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Perion - >>> This Ad Tech Stock Could Win Big From Microsoft's ChatGPT Investment
Motley Fool
By Jeremy Bowman
Feb 16, 2023
https://www.fool.com/investing/2023/02/16/this-ad-tech-could-win-big-from-microsofts-chatgpt/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Perion's technology helps search engine advertisers better monetize their ads.
The adtech company beat estimates on the top and bottom lines in its latest earnings report.
Its relationship with Microsoft and its ChatGPT-powered Bing stands to offer huge potential.
Perion Network (PERI) has been a surprising winner in the ad tech industry in recent years. In fact, according to the company, it was the only one of 52 ad tech stocks to post a gain in 2022.
The Israel-based, small-cap company has gained market share thanks to innovative premium advertising products and its intelligent hub, which efficiently connects ad buyers and sellers.
That strength was on display in the company's recent earnings report. Fourth-quarter revenue rose 33% to $209.7 million, driving adjusted earnings per share up 45% to $0.90. Both numbers easily beat analyst estimates.
Revenue growth was led by its search segment, where sales rose 49% to $85.9 million. Management said demand for direct-response for advertising was strong since advertisers tend to shift resources to search in difficult macroeconomic environments like the current one.
In spite of the strong results, the stock actually fell on the news, declining 8% on Feb. 8, though it has since recouped most of that loss. The decline could be because the company offered conservative guidance for 2023, forecasting revenue growth to slow to 14%, or because CEO Doron Gerstel is stepping down after a successful run, to be replaced by Tal Jacobson, who currently runs the company's search advertising business, CodeFuel.
The growth in Perion's search business is primarily driven by Microsoft's Bing, with which Perion is a preferred partner. With the recent announcement of Microsoft's new ChatGPT-powered Bing, Perion could be a big winner.
What the new Bing could mean
On the recent earnings call, Gerstel discussed the implication of ChatGPT, saying: "With regard to search, our expectation is that ChatGPT will revolutionize Bing search capabilities by providing more advanced and intuitive search experiences for its users, better meeting their needs and expectations. We believe that such superior search results will increase advertiser spending, and as a result, we expect to see a very positive impact on our search business."
The ChatGPT-powered Bing hasn't been made available to the general public yet, but at the very least, it will likely drive more attention to Microsoft's search engine as chat represents the new frontier in search.
Perion's technology helps Bing advertisers better monetize their ads on the platform, and Perion earns revenue share from ad clicks on the search engine. Because of that direct relationship, Perion will benefit as Bing earns more search traffic.
In Microsoft's own presentation on the new Bing last week, Chief Financial Officer Amy Hood said that for each additional percentage point of market share Bing earns, it gets $2 billion more in revenue. For Perion, that could translate into tens of millions or even hundreds of millions of dollars more in search revenue, since Gerstel explained on the call that he's expecting Bing to attract more and higher bids from advertisers as it rolls out enhanced search capabilities.
Its relationship with Microsoft also seems strong as Perion was named Microsoft's Advertising Global Supply Partner of the Year. Its current contract runs through the end of 2024.
What's next for Perion
With Gerstel set to step down later in the year, 2023 will be transitional for the company, and despite its conservative guidance, it still seems well-positioned to deliver solid growth this year.
In addition to the momentum from ChatGPT, the company is gaining traction from its cookie-less technology SORT, which drives a click-through rate of 1.33%, nearly triple that of the Google benchmark at 0.46%. It also continues to see momentum in connected TV as CTV revenue jumped 108%, helped by the company's innovative picture-in-picture advertising during live events like sports
There's also the potential for the company to drive growth in the business through more mergers and acquisitions. On the earning call, management said that its 2021 acquisition of Vidazoo, a video-monetization platform, has driven significant growth -- and at great value, since Perion acquired it for just 6.5 times Vidazoo's earnings before interest, taxes, depreciaion, and amortization (EBITDA).
Investors might have been surprised to see Gerstel stepping down, but given Jacobson's background in search advertising, he seems like a good fit for the current moment.
With momentum in a number of growth areas and the coming release of the new Bing, Perion seems well-positioned to continue growing. And the stock trades at a price-to-earnings ratio under 16, which seems dirt cheap considering its track record and growth prospects.
Perion doesn't need the new Bing to succeed, but if it does, this overlooked ad tech stock could really take off.
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>>> Britain Wargames a Crash Far Worse Than Covid If Chip Supplies Are Shut Off
Bloomberg
Philip Aldrick, Alex Wickham and Thomas Seal
February 16, 2023
https://finance.yahoo.com/news/britain-wargames-crash-far-worse-051434942.html
(Bloomberg) -- It’s 2027 and London’s black market for vintage smartphones is thriving. Second-hand cars are selling faster than any rolling off UK assembly lines. Internet blackouts are common, inflation is surging and waiting lists for public health services are lengthening again. Britain is in the grip of a global semiconductor crisis.
In this hypothetical scenario, chip supplies dried up a year after China stormed Taiwan and blockaded production at Taiwan Semiconductor Manufacturing Co. Ltd., which makes 92% of the world’s most advanced semiconductors. Broader tensions in the region disrupted supplies from other key producers in Japan and South Korea, and Beijing restricted its own exports for economic leverage against the US.
The spark for a fictitious tech shortage could also have been a tsunami big enough to knock out factories in Taiwan, South Korea and Japan. Such are the very real potential shocks envisaged in a war-game exercise the UK government will conduct to prepare for a chip shortage that people familiar with the plans claim would cause dire economic consequences.
The UK is preparing a contingency exercise across multiple government departments, Bloomberg has learned, and the pandemic offered a mere preview of the chaos that tiny silicon wafers can unleash. Since 2020, shortages were blamed for contributing to Honda Motor Co.’s closure of its Swindon factory and flagship battery start-up Britishvolt Ltd.’s collapse, according to a new paper from Associate Professor Chun-Yi Lee at the University of Nottingham. MPs said the crunch slowed Britain’s smart-energy meter rollout.
But the Covid dry-run was nothing compared with the catastrophe that would engulf the UK if the world’s chip supply is cut off in its East Asian heartland, where more than half of all semiconductors are made.
“There will be much higher prices to consumers,” Lee said by email. “The iPhone won’t be a grand, but three-to-five grand, because the chip making will be from South Korea, or from Arizona.”
In a 2021 paper by the International Monetary Fund modeling a controlled “technological decoupling” of China from the US and Europe, the most open economies including the UK suffer economic losses of 5% of gross domestic product within a few years.
A similar 2022 exercise by Britain’s Office for Budget Responsibility on the impact of a “plausible rise in trade barriers rather than the type of global disintegration which may occur” in the event of a Chinese invasion of Taiwan would drive borrowing up £20 billion ($24.1 billion) in year one. Prices for electronic goods would soar. Within four years, 2% would be wiped off GDP growth, rising to 5.2% of GDP in little over a decade and blowing a £57 billion permanent hole in the public finances — the size of the defense budget.
If the cause is military escalation by China, the OBR assumes UK defense spending rises from 2% to 3% of GDP, adding another £25 billion to the deficit just as rising trade barriers strangle Britain’s growth potential, putting the national debt on an unsustainable trajectory.
And that’s the best-case scenario. To prepare for a worst-case, the government will run a stress test — much like its pandemic simulation four years before Covid — and has placed chip supply resilience as a top priority in its Integrated Review of national security and international policy.
“We have no resilience and no contingency plans, unlike the US building a microchip factory in Arizona. We need a Plan B and to start that we need an urgent stock check,” Tory MP Tobias Ellwood, chairman of the Defence Select Committee, said in an interview.
“The problems of grain exporting from Ukraine will be dwarfed. China knows this,” he said. “It’s not just a long-term ambition to regain what they say is their territory but its economic competition with the west.”
China sees Taiwan, a democratically run island, as part of its territory. Beijing has said it prefers a peaceful solution to regain control of the island but has reserved the right to use force if necessary.
UK officials acknowledge they have been slow to realize the dangers. One said the decision by President Vladimir Putin to switch off gas to Europe after Russia’s invasion of Ukraine was a jolt to Whitehall thinking. That has led to a discussion in Rishi Sunak’s government about how to diversify supply but any suggestion the UK could follow the US with manufacturing subsidies are wide of the mark, the person said.
The shock of a TSMC shutdown would be felt immediately and in every corner of British life. The auto industry would struggle to survive. In Covid, registrations collapsed by almost a third because cars couldn’t be shipped for assembly until chips were installed. TSMC makes 35% of world’s automotive microcontrollers, according to the Rhodium Group.
Other domestic industries reliant on Taiwanese chips include “e-commerce, logistics, ride-hailing, entertainment,” a report by Rhodium said. Spare parts for medical devices such as insulin pumps could become scarce, and “ultimately, the full social and economic impacts of a chip shortage of that scale are incalculable, but they would likely be catastrophic.”
With most devices, modules and board-level components also assembled in Asia, even domestic chip plants wouldn’t be a silver bullet. Chips are a key point in fragile supply chains that stretch around the world.
At least the internet would keep working — in the short term.
Before long, though, new equipment for repairs or more capacity would be depleted, despite mobile data demand that’s increasing roughly 30% per year. As a result 4G and 5G mobile antennas, fiber network nodes and home routers would be hard to repair or replace once stockpiles ran out, leading to serious outages in the networks which underpin much of modern life, connecting everything from families to banks to hospitals.
Peter Claydon, president of Picocom, a UK startup designing chips for new mobile networks, which are made in Taiwan, said if the country was blockaded “we would probably go out of business very quickly.”
“We don’t have much stock, and after that we wouldn’t be able to make any more,” he said. “I don’t think any bank or financial institution would be prepared to invest to keep us going.”
Taiwan makes 70% of smartphone chipsets, Rhodium said, so prices of handsets, laptops, smart TVs and other home entertainment devices would surge instantly — supercharging inflation. As prices soared and supplies dwindled, consumers would turn to legacy technology for which less advanced chips are more available. In the pandemic, the dynamic played out in used cars, which briefly cost more than new models.
National defense would also be at risk. Chips are fundamental to almost all military systems, including the UK’s F-35 fighter jets, according to a review from the White House, which also mentions emergent technologies like artificial intelligence, 5G, satellites, hypersonics and cybersecurity.
The most advanced chips are also used in precision medicine, financial modeling, fraud detection, weather forecasting and seismic data analysis, according to American chipmaker Intel Corp.
In the UK’s National Health Service, the shortage of cutting-edge equipment like MRI scans would only get worse, causing treatment delays. Defense think tank RUSI says Britain’s energy security is dependent on chips, which are needed for solar, electric vehicles, and energy transmission.
Most western countries would struggle, but Britain is particularly exposed. Less than 1% of global chip production is in the UK, according to Malcolm Penn, chief executive of Future Horizons Ltd., but UK manufacturers account for 2% of global consumption. There is no realistic prospect of onshoring or building a domestic industry, either. Commercial-scale chip plants cost upwards of £10 billion and construction takes at least three years.
Britain’s departure from the European Union leaves it especially isolated in the battle for chip resilience. Manufacturing capacity that might have been based in the UK as a single-market member will be located inside the bloc where there are no border frictions. Speaking last month about the EU’s broader subsidy plans, Energy Security and Net Zero Secretary Grant Shapps said the UK would have been a net contributor rather than beneficiary of any package.
Meanwhile, the race to ramp up government-incentivized capacity has already started elsewhere. The US and the European Union last year set out subsidy and investment plans for their domestic industries — $52.7 billion earmarked from Washington and €43 billion ($46 billion) from Brussels. China has already provided about $130 billion of state-backed investment in its industry, according to UK government estimates.
The UK can’t compete with such sums.
Instead, its “route to resilience lies in focusing on co-operating with trusted long-term partners” and building up its science and university based research and development hubs, the business and energy select committee said in November.
Britain needs to make itself indispensable through “growth and leadership in next-generation technologies.” Yet the country has a skills shortage, has not seen any meaningful growth in domestically trained electronic engineers between 2007 and 2020 and is competing for foreign talent.
People familiar with government thinking hint at the UK’s paucity of options. Beyond the ambition to be at the bleeding edge of research, the plan is simple: stockpile chips and build relations with friendly allies to ensure a secure supply.
Yet the pandemic was a lesson in how those friendships can fail at their first test. In the initial months of the health crisis, dozens of countries imposed export restrictions on medical supplies, according to the World Trade Organisation and the World Bank. As vaccines came available, nations hoarded supplies in beggar-thy-neighbour self-interest. After Russia blockaded food supplies from Ukraine’s Black Sea ports, it happened again. At one point, 19 countries had bans on the export of food staples.
The only company other than TSMC that makes the smallest cutting-edge chips is South Korea’s Samsung Electronics Co. So an incursion into Taiwan could set off vaccine-style nationalism for the world’s remaining capacity.
Britain’s strategy for chip resilience depends on friendly suppliers. But, according to analysis by Boston Consulting Group, the US’s chip subsidies would provide only enough manufacturing capacity “to meet domestic demand for chips used in national security systems, aerospace, and critical infrastructure” such as telecom, energy, utilities, healthcare and financial services.
The US would have no chips to spare. For complete manufacturing self-sufficiency, $400 billion of state subsidies would be needed as part of a total $1 trillion investment over 10 years, BCG calculates.
In Europe, according to EU strategic working group ESPAS, severe supply disruption could deplete Europe’s chip reserves “within a few weeks, grinding many European industries to a halt.” Britain’s fond relationships and “principles of freedom” would become collateral damage to friendly nations’ domestic priorities.
“No one is predicting China will do anything serious in Taiwan for another four to five years,” Ellwood said. “But to be prepared we need to act now.”
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>>> MIND C.T.I. Ltd. (MNDO), together with its subsidiaries, designs, develops, markets, supports, implements, and operates billing and customer care systems in the Americas, Europe, Israel, the Asia Pacific, and Africa. It operates in two segments, Billing and Related Services and Messaging. The company offers billing and customer care solutions that support various services, such as voice, data, and content services, as well as prepaid, postpaid, and pay-in-advance payment models in a single platform. Its solutions also include a workflow engine to support the implementation of business processes, including subscriber registration, order management, trouble ticket, and debt collection; and an integral point of sale solution that covers all dealer, store and cashier management, and sales cycle related activities. In addition, the company offers professional services comprising turnkey project delivery, customer support and maintenance, integration, customizations, and project management, as well as managed services, including day to day billing operational tasks to its billing and customer care customers. Further, it provides PhonEX ONE, a call management system that collects, records, and stores call information, which is used by organizations for telecom expense management, call accounting, traffic analysis, and fraud detection. The company offers its products directly, as well as through distributors and resellers primarily to communication service providers, such as traditional wireline and wireless, voice over IP, broadband IP network operators, wireless internet service providers, LTE operators, cable operators, and mobile virtual network operators. MIND C.T.I. Ltd. was incorporated in 1995 and is headquartered in Yokne'am Illit, Israel.
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>>> AudioCodes Ltd. (AUDC) provides advanced communications software, products, and productivity solutions for the digital workplace. The company offers solutions, products, and services for unified communications, contact centers, VoiceAI business line, and service provider business. Its products include session border controllers, life cycle management solutions, VoIP network routing solutions, media gateways and servers, multi-service business routers, IP phones solutions, and value-added applications, as well as professional services. The company also offers One Voice Operations Center, a voice network management solution; Device Manager for administering business phones and meeting room solutions; AudioCodes Routing Manager for handling call routing in VoIP networks; and User Management Pack 365 simplifies user lifecycle and identity management across Microsoft Teams and Skype for Business deployments. In addition, it provides AudioCodes Live for Microsoft Teams, a portfolio of managed services for simplifying Teams adoption; appliances for Microsoft Skype/Teams for Business such as survivable branch appliances, CCE, and CloudBond 365; and a range of value-added voice applications comprising SmartTAP, Voca, VoiceAI Connect, and Meeting Insights. Further, the company offers managed services; and AudioCodes Live Cloud, a Microsoft Teams software as a service solution that enables service providers to offer their business customers a seamless migration to Microsoft Teams. It primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, network equipment providers, and systems integrators and distributors in the telecommunications and networking industries. The company primarily operates in the Americas, Europe, the Far East, and Israel. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.
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>>> Camtek Ltd. (CAMT), together with its subsidiaries, develops, manufactures, and sells inspection and metrology equipment for the advanced interconnect packaging, memory, complementary metal oxide semiconductor image sensors, micro-electro mechanical systems, radio frequency, and other segments of the semiconductor industry. It provides inspection and metrology systems, including Eagle-i, a system that delivers 2D inspection and metrology capabilities; Eagle-AP, which addresses the advanced packaging market using software and hardware technologies that deliver superior 2D and 3D inspection and metrology capabilities on the same platform; and Golden Eagle, a panel inspection and metrology system to support fanout wafer level packaging applications. The company sells its products in the Asia Pacific, the United States, and Europe. Camtek Ltd. was incorporated in 1987 and is headquartered in Migdal HaEmek, Israel.
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>>> Perion is a fast-growing ad tech company trading at a cheap valuation.
https://www.fool.com/investing/2023/01/27/want-1-million-in-retirement-invest-50000-in-these/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Perion Network
If you're looking for promising growth stocks, a great place to start your search is in the ad tech industry. For the most part, ad tech stocks are not only growing fast but are also profitable, and Perion Network (PERI 1.17%) offers a great example.
The company operates primarily through its intelligent hub, a digital advertising marketplace that connects buyers and sellers, optimizing ad purchases and placements and adding value for both sides. The company also offers premium experiences through connected TV and other channels, such as a "connected cart" that allows viewers to buy an advertised product with a QR code.
Like other ad tech stocks, Perion delivered strong growth early in the pandemic, but the company also continued to grow over the last year even as growth in the digital advertising industry has slowed, a sign Perion delivers a high return on investment for advertisers.
Revenue in 2023 rose 33% to $636 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 88% to $131 million. At a market cap of just $1.44 billion, that means the stock trades at just 11 times EBITDA, a surprisingly low valuation for a stock that just doubled its EBITDA profits.
With a combination of growth, a low valuation, and a small-cap valuation, Perion has the potential to be a multibagging stock over the coming years.
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>>> Monolithic Power (MPWR) Q4 Earnings Top Estimates, Revenues Meet
Zacks Equity Research
February 9, 2023
https://finance.yahoo.com/news/monolithic-power-mpwr-q4-earnings-145602784.html
Monolithic Power Systems, Inc. MPWR reported healthy fourth-quarter 2022 results, with the bottom line beating the Zacks Consensus Estimate and the top line meeting the same. The Kirkland, Washington-based company reported higher revenues year over year due to persistently strong demand in most of its business categories. However, higher inventory levels and changing market conditions remain a concern for the company.
Net Income
On a GAAP basis, net income rose to $119.1 million or $2.45 per share from $72.7 million or $1.51 per share in the prior-year quarter. Despite higher operating expenditures and greater income tax expenses, a solid top-line performance ensured net income improvement.
Non-GAAP net income was $154 million or $3.17 per share compared with $ 102.1 million or $2.12 per share in the year-ago quarter. The bottom line surpassed Consensus Estimate by 4 cents.
For 2022, net income stands at $437.7 million or $9.05 per share compared with $242 million or $5.05 per share in 2021. Excluding stock-based compensation of $161 million, non-GAAP net income stands at $599.9 million or $12.41 per share; this is 68.2% higher than the 2021 figure of $356.7 million or $7.45 per share.
Revenues
Quarterly revenues for Monolithic Power increased to $460 million, up 36.7% from $336.5 million in the year-ago period. The top line matched the Zacks Consensus Estimate. All of the company's segments experienced strong growth during the fourth quarter, with the exception of the Consumer business, which had little impact on top-line performance.
For 2022, the company experienced a 48.5% top-line expansion, with net sales increasing to $1,794.1 million from $1,207.8 million in 2021.
In the fourth quarter, Storage and Computing revenues rose to $120.8 million, up 55% from the prior-year quarter’s figure of $78 million. The performance was driven by an increase in sales of storage applications and enterprise notebook.
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Communication revenue grew 40.1% to $64.3 million from $45.9 million in the prior-year quarter. The upside was driven by sales growth of 5G and satellite communications infrastructure applications.
During the fourth quarter, Enterprise Data witnessed a staggering growth of 69% year over year. Revenues rose to $68.4 million from $40.5 million from the year-ago quarter’s levels. Top line expansion is due to greater sales of power management solutions for cloud-based CPU and GPU server applications.
In the December quarter, revenues from the Automotive segment were up by a solid 72.8% year over year as the top line increased to $97.4 million compared with $56.4 million in the prior-year quarter. Sales growth of company’s highly integrated applications that support automated driver assistance systems is primary driver of top line expansion in this segment.
In the fourth quarter Industrial revenues grew by 13.3% year over year. It increased to $56.1 million from $49.5 million in the year-ago quarter. Greater sales in applications for smart meter and industrial automation push up the top line.
Revenues from the Consumer segment witnessed a 20.1% decline year over year in the fourth quarter.
By product family, revenues in DC to DC surged 35.3% year over year to $432.6 million. In the fourth quarter, Lighting Control revenues increased to $27.5 million from $16.8 million in the previous year.
Other Details
Non-GAAP gross margin expanded 60 basis points (bps) from the year-ago quarter’s level to 58.5%. This is primarily caused by a change in the sales mix that favors high-value greenfield products and operational efficiencies, which more than balance greater product input costs.
Non-GAAP operating expenses were $94.8 million, up from $83 million in the prior-year quarter. Non-GAAP operating income rose 70.7% year over year to $174.1 million.
Cash Flow & Liquidity
As of Dec 31, 2022, cash and cash equivalents amounted to $288.6 million and $73.4 million in long-term liabilities compared with respective tallies of $189.3 million and $67.2 million in 2021.
Outlook
MPWR remain cautious about near-term business conditions as its Q4 inventory is above target levels. In the face of changing market dynamics, the company will continue to invest in infrastructure to ensure long-term growth and commercial expansion. For the first quarter 2023, company projects revenues within the range of $440 million to $460 million. Non-GAAP gross margin is estimated between 57.7% and 58.3%. On a non-GAAP basis, research and development and selling, general and administrative expenditure is expected between $96.1 million to $98.1 million. Management expects interest income to be in the range of $1.8-$2.2 million and a non-GAAP tax rate of 12.5%.
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>>> Arista Networks (ANET) leads high-speed data center networking
https://www.fool.com/investing/2023/02/06/2-market-beating-growth-stocks-to-buy-now-and-hold/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Arista provides the high-speed networking platforms (like switching and routing solutions) that allow information to flow through modern data centers. The company pairs its core networking products with adjacent software for network telemetry, workflow automation, and security. Arista first brought its technology to cloud data centers, but it has since expanded across enterprise and campus environments.
Arista says its principal innovation is its Extensible Operating System (EOS), the software that powers its entire lineup of switching and routing platforms. By running a single operating system, Arista allows clients to integrate their IT environments -- from public clouds to private data centers, in both wired and wireless workspaces -- into a seamless network. That distinguishes the company from legacy vendors that use multiple operating systems, an approach that increases cost and complexity for clients.
Arista's networking products offer industry-leading capacity and low latency, meanings its switches and routers can move large amounts of data very quickly. That selling point has helped Arista win the business of cloud titans like Microsoft and Meta Platforms, and it has propelled the company to the forefront of the industry. Arista holds 41.5% market share in high-speed data center switches (like 100G, 200G, and 400G), which is nearly twice as much market share as the next closest competitor.
Arista provides the high-performance networking platforms needed to support cloud data centers, and it lowers the total cost of network ownership for customers by implementing a single operating system. That value proposition has fueled impressive financial results, even in a difficult economic environment. Third-quarter revenue climbed 57% to $1.2 billion, and GAAP net income soared 61% to $1.13 per diluted share.
Going forward, Arista should benefit from several tailwinds, including the ongoing adoption of cloud computing, 5G networks, and artificial intelligence applications, and the proliferation of Internet of Things devices. Those trends will put pressure on data center infrastructure, creating a need for faster networking solutions over time. With that in mind, Arista estimates its total addressable market will grow at 13% annually to reach $51 billion by 2027.
Currently, shares trade at a reasonable 10.5 times sales, slightly above its three-year average of 10.3 times sales. At that price, Arista is still well positioned to produce market-beating returns for patient shareholders.
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>>> Perion Network Ltd. (PERI) provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It provides Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also offers supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights on the results of campaign investment and other campaign metrics; creative platform to create advertisements; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it provides an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company offers a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it provides Intelligent HUB (iHUB), a platform for pulling in signals across various advertising channels and optimizing traffic at scale, and yielding engagement metrics and KPIs; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.
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>>> Texas Instruments (TXN), Broadcom (AVGO), and Micron Technology (MU)
https://finance.yahoo.com/news/25-tech-stocks-buy-off-210149756.html
Cyclical stocks are prone to selloffs during market downturns. This is because demand for their products experiences a slowdown during recessions. Especially those in the semiconductor space are usually among the worst affected by recession fears. However, they rebound faster and offer a better entry point. Such stocks include Texas Instruments Incorporated (NASDAQ:TXN), Broadcomm Inc (NASDAQ:AVGO), and Micron Technology Inc (NASDAQ:MU).
The semiconductor business is the largest segment of these companies’ overall operations. While this sector has cooled down a lot, it still offers many opportunities going forward as it serves multiple end markets, including communications, industrial, automotive, computing, and the remarkably fast-growing cloud computing market. All of these areas have tremendous potential, and these stocks have fallen significantly in the past few months, making them excellent choices for tech stocks to buy.
Moreover, semiconductors are still in high demand, as evidenced by these companies’ robust sales growth. Another plus point is the CHIPS act aimed at boosting domestic semiconductor production. Thus, investors won’t mind paying a higher premium for these stocks once the economy inevitably starts turning its gears again.
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>>> Tyler Technologies (NYSE:TYL) is a leading enterprise infrastructure software and services provider. The company offers various products, including enterprise asset management, mapping and GIS, public safety, detention management, and court case management systems. The company is now growing its business by acquiring new firms and increasing its product offerings. It has a strong presence in North America and the Caribbean. The company is expected to benefit from the growing demand for infrastructure software in the coming years.
Investing in TYL stock is a great opportunity for investors looking to diversify their portfolios, being a global leader in providing software and technology solutions for the public sector while trading 41% down from its all-time high. Investors will resume paying a premium for the stock once the company continues its strong track record of financial performance and growth.
First and foremost, Tyler Technologies has an impressive revenue growth rate despite short-term hurdles. Over the past decade, Tyler Technologies has consistently grown its revenue over a double-digit clip. This demonstrates the company’s ability to expand and acquire new customers, as well as its ability to manage its existing customer base effectively.
Secondly, Tyler Technologies has a diverse portfolio of products and services, which provides investors with numerous options for diversifying their portfolios. The company currently offers solutions for public sector organizations in finance, human resources, and enterprise resource planning. Tyler Technologies’ solutions are also designed to easily integrate existing systems, allowing customers to reduce costs and increase efficiency.
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https://finance.yahoo.com/news/25-tech-stocks-buy-off-210149756.html
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>>> ServiceNow (NOW) -
https://finance.yahoo.com/news/3-tech-stocks-getting-ready-043209809.html
ServiceNow (NYSE:NOW) is a software service provider that is gaining ground in the IT service management business. The company has a strong user base and an improved cost structure that will pay off in the long run.
Despite the drag of rising interest rates and a faltering economy, ServiceNow has exceeded analysts’ earnings estimates in each of the past four quarters.
In its recently reported fourth-quarter results, the company saw earnings of $2.28 per adjusted share, up 46% year over year. Revenue also came in ahead of Wall Street’s estimates, rising 20% to $1.94 billion. Subscription revenue was up 22% to $1.86 billion, also better than expected, as was management’s subscription revenue forecast of $8.44 billion to $8.5 billion for the full year. Analysts had been calling for just $8.36 billion.
Finally, despite the headwinds facing the tech sector and the broader economy, ServiceNow’s management said it has no plans to cut its workforce this year. Investors should take this as a sign of confidence given all the layoffs currently happening at major tech companies.
NOW stock is down just 6.5% over the past year, outperforming the S&P 500. Moreover, shares have gotten off to a strong start in 2023, rising 19%. And they are up 37% since hitting a 52-week low of $337 on Oct. 13. A return to NOW’s all-time high above $700 a share would mean a gain of more than 50% from the current price. But first, the stock will need to break past $500, which could be in the cards sooner rather than later.
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>>> U.S. secures deal with Netherlands, Japan on China chip export limit- Bloomberg
Jan 2023
Reuters
https://www.msn.com/en-us/news/world/u-s-secures-deal-with-netherlands-japan-on-china-chip-export-limit-bloomberg/ar-AA16PkbL?OCID=ansmsnnews11
WASHINGTON (Reuters) -The United States has secured a deal with the Netherlands and Japan to restrict exports of some advanced chip-making machinery to China in talks that concluded on Friday, Bloomberg reported, citing people familiar with the matter.
The agreement would extend some export controls the United States adopted in October to companies based in the two allied nations, including ASML Holding NV, Nikon Corp and Tokyo Electron Ltd, the report said.
Officials from the Netherlands and Japan were in Washington discussing a wide range of issues in talks led by White House national security adviser Jake Sullivan.
John Kirby, the White House national security spokesperson, earlier said the officials were talking about issues that are "important to all three of us."
"And certainly the safety and security of emerging technologies is going to be on that agenda," he told reporters.
A source familiar with the talks said restricting exports of semiconductor manufacturing equipment to China was among the topics.
Getting the Netherlands and Japan to impose tighter export controls on China would be a major diplomatic win for President Joe Biden's administration, which in October announced sweeping restrictions on Beijing's access to U.S. chipmaking technology to slow its technological and military advances.
When asked about the Bloomberg report, the White House declined to comment beyond Kirby's earlier remarks.
The Dutch foreign ministry and a spokesperson at Japan's Ministry of Economy, Trade and Industry declined to comment.
A spokesperson at Nikon declined to comment, saying the company could not speak about something that had not been officially announced. Officials at Tokyo Electron were unavailable for comment when Reuters contacted them outside regular business hours.
The Netherlands' prime minister, Mark Rutte, earlier said that it was not clear whether his government would disclose the result of talks with the United States over new export restrictions for the semiconductor industry.
Japanese firms would still be able to sell non-advanced products to China under the regulation, and any dip in shipments to Chna could be covered in the medium-to-long term by increasing output to regions such as the United States, Germany and India, said Akira Minamikawa, analyst at research company Omdia.
But the Japanese government and firms may object to the restriction if it includes measures such as a ban on sending engineers to their equipment customers, Minamikawa said, adding: "That would bring too large an impact on their businesses."
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ASML - While ASML's lithography technology -- using light to make patterns on the silicon wafers used in semiconductor chips -- is undeniably complex, its investment thesis is far more straightforward. Do you believe the need for semiconductor chips will grow over the next few decades?
https://www.fool.com/investing/2023/01/28/4-stocks-with-high-dividend-growth-to-buy-in-2023/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
If you answered yes, ASML's dominant leadership position in its niche might make it a classic buy-and-hold-forever investment. Holding a monopoly with its bleeding-edge extreme ultraviolet (EUV) lithography system and a roughly 80% share of the more mature deep ultraviolet (DUV) market, ASML is of paramount importance to the semiconductor industry.
Thanks to this dominant positioning, the company has averaged a 26% free cash flow (FCF) margin across the last decade. With this incredible cash generation, ASML handsomely rewards its shareholders, as evidenced by its annual dividends skyrocketing 1,600% from its first payment in 2008.
In fact, using the last 12 months' figures, ASML could triple its 0.8% dividend and still have excess free cash flow. Going forward, ASML plans to make quarterly dividend payments, as opposed to their semi-annual payments in the last few years. This is great news for dividend reinvestment plans as they will now receive ASML shares at various price points throughout the year via its quarterly payouts.
As countries weigh becoming more technologically independent, the company's lithography systems should continue to see healthy demand. Trading at 27 times FCF, ASML brings incredible dividend growth potential at a reasonable price.
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>>> Microsoft to cut 10,000 jobs, as PC sales, cloud growth decline
Yahoo Finance
by Daniel Howley
January 18, 2023
https://finance.yahoo.com/news/microsoft-to-cut-10000-jobs-as-pc-sales-cloud-growth-decline-142207545.html
Microsoft (MSFT) announced on Wednesday that it is laying off 10,000 workers as part of an effort to cut costs at the tech behemoth. The layoffs impact roughly 4.5% of Microsoft’s 221,000 total employees.
The cuts are expected to be completed by Microsoft's fiscal Q3, which ends March 31. Microsoft says the layoffs will result in a $1.2 billion charge, representing -$0.12 per share.
The Redmond-based company previously announced layoffs in October, shedding as many as 1,000 jobs, according to Axios. In July, Microsoft laid off approximately 1% of its workforce. In May, the company announced it was slowing hiring in its Windows, Office, and Teams divisions.
"As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less," Microsoft CEO Satya Nadella said in a statement.
"We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform."
According to Nadella, Microsoft will continue to hire in strategic roles despite the layoffs.
"These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts," he said.
Microsoft is battling slowing PC sales compared to during the pandemic when consumers snatched up new desktops and laptops in droves to do everything from work and take remote classes to play games.
According to research firm Gartner, worldwide PC shipments declined a staggering 28.5% in the fourth quarter of 2022, the largest decline since the company began tracking shipments in the mid-1990s.
To that end, Microsoft says it will be making changes to its hardware offerings, though it hasn't gone into exactly what that will entail. Microsoft offers its own Surface line of laptops and desktops, as well as a dual-screen smartphone.
It’s not just PC sales, though. Microsoft and rival Amazon (AMZN) are also dealing with a slowdown in the cloud industry, as customers continue to work through high inflation and interest rates. In October, Microsoft reported it expects Q2 cloud growth to decrease. In Q1, cloud growth declined from 31% year-over-year in 2021 to 20% year-over-year.
Shares of Microsoft are down 22% over the last year.
Microsoft’s announcement follows similar moves by other Big Tech firms. Earlier this month, Amazon began laying off some 18,000 workers. Meta (META), meanwhile, cut 11,000 jobs in November.
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>>> Taiwan Semiconductor Starts Mass Production Of 3-Nanometer Chips
Investor's Business Daily
by PATRICK SEITZ
12/27/2022
https://www.investors.com/news/technology/taiwan-semiconductor-starts-mass-production-of-3-nanometer-chips/?src=A00220
Taiwan Semiconductor Manufacturing (TSM), the world's largest contract chipmaker, plans to hold a ceremony Thursday to celebrate the start of mass production using its 3-nanometer process technology. TSMC is leading the race to make chips with ever smaller circuits.
Circuit widths on chips are measured in nanometers, which are one-billionth of a meter. Smaller circuits translate to faster and more power-efficient semiconductors.
High-end central processing units and graphics processors are the biggest users of the smallest-node chips. TSMC's customers include Apple (AAPL), Advanced Micro Devices (AMD), Nvidia (NVDA) and more.
The start of 3-nanometer production at TSMC comes amid a slowdown in sales of devices that would use those chips, namely PCs, smartphones and servers.
Taiwan Semiconductor's current state-of-the-art chips use 5-nanometer process technology.
Taiwan Semiconductor To Tout Domestic Commitment
Focus Taiwan reported that it is unusual for TSMC to hold a ceremony to mark the beginning of commercial production of a new technology. The ceremony will reinforce TSMC's commitment to continue using Taiwan as a hub for research and development and production even as it plans new factories in the U.S. and Europe, the publication said.
Apple and Intel (INTC) are expected to place orders for chips made with TSMC's 3-nanometer process, Focus Taiwan said.
On the stock market today, Taiwan Semiconductor stock dipped 0.8% to close at 74.32.
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>>> ON Semiconductor Corporation (ON) provides intelligent sensing and power solutions worldwide. Its intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems. The company operates through three segments the Power Solutions Group, the Advanced Solutions Group, and the Intelligent Sensing Group segments. It offers analog, discrete, module, and integrated semiconductor products that perform multiple application functions, including power switching and conversion, signal conditioning, circuit protection, signal amplification, and voltage regulation functions. The company also designs and develops analog, mixed-signal, advanced logic, application specific standard product and ASICs, radio frequency, and integrated power solutions for end-users in end-markets, as well as provides foundry and design services for government customers. In addition, it develops complementary metal oxide semiconductor image sensors, image signal processors, and single photon detectors, including silicon photomultipliers and single photon avalanche diode arrays, as well as actuator drivers for autofocus and image stabilization for a broad base of end-users in various end-markets. ON Semiconductor Corporation was incorporated in 1992 and is headquartered in Phoenix, Arizona.
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>>> Taiwan Semiconductor Manufacturing Company Limited (TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support, account management, and engineering services, as well as manufactures masks. Its products are used in mobile devices, high performance computing, automotive electronics, and internet of things markets. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.
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>>> The fate of the world economy may depend on what happens to a company most Americans have never heard of
Business Insider
10-22-22
https://www.msn.com/en-us/money/markets/the-fate-of-the-world-economy-may-depend-on-what-happens-to-a-company-most-americans-have-never-heard-of/ar-AA13fP8K?cvid=8afa3a074bec4aab9749d496dd57b1ee
The fate of the global economy may rest on the shoulders of one company: TSMC.
TSMC is the world's biggest chipmaker — its chips power everything from cars to iPhones.
But US-China tensions, and China's standoff with Taiwan, could cost the global economy trillions.
On a tiny island off the coast of China, one company manufactures a product used across the globe for countless household products as varied as PCs and washing machines.
And as that island — Taiwan — worries about the threat of a standoff between the US and China, the world's economy holds its breath. That's because there could be trillions of dollars' worth of economic activity tied to that one company: Taiwan Semiconductor Manufacturing Company, the world's biggest chipmaker.
Industry watchers say an escalating dispute between the US and China over Taiwan could drag down the global economy, given the fact that no other company makes such advanced chips at such a high volume. If TSMC goes offline, they say, the production of everything from cars to iPhones could screech to a halt.
"If China would invade Taiwan, that would be the biggest impact we've seen to the global economy — possibly ever," Glenn O'Donnell, the vice president and research director at Forrester, told Insider. "This could be bigger than 1929."
What is TSMC?
While TSMC may not be a household name, you almost certainly own something that's powered by its chips.
TSMC is in the foundry business, meaning it doesn't design its own chips but instead produces them at fabrication plants for other companies. The company accounts for over half of the global semiconductor market, and when it comes to advanced processors that number is, by some estimates, as high as 90%. In fact, even the best chip from China's top semiconductor manufacturer, SMIC, has been said to be about five years behind TSMC's.
TSMC counts Apple as its biggest customer, supplying the California tech giant with the chips that power iPhones. In fact, most of the world's roughly 1.4 billion smartphone processors are produced by TSMC, as are about 60% of the chips used by automakers, according to The Wall Street Journal.
TSMC semiconductors are also used in high-performance computing: They can quickly process reams of data and guide missiles, making the company highly valuable in the eyes of government entities.
As TSMC has grown to dominate the industry, it has automatically become an oligopoly, according to William Alan Reinsch, a senior advisor at the Center for Strategic and International Studies, a national security think tank.
"When you have a very complex, very sophisticated, and very expensive technology where barriers to entry are very high — I mean, building a fab plant is in the billions — you can't just decide tomorrow, 'Well, I'm going to go into that business,'" he said. "It's not like making tea."
How did we become so reliant on chips made in Taiwan?
The semiconductor industry has its roots in the US, as much of the research and development is done on US soil. Companies in other countries license the US-made technology.
Dylan Patel, a chief analyst at the semiconductor research and consulting firm SemiAnalysis, pointed to the Dutch company ASML as an example: ASML produces high-end chipmaking equipment, but one of the technologies for which it's best known was invented in the US National Laboratories.
Over the past 30 years or so, manufacturers in developed countries concluded it was in their best interest to outsource the manufacturing of the chips, according to Reinsch.
"You build a big factory and you crank these things out by the thousands, and you do it in a low-wage, nonunion country that probably doesn't have environmental requirements," he said. "You keep all the design and IP at home and you do all your sales, marketing, and service at home, and that's where you make the money."
It's this approach that has directly led to the growth of chip foundries like TSMC and reduced production on American soil, Reinsch said.
According to a 2021 report from the Semiconductor Industry Association, in 1990 the US produced 37% of the world's chip supply. These days, the US is responsible for only 12% of global chip production.
Why is this a problem now?
As the coronavirus pandemic and the war in Ukraine have illustrated, having too much reliance on certain countries can upend supply chains when disruptions arise. It's for this reason that many US corporations are exploring "onshoring" — moving some of their manufacturing to the US — to make their supply chains more resilient.
The US's access to TSMC chips, however, is especially vulnerable, because though Taiwan is self-governing, China claims the island as its own and has threatened to invade. Controlling Taiwan is central to Chinese President Xi Jinping's goal of achieving a "great rejuvenation of the Chinese nation" by 2049, the 100th anniversary of the People's Republic of China.
While the consequences of an invasion could be significant, many experts say it's just a matter of time before it happens, whether it's by 2030, 2025, or even by the end of next year. On Monday, US Secretary of State Antony Blinken predicted China would take steps to annex Taiwan on a "much faster timeline" than previously thought, signaling that it could be sooner rather than later. The US government is already playing out war-game scenarios to prepare for this, and in the event of a full invasion it would reportedly consider evacuating the skilled chipmaker engineers on which it's become so reliant.
The spotlight has focused increasingly on Taiwan and the semiconductor industry as a whole in recent weeks following the export regulations the US government slapped on China. Those regulations limit sales of semiconductors made using US technology and are meant to curb China's ability to develop advanced technology.
The US and China are now locked in what Patel described as "a full-scale bilateral economic cold war," one that's likely to have severe financial repercussions, especially given how intertwined the semiconductor supply chain is.
What would happen if China invaded Taiwan?
Taiwan hopes its semiconductor business will protect it from Chinese aggression — government leaders have called the industry a "silicon shield" against invasion.
But if China did invade, disrupting the world's access to chips, "the entire global economy comes to a screeching halt," O'Donnell from Forrester said. "Semiconductors have become almost like the oxygen of the global economy," he said. "Without the chips, you can't breathe."
The effects of such a halt would be "economically devastating," says Martijn Rasser, a former senior intelligence officer at the CIA who is now a security and technology expert at the Center for a New American Security, a left-leaning think tank.
"You'd be looking at trillions of dollars in economic losses," he told Insider.
The US National Security Council agrees, and in July the US commerce secretary said the US would face a "deep and immediate recession" if American businesses no longer had access to these chips.
Some experts have speculated that, in the event of an invasion, the chip-manufacturing facilities would be intentionally destroyed so China couldn't access them. In a US Army journal article published in December, the academic Jared McKinney described this strategy as the "broken nest" — another way to put it is mutually assured destruction.
The destruction of those facilities, or an inability to access their chips, could have major national security implications, Rasser said.
"Every military system that we rely on has a ton of semiconductors in them," he said. "It would start impacting our ability to maintain existing weapon systems, upgrade ones, build new ones."
Considering that the US has committed to defending Taiwan in the event of a Chinese invasion, these hits to the US's defense capabilities could be especially significant.
But while a Chinese invasion of Taiwan would produce the most serious disruption, Rasser says it wouldn't necessarily take an invasion for the world's chip access to be blocked. As well as making investments in Taiwanese firms and poaching their workers, China could institute a blockade on the island that could cut off the world from semiconductor supplies.
What's the solution?
The US is taking some steps to make itself less reliant on Taiwan. In July, for instance, Congress passed the CHIPS Act, which includes nearly $53 billion in subsidies and tax breaks in an effort to bolster chip manufacturing in the US.
Some companies have already begun adding US facilities: Intel is building two $20 billion factories in Ohio, Micron has pledged to spend up to $100 billion on a massive chip factory in upstate New York, Samsung is building a $17 billion factory in Texas, and TSMC is constructing a $12 billion plant in Arizona.
TSMC is also building a new facility in Japan, one that will produce the less advanced chips needed in the auto industry. The Wall Street Journal reported that Japanese officials had signaled they'd like TSMC to expand its presence there by adding capacity for advanced chips as well, another sign global powers are growing wary of the geopolitical risk to Taiwan.
But O'Donnell warned it would be premature to celebrate an end to the chip shortage or to the US's reliance on Taiwanese chips. The factories themselves require equipment that's in short supply because of — ironically enough — the chip shortage. And besides, those plants take years to build and get online.
"Once you stick a shovel in the ground, you're not going to get chips for at least three years," he said.
Plus, there remain obstacles to substantially decreasing the country's reliance on TSMC. While the subsidies and tax breaks will help, Taiwan may continue to remain the cheaper option for businesses. And, for the time being at least, TSMC's chips are likely to be higher quality as well. Given that TSMC is "really at the cutting edge," Rasser said, the chips produced in the US by Intel, for instance, "wouldn't be as sophisticated" as those made in Taiwan.
While producing even these lower-quality chips would go some way to reduce the US's reliance on Taiwan, the US has a shortfall of the skilled workforce needed to ramp up production, a problem companies in this industry are facing across the globe. Rasser says enhanced training and education will be necessary to fill this gap.
It's for these reasons that it could be "years and potentially decades" before the US will be able to declare independence on the chipmaking front.
"The CHIPS Act, it's a good step in the right direction, but it's just a little more than scratching the surface," Rasser said.
In the meantime, the US may have to cross its fingers that an economy-shaking disruption doesn't come to pass.
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>>> Taiwan 'matters far more to the world economy' than many people realize, economist explains
Yahoo Finance
by Dani Romero
August 13, 2022
https://finance.yahoo.com/news/taiwan-world-economy-economist-explains-123545383.html
China's latest military exercises encircling Taiwan have clear ramifications for the global economy, following U.S. House Speaker Nancy Pelosi’s recent visit to Taipei.
"Taiwan matters far more to the world economy than its 1% share of global GDP would indicate," Gareth Leather, Senior Economist in the Emerging Asia team at Capital Economics, wrote in a note.
The military exercises included live-fire drills and missile launches, restricting access to ships and aircraft in the area. Data compiled by Bloomberg shows more than 40 vessels have navigated around the drill zones south of Taiwan’s main port.
"A further escalation in cross-strait tensions that cut Taiwan’s export off from the rest of the world would lead to renewed shortages in the automotive and electronics sectors and put further upward pressure on inflation," Leather wrote.
He noted that Taiwan is the world’s largest producer of the processor chips "that are increasingly ubiquitous in new products," having twice the market share of the next biggest producer.
Leather added that 92% of the most advanced semiconductors are made by TSMC in Taiwan, making its dominance at the high end even greater. So if Taiwanese semiconductor supply were disrupted for a prolonged period, electronics and automotive manufacturers would struggle to find alternative suppliers.
Taiwan’s autonomy has become a key geopolitical interest for the U.S. due to the island's dominance in the global market for microchips. Semiconductors, which go in everything from smartphones to cars, have become an integral piece to our daily lives.
In a 2021 report from the Biden Administration, it was explained that "the United States is heavily dependent on a single company – TSMC – for producing its leading-edge chips." Also in the report, "the lack of domestic production capability also puts at risk the ability to supply current and future national security and critical infrastructure needs."
While Washington and Beijing are locked in a fierce race to become the global leader in high-tech industries, U.S. Congress passed the Chips and Science Act last week, providing $52 billion in subsidies for America’s semiconductor sector.
This would shore up our homegrown chip industry, with around $39 billion being allocated for building new chip fabrication plants on U.S. soil. In the meantime, any added bottleneck would only make the global production of goods particularly vulnerable.
If production facilities become damaged, the stakes are extremely high as it takes two-to-three years to build a semiconductor plant from scratch, according to Leather. The implications would be "extremely expensive" replacing lost manufacturing capacity and it wouldn't be "possible to re-establish TSMC’s most advanced facilities without its personnel and intellectual property."
Given the size of the electronics industry in parts of
Asia and motor industry in parts of Europe, these economies are particularly vulnerable.
Another challenge would be an electronic shortage, which in turn would lead to an increase in prices, adding more pressure to global inflation.
Leather warns that If Taiwanese semiconductor supply were disrupted for a prolonged period, electronics and automotive manufacturers would struggle to find alternative suppliers. This would lead to many firms having to halt production.
"While electronic goods themselves make up a fairly small share of CPI baskets, widespread chip shortages would hit the output of a wider range of consumer goods and even digital services," Leather explained. "Consequently, a major escalation over Taiwan would constitute yet another supply shock, keeping inflation high for even longer."
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Chips bill - >>> Senate passes bill to boost US chip manufacturing
Engadget
by Jon Fingas
July 27, 2022
https://news.yahoo.com/senate-passes-chips-plus-chip-production-bill-185318688.html
The US government just crossed a key milestone in its bid to improve domestic chip production and compete with rivals like China. CNBC reports the Senate has passed the CHIPS and Science Act, a bill to fund and incentivize American semiconductor manufacturing, in a 64-to-33 vote. The measure includes over $52 billion for US firms making chips, additional funding for further technology development and tax credits to spur manufacturing investments.
The Act, also known as "CHIPS-plus," is a scaled-back version of bills previously circulating through Congress. Those efforts received opposition across the political spectrum. Republicans objected to earlier measures with accusations that Democrats were pushing a partisan reconciliation bill that would include climate, medicine and tax considerations. There were also concerns funding might inadvertently reach China. Independent Senator Bernie Sanders, meanwhile, was concered that a past variant was a "blank check" to already-profitable chip producers.
The House will still have to pass and help reconcile counterpart legislation before President Biden can sign the bill into law. That's considered very likely, however, as the Senate has cleared a 60-vote filibuster threshold. The House is expected to pass its version when Democrats only need to wield their majority to succeed.
The expected law is unlikely to have an immediate effect when new factories take years to complete, and upgrades aren't necessarily quicker. It won't address near-term chip shortages. Even so, CHIPS could play an important role in American tech manufacturing. On top of reducing the chances of future shortages, it could reduce the dependence on Taiwan and other semiconductor hubs threatened by countries like China. While there are no guarantees the Act will lead to more jobs and lower prices, it might help the US compete in an increasingly fierce market.
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Chips bill - >>> Commerce secretary expects vote on stalled chips bill 'next week,' says Biden will sign 'this summer'
Yahoo Finance
by Ben Werschkul
July 15, 2022
https://finance.yahoo.com/news/commerce-secretary-expects-vote-on-stalled-chips-bill-next-week-182546352.html
The Senate is hoping to vote soon on a long-delayed bill to boost the U.S. semiconductor industry and improve competitiveness with China amid a worldwide chip shortage.
Commerce Secretary Gina Raimondo has focused on the stalled bill for months. In a new Yahoo Finance interview on Friday, she vowed that it's going to get done this month, in spite of setbacks in recent days.
“It's going to get to the president's desk this summer,” she said Friday during an interview from her office between yet another round of outreach to lawmakers. She quickly added a second promise that “there'll be a lot of ups and downs between now and when it does.”
Congress has only a few weeks left before the August recess, and Raimondo says she expects that action on the bill will begin soon in the form "a vote next week” — a target date that Senate Majority Leader Chuck Schumer (D-NY) is pressing for, too.
"Time's up and it's time to take a vote," Raimondo said.
Biden officials have been arguing for months that this is must-pass legislation for the U.S. economy; a version of the bill even passed the Senate in June 2021. Raimondo and other administration officials spent both Wednesday and Thursday on Capitol hill for closed-door meetings with lawmakers to try to get the bill over the finish line.
It would be ‘really inexcusable to vote no’
A 'slimmed down' version of the bill appears set to include around $52 billion to provide new subsidies for semiconductor manufacturers such as Intel (INTC) to spur investment in the U.S. The bill is also likely to authorize another $200 billion that would go out in the form of tax credits to boost U.S. scientific and technological innovation more broadly as part of the effort to compete with China.
Intel recently postponed the groundbreaking on a key Ohio semiconductor factory because of delays with the bill. Company CEO Pat Gelsinger has even warned that production might migrate to Europe if the issue isn’t resolved soon.
Back in Washington, Raimondo recently warned that chip makers could flee the U.S. within "months" unless Congress acts. She upped the rhetorical stakes further this week, arguing in a letter she co-authored with Defense Secretary Lloyd Austin that alleviating the shortage is “imperative for our national security."
But the bill has stalled just short of the finish line for months. First, Senate Minority Leader Mitch McConnell suggested he'd stand in the way if Democrats continue to move forward on their unrelated reconciliation effort.
This week, there then appeared to be an opening for a “slimmed down” bill when McConnell noted: “There are members I have who are not overly fond of [the overall bill] but who think there's a national security aspect to the chips deficit.”
Raimondo quickly endorsed the idea to "cleave off" CHIPS Act and move on a smaller standalone bill. But even that idea has faced opposition from some Republican senators, including John Cornyn of Texas.
Friday afternoon, things got even more complicated as the news broke that the Democratic leadership was considering putting the semiconductor funding inside the reconciliation package with many things still up in the air.
In any case, Raimondo told reporters this week her she hopes there's enough “sense of urgency” to finally get it done. She went further during Friday’s conversation with Yahoo Finance, mentioning Cornyn specifically.
“He has worked on this CHIPS bill for years. He understands and cares about the national security ramifications [and it would be] really inexcusable to vote no next week because of some political jockeying or looking for leverage on an unrelated bill,” she said.
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>>> Russian Industry Faces Code Crisis as IT Providers Pull Out
Bloomberg News
June 28, 2022
https://finance.yahoo.com/news/russian-industry-faces-code-crisis-040000251.html
(Bloomberg) -- Russia’s reliance on foreign software to run its factories, farms and oil fields is turning into one of the biggest headaches for domestic industry as more IT providers pull out of the market in response to President Vladimir Putin’s invasion of Ukraine.
International sanctions and tensions over the war have forced industrial manufacturers from Siemens AG to SMS Group GmbH to wind down operations in what was once one of their biggest markets. Their computer programs might be missed more than their machines.
Sourcing software for computer-aided design and manufacturing is turning into a major issue that will be a drag on development, according to Elena Semenovskaya, a Russia-focused analyst at IDC.
“Russian analogues in this area are much weaker and the need is high,” Semenovskaya said. “But for now the approach is to rely on piracy and outdated copies, which is a dead-end and not sustainable.”
Foreign software is often baked directly into industrial machinery and controls high-precision processes. Equipment makers closely guard their intellectual property and in many cases don’t give clients access to the codes used to run their plants, Sergey Dunaev, the chief information officer of Severstal PJSC, said in an interview.
In steelmaking, which can require accuracy within a few hundredths of a millimeter for high-value products, even small deviations can render output worthless, according to Dunaev.
While the Russian economy, helped by high commodities prices, has fared better than most forecasts since the war began, it is facing a period of structural adjustments pushing it into recession. Steel production nationwide is down 25% to 30% since the invasion, Severstal’s owner, Alexey Mordashov, said this month.
‘Suboptimal’ Alternatives
The Russian government has emphasized import substitution since many industries were hit by an earlier wave of US and European sanctions after the 2014 annexation of Crimea, but its ambitions failed to take into account how modern facilities rely on programming.
The steel industry alone invested about 3.2 trillion rubles ($59 billion) in the last two decades to rebuild capacity after its post-Soviet decline, according to the Russian Steel Association. Much of that was spent on equipment supplied by foreign companies like Siemens, SMS Group and Danieli & C. Officine Meccaniche SpA to increase the sector’s efficiency.
“All industries are facing the same problems,” Dunaev said. “Many processes in modern units are controlled by software.”
The exodus is a challenge for the nation’s oil and gas industry, where domestic software accounts for only 5% to 10% of industry-specific tools and is often “suboptimal,” according to First Deputy Energy Minister Pavel Sorokin.
The situation is made worse with the depletion of Russia’s traditional oil deposits, forcing producers to tap hard-to-recover reserves that require more complicated equipment and programs if the country wants to maintain output at current levels.
“Super-sophisticated software for seismic, for modeling layers, drilling and hydraulic fracturing won’t be needed if we won’t have equipment for all those processes,” Sorokin said earlier this month at the St. Petersburg International Economic Forum.
The share of imported equipment in Russian oil and gas has fallen to 40% as of April, compared with about 60% in 2014, according to the head of B1 Energy Center, Olga Beloglazova, who cited estimates from the country’s trade ministry.
Imported MES
Even local food production, where Russia made strides in domestic farming in recent years, is facing challenges. Meat processing facilities at Ros Agro Plc, one of the country’s biggest agricultural holdings, rely on imported manufacturing execution systems, or MES.
“We are critically dependent on European companies in terms of MES, and we do not yet know what to do if something happens,” Maxim Basov, chairman of Ros Agro Plc, said at the St. Petersburg forum.
If software crashes lead to equipment failure, plants could require replacement parts that are difficult to source and increasingly expensive, Severstal’s Dunaev said. To avoid such delays, he proposed industry players cooperate to create a database of spare components that can be shared as necessary.
It’s not just industry that’s affected. SAP SE updates and services for Russian companies, leaving businesses and government services that rely on its software potentially vulnerable to security breaches and viruses. Microsoft Corp. is scaling down its business in Russia.
Russia’s ambitions for a 5G mobile network have also been upended by the war, raising fears the economy will lose its competitiveness as it struggles to maintain existing services while other countries upgrade their infrastructure.
New systems won’t appear overnight. It took nearly a decade and around $100 million to create Russia’s domestic alternative to Microsoft Office, according to Dmitry Komissarov, the developer of MyOffice.
“It is necessary to take a look at inventory and determine what solutions are missing, and then start developing them,” Komissarov said.
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>>> Adobe Inc. (ADBE) operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising.
The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, workers, marketers, educators, enthusiasts, communicators, and consumers.
The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite.
The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings.
The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.
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https://finance.yahoo.com/quote/ADBE/profile?p=ADBE
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>>> Is Autodesk Stock a Buy Now?
Motley Fool
By Leo Sun
Jun 1, 2022
https://www.fool.com/investing/2022/06/01/is-autodesk-stock-a-buy-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Autodesk's Q1 numbers beat analysts' expectations.
It provided steady guidance for the rest of the year.
The stock isn't cheap, but its evergreen business model deserves a premium valuation in this tough market.
The cloud-based software company continues to grow.
Autodesk's (ADSK 1.27%) stock price jumped 10% on May 27 after the software company posted its fiscal year 2023 first-quarter results (for the period that ended April 30). Its quarterly revenue rose 18% year over year to $1.17 billion, which beat analysts' estimates by $20 million. Its adjusted earnings increased 39% to $1.43 per share, which also surpassed the consensus forecast by $0.09.
Those growth rates are impressive, but should investors chase Autodesk's post-earnings rally?
What does Autodesk do?
Autodesk's software and services operations can be split into four categories: architecture, engineering, and construction (AEC); AutoCAD and AutoCAD LT; manufacturing (MFG); and media and entertainment (M&E).
During the first quarter, it generated 44% of its revenue from its AEC segment, 30% from AutoCAD and AutoCAD LT, 19% from MFG, and 6% from M&E. It provides most of its software as cloud-based services.
Autodesk's cloud-based subscriptions enabled it to generate stable growth throughout the pandemic. Its revenue rose 16% in fiscal 2021, which ended last January, and increased another 16% to $4.39 billion in fiscal 2022. All four of its core businesses generated robust growth over the past year.
A stable outlook for the rest of the year
Autodesk's sales in Europe initially slowed down following Russia's invasion of Ukraine, which resulted in the suspension of its business in Russia on March 3, but CEO Andrew Anagnost said during the recent conference call that its business in the region recovered as the quarter progressed.
Autodesk expects its revenue to rise 15% to 17% year over year in the second quarter, and grow 13% to 15% for the full year. That outlook includes a $40 million reduction (about 3% of its revenue) from the suspension of its services in Russia.
It expects its adjusted earnings per share (EPS) to increase 27% to 32% in the second quarter, and to grow 27% to 31% for the full year.
High gross margin and rising operating margin
Autodesk's conversion of its desktop software into cloud-based services, which occurred over the past decade, boosted its gross margin above 90% on a non-GAAP (adjusted) basis. Its operating margin has also consistently expanded.
For the full year, Autodesk expects its non-GAAP operating margin to increase 400 basis points to 36%, even after factoring in the suspension of its operations in Russia.
During the conference call, CFO Debbie Clifford also reiterated Autodesk's long-term goals of generating double-digit revenue growth, non-GAAP operating margins in the 38% to 40% range, and double-digit free cash flow growth on a compound annual basis.
A wide moat with a reasonable valuation
Autodesk's AutoCAD is the gold standard of computer-aided design software and that reputation gives it a wide moat against its smaller rivals. It then leveraged that reputation to launch additional software products and lock more subscribers into its sticky cloud-based ecosystem.
That evergreen business model makes Autodesk similar to Adobe, which also converted its suite of creative software into cloud-based services over the past decade.
Autodesk is growing at a similar rate as Adobe, and both stocks trade at about 30 times forward earnings. Those multiples aren't cheap, but their resilient businesses support their premium valuations.
Is it the right time to buy Autodesk?
Autodesk lost about a quarter of its value this year as rising interest rates drove investors away from higher-growth tech stocks. However, I believe Autodesk's well-diversified business, sticky subscriptions, rising margins, and clear targets for the future still make it a rock-solid investment.
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>>> Taiwan raids Chinese firms in latest crackdown on chip engineer-poaching
Reuters
May 26, 2022
https://finance.yahoo.com/news/taiwan-raids-chinese-firms-latest-092556768.html
TAIPEI (Reuters) - Taiwan authorities raided ten Chinese companies suspected of illegally poaching chip engineers and other tech talent this week, the island's Investigation Bureau said on Thursday, the latest crackdown on Chinese firms to protect its chip supremacy.
Home to chipmaker giant TSMC and accounting for the majority of the world's most advanced semiconductor manufacturing capacity, Taiwan has ramped up a campaign to counter illegal poaching by Chinese companies in what the island sees as a threat to its chip expertise.
The bureau said it raided 10 Chinese companies or their R&D centers which operate in Taiwan without approval earlier this week. It said nearly 70 people have been summoned for questioning in a joint crackdown across several cities including the capital Taipei and the island's semiconductor hub, Hsinchu.
"The illegal poaching of Taiwan's high-tech talent by Chinese companies has badly impacted our international competitiveness and endangered our national security," the bureau said in a statement.
It said technology is vital to Taiwan's security and urged people to "stay high on alert" for such Chinese activities.
The bureau did not name the companies currently being investigated, adding they included integrated circuit design firms and electronics parts makers.
China's Taiwan Affairs Office has not responded to Reuters' requests for comment on the issue.
The Investigation Bureau has launched investigations into around 100 Chinese companies suspected of illegally poaching technology talents, a senior bureau official told Reuters last month.
China's scramble for chip engineering talent has intensified amid Beijing's goal of achieving self-reliance in advanced chips, especially after a trade war with the former Trump administration in the United States.
Taiwanese law prohibits Chinese investment in some parts of the semiconductor supply chain, including chip design, and requires reviews for other areas such as chip packaging, making it very difficult for Chinese chip companies to operate on the island legally.
In March, the bureau raided eight Chinese companies aimed at countering what it said was "the Chinese Communist Party's illegal activities of talent-poaching and secret-stealing".
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>>> Axcelis Technologies, Inc. (ACLS) designs, manufactures, and services ion implantation and other processing equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia. The company offers high energy, high current, and medium current implanters for various application requirements. It also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services, and customer training. It sells its equipment and services to semiconductor chip manufacturers through its direct sales force. The company was founded in 1978 and is headquartered in Beverly, Massachusetts.
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>>> The Chip Shortage is Even Worse Than Biden Thinks
The supply of chips that power and move Americans has never been tighter, according to a U.S. Commerce Department report. Is a Strategic 'Chip' Reserve on the way?
The Street
M. COREY GOLDMAN
JAN 26, 2022
https://www.thestreet.com/investing/less-than-five-days-supply-chip-shortage-slams-u-s-manufacturers
In the wake of the 1970s oil crises, the U.S. established the Strategic Petroleum Reserve, making it official U.S. policy to stockpile billion of barrels of petroleum to end reliance on foreign producers for the literal gas that ran America's engine.
Fast forward 50 years, and that "gas" is now semiconductors.
While you still need to fill up your car and in some cases heat your home with oil, the vast majority of manufactured goods -- from cars and trucks to iPhones to refrigerators to video games and kids' toys -- function using tiny little computer chips.
And the supply of those tiny little computer chips has never been tighter, according to the U.S. Commerce Department.
The median supply of chips held by manufacturers has dropped from 40 days' worth in 2019 to less than five days' worth last year, according to the eye-popping request for information report released Tuesday, with inventories even smaller in "key industries."
"The semiconductor supply chain remains fragile," the report said. "Demand continues to far outstrip supply."
That limited supply means that disruptions to production overseas -- such as those from weather or new Covid-19 outbreaks -- could again lead to factory shutdowns and furloughed workers in the U.S., according to the report, which also noted that respondents “…did not see the problem going away in the next six months."
Chinese Carmakers Sidestep Chip Shortage Troubles To Grow Sales, Market Share At The Expense Of Global Rivals
More Pain on the Way for Consumers
A global supply crunch sparked by the pandemic, extreme weather and supply chain issues has led to shortages and, in some cases, higher prices of cars, iPhones, washing machines, kids' toys and more — at a time when consumers have never been more reliant on tech devices.
The Commerce Department report identified certain semiconductor products for which the supply challenges are most acute, including "legacy logic chips" which are used in cars, medical devices and other products, and "analog chips" used in image sensors.
"We aren’t even close to being out of the woods as it relates to the supply problems with semiconductors," Commerce Department Secretary Gina Raimondo said. "The semiconductor supply chain is very fragile, and it is going to remain that way until we can increase chip production."
Last year, General Motors was forced to temporarily shutter production at most of its North American plants because of the chip shortage, and many other automakers slashed their production plans.
The Biden administration has been working to prop up the US chip-making industry, both to ease current supply chain woes and reduce America's dependence on foreign production of the crucial components going forward.
The biggest bottleneck in the chip supply chain is capacity at semiconductor fabrication plants, called "fabs.” Still, some chipmakers are already looking to turn the tide.
A Strategic Chip Reserve?
Several chip makers have announced plans to invest billions of dollars in new plants. Just last week, Intel announced plans to invest another $20 billion to build a chip manufacturing complex outside Columbus, Ohio. Samsung, meantime, is set to build a semiconductor plant in Taylor, Texas.
Congress has passed the CHIPS for America Act, which includes $52 billion in subsidies to support domestic semiconductor manufacturing but has not yet allocated the funds.
To be sure, one high-profile company isn't being stopped in its tracks by the ongoing chip shortage.
Tesla delivered a record 308,000 vehicles in the fourth quarter, a record for the electric vehicle (EV) company, with most of those deliveries being 3 and Y models stacked to the brim with chips.
Tesla's ability to design parts and components in-house and also adapt parts and even switch to newly available parts has helped it navigate the chip crisis.
A better view of just how well will emerge after the bell on Wednesday when the electric car maker releases its fourth-quarter results.
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Digital Realty - >>> 2 High-Yield Tech Stocks to Buy in January
These income-generating companies can make long-term investors a lot richer.
Motley Fool
by Rich Duprey
Dec 30, 2021
https://www.fool.com/investing/2021/12/30/2-high-yield-tech-stocks-to-buy-in-january/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Digital Realty
Real estate investment trust (REIT) Digital Realty (NYSE:DLR) is an unusual choice for a high-yield tech stock because REITs are usually seen as financial stocks, not technology picks. However, because Digital Realty owns and operates warehouses full of servers and data centers, it neatly straddles both worlds.
Data center REITs are also becoming a rare commodity these days because of the merger and acquisition boom in the space. Assuming all the deals that have been announced are completed, Digital Realty and Equinix (NASDAQ:EQIX) will be the last two remaining REITs in the space. With market valuations of $50 billion and $75 billion, respectively, it's unlikely anyone will be acquiring them or taking them private.
Digital Realty owns 282 data centers that represent 35 million square feet of space, including 36 data centers held as investments in unconsolidated joint ventures (Equinix owns 235 data centers).
Data centers essentially serve as the backbone of the internet, providing the nerve center for everything that occurs in the cloud and online, whether it's e-commerce or Internet of Things devices accessing their network. All of that data needs a home in which to live, and data centers provide the warehousing for the servers and networking equipment in a secure environment.
However, data centers are no longer simply a bricks-and-mortar presence -- they have moved into the cloud themselves. Digital Realty's PlatformDIGITAL service is a global data center platform that meets the evolving needs of enterprise customers by allowing them to customize by the cabinet or to scale and hyperscale for very large deployments. It recently closed on a joint venture with Brookfield Infrastructure Partners (NYSE:BIP) to bring the platform to India, one of the world's biggest, most important data center markets.
Third-quarter adjusted funds from operations (AFFO), a critical profitability metric for REITs, was $1.60 per share, up from $1.47 per share a year ago, and was primarily pushed higher by the expansion of the PlatformDIGITAL service.
Digital Realty's dividend currently yields 2.7% annually, which is not especially high compared to AT&T. It is still a hefty payout for a tech stock, and one that investors should count on growing in the future.
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>>> These are tech’s 10 megatrends for 2022 — and the stocks to buy
MarketWatch
Jan. 3, 2022
By Daniel Newman
https://www.marketwatch.com/story/these-are-techs-10-megatrends-for-2022-and-the-stocks-to-buy-11640790443?siteid=yhoof2
From cloud computing to autonomous vehicles to 5G, here’s what to watch
It’s been a turbulent year for stock markets – record levels across all major indexes despite an onslaught of economic worries and what feels like never-ending variants of Covid-19. Now it’s time to look ahead to 10 major technology trends and which companies show the most promise to win big in 2022.
Cloud computing
Top pick: Amazon
Amazon AMZN, +2.21% has enjoyed the leadership position in Cloud for some time, and its AWS business now tops $16 billion in revenue a quarter. However, there have been two notable AWS outages in recent months. More broadly, Amazon’s stock price has badly lagged the S&P 500 SPX, +0.64% in 2021 with a gain of only 4.8% through Dec. 28. Yet given that enterprise cloud investment is not expected to slow in 2022 and that AWS is Amazon’s cash-cow business, I expect the new year to be better for Amazon shareholders.
Keep an eye out for: Oracle
Oracle ORCL, +0.79% enjoyed a substantial growth year, capped off by a $28 billion deal to acquire Cerner, which sells software that helps doctors access and analyze medical records. In 2021, Oracle provided a peek into its Cloud growth, a business now exceeding $10 billion annually. Combined with its strong stock performance — up 37% through Dec. 28 — and stability in volatile markets, Oracle looks primed for more growth in 2022.
Metaverse
Top pick: Roblox
Meta Platforms FB, +0.65% (once known as Facebook) may be receiving much credit for the popularization of the Metaverse. However, Roblox RBLX, -4.22% has spent 17 years creating immersive experiences that could be considered the Metaverse. It claims that half of U.S. children are on the platform and that a developer community of 10 million has created more than 24 million experiences on the Roblox platform.
While Meta and others look to AR and VR to create the Metaverse experience. Roblox has taken a more real-world approach to its gaming platform that has made it a real leader in the space. This practical approach coupled with continued platform adoption should lead to continued gains as the popularization of the technology leads to more investors looking to get into the space.
Keep an eye out for: NVIDIA
CEO Jensen Huang doesn’t acknowledge the Metaverse, but the company NVDA, +2.41% has been playing a pivotal role in developing this technology with its Omniverse Platform. With 40 million developers looking for the tools to unlock the Metaverse, NVIDIA’s technology seems primed to be a critical contributor, and we will most likely see NVIDIA continue to run alongside this trend in 2022.
Top pick: Qualcomm
5G has been a hot topic for a few years, but the technology gained steam in 2021 with more than 560 million 5G handsets shipping worldwide. Qualcomm QCOM, +1.83% benefits as both a leading chip maker and licenser of 5G technologies that goes into nearly every 5G-enabled handset. The year ahead will be another big year for 5G. It won’t just be handsets, but also automotive, IoT, infrastructure and more–all of which are beneficial to Qualcomm.
Keep an eye out for: Apple
As part of their 2019 settlement, Apple AAPL, +2.50% still depends on Qualcomm for 5G chipsets and technology as part of its license agreement, which may last longer than most think. However, since rolling out its iPhone 13 with 5G, the company has quickly become the world’s leader in 5G handset shipments, accounting for nearly one-third of all 5G handsets worldwide. While I’ve been critical of the lack of 5G mmWave in its international units, I think that will come with the next generation, meaning more sales, more revenue and even happier shareholders.
Digital transformation
Top pick: Microsoft
Microsoft MSFT, -0.47% has had a great year, with the stock up 53% though Dec. 28 and both revenue and profit continuing to grow every quarter under the leadership of Satya Nadella. Its portfolio from software to cloud to devices is one of the most, if not the most comprehensive, to meet the needs of enterprises in their transition to digital. Even with rising interest rates, inflation, and COVID-19, it’s hard to see a scenario where Microsoft’s stock doesn’t continue its ascent.
Keep an eye out for: Alphabet
With stock-market gains of 67% thought Dec. 28, Google parent Alphabet GOOG, +0.27% GOOGL, +0.10% has outperformed Microsoft. While a lot of its business success can be attributed to its massive ad revenue, Alphabet has quietly built up a modern productivity suite that includes Cloud, SaaS, business applications, collaboration, and more. That makes it a great partner for companies looking to expedite their digital transformation. With the ad business underpinning the company, I believe Alphabet’s bets on enabling digital for enterprise and SMB will help it keep its momentum in 2022.
E-commerce and customer experience
Top pick: Adobe
Amazon may feel like the low-hanging fruit here, but I think 2022 will be a big year for Adobe. The company’s stock recently took a significant hit following its earnings and investor day. Still, its stack of creative and experience technologies for marketers puts it in the pole position for a strong bounce back in 2022. Adobe’s experience cloud, which enjoys a rising TAM to more than $200 billion by 2024, is something I feel investors should keep a close eye on, as this is where the most significant subsection of Adobe’s growth will come over the next few years.
Keep an eye out for: Twilio
Hit hard by the growth selloff, Twilio’s TWLO, -0.40% stock is down more than 23% thought Dec. 28. However, its technology, developer ecosystem, and several key acquisitions, including Segment CDP, put the company in an excellent position as one of the leading platforms for enterprises seeking to deliver best-of-breed customer experiences through mobile and digital platforms. It’s far from a sure thing, but the upside for Twilio is enticing.
Enterprise collaboration
Top pick: Microsoft
With 250 million monthly active users, Microsoft Teams is the hands-down winner here. As the company diversifies to be more than just collaboration and the center of the work experience, it is looking increasingly difficult for the competition. Watch what Salesforce does with Slack, but right now, Microsoft has a big head start.
Keep an eye out for: Zoom
A pandemic darling, Zoom Video Communications ZM, +0.19% saw its stock shoot up to $500 on the stay-at-home trade, only to fall back below $200, causing its deal to acquire cloud contact-center software firm Five9 to fall apart. With all of that in mind, the company still enjoys a massive user base and strong double-digit growth after surpassing $1 billion a quarter in revenue. It is also diversifying with its platform into hybrid events and asynchronous messaging. As I see it, Zoom shares went up too fast and then went down too fast. I think there is an opportunity here for Zoom and its investors.
Artificial intelligence (AI)
Top pick: NVIDIA
This one isn’t even close, and investors have had their say as NVIDIA’s stock-market value has gone north of $760 billion and on its way to $1 trillion. Investors have shaken off its increasingly unlikely bid to acquire ARM, and that is because growth is so good without it. Whether it’s AI for gaming, Metaverse, conversation, recommendations, or automotive, the company offers the software, hardware, and frameworks needed to implement AI at scale.
Keep an eye out for: Amazon
Amazon has gone all-in on its homegrown chipmaking, and it will bear fruit for the company in 2022. While AWS’s portfolio of AI and machine learning services offers GPUs from the likes of Intel and NVIDIA, the company has built a future where its offers highly competitive or market-leading performance for AI training and inference. While I don’t see AWS going toe-to-toe with NVIDIA to be the “AI” company, I do think its rapid capabilities to deliver enterprise-oriented virtual servers in the cloud, known as instances, will help keep AWS growing near or above 30% rate it has enjoyed over the past year.
Autonomous vehicle/ADAS technology
Top pick: Intel Mobileye
I focused on technology makers that stand to win big from the interest in autonomous vehicles that has sent names like Lucid LCID, +7.57% and Rivian RIVN, -0.94% to stock-market values above GM, BMW, Volkswagen and others despite barely having any revenue. I believe Mobileye, now currently part of Intel INTC, +3.32%, is set to deliver big returns to shareholders in 2022. With the recent announcement that it will spin off its Mobileye business that it acquired less than five years ago, Intel stands to unlock considerable value through this deal. With more than 100 million eyeQ ADAS units shipped by Mobileye to date, I believe this could be an even bigger winner for investors who get in on Mobileye’s impending IPO as well as for Intel, which will remain Mobileye’s largest shareholder.
Keep an eye out for: Qualcomm
With recent design wins from the likes of BMW and GM, Qualcomm’s automotive design pipeline has swelled above $10 billion and stands to become the company’s next billion-dollar annual business. The company’s Snapdragon Ride platform is a full stack of components to address advanced driver assistance systems, or ADAS, telematics and infotainment, and it can be done on an open platform that makes it easier for large auto makers to adopt and iteratively upgrade their vehicles on a shorter time horizon.
I don’t think Qualcomm’s automotive business has been highly appreciated by investors as the company’s stock-market value has surged above $200 billion, and that could be a good thing for its share price in 2022.
Semiconductors
Top pick: AMD
Much like NVIDIA has become the darling of AI, AMD AMD, +4.41% has become one of the most exciting names in semiconductors; the company has taken market share in laptops, and perhaps more important, servers over the past few years.
The growth under CEO Lisa Su has been nothing short of remarkable. The stock has climbed 67% through Dec. 28, and the company claimed a 10% market share in the datacenter server space for the first time since 2007. That growth has been critical to the company’s top-line growth and its increasing margins, making it even more attractive to its investors.
Keep an eye out for: Marvell
It seems like Marvell MRVL, +2.22% CEO Matt Murphy can do no wrong. The chipmaker’s turnaround has been underpinned by solid growth in key secular trends, including 5G, automotive, and datacenter. In 2021, Marvell went from being part of a large swath of semiconductor names to one of the must-own names for those that share my belief that semiconductors will eat the world. The stock nearly doubled in 2021 and has recently hit an all-time high; count on more gains in 2022.
Enterprise software
Top pick: Salesforce
This one was a close call, given that Microsoft and Oracle both have had a solid year for their enterprise software. However, Salesforce CRM, +0.52% has been extraordinarily stable in its growth, and I’m increasingly optimistic about its platform, Hyperforce, and how that will expand its growth trajectory. The company has made several significant acquisitions in MuleSoft, Tableau and, most recently, Slack, and I think the best of Salesforce is yet to come. Its humble 15% stock-market gain through Dec. 28 makes it stand out as a smart pick for a pop in 2022.
Keep an eye out for: SAP
This name may not exude excitement, but SAP SAP, +0.92% SAP, -0.53% touts more than 425,000 customers, and this means strong recurring revenue. Now it’s making a real push into the cloud, and that transition makes SAP an interesting growth opportunity in 2022. With 77% of its revenue falling into the “predictable” category and mid-double-digit (20%) cloud growth, there is a real opportunity for upside if its cloud transformation continues to take shape.
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>>> 3 Top Stocks to Play the Data Center Upgrade Cycle in 2022
The internet is evolving again, and data center construction is picking up pace to facilitate it.
Motley Fool
by Nicholas Rossolillo
Dec 31, 2021
https://www.fool.com/investing/2021/12/31/3-top-stocks-to-play-the-data-center-upgrade-cycle/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
AMD's CPUs and GPUs have momentum on their side in the important data center market.
Arista Networks is forecasting strong growth for the new year from its data center customers.
Fortinet designs some of the best data center and network security hardware around.
Facebook's recent corporate rebrand to Meta Platforms has set off a firestorm of media headlines surrounding terms like "metaverse," "web 3.0," and "cryptocurrencies." But even before that, lots of organizations had already started upgrading their data centers to get ready for more advanced web-based services and experiences.
A new wave of tech hardware construction is thus underway, and Advanced Micro Devices (NASDAQ:AMD), Arista Networks (NYSE:ANET), and Fortinet (NASDAQ:FTNT) look like top buys right now. Here's why these are three top stocks to play the data center upgrade push.
1. AMD: Gobbling up market share of the web's basic computing unit. It doesn't look like AMD's pending acquisition of fellow chip designer Xilinx (NASDAQ:XLNX) will get done in 2021, as it's still pending sign-off from regulators in China. Management said it hopes to finalize the $35 billion acquisition in early 2022. Xilinx, which is the leader in field-programmable gate arrays (FPGAs), will open up a new front for AMD as it gobbles up market share from Intel (NASDAQ:INTC) in multiple areas.
Even should the Xilinx deal get hung up by China (regulators in the U.S., U.K., and Europe have already given the go-ahead), AMD will be just fine. AMD's CPUs for data centers (one of Intel's most important business lines) have been building steam for years. And along with Nvidia, AMD GPUs designed for artificial intelligence are also a key growth driver for the company.
But FPGAs from Xilinx, a flexible chip type that can be reprogrammed at the hardware level, have also been on the offensive. Intel acquired a couple of FPGA firms in recent years, but that segment has mostly stalled out while Xilinx has been growing at a healthy clip. Together, AMD and Xilinx would be a powerful force and help AMD continue to eat away at Intel's massive lead in the semiconductor industry.
Besides sustaining AMD's stand-alone growth momentum, Xilinx will improve AMD's profit margins, and boost research and development spending. Currently, AMD stock trades for 61 times trailing-12-month free cash flow and 44 times next year's expected earnings. This valuation implies another year of rapid growth for the company in 2022, which looks more than viable given the high demand chips are in and the rapid pace of data center upgrades (for example, Meta choosing AMD chips to help power the metaverse). Adding in Xilinx could just be extra gravy. I remain optimistic on AMD's prospects for the long term.
2. Arista Networks: Constructing the backbone of cloud computing
After a few years of struggle, Arista Networks stock was back on the rise in 2021 and set fresh all-time highs throughout the year. The company made a solid rebound from the adverse effects of the U.S.-China trade war that were exacerbated by the early days of the pandemic, and Arista's sales are in strong growth mode once again.
Arista designs open-source switches and other networking equipment. As it's a key ingredient in data centers and other internet infrastructure, a surge in web traffic and cloud computing has Arista's hardware in high demand right now. With order lead times extending well into 2022, management expressed confidence on its last earnings call that it will continue to grow in the new year (through the first nine months of 2021, Arista revenue was up 27% year over year).
Along with its hardware, Arista has also been expanding on its library of software solutions for its data center customers. Together, the company provides a full suite of solutions for enterprises looking to build out new capabilities for the digital world, like cloud operation monitoring and security. In total, it makes for an incredibly profitable business. Arista generated $914 million in free cash flow over the last 12 months, a 33% free cash flow profit margin.
As of this writing, the stock trades for 50 times trailing-12-month free cash flow and nearly 42 times next year's expected earnings. It's the highest premium Arista has traded for in years, but given the company's return to double-digit percentage growth, it's not an unwarranted price tag. This is a great stock to own if you think data center construction, the cloud, and other next-gen web experiences will remain a secular growth trend throughout the 2020s.
3. Fortinet: A best-in-class play for security
Cloud-based security software has been all the rage since the start of the pandemic. Firms like CrowdStrike and Zscaler have been top performers in the cybersecurity industry. But Fortinet, often considered a "legacy" security firm, is no slouch. For every cloud service, a data center is doing the work somewhere, and that physical asset needs to be secured as well.
Fortinet designs some of the top chips on the market for this purpose. Even during lockdowns and corporate freezes on some spending in year one of the pandemic (2020), Fortinet's hardware sales kept growing. And then in 2021 as data center upgrades picked up pace, the company's product sales segment accelerated (up 40% through the first nine months of the year).
But let's not pigeonhole Fortinet as a hardware company. In fact, nearly two-thirds of its revenue is derived from services -- recurring and very sticky software-based sales that get packaged with the company's best-in-class equipment. Even as cybersecurity needs have evolved with proliferating use of the internet, Fortinet has adapted and maintained fast and steady growth for years. Development of a new wave of IT services bodes well for the company's continued success.
As can be expected from a company that has a long track record of profitable growth, Fortinet stock can be purchased for a premium 48 times trailing-12-month free cash flow and 79 times next year's expected earnings (a higher multiple for next year assumes the company invests heavily in research and development in 2022). Nevertheless, I still like Fortinet for the long haul. Expect some turbulence after shares more than doubled in 2021, but if you are focused on the firm's potential over the next five-plus years like I am, this top data center security play deserves attention.
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IQSTEL To Make EV Motorcycles!!
$IQST - @IQSTEL just confirmed that their first Batch of EVOSS EV Motorcycles will roll on the production line this year.
$IQST - IQSTEL, Our factory just confirmed that our first Batch of our EVOSS EV Motorcycles will roll on the production line this year. @Etelix @vimo_vip #otcmarkets #OTCQX #EV
— iQSTEL Inc. (OTCQX: IQST) (@IQstel) November 24, 2021
@IQstel To Acquire Telecom Company!
$IQST - iQSTEL Announced MOU To Acquire Telecom Company Supporting $75.5 Million Initial 2022 Annual Revenue Forecast for Telecom Business.
https://www.prnewswire.com/news-releases/iqst--iqstel-announces-mou-to-acquire-telecom-company-supporting-75-5-million-initial-2022-annual-revenue-forecast-for-telecom-business-line-301428083.html
ClickStream's HeyPal ranks 2 NOW on Google Play Store!
$CLIS - HeyPal(TM) Android Charges to #2 Ranking in the Google Play Store for Social Apps in the United States in Less Than 2 Weeks"
https://finance.yahoo.com/news/heypal-tm-android-charges-2-133000590.html
>>> Adyen N.V. (ADYEY) operates a payments platform in Europe, North America, the Asia Pacific, Latin America, and internationally. The company's platform integrates payments stack that include gateway, risk management, processing, acquiring, and settlement services. It offers a back-end infrastructure for authorizing payments across merchants' sales channels, as well as online, mobile, in-store, and APIs. The company's platform services a range of merchants across various verticals, connecting them directly to Visa, Mastercard, and other payment methods and providing data insights. Adyen N.V. was incorporated in 2006 and is headquartered in Amsterdam, the Netherlands.
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$CLIS - Heypal To Integrate Cryptocurrency and Blockchain!
$CLIS - Click Stream's HeyPal(TM) Announces Plans of Cryptocurrency and Blockchain Integrations into Platform via NFTs! Going to boooom!
Arteris - >>> Tesla is not a car company — it's an 'internet-of-cars company:' Arteris CEO
Yahoo Finance
by Pras Subramanian
October 29, 2021
https://finance.yahoo.com/news/tesla-is-not-a-car-company-its-an-internet-of-cars-company-arteris-ceo-191640972.html
It's been a huge week for Tesla (TSLA).
Shares jumped to new highs as the market cap of the pure-play electric vehicle maker topped $1 trillion for the first time, making it the 5th most valuable company in the S&P 500 (^GSPC) — and sending Elon Musk's personal fortune north of $300 billion.
A huge deal with Hertz buying 100,000 Teslas for its rental fleet, and a big bullish note from Morgan Stanley analyst Adam Jonas had shares jumping. But it also follows a big earnings report in the week prior, where Tesla again posted record deliveries of 241,391 in the third quarter, up over 60% from a year ago. This as the company has now achieved an annual production run rate of 1 million vehicles.
Tesla's production and delivery output comes amid the backdrop of massive automakers like GM (GM), Volkswagen (VWAGY), and Ford (F) seeing production cuts because of the ongoing component and chip shortages brought on by the lingering effects of the global pandemic.
From a scale perspective, traditional OEM automakers produce far more vehicles compared to Tesla, but even Musk naysayers can't deny what the company has been able to achieve in difficult times.
So what can other automakers learn from Tesla? Yahoo Finance asked chip tech company Arteris' (AIP) CEO Charles Janac, whose company helps SoC (system-on-chip) manufacturers make chips for cars, why Tesla has not been as affected as some of their competitors. His answer turned the question on its head.
"In my opinion, Tesla is not necessarily a car company — It's an internet of cars company," he said. "They control their software architecture very well, and ... they make some of their own chips."
Janac noted Tesla has an innovative partnership with Samsung to make chips it specifically needs, but adds that Tesla's ingenuity goes further. "Even for the chips that they buy, they're able to get their software teams to reprogram some of the software for chips that are available. So they're a little bit more nimble because they control their own software architecture."
What's happening is Tesla is that its engineers are able to repurpose and reprogram chips that control the automatic climate control system to then work with the cars infotainment system, for example.
Because Tesla has been doing all of its software programming in-house — and has basically grown up as as software and tech company first, and automaker second — it can solve problems differently than traditional automakers.
Janac's not the first to point out how nimble the company can be. And many investors are betting on the company's creative problem-solving and its tech and software prowess when when they value the EV automaker at a forward P/E (price/earnings) ratio of 127, compared to GM's forward P/E of 8.
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>>> Arteris - >>> 4 Stocks Insiders Are Buying
Benzinga
by Lisa Levin
November 1, 2021
https://finance.yahoo.com/news/4-stocks-insiders-buying-111428953.html
The Trade: Arteris, Inc. (NASDAQ: AIP) Director Wayne C Cantwell acquired a total of 47094 shares at an average price of $18.75.
What’s Happening: The company, last week, priced its IPO at $14 per share.
What Arteris Does: Arteris is a provider of network-on-chip interconnect semiconductor intellectual property (IP) and IP deployment technology to accelerate system-on-chip semiconductor development and integration for a wide range of applications from AI to automobiles, mobile phones, IoT, cameras, SSD controllers, and servers for customers such as Bosch, Baidu, Mobileye, Samsung, Toshiba and NXP.
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>>> Arteris IP Announces Pricing of Initial Public Offering
Yahoo Finance
October 26, 2021
https://finance.yahoo.com/news/arteris-ip-announces-pricing-initial-033600681.html
CAMPBELL, Calif., Oct. 26, 2021 /PRNewswire/ -- Arteris IP, a leading provider of system-on-chip (SoC) system intellectual property (IP) consisting of network-on-chip (NoC) interconnect IP and IP deployment software, today announced the pricing of its initial public offering of 5,000,000 shares of its common stock at a price to the public of $14.00 per share. The gross proceeds to Arteris IP from the offering, before deducting the underwriting discounts and commissions and offering expenses, are expected to be $70.0 million. All of the shares are being offered by Arteris IP. In addition, Arteris IP has granted the underwriters a 30-day option to purchase up to 750,000 additional shares of its common stock at the initial public offering price, less underwriting discounts and commissions.
The shares are expected to begin trading on the Nasdaq Global Market on October 27, 2021 under the ticker symbol "AIP," and the offering is expected to close on October 29, 2021, subject to the satisfaction of customary closing conditions.
Jefferies LLC and Cowen are serving as lead bookrunners and BMO Capital Markets is serving as joint book-running manager for the offering. Northland Capital Markets and Rosenblatt Securities are acting as co-managers for the offering.
A registration statement relating to the sale of these securities has been filed with, and declared effective by, the Securities and Exchange Commission on October 26, 2021. Copies of the registration statement can be accessed through the Securities and Exchange Commission's website at www.sec.gov. The offering is being made only by means of a written prospectus, forming a part of the effective registration statement. A copy of the final prospectus relating to the offering may be obtained, when available, from: Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022; by phone at (877) 821-7388; or by e-mail at Prospectus_Department@Jefferies.com; and Cowen and Company, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attn: Prospectus Department, by phone at (833) 297-2926, or by email at PostSaleManualRequests@broadridge.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Arteris IP
Arteris IP is a leading provider of System IP consisting of NoC interconnect and other IP as well as IP Deployment software that accelerate creation of SoC type semiconductors. Our products enable our customers to deliver increasingly complex SoCs that not only process data but are also able to make decisions.
Investor Contacts
Nick Hawkins, VP and CFO
Arteris, Inc.
ir@arteris.com
Erica Mannion or Mike Funari
Sapphire Investor Relations, LLC
+1 617 542 6180
ir@arteris.com
Media Contact
Kurt Shuler
Arteris IP
+1 408 470 7300
kurt.shuler@arteris.com
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>>> Move over, Cathie Wood: 3 picks from Goldman Sachs' new ETF that could smash Ark
MoneyWise
by Sigrid Forberg
September 24, 2021
https://finance.yahoo.com/news/move-over-cathie-wood-3-141700625.html
Goldman Sachs is hoping to give Cathie Wood a run for her (very large pot of) money.
The investment banking giant launched a technology ETF last week seemingly to compete with Wood’s successful firm, Ark Invest, for the dollars of innovation-focused investors.
Unlike Wood’s flagship ETF Ark Invest (ARKK), which is heavily exposed to mega-cap innovators like Tesla and Shopify, the Goldman Sachs Future Tech Leaders Equity ETF (GTEK) looks to invest in smaller under-the-radar tech names with more room to grow.
Let’s take a look at GTEK’s top three holdings. One of them could be the next mega-cap millionaire maker — and worth pouncing on using just some spare change.
1. Marvell Technology (MRVL)
Based in Delaware, this semiconductor technologist is GTEK’s largest holding representing 3.4% of the portfolio.
As technology evolves and more and more connections are being powered by the “internet of things,” advanced machine learning, and 5G — especially through the pandemic — Marvell’s long-term growth trajectory is highly attractive.
Specifically, its diverse products will prove useful as even further technological advances in AI, network connected industrial equipment and even autonomous vehicle technology require more information.
Despite facing intense competition from the likes of Micron Technology and Broadcom, Marvell has been posting impressive numbers.
In Q2, it brought in a record revenue of $1.076 billion, which represents 48% growth year over year. And 40% of its growth came from its data center sector.
When announcing the results, Matt Murphy, Marvell’s president and CEO, added that he expects the company’s 5G business to continue to generate strong revenue growth throughout the rest of the year.
2. MercadoLibre (MELI)
Laptop computer displaying logo of Mercado Libre, an Argentine company that operates online marketplaces dedicated to e-commerce and online auctions
Hailing from Buenos Aires, Argentina, MercadoLibre is an online commerce platform operating in 18 Latin American countries.
Basically, it’s the eBay of South America, and accounts for 3.2% of GTEK’s holdings.
MercadoLibre, which translates to “free market,” is an already large e-commerce community that is continuing to grow. On its site, the company notes that Latin America has a population of more than 635 million people and has one of the fastest-growing internet penetration rates in the world.
In the first half of 2021, the company recorded 98 million unique active users and moved $13 billion in merchandise over that period.
Specifically in Q2, MercoLibre saw net revenues of $1.7 billion — a 93.9% increase on a year-over-year basis as well as a 47.4% growth to its unique active visitors rate.
Given the size of the region it serves, MercadoLibre has massive potential for growth and appears poised to continue to grow its presence in the e-commerce and digital payment sphere.
To be sure, MercadoLibre trades at more than $1,880 per share. But you can get a piece of MercadoLibre using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
3. HubSpot (HUBS)
Hands holding smartphone displaying logo of HubSpot, an American developer and marketer of software products for inbound marketing, sales, and customer service
This software company offers a suite of products to help manage customer relationships for marketing, sales and customer service organizations.
The company reports it has more than 121,000 customers in more than 121 countries.
It represents 2.8% of GTEK’s portfolio.
HubSpot reported $310.8 million in total revenue in the second quarter — up 53% from the year before. Subscription revenue accounted for $300.4 million of that sum, which was also an increase of 53% from the same quarter the year before.
By the end of the year, the company anticipates its total revenue to be in the range of $1.268 billion to $1.272 billion.
Clearly, HubSpot sees plenty of room for growth in its industry and it’s aiming to gain a larger and larger slice of that pie.
A less volatile approach
All three stocks look like solid bets for investors interested in the future of technology. That said, growing innovators tend to reinvest all of their profits back into the business.
If you're a risk-averse investor looking to diversify into something more stable, you might prefer assets that produce cold, hard cash.
And you don't have to limit yourself to the stock market.
For instance, some popular investing services make it possible to lock in a steady rental income stream by investing in premium real estate properties — from commercial developments in LA to residential buildings in NYC.
You’ll gain exposure to high-end properties that big-time real estate moguls usually have access to, and you’ll receive regular payouts in the form of quarterly dividend distributions.
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Digital Advertising Stocks Are Underperforming, Time To Buy?
According to Forbes, unlike high-growth software and cloud stocks which have seen a correction this year, advertising players are faring well as companies are likely to scale up ad budgets as the economy continues to open post-Covid.
The shift from traditional to digital trends (paid ads, SEO, etc) has declined a bit since our last update in late July. But as we approach 2022, the global digital advertising market is expected to grow by around 20% this year to over $450 billion in 2022.
So, is now the best time to buy?
>>> Goldman Hunts for Next 175,000% Stock Rally With New Active ETF
Bloomberg
By Katherine Greifeld
September 16, 2021
https://www.bloomberg.com/news/articles/2021-09-16/goldman-hunts-for-next-175-000-stock-rally-with-new-active-etf?srnd=premium
GTEK tracks tech stocks with market caps under $100 billion
Bank’s asset arm ‘working hard’ to find next rally leaders
Goldman Sachs Asset Management is on the hunt for the Faangs of the future with its latest exchange-traded fund.
The actively managed Goldman Sachs Future Tech Leaders Equity ETF (ticker GTEK) launches Thursday, holding technology companies with market capitalizations under $100 billion from both developed and emerging nations.
Goldman itself intends to invest alongside clients, according to a press release.
With GTEK, Goldman is trying to identify the next tech moonshots to stay on “the right side of disruption and innovation,” according to Katie Koch.
“It’s going to be another company’s chance to be up another 175,000% since its IPO,” said Koch, GSAM’s co-head of fundamental equities. “We’re working hard at finding those companies.”
Large-cap tech ETF has outperformed its mid-cap peer this year
Big tech firms such as Facebook Inc., Apple Inc. and Google’s parent Alphabet Inc. have long dominated the stock market, but their influence soared to new highs during the pandemic amid widespread lockdowns and the work-from-home era. The might of the mega caps remains intact this year even as higher inflation renews concerns over their lofty valuations.
GTEK is launching into a market where bigger still seems to be better. The $195 billion Invesco QQQ Trust Series 1 ETF (QQQ) -- which tracks the large-cap Nasdaq 100 -- has surged over 20% so far this year. By comparison, the $1.2 billion Invesco NASDAQ Next Gen 100 ETF (QQQJ) -- populated by mid-cap tech stocks -- has gained about 11% over that stretch.
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>>> The 'Big Short' guy and star stock picker Cathie Wood are feuding — here's why
Yahoo Finance
by Clayton Jarvis
August 25, 2021
https://finance.yahoo.com/news/ark-innovation-etf-sell-big-210000360.html
Gather ‘round, everybody! Two super investors are fighting!
While it may lack the melodrama of the Kim and Kanye split, the public spat between Michael Burry, the hedge fund manager who famously bet against the country’s housing market and won, and Cathie Wood, the celebrated head of Ark Invest, adds to an important discussion taking place in the investment space.
Burry, skeptical of its valuation, is currently shorting Ark Invest’s flagship technology exchange-traded fund, Ark Innovation ETF (ARKK). Wood has countered by accusing Burry of not understanding growth in today’s environment.
Wood and Burry have repeatedly proven that they know what they’re talking about. But in this case, they can’t both be right.
Why Burry is shorting ARKK
Michael Burry’s introduction to most of America came in the form of the movie* The Big Short*, which detailed his uncovering of the fraud at the heart of America’s subprime mortgage madness of the mid-2000s. (Burry was played by Christian Bale.)
By shorting the U.S. housing market, the collapse of which he felt was inevitable, Burry generated a reported $700 million for investors and pocketed about $100 million for himself.
Burry’s issue with ARRK is the seemingly unsustainable growth expectations being priced into its valuation.
In a since-deleted tweet from February, Burry compared Wood and ARKK to investor Gary Pilgrim and his PBHG Growth Fund, which soared in the mid-1990s by backing innovative technologies, much like ARKK does.
After the brief explosion in value tech stocks enjoyed in 1999, PBHG Growth fell by 34% in 2001 and another 30% in 2002.
Could ARKK be following the same path? After increasing by an eye-popping 153% in 2020 on the back of investments in companies like Tesla, Zoom and Shopify, ARKK has produced negative returns this year.
The fund is down 4% year to date and has fallen almost 25% since peaking at $156.58 in February. And yet, the fund has drawn in another $6.5 billion in assets this year, according to ETF Stream.
"If you know your history, there is a pattern here that can help you,” Burry, who is also shorting Tesla stock, tweeted. “If you don't, you're doomed to repeat it."
The case for ARKK
Wood politely dismisses Burry's skepticism.
“To his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market,” wrote Wood in an August 17 tweet. “I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”
Wood went on to tout her belief that the technologies ARK believes and invests in “should transform the world” in the next decade.
“If we are correct, GDP and revenue growth will diminish until the opportunities in nascent technologies begin to move macro needles. In this environment, innovation based strategies should distinguish themselves.”
There’s a good chance Wood will inevitably be proven right. But at their current levels, do the sectors and companies she and ARKK are backing have substantial room to run?
Shark Tank host and Dallas Mavericks owner Mark Cuban believes they do. After Burry’s short position in the ARKK fund was made public, Cuban came out in support of ARKK’s investment strategy, particularly its healthy exposure to the artificial intelligence space.
"There are 2 kinds of companies in the world: Those who originate their own AI successfully, and everyone else," Cuban tweeted. "The top companies are AI dominate [sic] and running away from their Non-AI competitors. AI's competitive advantage is exponential, but nowhere to be seen on a Balance Sheet."
The lesson for investors
Multi exposure of businessman hand with pen working with virtual creative financial chart hologram on blurred office background, research and analytics concept
While Cathie Wood and Michael Burry have different opinions on the future of the ARKK ETF, they both approach the question of the fund’s value the same way: through careful, exhaustive research.
Burry’s analysis might be more backward-looking and Wood’s more speculative, but they’re both weighing the available evidence and making informed decisions — exactly what successful investors would be expected to do.
Whether you’re investing for short-term growth or long-term stability, it’s important not to rush out and throw your money around until you’re sufficiently educated about the sectors you hope to round out your portfolio with.
And when that time comes, there are several ways to proceed.
You can get started with a popular investing app, which not only offers ETFs, but fractional shares as well.
Another allows you to build a diversified portfolio with little more than the “spare change” left over from your everyday purchases.
And if you agree with Burry that the tech stock mania has gotten out of hand, you might want to consider the above-average returns being generated by farmland thanks to both rising land and food costs. An innovative new company is offering investors the chance to own shares in thriving farms across the country.
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>>> Best Tech ETFs for Q3 2021
BLOK, GAMR, and ARKW are the best tech ETFs for Q3 2021
Investopedia
By MATTHEW JOHNSTON
Jun 2, 2021
https://www.investopedia.com/top-performing-information-technology-etfs-of-2018-4582874
The technology sector includes companies focused on the research, development, and sale of a broad range of hardware and software used by consumers and businesses. It includes giants such as Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN), as well as many fast-growing younger companies. The sector has been a major driver of overall gains in the stock market.
KEY TAKEAWAYS
The tech sector outperformed the broader market over the past year.
The ETFs with the best 1-year trailing total return are BLOK, GAMR, and ARKW.
The top holdings of these ETFs are PayPal Holdings Inc., Wemade Co. Ltd., and Tesla Inc., respectively.
There are 68 distinct technology ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). The technology sector, as measured by the S&P 500 Information Technology Sector Index, has outperformed the broader market with a total return of 44.3% over the past 12 months compared to the S&P 500's total return of 41.0%, as of May 28, 2021.1 The best-performing technology ETF, based on performance over the past year, is the Amplify Transformational Data Sharing ETF (BLOK). We examine the top 3 best tech ETFs below. All numbers below are as of June 1, 2021.2
Amplify Transformational Data Sharing ETF (BLOK)
Performance over 1-Year: 145.1%
Expense Ratio: 0.70%
Annual Dividend Yield: 1.41%
3-Month Average Daily Volume: 979,826
Assets Under Management: $1.0 billion
Inception Date: Jan. 16, 2018
Issuer: Amplify Investments
BLOK is an actively managed ETF that invests at least 80% of its assets in stocks of companies that are actively engaged in the development and utilization of blockchain technologies. Blockchain technology is a type of distributed ledger technology underpinning many cryptocurrencies. The vast majority of the fund's holdings are based in the U.S. and over half operate within the software and services sector of the economy. It follows a blended strategy, investing in a mix of both growth and value stocks across the market cap spectrum.3 The fund's top three holdings include PayPal Holdings Inc. (PYPL), a provider of online payments solutions; Voyager Digital Ltd. (VYGR:CNQ), a provider of cryptocurrency brokerage services; and class A shares of Square Inc. (SQ), a financial services and digital payments company.4
Wedbush ETFMG Video Game Tech ETF (GAMR)
Performance over 1-Year: 93.8%
Expense Ratio: 0.75%
Annual Dividend Yield: 0.84%
3-Month Average Daily Volume: 16,235
Assets Under Management: $114.2 million
Inception Date: March 8, 2016
Issuer: ETFMG
GAMR tracks the EEFund Video Game Tech Index, which provides a measure of the performance of companies involved in the electronic gaming industry. The ETF offers pure-play and diversified exposure to the video game industry, including game developers, console and chip manufacturers, and game retailers.5 It follows a blended strategy, investing in both value and growth stocks of various market capitalizations. The fund's top three holdings include Wemade Co. Ltd. (112040:KRX), a Korea-based mobile and online game developer; class A shares of Roblox Corp. (RBLX), a video game developer; and NetDragon Websoft Holdings Ltd. (777:HKG), a China-based video game developer.6
ARK Next Generation Internet ETF (ARKW)
Performance over 1-Year: 89.9%
Expense Ratio: 0.79%
Annual Dividend Yield: 1.37%
3-Month Average Daily Volume: 1,659,949
Assets Under Management: $5.5 billion
Inception Date: Sept. 29, 2014
Issuer: ARK
ARKW is an actively managed ETF that invests primarily in domestic and U.S. exchange-traded foreign securities of companies engaged in cloud computing, cyber security, e-commerce, big data and artificial intelligence (AI), mobile technologies, the Internet of Things (IoT), social platforms, blockchain and P2P. The fund is focused on large-cap equities with strong growth potential.7 Its top three holdings include Tesla Inc. (TSLA), an electric vehicle and clean energy company; class A shares of Shopify Inc. (SHOP), a Canada-based multinational e-commerce company; and Twitter Inc. (TWTR), a micro-blogging and social media platform.8
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>>> The Chip Shortage Looks Like the Oil Shortage of the 1970s. What It Means for Stocks and the Economy.
Barron's
By Al Root
August 22, 2021
https://www.barrons.com/articles/chip-shortage-stocks-economy-51629507891?siteid=yhoof2
Semiconductors might be the new oil—and that could make the 2020s the new 1970s.
Back then, the world ran on oil—and any change in supply had a massive impact on demand. When OPEC embargoed the U.S. in the 1970s, the price of crude rose from about $3 a barrel at the beginning of the decade to $13 a barrel by its end. The U.S. even issued gas ration coupons in 1974.
The spike was good news for Chevron (CVX) and Exxon Mobil (XOM), which returned roughly 100% and 70%, respectively, in the 1970s, but painful for everyone else, as inflation raged. The S&P 500 and Dow Jones Industrial Average rose just 17% and 5%, respectively, over the decade.
If oil was the necessary component for the 1970s economy, chips provide the same function in the 2020s. They power everything from our computers and phones to our cars and appliances. And, as everyone knows by now, there is a shortage, with delivery times growing to more than 20 weeks, per Susquehanna Financial Group data.
Roughly 80% of all the chips in the world are made in Northeast Asia. Politicians realize how big a problem this is, and they have started to demand local manufacturing, with President Joe Biden introducing a plan for $50 billion in chip research earlier this year. Reshoring any industry, including semiconductors, is a yearslong process that requires billions in capital. There will be winners and losers. And if it goes on too long, it will filter into the prices of all kinds of goods.
“Shortages related to rapid upswings in demand could become inflationary,” TS Lombard’s Rory Green and Steven Blitz wrote back in January, when the scarcity of chips—”a product more known for steadily declining prices”—was in its infancy.
The global semiconductor shortage has been a particular thorn in the side of the automotive industry all year. It was supposed to resolve itself by the second half of 2021. But more production cuts announced by Toyota Motor (TM) this past week shows the problem isn’t going away soon. In fact, RBC analyst Joseph Spak argues the shortage could last for years.
Part of the problem is structural, Spak says. Electric vehicles need more computing power, but the auto industry typically relies on older-generation chip technology, where capacity isn’t being as readily added by chip makers. Instead, they prefer to focus on newer, higher-end chips for the consumer electronics industry.
The result: Instead of lines at the gas stations, there are lines at the automotive dealerships. Low new- and used-car inventories have pushed up pricing and contributed to rising inflation. Used-car prices rose about 20% in the first half of 2021, while new-car prices rose about 3%. The rise in used-car prices has started to slow, but new-car price gains are accelerating, rising about 7% year over year in July.
That’s not good for consumers, but auto makers stand to benefit. Constrained production will lead to persistently low inventories and higher pricing. Companies will sell fewer cars, but that’s been offset by higher prices. Ford Motor (F) and General Motors (GM) shares are up 43% and 17%, respectively, in 2021, and both still trade for about seven times 2022 earnings.
And that’s just the auto industry. The longer the chip shortage goes on, the more prices will rise in all types of products. That will benefit chip makers such as Intel (INTC) and Taiwan Semiconductor Manufacturing (TSM). Wall Street sees upside in the latter. Some two-thirds of analysts covering the stock rate it Buy, and the average price target implies about a 33% upside.
Don’t expect long lines outside RadioShack, but expect the chip shortage to be felt just the same.
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$NAK Northern Dynasty: Pebble Partnership plans summer program at southwest Alaska’s Pebble Project,
"Thiessen said Northern Dynasty continues to believe in the rarity and unique value of the Pebble deposit, noting it is the world's most significant undeveloped copper resource, located on US soil, at a time when the world is facing unprecedented shortfalls of critical metals related to the transition to a low-carbon future, including copper."
"The work we are funding this summer is really an extension of our fundamental belief in the Pebble Project," he said. "That it can be developed safely and responsibly, that it can co-exist with the Bristol Bay fishery and that it can make an important contribution to America's minerals independence and climate change goals."
https://northerndynastyminerals.com/site/assets/files/4922/2021-06-15-nr-ndm-11ity8fgrrt.pdf?
Marvell Technology - >>> My Top Growth Stock to Buy in June
This tech stock is growing at a terrific pace and looks primed for tremendous upside.
Motley Fool
by Harsh Chauhan
Jun 15, 2021
https://www.fool.com/investing/2021/06/15/my-top-growth-stock-to-buy-in-june/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Marvell Technology Group (NASDAQ:MRVL) looked like an enticing bet going into its first-quarter fiscal 2022 earnings report thanks to a bunch of powerful catalysts, and the company didn't disappoint. The chipmaker bested Wall Street's estimates as its top and bottom lines shot up remarkably, while the outlook was solid enough to send the stock higher after the earnings report.
Robust demand from several fast-growing end markets gave Marvell a nice boost during the quarter, a trend that's likely to continue for a long time to come. Let's look closely at the factors driving Marvell's growth and see why it is one of the top growth stocks you can buy right now.
Marvell Technology's terrific growth is here to stay
Marvell's revenue jumped 20% year over year to $832.3 million in Q1, easily clearing the consensus estimate of $806.7 million. Adjusted earnings came in at $0.29 per share, a substantial increase over the prior-year period's figure of $0.18 per share and ahead of the $0.27 per-share analyst estimate. The results were better than what Marvell was anticipating.
The acquisition of Inphi that was completed toward the end of the quarter gave Marvell's top line a shot in the arm. However, it is worth noting that the chipmaker did well even on a stand-alone basis. It reported $810.5 million in revenue excluding Inphi's contribution, which exceeded the company's guidance of $800 million, driven by the growth of its networking and storage businesses.
The networking business recorded 26% year-over-year growth during the quarter and accounted for 60% of the total revenue. Excluding Inphi's contribution, Marvell's networking revenue was up 21% on the back of growth in the 5G and cloud networking markets. Marvell's 5G business did well on the back of "standard and semi-custom product shipments to Samsung and Nokia," which isn't surprising as these two companies are winning big from global 5G deployments.
Meanwhile, the demand for Marvell's data processing units was strong last quarter, which isn't hard to believe given the massive potential in this market. The chipmaker's enterprise business also put in a solid performance, recording double-digit growth once again despite a soft spending scenario. Marvell expects enterprise spending to recover later in the year. Throw in the fact that Marvell is winning new business in the switching and data center markets, and it's easy to see why the company anticipates its networking business to keep growing at high rates.
Marvell expects networking revenue to increase in the high teens on a year-over-year basis this quarter. Including Inphi's contribution, the year-over-year growth is expected to hit 70%. Marvell says that Inphi will add $215 million to its revenue this quarter and prove accretive to the company's adjusted earnings. More importantly, the chipmaker expects Inphi to grow at a higher pace than Marvell thanks to the "demand for high-speed connectivity inside and between data centers and in the carrier market."
All of these catalysts are expected to drive stronger growth in the networking business in the second half of the year.
The storage business also chipped in with a nice showing during the quarter. Revenue increased 17% year over year and accounted for 36% of the top line, driven by an increase in demand for solid-state drive (SSD) controllers and nearline drives deployed in the cloud. Marvell expects the storage business to clock yet another quarter of growth in the mid-teens in Q2 . Given that the cloud storage and the SSD markets are expected to grow at annual rates of 22% and 15%, respectively, Marvell's storage business can keep growing at impressive rates for a long time.
It isn't too late to buy the stock
Marvell's Q2 outlook provides further evidence that this is a high-growth company. It expects $1.06 billion in revenue at the midpoint of its guidance range, up 46% year over year. The adjusted gross margin is expected to increase 70 basis points year over year to 64%. The adjusted earnings of $0.31 per share would be a major improvement over the year-ago period's figure of $0.21. Wall Street was expecting $0.30 per share in earnings on $841 million in revenue.
What's more, analysts expect Marvell to clock annual earnings growth of over 35% over the next five years, handsomely outpacing the 13% CAGR (compound annual growth rate) seen in the last five years. The chipmaker looks well placed to deliver such strong earnings growth in the future thanks to the opportunities it is sitting on, which is why investors looking to add a tech stock benefiting from the 5G rollout and data center investments should consider buying Marvell Technology Group.
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