ:CDNS) was another contributor. The company reported strong operating results with broad-based strength from its semiconductor customers who are migrating to next-generation manufacturing nodes. We believe the multi-year investment cycle for semiconductor design spending should drive sustainable double-digit growth well into next year.”
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>>> Why CDW Corporation Stock Just Tumbled 13%
Motley Fool
By Rich Smith
Apr 19, 2023
https://www.fool.com/investing/2023/04/19/why-cdw-corporation-stock-just-tumbled-13/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Wall Street was expecting CDW to report $5.6 billion in Q1 sales, but CDW just warned it's going to miss that target.
Indeed, earnings for the entire year of 2023 will probably fall below 2022 levels.
What happened
Shares of CDW Corporation (CDW -13.23%) are down 13.3% Wednesday morning after the IT hardware and software distributor preannounced Q1 2023 sales numbers that fell far short of analyst predictions.
Heading into the quarter -- where official results are due out before market open on May 3 -- analysts had been forecasting nearly $5.4 billion in sales for CDW (according to Yahoo! Finance figures), and flat earnings of $2.20 per share. But this morning, CDW warned that sales will actually be closer to $5.1 billion for the quarter, and that profits for the full year will be "modestly below" 2022 numbers.
So what
How much lower? CDW hasn't said just yet.
CEO Christine Leahy noted that "intensifying economic uncertainty ... led our customers to spend more cautiously," with cutbacks being "most acute with our largest commercial customers." Now, the good news is that Leahy says CDW was able to maintain strong gross profit margins during the quarter because of favorable product mix. But the bad news is that there will be less revenue to apply these strong gross profit margins to, and that operating profit margins are looking weaker than anticipated.
That all seems to imply that earnings for the quarter could miss Wall Street's $2.20 estimate -- and that full-year earnings will fall short of last year's $8.13-per-share net profit.
Now what
Granted, this isn't a problem limited to CDW. To the contrary, CDW management is forecasting that the entire US IT industry will shrink "at a high single-digit rate in 2023" -- and predicts CDW will gain market share in this contracting environment, outperforming on sales growth by as much as 2% or 3% relative to the rest of the industry.
Granted, too, if CDW's full-year miss isn't too huge -- say, still in the $8-per-share range -- this would leave the stock priced at not much more than 20 times current-year earnings, which isn't particularly expensive if CDW can resume growing strongly again soon. Then again, though, analysts are forecasting only about 13% annualized earnings growth for CDW over the next five years.
For a 20-times-earnings stock, that may be too slow to justify a buy rating, especially at the start of a "down" year for profits.
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CDW Corporation (NASDAQ:CDW) - >>> Number of Hedge Fund Holders: 34
https://www.insidermonkey.com/blog/12-high-growth-software-stocks-that-are-profitable-1122091/
Illinois-based CDW Corporation (NASDAQ:CDW) makes application software for small businesses operating in several industries, including retail and finance. CDW Corporation (NASDAQ:CDW) has gained about 15% year to date through February 16. According to WSJ, the firm’s sales growth as of 2022 is about 14%. CDW Corporation (NASDAQ:CDW) is one of the dividend-paying technology stocks. Earlier in February, CDW Corporation (NASDAQ:CDW) declared a quarterly dividend of $0.59 per share. Forward dividend yield came in at 1.18%. The dividend is payable on March 10 to shareholders of record as of February 24. CDW Corporation (NASDAQ:CDW) also said its board of directors approved a $750 million boost to CDW’s share buyback program.
34 hedge funds in Insider Monkey’s database of elite hedge funds had stakes in CDW Corporation (NASDAQ:CDW) at the end of the third quarter of 2022. The total value of these stakes was about $1.7 billion. The biggest stakeholder of CDW Corporation (NASDAQ:CDW) during this period was Robert Joseph Caruso’s Select Equity Group which reported owning about 7.1 million shares of the company at the end of the September quarter.
Here is what Wedgewood Partners has to say about CDW Corporation (NASDAQ:CDW) in its Q3 2022 investor com:
“CDW contributed to performance during the quarter after logging +19% currency-neutral revenue growth and +26% operating earnings growth. The Company’s “omni-office” strategy of outfitting small and medium businesses with software, hardware and services, wherever workers decide or need to work continues to resonate. CDW organizes itself across several end-markets, with each of these end markets at different stages of building out their omni-office presences. In the meantime, the post-Pandemic IT environment has quickly evolved from supply scarcity (due to vendor shortages and strong demand) where CDW flexed its balance sheet to ensure inventory availability, to more recently helping customers manage never before seen levels of complexity related to a work-from-every-where workforce. CDW’s consistent returns, cheap multiple, and mission-critical functions it offers to vendors and customers continues to be an attractive risk-reward for portfolios.”
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Manhattan Associates, Inc. (NASDAQ:MANH) - >>> Number of Hedge Fund Holders: 26
https://www.insidermonkey.com/blog/12-high-growth-software-stocks-that-are-profitable-1122091/
Supply chain software company Manhattan Associates, Inc. (NASDAQ:MANH) shares have gained about 21% year to date in 2023 through February 16. Earlier this month Manhattan Associates, Inc. (NASDAQ:MANH) posted its fourth quarter results. Adjusted EPS in the quarter came in at $0.81, beating consensus estimates by $0.31. The software company’s revenue in the quarter increased by about 15.5% on a YoY basis to reach $198.1 million, beating estimates by $15.32 million. Adjusted operating income in the quarter totaled $59.9, much better than $39.1 million posted in the comparable quarter of 2021. Manhattan Associates, Inc. (NASDAQ:MANH)’s cash flow from operations in the period was $55.2 million, compared to $40.1 million for the fourth quarter of 2021.
At the end of the third quarter of 2022, 26 hedge funds tracked by Insider Monkey reported owning stakes in Manhattan Associates, Inc. (NASDAQ:MANH).
Brown Capital Management made the following comment about Manhattan Associates, Inc. (NASDAQ:MANH) in its Q3 2022 investor letter:
“Manhattan Associates, Inc. (NASDAQ:MANH) provides supply-chain-management software and services. For retailers, wholesalers, and manufacturers, the company’s products increase supply chain visibility to improve asset turnover, reduce costs and uncertainty on when goods will be delivered. The market for supply-chain software has risen steadily over recent years and Manhattan has been a beneficiary of this increased demand.
The company continues to generate strong revenue growth from its Cloud and Services offerings. During the second quarter, Cloud subscription revenue grew 48% year over year while Services revenue grew 19%. Existing and new customers are responding positively to the company’s new product launches. Additionally, increasing revenue from Cloud buyers against its historical investment in the cloud infrastructure is poised to expand the segment’s operating margins in the years to come. Manhattan should also benefit from other tailwinds, including supply-chain digitalization, an increased focus on fulfillment and Manhattan’s new omni-channel software offering. We met with Manhattan Associates’s management team in September. After discussing the company’s product development roadmap and its approach to solving customer challenges, we were convinced the company has many years of attractive growth remaining. Despite our enthusiasm, we did modestly reduce our position size in response to our internal risk controls on position sizing.”
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Qualys, Inc. (NASDAQ:QLYS) - >>> Number of Hedge Fund Holders: 25
https://www.insidermonkey.com/blog/12-high-growth-software-stocks-that-are-profitable-1122091/
Shares of IT security and compliance platform company Qualys, Inc. (NASDAQ:QLYS) have gained about 5% so far in 2023 through February 16. Qualys, Inc. (NASDAQ:QLYS)’s fourth quarter results show that the company saw a 19.2% YoY growth in revenue. Non-GAAP EPS in the quarter came in at $1.01, surpassing estimates by $0.11.
Qualys, Inc. (NASDAQ:QLYS) also announced a $100 million increase in its share buyback program. For the fiscal first quarter of 2023, Qualys, Inc. (NASDAQ:QLYS) is expecting its revenue to come in between $130.2 million to $131 million, which will show YoY growth of 15%-16%.
A total of 25 hedge funds tracked by Insider Monkey had stakes in Qualys, Inc. (NASDAQ:QLYS) as of the end of the third quarter of 2022. The biggest stakeholder of Qualys, Inc. (NASDAQ:QLYS) during this period was Terry Smith’s Fundsmith LLP which owns a $92 million stake in the firm.
Polen Capital made the following comment about Qualys, Inc. (NASDAQ:QLYS) in its Q4 2022 investor letter:
“Qualys, Inc. (NASDAQ:QLYS) is a provider of cloud-based cybersecurity software primarily focused on the vulnerability management segment. While the company has outperformed year to date, it experienced weakness after reporting earnings results and given investors’ concerns over decelerating billings growth and lower-than expected fourth-quarter guidance. While the market was disappointed, these results were in-line with our expectations, and we still believe Qualys’s growth is impressive and presents an attractive long-term opportunity for investors.”
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SPS Commerce, Inc. (NASDAQ:SPSC) - >>> Number of Hedge Fund Holders: 19
https://www.insidermonkey.com/blog/12-high-growth-software-stocks-that-are-profitable-1122091/
Cloud-based supply chain management software company SPS Commerce, Inc. (NASDAQ:SPSC) ranks 10th in our list of high growth software stocks that are profitable. On a year-to-date basis SPS Commerce, Inc. (NASDAQ:SPSC) has gained about 18% through February 16. Earlier this month, SPS Commerce, Inc. (NASDAQ:SPSC) reported its fourth-quarter results, according to which it saw revenue growth of about 19% in the period. SPS Commerce, Inc. (NASDAQ:SPSC)’s revenue of $122 million beat analyst estimates by $1.22 million. Adjusted EPS in the quarter was $0.63, beating forecasts by $0.09.
Adjusted EBITDA in the period jumped 26% to $35.0 million compared to the year-ago period.
At the end of the third quarter of 2022, 19 hedge funds in Insider Monkey’s database of hedge funds had stakes in SPS Commerce, Inc. (NASDAQ:SPSC).
Conestoga Capital Advisors made the following comment about SPS Commerce, Inc. (NASDAQ:SPSC) in its Q3 2022 investor letter:
“SPS Commerce, Inc. (NASDAQ:SPSC): SPSC has benefitted from being truly omni-channel and agnostic to where people shop. This contrasts with some software peers that derive revenue just online channels. SPSC beat revenue and earnings expectations for the second quarter and increased their full year guidance. Strength was broad-based with fulfillment consistent with 17% growth and analytics growth accelerating to 12%. SPSC is also benefiting from the industry looking to streamline supply chains and from digital transformations.”
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>>> Agilysys, Inc. (NASDAQ:AGYS) - >>> Number of Hedge Fund Holders: 17
https://www.insidermonkey.com/blog/12-high-growth-software-stocks-that-are-profitable-1122091/
Agilysys, Inc. (NASDAQ:AGYS) makes software for the hospitality industry. Over the past year Agilysys, Inc. (NASDAQ:AGYS) has doubled in value. During the third quarter, Agilysys, Inc. (NASDAQ:AGYS)’s revenue saw growth of about 26.5% on a YoY basis. Adjusted EPS in the period came in at $0.26, beating estimates by $0.05. For the full-year 2023, Agilysys, Inc. (NASDAQ:AGYS) expects its revenue to come in between $190 million to $195 million, versus the consensus estimate of $194.57 million.
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>>> Why Perion Network Stock Climbed 17% in March
Motley Fool
By Jeremy Bowman
Apr 10, 2023
https://www.fool.com/investing/2023/04/10/why-perion-network-stock-climbed-17-in-march/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
The company has emerged as a top performer in the adtech industry.
Its partnership with Microsoft's Bing could unlock more gains.
The stock still looks cheap at a price-to-earnings ratio of 16
.
What happened
Shares of Perion Network (PERI) were gaining in March as the company benefited from the broader recovery in tech stocks and anticipation for the new Bing, which helps Perion because of its strategic partnership with Microsoft.
According to data from S&P Global Market Intelligence, the stock gained 17%. As you can see from the chart below, those gains came primarily in the second half of the month as tech stocks rose broadly in response to falling interest rates.
So what
There was no company-specific news out on Perion, but the stock seems to be picking up momentum after a stellar performance last year and as it gains more recognition thanks to its partnership with Microsoft.
Perion was the only adtech stock on the market to gain last year as the company delivered strong growth on the top and bottom lines and continues to trade at a modest valuation.
In 2022, revenue rose 34% to $640.3 million and adjusted earnings per share jumped 57% to $2.47.
Excitement around the stock also seems to be building as the new Bing, which is powered by ChatGPT, attracted more attention. Perion is a preferred partner of Bing, repackaging ads and adding premium features to them in order to boost clicks and conversions. The current contract between the two companies runs through the end of 2024, but Perion has won accolades from Microsoft, indicating a high likelihood that the partnership will be renewed.
Last year, more than 40% of Perion's revenue came from search, nearly all of that from Bing, and Microsoft's CFO has said that every percentage point of market share that Bing gains would translate into nearly $2 billion of additional revenue for Microsoft, a potential windfall for Perion.
Additionally, the stock got a bullish analyst note as Needham raised its price target from $37 to $42, noting that its productivity trends were tops in the adtech industry in each quarter in 2022 and it expected that trend to continue in 2023. Needham also noted improving revenue per employee, a sign that the company's gaining leverage on the bottom line.
Now what
Even after last month's gains, the stock still looks cheap at a price-to-earnings ratio of 16.
Perion will report first-quarter earnings on May 3. Analysts are expecting revenue to increase 13% to $141.3 million, and for adjusted earnings per share to rise from $0.33 to $0.41. Keep an eye on the earnings report as strong numbers could spark another leg up for the stock.
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>>> Microsoft Corporation (NASDAQ:MSFT) - Number of Hedge Fund Holders: 259
https://www.insidermonkey.com/blog/5-cheap-quarterly-dividend-stocks-to-buy-1135924/5/
Dividend Yield as of 3/29: 0.97%
Microsoft Corporation (NASDAQ:MSFT) ranks #1 on our list of 14 Cheap Quarterly Dividend Stocks to Buy given 259 hedge funds in our database owned shares of the tech giant at the end of Q4. Although it has a forward P/E of 26.1 as of March 30, Microsoft Corporation (NASDAQ:MSFT) is cheap in the long term if it can capitalize on its AI potential. Microsoft Corporation (NASDAQ:MSFT) reportedly owns 49% of OpenAI which makes the popular ChatGPT. Although ChatGPT makes mistakes, Microsoft Corporation (NASDAQ:MSFT) has incorporated it into Bing, giving it potential to increase market share. Microsoft Corporation (NASDAQ:MSFT) also has the second largest cloud computing business in the world that could benefit from more AI processing.
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>>> ASML Holding N.V. (NASDAQ:ASML) - Number of Hedge Fund Holders: 59
https://finance.yahoo.com/news/14-cheap-quarterly-dividend-stocks-161933738.html
Dividend Yield as of 3/29: 1.51%
ASML Holding N.V. (NASDAQ:ASML) is a leading semiconductor equipment manufacturer that is at least several years ahead of its competitors in making EUV lithography systems which are essential for making advanced semiconductors. Although ASML Holding N.V. (NASDAQ:ASML) has a forward P/E ratio of 27.25 and a dividend yield of 1.51% as of 3/29, demand for advanced semiconductors is expected to grow substantially in the long term, and demand for ASML Holding N.V. (NASDAQ:ASML)'s products could also grow substantially if it maintains its market share, making the stock cheap in terms of its long term potential.
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>>> ServiceNow, Inc. (NYSE:NOW) - Number of Hedge Fund Holders: 97
https://www.insidermonkey.com/blog/5-stocks-about-to-pop-according-to-jim-cramer-in-retrospect-1137168/3/
6-Month Performance as of March 30 (Relative to SPY): 2.11%
One of Cramer’s favorite stocks from the software space was ServiceNow, Inc. (NYSE:NOW). Cramer did not think that the company’s CEO would “let this stock continue to roll over and play dead”. ServiceNow, Inc. (NYSE:NOW) has outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 2.11% over the past 6 months, as of March 30.
At the end of Q4 2022, ServiceNow, Inc. (NYSE:NOW) was spotted on 97 investors’ portfolios that held collective stakes worth $3.85 billion in the company. Of those, SCGE Management was the most prominent investor in the company and held a position worth $363 million.
Here is what Polen Capital had to say about ServiceNow, Inc. (NYSE:NOW) in its Q4 2022 investor letter:
“ServiceNow, Inc. (NYSE:NOW) is an $80 billion market cap business based in California. Its purpose is to make the world of work, work better for people. Getting a job done in an enterprise (what the company refers to as “workflow”) usually requires different people in various functions of an organization to work together. Often, they rely on different technology systems and inefficient manual processes to complete each step of the job before moving on to the next.
ServiceNow believes the most effective digital transformation initiative utilizes tools that can integrate workflows across siloed systems, departments, processes, and people. The company is solving what is arguably the biggest pain point in the biggest profit pool in the world (enterprises). Consider the explosion in data growth and all the software point solutions emerging constantly. ServiceNow wrangles all this into a fully integrated dashboard on a global scale with global customers in every industry. Nearly 100% of revenues are subscription based with a 99% renewal rate, and the company currently has no direct competition, according to our research. ServiceNow started with IT workflow, and today, ~40% of net new annual contract value is in non-IT workflows. Through constant innovation, the business has continued to expand its total addressable market, and we think it can grow free cash flow (FCF) at a 20%+ annualized rate for the next three to five years. At less than 30x FCF, we thought the valuation was attractive.”
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Finally switched to digital business cards this week. I attended a conference yesterday (as a part of April's networking events) and came back with a few DBCs. Naturally, I started researching immediately how to create a digital business card, as I hate dragging my business cards around anyway. Frankly, I can't see why wouldn't we reduce paper waste not to mention that you cannot lose a digital one.
Some makers, like the one I picked, Beaconstac, allow you to update your information without having to create a new batch. Also, you can include a lot more than on a traditional card - name, address, bio, social media links, website, location, photo, you name it! Another thing that didn't even cross my mind - you can actually track when/where people check out your card.
I imagine the youngsters are not as excited about this as I am, as they probably didn't go through the whole process of printing business cards and sharing them around as many times as we did.
>>> Accenture Plc (NYSE:ACN) - Number of Hedge Fund Holders: 63
https://www.insidermonkey.com/blog/5-stocks-about-to-pop-according-to-jim-cramer-in-retrospect-1137168/
6-Month Performance as of March 30 (Relative to SPY): -3.41%
Accenture Plc (NYSE:ACN) is the “gold standard for consulting” for tech companies. He mentioned the stock among his tech stock picks that were “about to pop” back in October. As of March 30, Accenture Plc (NYSE:ACN) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 3.41%, over the past 6 months.
At the end of the fourth quarter of 2022, 63 hedge funds were long Accenture Plc (NYSE:ACN) and disclosed positions worth $2.89 billion. Of those, GuardCap Asset Management was the largest investor in the company and held a stake worth $386.9 million.
ClearBridge Investments made the following comment about Accenture plc (NYSE:ACN) in its Q4 2022 investor letter:
“Accenture plc (NYSE:ACN) is a leading global professional services company that helps clients build their digital infrastructure and optimize their operations. We view Accenture as a resilient, high-quality business with consistent earnings and cash flow, a strong balance sheet and very attractive returns on capital. Secular drivers like cloud migration and digital transformation, as well as new, innovative technology deployments like data security, block chain, AI and machine learning position Accenture well for continued growth. It is also currently rolling out a suite of sustainability tools that offers a comprehensive view of a company’s goals, progress and performance across financial and ESG measures, so it is an enabler of ESG for its clients. We exited our position in software-as-a-service company Workday to fund the position, largely on better relative risk/reward, in our view.”
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>>> StoneCo stock has explosive potential -
https://www.fool.com/investing/2023/04/11/2-stocks-down-more-than-75-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Keith Noonan: StoneCo (STNE 3.09%) is a Brazil-based payment processing and lending company that's seen volatile trading over the last few years. To be more descriptive, it's a fintech services provider with thriving payment solutions for small and medium-sized businesses and a credit business that was crushed by headwinds related to the coronavirus pandemic and flaws in Brazil's national registry system, which was used for loan underwriting.
Even after discharging or selling off much of its credit portfolio at basement-level prices, StoneCo still carries roughly $79 million in bad debt on its books. Due to macroeconomic pressures and the collapse of the credit business, the company's share price is down approximately 91% from its high. But there's an opportunity here.
StoneCo's fourth-quarter earnings report arrived with strong performance for the core payments business and signs the company is emerging from challenges created by its credit business. Sales and earnings performance for the period beat both internal guidance and the average analyst estimates, with revenue growing 44% year over year and non-GAAP (adjusted) net income swinging into positive territory at $46.4 million from a loss of $6.4 million in the prior-year period.
While StoneCo shouldn't be thought of as a low-risk stock, the market appears to be too pessimistic about the company, and it trades at multiples that leave room for explosive upside.
Valued at less than 15 times expected earnings for this year and less than 1.3 times expected sales, the Brazilian fintech services provider offers an attractive risk-reward proposition at current prices. If macroeconomic pressures ease and the company maintains solid footing in its corner of Brazil's payment-processing space, the stock stands a very good chance of delivering strong returns.
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Semiconductors - >>> Time to Pick Up Your SOXX?
Yahoo Finance
by Andrew Hecht
March 30, 2023
https://finance.yahoo.com/news/time-pick-soxx-150000550.html
The iShares Semiconductor ETF (SOXX) appears to have returned to its old ways. That is, its market-beating ways.
With high-flying Nvidia Corp. as the exchange-traded fund’s top holding—the stock has nearly doubled in 2023—SOXX is soaring. It’s added 24% so far this year through March 28, handily beating the 3.9% gain in the SPDR S&P 500 ETF Trust (SPY). The fund has been beating SPY for the past few years, although going back even further, SPY has generated better returns.
SOXX is highly liquid. At around its current $420 per share, the ETF had around $7.63 billion in assets under management. It trades an average of over 910,000 shares daily and charges a 0.35% expense ratio. The blended $4.37 annual dividend translates to a 1.02% yield.
A little background on semiconductors. The silicon chips packed with integrated circuits are essential components in electronic devices that enable advances in nearly everything: communications, computing, health care and so on. A semiconductor has an electrical conductivity value between a traditional copper conductor and an insulator, like glass. The resistivity decreases as the temperature rises, the opposite of the conductive metals.
Gallium arsenide, germanium and silicon are critical semiconductor components. Electronic circuit fabrication uses silicon, while solar cells and laser diodes require gallium arsenide. Transistors and other electronic devices tend to require germanium.
Taiwan Semi Exposure
SOXX also has a 3.55% exposure to Taiwan Semiconductor, the world’s leading semiconductor foundry, an industry term for manufacturing integrated circuits on behalf of customers.
While the fund underperformed the S&P 500 last year, it’s making up those losses.
The S&P 500 is the most diversified U.S. stock market index. In 2022, SPY fell 19.5%.
The chart shows the SOXX dropped 29% in 2022, underperforming SPY. In 2022, pandemic-related supply chain bottlenecks and shutdowns created semiconductor shortages, weighing on the sector’s revenues. In 2023, supplies and prices increased, supporting profits and share prices.
Geopolitical Considerations
The Chinese-Russia alliance injects a geopolitical angle, with respect to Taiwan Semiconductor. China considers Taiwan a breakaway country that belongs under Beijing’s umbrella, and it’s made no secret about its reunification ambitions.
The above chart shows Taiwan Semiconductor’s market cap is second only to Nvidia, and Taiwan Semiconductor’s annual revenue is second to Samsung’s. In last year’s fourth quarter, the company had a 58.5% global semiconductor foundry market share.
As Taiwan Semiconductor is a world leader, China’s designs on the island nation pose a significant threat to peace in the region and worldwide semiconductor supplies.
Supply Shortages Loom
Semiconductors are critical for technological advances in a wide range of industries and essential for worldwide consumer products.
Inflation at the highest level since the 1980s has caused production costs to rise. Meanwhile, rising prices and supply concerns over potential issues surrounding Taiwan should underpin demand. The trend in the stock market has been bearish, and investors are searching for companies with proven track records and profits.
The above chart of etf.com’s fund flow tool shows $292.2 million has flowed into SOXX since the beginning of 2023. The ETF traded to a $287.82 low in October 2022, where it found a bottom. Over the past five months, the semiconductor fund has made higher lows and higher highs and was sitting near the most recent $442.89 peak on March 24.
The trend is always your best friend in markets, and SOXX’s path of least resistance remains higher, as semiconductors are essentials.
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StoneCo - >>> 1 Warren Buffett Stock Down 91% to Buy Before the Next Bull Rally
Motley Fool
By Cory Renauer
Mar 21, 2023
https://www.fool.com/investing/2023/03/21/1-warren-buffett-stock-down-91-to-buy-before-the-n/
KEY POINTS
Warren Buffett's holding company, Berkshire Hathaway, owns more than 4% of StoneCo, a Brazillian e-commerce company.
StoneCo's business is growing by leaps and bounds, but you can scoop up its stock for just 15.1 times trailing free cash flow.
The company appears to have overcome the poorly timed rollout of lending products that led to previous losses.
After reporting some frightening losses, this Brazillian e-commerce company has swung back to profitability.
Warren Buffet's stock picks get lots of attention, but they can't all be zingers. Berkshire Hathaway made a large investment in Brazillian e-commerce pioneer, StoneCo (STNE 0.22%), when it made its stock market debut in 2018. It bolted out of the gate, but the good times didn't last.
StoneCo stock peaked during the lockdown phase of the pandemic and has fallen around 91% from the high water mark it set in 2021.
Despite the disappointing drop from its peak, StoneCo looks like an unbeatable bargain at its depressed price. Here's why.
StoneCo's gaining market share
Brazil's a big country with more than 200 million people who increasingly shop online. Brazil's e-commerce industry grew sales by 24.6% in 2022, according to StoneCo.
StoneCo's recent earnings report suggests its share of Brazil's rapidly growing e-commerce industry is growing too. In 2022, the total volume of payments processed (TPV) grew 33.4%, which was significantly faster than its average competitor.
Small and midsize businesses (SMBs) and micro small and midsize businesses (MSMBs) are driving growth for StoneCo. In 2022, TPV from MSMBs soared 52.3% year over year.
Improving profit margins
StoneCo markets financial services such as payments and banking. The company also offers a suite of software solutions similar to Shopify but geared toward Brazillian merchants.
StoneCo works with companies of all sizes, but it generally squeezes wider profit margins from smaller businesses. At 2.15% last year, StoneCo's take rate for payments sent by MSMBs was more than double its take rate for established e-commerce companies.
Increased focus on clients willing to absorb higher fees is working wonders for the company's bottom line. Adjusted earnings before taxes worked out to 12.4% of revenue in the fourth quarter compared to a loss of 2% in the previous year's period.
Why the nice price?
At the moment, you can scoop up shares of StoneCo for just 15.1 times trailing free cash flow. At this very reasonable multiple, investors will come out ahead even if the business creeps forward at half the pace of Brazil's overall e-commerce industry.
StoneCo's past misfires are the reason its stock currently trades at a somewhat depressed valuation. Before the pandemic, it let a lot of smaller merchants borrow money they couldn't pay back when COVID-19 lockdowns threw out unprecedented obstacles.
As a result, the previously profitable company began posting heavy losses in 2021. Luckily, an expanded client base and improved take rates have already pushed its bottom line back into positive territory. Continuing along this trajectory could return StoneCo's bottom line to growth before the end of 2024.
Follow Buffett
Warren Buffett will be the first to tell you that blindly following Berkshire Hathaway's stock purchases isn't recommended. In this case, though, following the Oracle of Omaha into this particular investment looks like a smart move.
Everyday investors would do well to follow Buffett's lead with this stock in more ways than one. First of all, Berkshire has held this stock for about three and a half years already with no sign of letting go.
While the stock has what it needs to produce market-beating gains, there are no guarantees. Perhaps the most valuable lesson individual investors can learn from Berkshire's investment in StoneCo is diversification. Berkshire Hathaway owns around 4% of StoneCo's outstanding shares, but this position makes up just a sliver of the holding company's total equity portfolio. Investors should only take a chance on this fintech stock if they too can make it a relatively small part of a diversified portfolio.
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>>> Is Palantir Among The Best AI Stocks? One Analyst Says Buyer Beware
Investor's Business Daily
by REINHARDT KRAUSE
04/05/2023
https://www.investors.com/news/technology/pltr-stock-is-palantir-among-the-best-ai-stocks-one-analyst-says-buyer-beware/?src=A00220
Whether Palantir Technologies (PLTR) can expand its prowess in artificial intelligence into new commercial markets is a big question for bulls and bears. Right now, it's too early to count on PLTR stock as one of the best AI stocks, says one analyst.
"The launch of ChatGPT has generated significant interest in AI software and its applications," CFRA Research analyst Janice Quek said in a note to clients Tuesday.
She added, "As a strong market player, PLTR is well positioned to benefit from investments in the AI software platform market. However, recent performance is concerning as we question its ability to execute and capitalize on the large market opportunity."
On the stock market today, PLTR stock fell 4.4% to close at 7.98.
Palantir is one of many AI stocks to watch. One of them, C3.ai (AI), plunged Tuesday on a short-seller's report. Meanwhile, PLTR stock is up 26% this year. In 2022, shares fell nearly 65%.
Also, Palantir gets nearly 60% of revenue from government agencies. They use Palantir software for intelligence gathering, counterterrorism and military purposes. That gives it a narrower market than some rivals.
Meanwhile, Bank of America maintains a buy rating on PLTR stock.
In a Feb. 28 report, BofA analyst Mariana Mora said: "Palantir is uniquely positioned as a software infrastructure company with robust experience providing AI-powered data operating solutions to intel and defense customers."
Mora added, "According to CEO Alexander Karp, the most applicable opportunity for AI is on the battlefield. One such example is the company's Skykit tactical C2 system, which enables operators to source and aggregate data, allowing for timely and actionable analysis."
Founded in 2003, Palantir's government work preceded recent AI buzz. Startup OpenAI launched ChatGPT in late November.
Also, generative AI technology already is finding applications in a number of areas. They include marketing, advertising, drug development, legal contracts, video gaming, customer support and digital art.
So Palantir aims to grow its commercial business by expanding into the health care, energy, automotive and manufacturing sectors.
CFRA Research cited market research firm IDC's forecast for AI growth. IDC projects that the AI software platform market will grow from $19 billion in 2022 to $47 billion in 2026.
"While we are optimistic of PLTR's AI opportunity, recent performance gives us pause on a buy recommendation," added CFRA's Quek. "Revenue growth has been decelerating rapidly from lumpy results in its government segment and smaller deal sizes."
However, BofA has a different view.
"Despite some controversy around the use of PLTR's software around the right to privacy, the company has historically focused on the responsible use of AI," said Mora.
She added, "The increasing availability of AI-powered solutions in commercial/civilian applications raises concerns of security and transparency. According to Karp, this trend should require AI-systems to incorporate increasing security, privacy, regulatory and accountability requirements. Palantir's solutions are in a unique position as its ontology is designed to embrace these requirements already."
Meanwhile, bulls and bears on PLTR stock have been looking at the renewal of big U.S. government contracts. Also, Palantir's business in Japan is a new factor.
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>>> Palantir Expands Microsoft Cloud Computing Pact To Government Agencies
Investor's Business Daily
REINHARDT KRAUSE
04/05/2023
https://www.investors.com/news/technology/pltr-stock-palantir-expands-microsoft-cloud-computing-pact-to-government-agencies/
Palantir Technologies (PLTR) on Wednesday expanded its cloud computing partnership with Microsoft (MSFT) on federal government contracts. PLTR stock fell on the news as the Nasdaq composite sold off.
In addition, a government procurement arm, FedRAMP, has approved the Palantir cloud service using Microsoft's Azure cloud infrastructure.
"This milestone expands Palantir and Microsoft's strategic partnership from the private sector to the public sector, bringing the best in class cloud components to the federal marketplace," said a Palantir news release.
William Blair analyst Louie DiPalma holds a underperform rating on Palantir stock.
"We do not view the Microsoft Azure partnership as significant," he said in a report. "Palantir already offered its Gotham and Foundry application on Amazon Web Services as a SaaS (software-as-a-service) model."
On the stock market today, PLTR stock fell 4.4% to close at 7.98. Also, Palantir stock has gained 26% thus far in 2023.
PLTR Stock: Big Government Provider
In addition, Palantir gets nearly 60% of revenue from government agencies. They use Palantir software for intelligence gathering, counterterrorism and military purposes. Also, Palantir uses artificial intelligence tools in some products.
Further, PLTR aims to grow its commercial business. The software maker is looking to expand into the health care, energy, automotive and manufacturing sectors.
Also, Palantir's big government business remains key as some large U.S. government contracts are coming up for renewal.
Meanwhile, PLTR stock holds a Relative Strength Rating of 52 out of a best-possible 99, according to IBD Stock checkup.
>>>
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StoneCo - >>> Strong growth driven by pandemic lockdowns and an endorsement from Warren Buffett helped shares of StoneCo (STNE 0.22%) rocket up to dizzying heights in early 2021. Buffett's holding company, Berkshire Hathaway, still owns more than 4% of the Brazilian e-commerce company, but the stock has tumbled more than 90% from its previous peak.
https://www.fool.com/investing/2023/03/27/2-stocks-to-buy-before-the-next-nasdaq-bull-market/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
StoneCo offers merchants throughout Brazil increasingly popular financial services such as banking and payment processing. The company also markets a collection of software solutions designed for merchants in Brazil.
According to StoneCo, Brazil's e-commerce industry grew sales by 24.6% in 2022. The stock looks like a buy because the company's share of this market is increasing. It reported a total payment volume figure that grew 33.4% last year.
StoneCo is a well-run business, with revenue expanding much faster than operating expenses. In the fourth quarter, the company reported net income according to generally accepted accounting practices (GAAP) that worked out to 2.9% of total revenue. In the previous year's period, the company reported a steep loss.
Right now, you can buy shares of StoneCo for just 14.9 times the amount of free cash flow its operations generated over the past year. Investors who buy at this modest valuation will come out ahead if the business creeps forward at a single-digit percentage from year to year. With a growing share of Brazil's e-commerce industry, we can reasonably expect this business to exceed the market's low expectations.
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>>> StoneCo Ltd. (NASDAQ:STNE)
Number of Hedge Fund Holders: 35
https://www.insidermonkey.com/blog/5-best-low-priced-technology-stocks-to-invest-in-1136108/
If we could mention just one thing to get your attention to this low-priced tech stock, it’s that the Oracle of Omaha Warren Buffett has a $101 million stake in StoneCo Ltd. (NASDAQ:STNE). Overall, 35 hedge funds tracked by Insider Monkey had stakes in StoneCo Ltd. (NASDAQ:STNE) as of the end of the fourth quarter of 2022. The total value of these hedge funds’ stakes was $635 million. Buffett isn’t the only famous stakeholder StoneCo Ltd. (NASDAQ:STNE). Point72 Asset Management of Steve Cohen and Citadel Investment Group of Ken Griffin also have huge stakes in StoneCo Ltd. (NASDAQ:STNE).
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>>> StoneCo Ltd. (STNE) provides financial technology solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and technology and solutions to digital merchants through sales and technical personnel and software vendors, as well as sells solutions to brick-and-mortar and digital merchants through sales team. As of December 31, 2021, the company served approximately 1,766,100 clients primarily small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands. <<<
https://finance.yahoo.com/quote/STNE/profile?p=STNE
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>>> Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 28
https://finance.yahoo.com/news/12-best-low-priced-technology-132908063.html
Palantir Technologies Inc. (NYSE:PLTR) shares were hammered in 2022 on the back of a broader rotation away from tech stocks. However, Palantir Technologies Inc. (NYSE:PLTR)’s performance has been decent this year. It’s up 25% year to date through March 28.
Palantir Technologies Inc. (NYSE:PLTR) recently said it won a $99.6 million contract from the U.S. State Department. Palantir Technologies Inc. (NYSE: PLTR), under the contract, will provide software services to the Bureau of Medical Services to keep track of the health, safety, and readiness of State Department personnel.
In February, BofA published a list of stocks that can benefit from the latest AI boom. Palantir Technologies Inc. (NYSE:PLTR) made it to the list as BofA is bullish on the company’s “AI-enabled platforms used by both commercial enterprises and governments.”
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Just another Monday for me to survive. Exploring and considering investing in software stocks. In the meantime and more urgent, trying to decide on automation software to purchase. Spotted a favorite, I am hoping to get this over and done with this week.
>>> 'War of the states': EV, chip makers lavished with subsidies
Yahoo Finance
by MARC LEVY
April 1, 2023
https://finance.yahoo.com/news/war-states-ev-chip-makers-130040413.html
HARRISBURG, Pa. (AP) — States are doling out more cash than ever to lure multibillion-dollar microchip, electric vehicle and battery factories, inspiring ever-more competition as they dig deeper into their pockets to attract big employers and capitalize on a wave of huge new projects.
Georgia, Kansas, Michigan, New York, North Carolina, Ohio and Texas have made billion-dollar pledges for a microchip or EV plant, with more state-subsidized plant announcements by profitable automakers and semiconductor giants surely to come.
States have long competed for big employers. But now they are floating more billion-dollar offers and offering record-high subsidies, lavishing companies with grants and low-interest loans, municipal road improvements, and breaks on taxes, real estate, power and water.
“We’re in the second war of the states,” said John Boyd, a principal at the Florida-based Boyd Company, which advises on site selections. “That’s how competitive economic development is between the states in 2023.”
The projects come at a transformative time for the industries, with automakers investing heavily in electrification and chipmakers expanding production in the U.S. following pandemic-related supply chain disruptions that raised economic and national security concerns.
One of the driving forces behind them are federal subsidies signed into law last summer that are meant to encourage companies to produce electric vehicles, EV batteries, and computer chips domestically. Another is that states are flush with cash thanks to inflation-juiced tax collections and federal pandemic relief subsidies.
The number of big projects and the size of state subsidy packages are extraordinary, said Nathan Jensen, a University of Texas professor who researches government economic development strategies.
“It is kind of a Wild West moment,” Jensen said. “It’s wild money and every state seems to be in on it.”
Good Jobs First, a nonprofit that tracks and is critical of corporate subsidies, said 2022 set a record for the number of billion-dollar-plus incentive deals. At least eight were finalized, though that figure might be higher since such deals can be cloaked in secrecy and take time to come to light.
Eighteen of last year's 23 known “megadeals," in which state and local incentive packages to private companies exceeded $50 million in value, were for semiconductor and EV plants, according to the group's data.
More than $20 billion in public money was committed to subsidizing those known megadeals, according to Good Jobs First data. That total eclipsed the previous record of $17.7 billion that was committed to subsidizing such deals in 2013.
Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast.
The subsidy offers are generally embraced by politicians from both major parties and the business elite, who point to promises of hundreds or thousands of jobs, massive investments in construction and equipment, and what they contend are immeasurable trickle-down benefits.
Still, academics who study such subsidies find them to be a waste of money and rarely decisive in a company's choice of location.
In a 2021 paper arguing that subsidies are driven by politicians for their own benefit, researchers from The Citadel, the College of Charleston and the University of Louisville-Lafayette wrote that studies conclude “they do little, if anything, to promote meaningful improvements in economic outcomes.”
The mounting cost of competing for the projects hasn't dissuaded states from trying. On the contrary, they're clambering to outdo each other.
Michigan was stung by hometown Ford's $11.4 billion commitment in 2021 to build electric vehicle and battery plants in Tennessee and Kentucky. It responded by pledging more than $2.5 billion for electric-vehicle projects by Ford and GM and plants by makers of EV batteries and battery components.
Pennsylvania has yet to lure a microchip or EV factory, and the state's business elite are sounding the alarm after watching neighboring Ohio land a $20 billion Intel plant.
In his first budget speech to lawmakers, newly inaugurated Gov. Josh Shapiro said Pennsylvania needs to “get in the game" and warned that it would take money.
Jabbing a finger in the air, he brought the room to a standing ovation, saying: ”It’s time to compete again here in Pennsylvania!”
Oregon lawmakers hoping to attract a major semiconductor plant are advancing legislation that would marshal $200 million in subsidies and loosen decades-old protections against urban sprawl.
The aim is to procure huge plots of land with ready-made utilities. That has elicited protests from conservationists who say the state mishandled developable land and agricultural groups that warned of the permanent destruction of high-quality farmland.
Dick Sheehy, a retired site selection consultant who traveled the world to inspect possible locations for semiconductor makers, told a panel of Oregon lawmakers in January that states are tipping the scales over better-qualified competitors by offering larger incentive packages.
“The money the state is putting up is so large that certain companies can’t afford not to look at it,” Sheehy said.
In Texas, Gov. Greg Abbott promised to win passage of “economic development tools” during the current legislative session, saying the state lost out on a massive Micron semiconductor plant because it couldn't match the $5.5 billion in tax credits offered by New York.
"The CEO of Micron was basically begging me because he really wanted to do business in Texas. He knew Texas was a better place. He said, 'Please could you come up with some more?'" Abbott told a Greater Arlington Chamber of Commerce crowd in February. "We gave every penny that we could give.”
Asked about Abbott's assertions, Micron declined to address Abbott's description of the phone call with CEO Sanjay Mehrotra, but it called New York the most competitive state and listed reasons why it is the “ideal home” for its plant.
Those included a compelling case made by top officials — including Gov. Kathy Hochul and U.S. Sen. Chuck Schumer — plus an attractive local workforce, local research and development partners, and a good quality of life for employees.
In Oklahoma, frustration among lawmakers has been bubbling over since the state lost out on a string of projects: first a Tesla plant to Texas, then a Panasonic EV battery plant to Kansas and, just days ago, a Volkswagen EV battery plant to Canada.
That latest loss led state Senate President Pro Tempore Greg Treat to create a committee to figure out what went wrong in Oklahoma's bidding for a “megaproject.”
Business-friendly Oklahoma shouldn't keep losing out to other states, Treat said.
“You never know if you’re being used so they can go to that other state so they can say, ‘Hey, Oklahoma is willing to do this,’" Treat said in an interview. “And they intend on going to that state the whole time.”
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>>> Why Accenture Shares Are Gaining Today
Benzinga
by Akanksha Bakshi
March 23, 2023
https://finance.yahoo.com/news/why-accenture-shares-gaining-today-154450255.html
Accenture plc (NYSE: ACN) shares are gaining over 4% during Thursday morning trading session following its solid Q2 results. The company also disclosed its plan to reduce 19,000 jobs.
ACN reported second-quarter FY23 revenue growth of 5% year-over-year to $15.81 billion, beating the consensus of $15.59 billion.
New bookings increased by 13% Y/Y to $22.1 billion. Consulting revenues decreased by 1% Y/Y to $8.28 billion, and Managed Services revenues increased by 12% Y/Y to $7.54 billion.
Adjusted EPS of $2.69 beat the consensus of $2.50.
Adjusted operating margin was 13.8%, an expansion of 10 bps from 2Q22. The gross margin was 30.6% compared to 30.1% a year ago.
SG&A expenses for the quarter were 16.7% of revenues, compared to 16.4% in 2Q22.
Operating cash flow was $2.33 billion for the quarter, and property and equipment additions were $108 million. Free cash flow was $2.22 billion.
Accenture’s total cash balance as of Feb. 28, 2023, was $6.2 billion.
Dividend: Accenture declared a quarterly cash dividend of $1.12 per share, payable on May 15, 2023, for shareholders of record on Apr. 13, 2023.
During the quarter, Accenture repurchased or redeemed 4.1 million shares for $1.12 billion. The company’s remaining share repurchase authority on Feb. 28, 2023, was ~$4.2 billion.
Workforce Reduction: ACN disclosed in a filing that during Q2, it initiated actions to streamline its operations. Over the next 18 months, the company expects these actions to result in the departure of approximately 19,000 people or 2.5% of its current workforce.
ACN expects over half of these departures will consist of people in its non-billable corporate functions.
3Q23 Outlook: Accenture expects revenues of $16.1 billion - $16.7 billion, vs. consensus of $16.64 billion.
FY23 Outlook: Accenture now expects revenue growth of 8% - 10% in local currency, compared to 8% - 11% previously.
It sees GAAP operating margin of 14.1% - 14.3%, compared to the prior 15.3% - 15.5%, and an adjusted operating margin of 15.3% - 15.5%, an expansion of 10 to 30 basis points from FY22.
The company now expects GAAP EPS of $10.84 - $11.06, compared to the prior $11.20 - $11.52, and adjusted EPS of $11.41 - $11.63 (vs. consensus of $11.45), an increase of 7% - 9% from FY22.
Price Action: ACN shares traded higher by 4.23% at $263.98 during the market session on the last check Thursday.
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Apple - >>> Most investors who follow Warren Buffett know that he is among the most bullish big-time money managers when it comes to Apple (AAPL).
https://finance.yahoo.com/m/b6aa7a04-2450-3273-aae3-a4758c72e87e/want-passive-income-in-a-bear.html
The Oracle of Omaha first bought Apple's stock in 2016, being influenced in his decision by his two deputies, Todd Combs and Ted Weschler. Over the years, Buffett has decried not buying more Apple on dips, providing many such reasons for doing so over the years.
Buffett's view of Apple, as a premium provider of consumer goods to a very loyal clientele, has been on point. Apple's closed-loop ecosystem and focus on quality has led the company to become the leading smartphone provider in the U.S. With over 50% market share in this incredibly powerful segment, Apple has become ubiquitous in most of its key markets. The company's sheer cash flow growth over the years is a testament to the fundamental soundness (or quality) Buffett looks for in his core holdings.
With Apple now comprising approximately 39% of Berkshire Hathaway's portfolio, Buffett is clearly in this position for the long haul. While Buffett has trimmed his Apple position from time to time, his purchases over the years have far outweighed his divestitures, providing Berkshire holders with significant exposure to this world-class gem.
Apple's dividend yield of only 0.6% ($0.92 per share annually) is quite small, relative to the other names on this list. However, this is also a stock that's exploded in value since Buffett started buying in 2016, meaning his realized yield is much higher compared to his base cost than an investor putting fresh capital to work. Indeed, while Apple has raised its dividend distribution over the years, it hasn't quite kept up with its stock price appreciation over time. But for those looking for a mix of passive income and growth, this remains a top pick to consider, in my books.
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>>> Microsoft integrates AI behind ChatGPT to more developer tools
Reuters
March 6, 2023
https://finance.yahoo.com/news/microsoft-expands-chatgpt-integration-more-140153749.html?.tsrc=fin-notif
(Reuters) -Microsoft Corp on Monday bundled the technology behind ChatGPT with its Power Platform that allows users to develop applications with little or no coding, the latest integration of artificial intelligence into its products.
Big tech companies from Alphabet Inc to Baidu Inc are speeding up the integration of generative AI - technology that has gained popularity for its ability to generate human-like text responses to queries - into their offerings.
Microsoft said a line of business-intelligence and app-development tools within Power Platform, including Power Virtual Agent and AI Builder, was updated with the new capabilities.
Power Virtual Agent, a tool for businesses to build chatbots, can now connect to internal company resources to generate summaries of weekly reports and customer queries.
Microsoft has also added generative AI capabilities to AI Builder, which lets businesses automate workflows, and launched a new version of its business management platform Dynamics 365 based on the technology.
Dynamics 365 Copilot, the latest version of Microsoft's tool that includes a number of applications for sales, customer service and marketing, integrates AI to automate certain tasks like data gathering and analysis or creating an email campaign, among other capabilities.
Microsoft also said on Monday that Chief Executive Satya Nadella would host an event on March 16 to discuss "reinventing productivity with AI."
The company so far has announced AI updates for its popular Windows operating system and search engine Bing but not yet for its Office productivity suite, which includes Word and Excel.
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>>> Is ASML the Most Important Tech Company in the World?
ASML is the only company in the world that makes EUV lithography systems.
Analytics India Mag.com
Oct 6, 2022
By Pritam Bordoloi
https://analyticsindiamag.com/is-asml-the-most-important-tech-company-in-the-world/
Today, almost all electronic devices are powered by silicon-based chips. From the device on which you are reading this article to the car you own, everything is powered by chips. These chips power the data centres and also many military technologies. While Intel, Samsung or TSMC are well-known names in the semiconductor space, ASML Holdings is probably the most important and much less known of them all. ASML is the only company in the world that makes these highly sophisticated machines used in chip making.
Based in the Netherlands, Advanced Semiconductor Materials Lithography (ASML) has often been dubbed the most important technology company of our time. To put things in perspective, without ASML, there are no chips, and without chips, there is no progress.
Chris Miller, author of the book Chip War: The Fight for the World’s Most Critical Technology, claims that microchips are the new oil. While World War II was decided by steel and aluminium, chips will decide the next phase of human history.
ASML, which started as a subsidiary of Philips, sells its machines to Intel, TSMC and Samsung. Founded in 1984, ASML’s profit has soared in the last couple of years, with the company valued higher than Intel. So what led to the rise of ASML?
EUV Lithography—ASML’s Goliath
ASML has a monopoly on the fabrication of Extreme Ultraviolet (EUV) lithography machines because each one of them is among the most complicated devices ever made, according to Miller.
EUV lithography is a new state-of-the-art technology developed by ASML. Its closest competitors, Nikon and Canon, are not working on this technology, and experts believe that it could take them decades to crack EUV lithography. This further establishes ASML as the only company that makes EUV lithography systems in the whole wide world.
“EUV light occurs naturally in outer space. But to make EUV lithography possible, we needed to engineer a way to create such light within a system. So, we developed a radically new approach to generating light for lithography,” ASML said on its website.
The technology is very complex and produces light wavelengths of 13.5 nanometers (billionths of a metre). The reduction in size is almost 15 times when compared to deep ultraviolet (DUV) lithography, which uses 193 nanometer light.
The EUV lithography system uses powerful lasers and a system of complex mirrors—the flattest material on Earth, according to ASML—to etch integrated circuits on silicon wafers.
“The TWINSCAN NXE:3600D is ASML’s latest-generation lithography system, supporting EUV volume production at the 5 and 3 nm Logic nodes and leading-edge DRAM nodes,” the company said.
ASML Monopoly
Its monopoly has been due to the exploitation of photolithography to an extreme level. Each EUV lithography system made by ASML costs around USD 200 million and is made of thousands of components acquired from nearly 5000 different suppliers. The machines, which are the size of a double-decker bus and weigh around 180 tonnes, are also made up of seven different modules, built around ASML’s manufacturing sites spread across more than 60 locations on three continents.
The modules are then shipped to Veldhoven, where they are assembled, tested, and then again disassembled for delivery. The exorbitant costs involved means not many can afford them, and not many can afford to make them either.
With its competitors years away from cracking the technology, ASML has a monopolistic hold on the market, and the company has already begun working on the next generation of lithography systems.
However, competition might be imminent. Recent reports suggest that China might have cracked the lithography code. It is common knowledge that China wants to establish an autonomous semiconductor supply chain within the country to hedge against US sanctions and growing geopolitical and supply chain risks.
Earlier this year, the US blocked the sale of EUV lithography machines to China. However, SMIC, China’s biggest semiconductor manufacturer, indigenously produced 7 nm chips using DUV lithography and is now working on advanced 5 nm chips.
Lithography has been the weak link in China’s semiconductor ecosystem, but now they seem to have cracked the code. Some experts in China believe that the country will be able to achieve a key breakthrough in EUV lithography in less than five years.
“I think China also would love to develop their own EUV competency, their ecosystem for these things. I think it’s going to be very difficult for them to do that, frankly,” JSR chief executive Eric Johnson told the Financial Times.
However, earlier this year, ASML alleged that SMIC might have infringed its trade secrets. With China in the lithography picture, ASML’s monopolistic hold in the market could very well be at stake.
High-NA EUV lithography
ASML has been working on high-NA (??numerical aperture) EUV scanners, the follow-up to its EUV lithography systems. Even though it is in the R&D phase, it could help ASML stay ahead in the game.
Still in R&D, the new high-NA EUV system features a 0.55 NA lens capable of 8 nm resolutions, compared to 13 nm for the existing tool. These new machines are expected to cost more than USD 300 million. However, the new technology is not expected to move into production before 2025.
Interestingly, in an interview, Martin van den Brink, chief technology officer at ASML, said that the high-NA EUV lithography could be the end of the game. Besides the occasional debate around the demise of Moore’s Law, the end of the line could have a significant impact on the very future of ASML.
Without shrink, there is no innovation and could this mean, ASML will cease to be an innovation-driven company? While it’s too early to speculate, ASML has a bright future ahead, at least for a considerable period of time. Chip makers are ramping up production and are lining up at ASML’s office for new machines.
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