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


by Sean Williams

Motley Fool

September 13, 2024


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


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

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

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

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

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

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

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

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

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

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

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

Israel Englander of Millennium Management (676,242 shares)

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

Philippe Laffont of Coatue Management (96,963 shares)

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

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

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

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

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

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

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


Super Micro Computer

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

Israel Englander of Millennium Management (553,323 shares)

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

Ken Griffin of Citadel (98,752 shares)

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

Ray Dalio of Bridgewater Associates (15,777 shares)

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

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

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

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

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

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

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


Broadcom

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

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

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

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

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

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

Ken Fisher of Fisher Investments (865,090 shares)

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

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

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

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

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

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


Barron's

by Emily Dattilo

Sept 09, 2024


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


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

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

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

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

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

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

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

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

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

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


Business Wire

Jul 31, 2024


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


Record Quarter for Net Income and Earnings per Share

SECOND QUARTER SUMMARY:

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

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

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

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

Diluted EPS: $0.99, compared to $0.75


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

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

Second Quarter of 2024 Results:

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

Performance by Segment:

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

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

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

Sales by Product Mix:

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


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


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


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


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

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

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

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

Six Months of 2024 Results:

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

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

_________________

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

Conference Call and Webcast

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

Non-GAAP Financial Information

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

About Connection

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

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

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

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

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


Climb Global Solutions, Inc.

Aug 6, 2024


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


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

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

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


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

Second Quarter 2024 Summary vs. Same Year-Ago Quarter

Net sales increased 13% to $92.1 million.

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

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

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

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

Management Commentary

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

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

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

Dividend

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

Second Quarter 2024 Financial Results

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

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

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

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

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

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

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

Acquisition of Douglas Stewart Software & Services, LLC

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

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

Conference Call

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

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

Date: Wednesday, August 7, 2024
Time: 8:30 a.m. Eastern time
Toll-free dial-in number: (800) 245-3047
International dial-in number: (203) 518-9765
Conference ID: CLIMB
Webcast: Climb’s Q2 2024 Conference Call

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

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

About Climb Global Solutions

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

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

About Douglas Stewart Software & Services, LLC

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

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

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


Business Wire

Aug 14, 2024


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


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

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

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

Strong Results from Operations Continue Since 2022 Listing

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

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

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

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

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

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

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

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

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

Second Quarter 2024

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

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

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

Results in Second Quarter 2024 and Since Second Quarter 2022

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

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

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

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

Improved 2024 Outlook

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

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

Fiscal Year to Date 2024

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

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

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

Backlog

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

Strategic Direction Continues

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

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

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

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

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

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

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

Investor Call

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

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

Toll-Free Dial-in Number:

(800) 715-9871

Toll Dial-in Number:

+1 (646) 307-1963

Conference ID:

8891215

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

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


by Eric Volkman

Motley Fool

Aug 20, 2024


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


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

A good way to ring in the new fiscal year

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

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

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

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

Crushing it on guidance, too

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

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


Bloomberg

by Redd Brown and Katrina Manson

Aug 20, 2024


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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


Motley Fool

by Danny Vena

Aug 12, 2024


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


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

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

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

Broadcom: Implied upside 76%

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

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

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

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

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

Nvidia: Implied upside 99%

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

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

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

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

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

Super Micro Computer: Implied upside 204%

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

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

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

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

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

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

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

A note on valuation

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

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


Motley Fool

by Billy Duberstein

Aug 12, 2024


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


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

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

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

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

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

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

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

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

Supermicro is investing to dominate this market

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

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

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

Why Supermicro isn't charging more

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

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

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

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

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


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

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

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


by Adam Levy

Motley Fool

Aug 7, 2024


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


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

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

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

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

The other AI chipmaker

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

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

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

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

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

AI chips are just one part of Broadcom's business

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

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

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

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

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

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


Investopedia

by Naomi Buchanan

Aug 6, 2024


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


Key Takeaways

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

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

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

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

Record Demand for New AI Infrastructure

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


by Adria Cimino

Motley Fool

Jul 31, 2024


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


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

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

Citadel's track record

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

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

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

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

Broadcom's new wave of growth

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

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

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

Nvidia vs Broadcom

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

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

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

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

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


by Will Healy

Motley Fool

Jul 31, 2024


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


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

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

The state of Supermicro

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

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

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

Where Supermicro is going

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

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

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

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

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

Supermicro in five years

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

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

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

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


Yahoo Finance

by Yasmin Khorram

Jul 28, 2024


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


Nearly $50 billion.

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

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

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

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

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

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

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

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

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

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

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

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

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

'Employee Bingo'

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


by Keith Noonan

Motley Fool

Jul 26, 2024


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


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

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

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

Bearish ripple effects from earnings season hit Supermicro

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

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

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

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

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

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

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>>> Google scraps plan to remove cookies from Chrome


Reuters

7-22-24

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


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


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

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

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

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

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

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

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

The announcement drew mixed reactions.

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

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

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

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

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

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

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

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

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

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

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



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

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

iShares Semiconductor ETF (NASDAQ: SOXX)

VanEck Semiconductor ETF (NASDAQ: SMH)

SPDR S&P Semiconductor ETF (NYSEMKT: XSD)

Invesco Semiconductors ETF (NYSEMKT: PSI)

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

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


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

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

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

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

<<<

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


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

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

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

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

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

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

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

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

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>>> Motorola (MSI) Opens R&D Facility in Ireland to Drive Innovation


Zacks Equity Research

Jul 8, 2024


https://finance.yahoo.com/news/motorola-msi-opens-r-d-161300593.html


Motorola Solutions, Inc. MSI recently announced the inauguration of a new research and development center in Cork, Ireland. Motorola already boasts a strong presence in the country. The company acquired TETRA Ireland Communications Limited in 2022 to strengthen its land mobile radio (LMR) communications portfolio and its worldwide Managed & Support Services business. Motorola currently provides its secure communications network to emergency services for Ireland’s National Digital Radio Service.

The latest R&D center at Cork's vibrant city center will house 200 highly skilled workers. The new facility will primarily focus on designing software for Motorola Solutions' LMR portfolio. Plans to expand into other technologies are also in the cards.

Motorola’s mission critical LMR technology is gaining solid traction due to its robust and secure communications capabilities, engineered to operate even in the most extreme environments. So far more than 13,000 LMR networks have been deployed by various government agencies and enterprises globally.

Motorola boasts a rich legacy of innovation; the launch of the first car radios in the 1930s and its role in Apollo missions are testaments of that heritage. Over the past decade, Motorola has invested more than $12 billion in R&D and acquisitions to develop a leading-edge and comprehensive safety and security portfolio. With LMR representing the foundational core, Motorola is at the forefront of developing communications, video security, artificial intelligence and command center technologies to address the diverse scale of safety and security challenges.

Motorola recently acquired Noggin, a global provider of critical event management software. Noggin’s product offerings facilitate effective communications and unified procedures during incidents, fostering enhanced collaboration and a more proactive approach to safety and security. The buyout has strengthened Motorola’s portfolio for emergency coordination solutions.

Management’s strong focus on innovations and expansion of technological capabilities combined with strategic buyouts will bolster its position in the industry. The company remains poised to benefit from strong commercial growth backed by a diversified portfolio for a large addressable market.

The stock has gained 31.9% over the past year compared with the industry’s growth of 45.9%.

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LWLG - >>> Commencement of Commercial Operations

We commenced commercial operations in May 2023. Presently, our commercial operations consist of a material supply license agreement to provide Perkinamine® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs). The license agreement represents tangible commercial progress for electro-optic polymers as part of our Company's business plan. Our Company is also in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic device components. We have seen increased interest in our materials during 2023 and we are in discussions on future license agreements.

<<<


https://www.sec.gov/ix?doc=/Archives/edgar/data/1325964/000155335024000021/lwlg_10q-033124.htm


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LWLG - >>> Common Stock, Options and Warrants

In January 2019, the Company signed a purchase agreement with the institutional investor to sell up to $25,000,000 of common stock. The Company registered 9,500,000 shares pursuant to a registration statement filed on January 30, 2019 which became effective February 13, 2019. The Company issued 350,000 shares of common stock to the institutional investor as an initial commitment fee valued at $258,125, fair value, and 812,500 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. The Company registered an additional 6,000,000 shares pursuant to a registration statement filed on January 24, 2020 which became effective February 4, 2020. The Company registered an additional 8,000,000 shares pursuant to a registration statement filed on November 20, 2020 which became effective November 20, 2020. During the period January 2019 through June 30, 2021, the institutional investor purchased 22,337,500 shares of common stock for proceeds of $23,773,924 and the Company issued 772,666 shares of common stock as additional commitment fee, valued at $1,575,509, fair value, leaving 39,834 in reserve for additional commitment fees. All of the registered shares under the purchase agreement have been issued as of December 31, 2023.

On July 2, 2021, the Company filed a $100,000,000 universal shelf registration statement with the U.S. Securities and Exchange Commission which became effective on July 9, 2021.

On October 4, 2021, the Company entered into a purchase agreement with the institutional investor to sell up to $33,000,000 of common stock over a 36-month period. Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued under the purchase agreement. Pursuant to the purchase agreement, the Company issued 30,312 shares of common stock to the institutional investor as an initial commitment fee valued at $279,174 fair value, and 60,623 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. During the period October 4, 2021 through June 30, 2023, the institutional investor purchased 3,632,456 shares of common stock for proceeds of $33,000,000 and the Company issued 60,623 shares of common stock as additional commitment fee, valued at $694,531 fair value. All of the registered shares under the purchase agreement have been issued as of December 31, 2023.

On February 28, 2023, the Company entered into a purchase agreement with an institutional investor to sell up to $30,000,000 of common stock over a 36-month period. Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued under the purchase agreement. Pursuant to the purchase agreement, the Company issued 50,891 shares of common stock to the institutional investor as an initial commitment fee valued at $279,391 fair value, and 101,781 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. During the period February 28, 2023 through March 31, 2024, the institutional investor purchased 4,120,455 shares of common stock for proceeds of $21,298,402 and the Company issued 72,261 shares of common stock as additional commitment fee, valued at $433,003, fair value, leaving 29,520 in reserve for additional commitment fees. During the three-month period ending March 31, 2024, pursuant to the purchase agreement, the institutional investor purchased 1,250,000 shares of common stock for proceeds of $5,152,350 and the Company issued 17,482 shares of common stock as additional commitment fee, valued at $76,977 fair value. During April and May 2024, pursuant to the purchase agreement, the institutional investor purchased 250,000 shares of common stock for proceeds of $973,950 and the Company issued 3,304 shares of common stock as additional commitment fee, valued at $13,658 fair value, leaving 26,216 in reserve for additional for additional commitment fees.

On December 9, 2022, the Company entered into a sales agreement with an investment banking company. In accordance with the terms of this sales agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $35,000,000 from time to time through or to the investment banking company, as sales agent or principal. Sales of shares of the Company’s common stock, if any, may be made by any method deemed to be an “at the market offering”. The sales agent will be entitled to compensation under the terms of the sales agreement at a commission rate equal to 3% of the gross proceeds of the sales price of common stock that they sell. During the three months period ending March 31, 2024, pursuant to the sales agreement, the investment banking company sold 77,150 shares of the Company’s common stock for proceeds of $330,453 after a payment of the commission in the amount of $10,221 to the investment banking company. During April and May 2024, pursuant to the sales agreement, the investment banking company did not sell any shares of the Company’s common stock.

<<<


https://www.sec.gov/ix?doc=/Archives/edgar/data/1325964/000155335024000021/lwlg_10q-033124.htm


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LWLG - >>> The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement. Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.

During 2024, the Company performed device poling work for a customer.

Timing of Revenue Recognition and Contract Balances

Revenues related to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An up-front license fee in the amount of $50,000 was paid during the period ending December 31, 2023. $35,708 of this amount is recorded in short term liability deferred revenue in the Company’s balance sheet as of March 31, 2024. For the three months ended March 31, 2024, the Company recognized $16,667 in revenue related to this agreement.

In March 2024, the Company completed coating and poling work on the devices supplied by a customer. Revenue for this contract was recognized at the time of shipment of the devices back to the customer and amounted to $13,750 for the three months ended March 31, 2024.

<<<


https://www.sec.gov/ix?doc=/Archives/edgar/data/1325964/000155335024000021/lwlg_10q-033124.htm


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LWLG - from Q1-24 (Form 10 Q)

>>> Our future expenditures and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which we can, directly or through arrangements with original equipment manufacturers, introduce and sell products incorporating our polymer materials technology; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of our products and competing technological developments; and our ability to establish cooperative development, joint venture and licensing arrangements. We expect that we will incur approximately $1,840,000 of expenditures per month over the next 12 months. Our current cash position enables us to finance our operations through August 2025.

On February 28, 2023, the Company entered into a purchase agreement with an institutional investor to sell up to $30,000,000 of common stock over a 36-month period (described in Note 10). Pursuant to the purchase agreement, the Company received $973,950 in April and May 2024 and the remaining available amount of $7,727,648 is available to the Company per the agreement.

On December 9, 2022, the Company entered into a sales agreement with an investment banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price of up to $35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described in Note 10). There were no sales of shares of the Company’s common stock pursuant to the sales agreement in April and May 2024. The remaining available amount of $33,096,514 is available to the Company per the agreement.

The Company's first commercial agreement occurred in May 2023 from a material supply and license agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing photonic devices (described in Note 3). For the three months ended March 31, 2024, we recognized $16,667 in revenue related to this agreement.

Our cash requirements are expected to increase at a rate consistent with the Company’s path to revenue as we expand our activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic polymer technology. We currently have no debt to service.

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>>> Why Badger Meter Stock Is Off the Charts Today


by Rich Smith

Motley Fool

Apr 18, 2024


https://finance.yahoo.com/news/why-badger-meter-stock-off-154259846.html


Shares of water measurer Badger Meter (NYSE: BMI) jumped 12% through 11:15 a.m. ET Thursday after exceeding expectations with its Q1 2024 earnings report this morning.

Analysts had forecast Badger Meter would earn $0.82 per share on sales of $182.3 million -- but Badger beat those numbers with a stick. Badger's earnings for the quarter came within a whisker of $1 a share -- $0.99 -- and sales were $196.3 million.

Badger Meter Q1 sales and earnings

Badger Meter scored wins across the board this morning, growing sales 23% year over year, expanding its operating profit margin by 290 basis points to 18.6%, and growing its net income a whopping 50%. CEO Kenneth Bockhorst credited both "robust customer demand" and "operating execution" for the "exceptional" results.

Sales growth among water utility customers was particularly strong, up 29% -- continuing a yearlong trend of 30%-ish sales growth in this sector. This suggests that America's long-delayed project to improve water infrastructure is now well underway.

Is Badger Meter stock a buy in 2024?

There are pluses and minuses in this for Badger Meter investors. On the one hand, Bockhorst notes that Badger Meter will face "more difficult prior-year comparisons as the year progresses" in 2024. On the other hand, though, he agrees that the water industry is currently enjoying a "resilient macro trend" that should "drive sales and earnings growth."

My big worry as an investor: Continuation of this trend could already be baked into the stock's price. While 50% Q1 earnings growth was certainly impressive, Badger stock also trades at a very impressive price-to-earnings ratio of 48. That's a fair price to pay if growth keeps going at its present pace, and Badger's share price surge today is certainly justified by the news.

But if growth slows at all, Badger investors could find themselves caught in a trap. Caveat investor.

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>>> Palantir looks to have many years of growth ahead

https://finance.yahoo.com/news/forget-nvidia-likely-next-once-113000380.html

Jake Lerch (Palantir Technologies): What makes for a once-in-a-generation stock buying opportunity? For me, the most important factor is a secular growth story. And today, nothing fits that bill better than the rise of artificial intelligence. So it should come as no surprise that my pick is an AI stock: Palantir Technologies.

Palantir specializes in AI-driven data analysis and pattern recognition. Through its software platforms, Palantir can help various organizations achieve very different ends. On the one hand, it could help law enforcement track and apprehend cybercriminals. On the other, it might assist healthcare organizations deliver better outcomes to patients.

In short, almost every organization today could benefit from its products in some capacity. Moreover, AI is only getting better. As it improves, the results it can deliver will also scale -- making Palantir's products even more appealing to organizations looking to increase revenue, cut costs, or improve customer satisfaction.

Best of all for potential investors, Palantir remains in the early stages of its life cycle. The company got its start partnering with governmental organizations -- law enforcement, national security agencies, and military branches. Recently, however, Palantir's commercial customer base has expanded.

In its most recent quarter (the three months ending on Dec. 31, 2023), Palantir reported commercial revenue of $284 million -- up 32% from a year earlier and representing 47% of its overall sales. American-based commercial revenue grew even faster -- 70% year over year.

To sum up, American companies are flocking to Palantir. Yet, the company still has ample room to grow -- a fantastic combination for investors.

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>>> Why a near-miss cyberattack put US officials and the tech industry on edge


Reuters

by Raphael Satter

April 5, 2024


https://finance.yahoo.com/news/why-near-miss-cyberattack-put-110219091.html


WASHINGTON (Reuters) -German software developer Andres Freund was running some detailed performance tests last month when he noticed odd behavior in a little known program. What he found when he investigated has sent shudders across the software world and drawn attention from tech executives and government officials.

Freund, who works for Microsoft out of San Francisco, discovered that the latest version of the open source software program XZ Utils had been deliberately sabotaged by one of its developers, a move that could have carved out a secret door to millions of servers across the internet.

Security experts say it’s only because Freund spotted the change before the latest version of XZ had been widely deployed that the world was spared a digital security crisis.

“We really dodged a bullet,” said Satnam Narang, a security researcher with Tenable who has been tracking the fallout from the find. “It is one of those moments where we have to wipe our brow and say, ‘We were really lucky with this one.’”

The near-miss has refocused attention on the safety of open source software – free, often volunteer-maintained programs whose transparency and flexibility mean they serve as the foundation for the internet economy.

Many such projects depend on a tiny circle of unpaid volunteers fighting to get out from under a pile of demands for fixes and upgrades.

XZ, a suite of file compression tools packaged into distributions of the Linux operating system, was long maintained by a single author, Lasse Collin.

In recent years, he appeared to be under strain.

In a message posted to a public mailing list in June 2022, Collin said he was dealing with "longterm mental health issues" and hinted that he working privately with a new developer named Jia Tan and that “perhaps he will have a bigger role in the future.”

Update logs available through the open source software site Github show that Tan’s role quickly expanded. By 2023 the logs show Tan was merging his code into XZ, a sign that he had won a trusted role in the project.

But cybersecurity experts who’ve scoured the logs say that Tan was masquerading as a helpful volunteer. Over the next few months, they say, Tan introduced a nearly invisible backdoor into XZ.

Collin didn’t return messages seeking comment and said on his website that he would not respond to reporters until he understood the situation well enough to do so.

Tan did not return messages sent to his Gmail account. Reuters has been unable to ascertain who Tan is, where he is, or who he was working for, but many of those who've examined his updates believe Tan is a pseudonym for an expert hacker or group of hackers -- likely one working on behalf of a powerful intelligence service.

“This is not kindergarten stuff,” said Omkhar Arasaratnam, the general manager of the Open Source Security Foundation, which works to defend projects like XZ. “This is incredibly sophisticated.”

‘WE LUCKED OUT’

Tan could easily have gotten away with it had it not been for Freund, the Microsoft developer, whose curiosity was piqued when he noticed the latest version of XZ intermittently using an unexpected amount of processing power on the system he was testing.

Microsoft declined to make Freund available for an interview, but in a publicly-available email and posts to social media, Freund said a series of easy-to-miss clues prompted him to discover the backdoor.

The find “really required a lot of coincidences,” Freund said on the social network Mastodon.

Microsoft CEO Satya Nadella congratulated Freund over the weekend, saying in a post to the social network X that he loved seeing how the developer, “with his curiosity and craftsmanship, was able to help us all.”

In the open source community, the discovery has been sobering. The volunteers who maintain the software that underpins the internet aren't strangers to the idea of little pay or recognition, but the realization that they were now being hunted by well-resourced spies pretending to be Good Samaritans was “incredibly intimidating,” said Arasaratnam, of the Open Source Security Foundation.

Government officials are also weighing the implications of the near-miss, which has underlined concerns about how to protect open source software. Assistant National Cyber Director Anjana Rajan told Politico that “there’s a lot of conversations that we need to have about what we do next” to protect open source code."

The Cybersecurity and Infrastructure Security Agency (CISA) says it has been leaning on U.S. companies that use open source software to plow resources back into the communities that build and maintain it. CISA adviser Jack Cable told Reuters the burden was on tech companies not just to vet open software but to “contribute back and help build the sustainable open source ecosystem that we get so much value from.”

It’s not clear that software companies are properly incentivized to do so. Online open source mailing lists are teeming with complaints about tech giants demanding that volunteers troubleshoot issues with open source software those companies use to make billions of dollars.

Whatever the solution, almost everyone agrees the XZ episode shows something has to change.

“We got unreasonably lucky here,” said Freund in another Mastodon post. “We can't just bank on that going forward.”

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Vertiv Holdings - >>> Here's Why Shares in This Nvidia Partner Soared in March


by Lee Samaha

Motley Fool

Apr 5, 2024


https://finance.yahoo.com/news/heres-why-shares-nvidia-partner-121917710.html


Shares in data center equipment company Vertiv Holdings (NYSE: VRT) rose by a whopping 20.8% in March as the company rode the artificial intelligence (AI) investment boom. The stock price took a leg up in mid-March following the announcement that Vertiv would become a Solution Advisor: Consultant partner in the Nvidia (NASDAQ: NVDA) Partner Network.

Data centers are cool

You can't have a burgeoning investment in AI applications without data centers, and you can't have data centers without cooling. As such, Vertiv has a critical role in the growth of AI, a fact acknowledged by Nvidia CEO Jensen Huang at Nvidia's GPU Technology Conference (GTC) a day after the announcement. Huang noted that Nvidia and Vertiv were working on cooling systems, with Vertiv acknowledged as "very important" in ensuring the cooling of data centers.

While that's a red rag to an Nvidia bull, there's reason and hard numbers behind the optimism.

Spending on data centers continues to surge

As previously discussed, there's been an incredible boom in U.S. manufacturing construction investment over the last couple of years, led by investment in semiconductors and electronics, including data centers. In fact, U.S. manufacturing spending came in at $214 billion in 2023 compared to less than $100 billion in 2022 and even lower in the pre-pandemic era.

Moreover, the boom in interest in AI has made spending on data centers higher. For example, here's a look at capital expenditures at leading data center company Equinix. Although it dipped through 2022 in line with a correction after the boom inspired by the pandemic, it's now taken off again. Equinix management expects $2.9 billion to $3 billion in capital spending in 2024.

Vertiv will benefit from booming data center spending

The ongoing spending in data centers is also seen in Vertiv's order growth -- up 23% on a year-over-year basis in the fourth quarter of 2023 and 18% in the third quarter of 2023. Moreover, CEO Giordano Albertazzi expects spending "to continue to be strong up in the high teens on a year-on-year basis in the first quarter across the portfolio" in the first quarter.

As such, Vertiv is set for another year of strong growth, and management forecasts call for a double-digit increase in organic revenue for the full year.

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>>> Microsoft Corporation (NASDAQ:MSFT) -- Number of Hedge Fund Holders: 302

https://www.insidermonkey.com/blog/5-best-stocks-to-buy-right-now-according-to-financial-media-1270874/4/

Number of Times Stock Appeared in Top Picks of Financial Media: 7

Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. On March 6, investment advisory Jefferies maintained a Buy rating on Microsoft Corporation (NASDAQ:MSFT) stock with a price target of $500.

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 25 million shares worth more than $9.5 billion.

In its Q4 2023 investor letter, Fred Alger Management, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments:

Productivity and Business Processes (Office. LinkedIn, and Dynamics),

Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and

More Personal Computing (Windows, Devices. Gaming, and Search).

During the quarter, the company reported strong fiscal first quarter results, where revenues and earnings beat analyst estimates, driven in large part to growing Al demand. Regarding Intelligent Cloud segment, management noted Azure optimizations were similar to the previous quarter, but new Al and traditional workloads are helping drive greater consumption growth, which resulted in their first reacceleration since March 2022. We believe the strong Azure performance suggests diminishing cost optimization headwinds and growing strength in Al service consumption.”

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>>> Apple Inc. (NASDAQ:AAPL)

https://www.insidermonkey.com/blog/5-best-stocks-to-buy-right-now-according-to-financial-media-1270874/4/

Number of Hedge Fund Holders: 131

Number of Times Stock Appeared in Top Picks of Financial Media: 6

Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. On March 5, investment advisory Wedbush maintained an Outperform rating on Apple Inc. (NASDAQ:AAPL) stock with a price target of $250.

At the end of the fourth quarter of 2023, 131 hedge funds in the database of Insider Monkey held stakes worth $205 billion in Apple Inc. (NASDAQ:AAPL), compared to 134 in the previous quarter worth $179 billion.

In its Q4 2023 investor letter, Horizon Kinetics LLC highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“The full point is that if BYD has turned its attention from its domestic market to direct global competition, then other Chinese companies can do the same. The next most visible example of Chinese commercially applied technological prowess relates to the 2nd highest-weight company in the S&P 500, Apple Inc. (NASDAQ:AAPL).

In September 2023, Huawei Technologies introduced its Mate 60 Pro smartphone. It uses its own, internally developed 5G enabled chip that is apparently competitive with the Apple A17 chip. For practical purposes it has the functionality of the iPhone 15 Pro. This came as a great surprise – perhaps even shock – to the U.S. technology community, because four years ago the U.S. placed strict sanctions on China’s access to state-of-the-art semiconductor manufacturing technology…”

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>>> NVIDIA Corporation (NASDAQ:NVDA) -- Number of Hedge Fund Holders: 173

https://www.insidermonkey.com/blog/5-best-stocks-to-buy-right-now-according-to-financial-media-1270874/3/

Number of Times Stock Appeared in Top Picks of Financial Media: 5

NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On March 7, investment advisory Mizuho maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $1,000 from $850.

Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 15.4 million shares worth more than $7.6 billion.

In its Q4 2023 investor letter, Fred Alger Management, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:

“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super- computing parallel processing techniques for solving complex computational problems. Simply put, Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. During the period, shares contributed to performance as Nvidia reported solid fiscal third quarter results well above analyst expectations, driven by strong demand from data centers. Growing Al data center workloads are driving demand for the increased interconnections and fully accelerated software stacks, thereby enabling leading application performance and fast result times.”

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>>> Apple Inc. (NASDAQ:AAPL) -- 14-day RSI: 32.14

https://finance.yahoo.com/news/11-oversold-blue-chip-stocks-195219274.html

Number of Hedge Fund Holders: 131

Apple Inc. (NASDAQ:AAPL) is a leading technology company focused on the designing, manufacturing, and marketing of smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. It released worldwide the latest version of its flagship smartphone titled iPhone 15, on September 22 last year.

The quarterly revenue of Apple Inc. (NASDAQ:AAPL) increased by 2% on a y-o-y basis in the quarter ended December 30. The company posted a revenue of $119.6 billion and a net income of $33.9 billion, which translated to an adjusted EPS of $2.18.

As of Q4 2023, Apple Inc. (NASDAQ:AAPL) shares were held by 133 of the 933 hedge funds tracked by Insider Monkey, the highest on our list of 11 oversold blue chip stocks to buy right now. Warren Buffett’s Berkshire Hathaway was its biggest shareholder with ownership of 905.6 million shares valued at $174 billion.

In its Q4 2023 investor letter, Wedgewood Partners, an investment management firm, made the following comments about Apple Inc. (NASDAQ:AAPL):

“The Company's services segment revenue growth accelerated to +16% over last year, one of the fastest growth rates since Covid-19 lockdowns, helping drive +11% growth in earnings per share. The strength in the Company's services segment was aided by over 1 billion paid subscribers across Apple's media platforms. We estimate that there are more than 2 billion iOS devices in Apple's global installed base, which still represents a very large addressable share of their current subscriber count. Apple also continues to innovate across its hardware portfolio, with custom silicon for nearly all its device form factors. More recently, the Company launched its new line of Mac computers, which included their M3 family of chips, including the M3 Max, which contains up to an astonishing 92 billion transistors. Apple's long-term strategy of creating products with customized hardware and software should continue to differentiate their products and help drive solid revenue growth and expense leverage across the Company's ecosystem.”

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Palantir - >>> Analyst who correctly forecast Palantir's stock rally updates outlook


The Street

by Todd Campbell

Mar 29, 2024


https://finance.yahoo.com/news/analyst-correctly-forecast-palantirs-stock-173300455.html


The artificial intelligence boom has helped many tech stocks, including Palantir Technologies, produce market-beating returns.

While the S&P 500's 10% first-quarter return is nothing to sneeze at, Palantir shares surged 34%. Its shares also substantially outperformed the benchmark index over the past year, returning 172% since March 2023. Meanwhile, the S&P 500 is up about 29%.

Those extraordinary gains likely surprised many investors who were concerned that the Peter Thiel-founded company would struggle because the possible recession and congressional wrangling over the debt ceiling would dent demand.

However, where others saw risk, TheStreet Pro's Stephen Guilfoyle saw an opportunity. He bought shares when they were trading below $10 in April 2023, allowing him to profit handsomely from surging optimism over AI spending.

Given Palantir's shares rocket-ship ride higher and a current price near $23, Guilfoyle has updated his analysis and stock price target.

Palantir's demand driven by AI wave

Guilfoyle's purchase of Palantir stock last year was based on its strong, debt-free balance sheet, improving free cash flow, and a clearer pathway to profit growth.

The highly successful launch of OpenAI's ChatGPT in December 2022 has proven to be a boon for the company, making Guilfoyle's prediction prescient.

Interest in using AI to digest, interpret, and create new insights from siloed data has swelled across most industries, resulting in the most rapid research and development since the Internet Age in the 1990s.

Banks are using AI programs to hedge risks, evaluate loans, and price products. Drugmakers are exploring its use in predicting drug targets and clinical trial outcomes. Manufacturers are evaluating if it can boost production and quality. AI may also help retailers forecast demand, manage inventories, and curb theft.

AI's widespread applications seem boundless, which has led many companies and governments to turn to Palantir's deep expertise in managing and protecting data for help in training and running new AI apps.

Palantir's (PLTR) roots stretch back to helping the U.S. government design systems for counter-terrorism. Its Gotham platform continues to assist governments in those efforts today. It also offers solutions that manage, interpret, and report data across enterprise and cloud networks to large companies too.

Its deep data experience positioned it perfectly to help customers design large language models and other AI solutions using its AI platform (AIP).

"The demand for [Artificial Intelligence Platform] AIP is unlike anything we have seen in the past twenty years," said CEO Alan Karp last summer. "We are currently in discussions with more than three hundred additional enterprises to deploy AIP within their organizations, all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data."

Karp's optimism appears to have been well-placed. Palantir's year-over-year sales growth has exceeded 20% in each of the past three quarters, and its earnings per share growth in each of those quarters has been in the double-digit percentages.

Revenue totaled $736 million and earnings per share were 9 cents in the fourth quarter, up 21% and 16% from the previous year.

Wall Street analysts think Palantir's profit growth will continue. The consensus analyst estimate for earnings in 2024 and 2024 is 33 cents and 39 cents, respectively, an increase of 34% and 17%.

Palantir pause may set up another opportunity

Initially, Guilfoyle's Palantir stock price target was $12. However, he bumped that target to $18 last June, $20 last July, and $22 last August.

Shares eclipsed $22 in February, reaching a high of $27.5 in early March. Since then, they've retreated about 16% to $23.

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Again - this is one of several substrates that LWLG's Perkinamine can work with and maximize potential.

It is a POSSIBLE symbiotic tech, not competitive.

It's an industry focused news site - with no relationship to LWLG.

>>> Apple’s first quarter has felt more like an entire (bad) year


Yahoo Finance

Daniel Howley

Mar 27, 2024


https://finance.yahoo.com/news/apples-first-quarter-has-felt-more-like-an-entire-bad-year-201715880.html?.tsrc=fin-notif


Apple (AAPL) is in the midst of what you could generously call a “difficult” period. The company is contending with a high-profile antitrust battle with the Department of Justice, falling iPhone sales in China, and a regulatory investigation in the European Union. And those are just the headlines from the past week.

The company is also still facing a shortfall when it comes to generative AI capabilities. And while it’s widely expected to debut some kind of generative AI offering during its WWDC developer event on June 10, it’ll need to have quite an impressive showing if it’s going to catch up to its Big Tech rivals including Microsoft (MSFT) and Google (GOOG, GOOGL).

All of that is hurting Apple’s stock price. Shares of the iPhone maker have fallen more than 7% since the start of the year and are up just 6.25% over the last 12 months. Shares of Microsoft, meanwhile, are up 14% year to date and 49% over the last 12 months. Google? Shares of the search giant are up 9% year to date and 43% in the last 12 months.

Suffice it to say, Apple’s 2024 is not going well.

Apple’s China problem

Apple’s latest headache came Tuesday, when Bloomberg, citing Chinese government data, reported that iPhone shipments fell 33% year over year in the country in February.

China is Apple’s third-largest market behind North America and Europe. In 2023, the region accounted for $72.6 billion of Apple’s $383.3 billion in total revenue. That’s roughly 19% of the company’s sales.

And this isn’t exactly out of the blue. Earlier this month, Counterpoint Research reported that iPhone sales fell 24% year over year through the first six weeks of 2024 in the country. Overall smartphone unit sales in China declined 7% during the same period.

Apple has been aggressively expanding in China for years, but a resurgent Huawei and difficult economic conditions in the country are squeezing device sales. The company isn’t just sitting idly by, though. Last week, CEO Tim Cook flew to China for the opening of the company’s latest flagship store in Shanghai. He also attended the China Development Forum in Beijing and was expected to meet with Chinese President Xi Jinping.

According to the South China Morning Post, Apple-authorized retailers are also trying to goose sales, cutting the price of the company’s latest iPhones in the hopes that it will get consumers to start buying again. However, it might take more than lower prices to make that happen.

A battle with the DOJ

Outside of Apple’s China sales drama, the company is also facing its long-anticipated antitrust fight with the Department of Justice. The lawsuit, which the DOJ filed last Thursday, accuses Apple of illegally maintaining dominance over the premium smartphone market by pushing aside competing apps and devices.

The Justice Department claims that Apple imposes restrictions on app developers, makes it difficult for users to switch to competing platforms, and hinders cloud gaming and so-called super apps that allow users to access multiple smaller apps from one larger platform.

Apple, however, is fighting back, saying in a statement that the suit "threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple."

The DOJ is seeking to force Apple to change its business practices, which could mean giving third-party apps greater access to the company’s platforms and requiring Apple to expand compatibility with third-party device makers.

The lawsuit could also prove to be a dangerous distraction for Apple similar to how Microsoft’s antitrust battle in the 90’s stole executives’ attention away from emerging technologies like smartphones. If Microsoft hadn’t been so invested in its antitrust fight at the time, there’s a good chance it would have seen the smartphone age coming as did Apple and Google, and launched its own line of handsets.

European Commission calling

In addition to slowing iPhone sales in China and the DOJ’s antitrust suit, the European Union’s competition watchdog, the European Commission on Monday, announced that it is looking into whether Apple is in compliance with the bloc’s Digital Markets Act.

In a statement released Monday, the Commission said it is investigating Apple’s new app fee structure in the EU as well as whether it meets user choice obligations related to default apps and the ability to delete preinstalled apps.

The Digital Markets Act requires Apple to open up the iPhone to third-party app stores, enabling developers to get around the 30% and 15% fees the company charges for sales through its own App Store. While Apple said it will allow those third-party stores, the company said it will also charge developers a 50 euro cent Core Technology Fee per install per year on apps that have been installed more than 1 million times in the last 12 months.

In a statement, the EC said it is looking into whether Apple’s new fees defeat the purpose of the obligations of the Digital Markets Act.

While Apple is certainly facing a slew of challenges, it’s far from down and out. It’s still the second-richest company in the world by market capitalization — behind Microsoft — and it’s sure to continue to sell millions of devices and services subscriptions throughout the year ahead.

Still, for the foreseeable future, Apple could be in for a bumpy ride.

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>>> Startup HyperLight debuts thin-film Lithium Niobate platform at ECOC 2021


Sept. 13, 2021


https://www.lightwaveonline.com/optical-tech/components/article/14210212/startup-hyperlight-debuts-thin-film-lithium-niobate-platform-at-ecoc-2021


The company, led by CEO and Co-Founder Dr. Mian Zhang, has developed an electro-optic photonic integrated circuit (PIC) platform based on the thin-film Lithium Niobate (LiNbO3) technology.

HyperLight, a startup founded out of Harvard in 2018, will make its debut this week at ECOC 2021 in Bordeaux, France. The company, led by CEO and Co-Founder Dr. Mian Zhang, has developed an electro-optic photonic integrated circuit (PIC) platform based on the thin-film Lithium Niobate (LiNbO3) technology.

Zhang says that HyperLight has been able to apply silicon photonics processes to LiNbO3, thus enabling a significant reduction in size versus traditional modulators based on the technology. As a result, products such as optical transceivers and transponders, among others, can enjoy the power and performance benefits of LiNbO3 without sacrificing the small package sizes silicon photonics and other photonic integration approaches make possible.

Zhang expects HyperLight’s technology will enable thin-film LiNbO3 modulators that require sub-volt driving voltages while supporting greater than 100-GHz bandwidth. Working with Nokia Bell Labs, an “early version” of the platform demonstrated a 700.5-Gbps line rate and 538.8 Gbps net rate with intensity-modulated and direct detect (IM-DD) signals over 10.2 km of single-mode fiber. However, Zhang says the company and Nokia Bell Labs have since demonstrated the ability to accommodate coherent transmissions up to 1.58 Tbps at 200 GBaud. Both results required only a single thin-film LiNbO3 modulator.

The company is working with partners towards productization and has begun shipping prototype chips in this context. However, a generally available product using the thin-film LiNbO3 technology is still “a couple of years away,” in Zhang’s estimation.

Zhang will discuss the company’s work via a presentation as part of ECOC’s Market Focus on September 15, at 12:40 pm, CET.

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>>> Optical Fiber Conference 2022 - Who are these people?


March 30, 2022


https://www.lightwaveonline.com/business/companies/article/14233154/who-are-these-people


Some of these companies may be relatively young; others may have recently rebranded. All would like a bit of your time and attention. So, as a public service, here is some background on a few companies that may not be familiar to you, but it might benefit

A look through the conference program for OFC 2022 will reveal speakers from the usual list of well-established optical communications technology suppliers as well as a wide assortment of research centers (and centres), universities, colleges, institutes, écoles, and whatnot. However, it would not be surprising to see a company or two you may not know well, if at all. The same may also be true upon perusal of the exhibitor list.

Some of these companies may be relatively young; others may have recently rebranded. All would like a bit of your time and attention. So, as a public service, here is some background on a few companies that may not be familiar to you but it might benefit you to know.

In the conference sessions

Several presenting companies in 2022 made their debuts around the OFC 2021 timeframe but may have escaped your notice. For example, Mountain View, CA, based Avicena Tech Corp. focuses on chip-to-chip communications for high-performance computing, cloud computing, and data center networking using a combination of micro-LEDs from the display world and multicore fiber similar to what’s found in imagery applications.

Central to Avicena’s LightBundle architecture are Cavity-Reinforced Optical Micro-Emitters (CROMEs) based on GaN micro-LEDs. These visible blue light emitters typically can transmit less than 1 Gbps of information but Avicena has developed a way to increase that by 10X. The CROMEs are bonded to CMOS in a highly parallel array alongside arrays of silicon photodetectors (PDs) grown directly in CMOS. The technology can enable 10 Tbps per square millimeter at a power efficiency of less than 0.5 pJ/bit, company sources have told Lightwave. The CROME emitters operate at ASIC temperatures, meaning they can serve reliably as internal laser sources for co-packaged optics without cooling.

The multicore fibers will connect to the CROME/PD combinations via passive alignment. Avicena expects the fiber, in a diameter of about 1 mm, to support hundreds of channels initially and thousands of channels eventually. However, development work on the multicore fiber now being used in applications such as endoscopy will be required to support such channel counts, Avicena acknowledges.

The company introduced the LightBundle concept to OFC 2021 attendees via a post-deadline paper. Here, the company described a demonstration of an array of more than 200 devices at a 30-mm pitch coupled simultaneously through a 0.5-mm imaging fiber. As 10G drivers were not available then in an array format, the CROME arrays were driven at 2 Gbps. However, the engineers conducting the demonstration also were able to package the CROME with an external driver to achieve 10 Gbps. At OFC 2022, Avicena CEO Bardia Pezeshki (most recently CEO of Kaiam) will deliver “W1E.1: Microled Array-Based Optical Links Using Imaging Fiber for Chip-to-Chip Communications” as a paper Wednesday, March 9, in which he will undoubtedly report on the company’s progress since last June.

Ayar Labs is another young company focused on chip-to-chip communications and co-packaged optics that will present a paper during the show. The company’s optical I/O approach features 5x9-mm TeraPHY silicon chiplets paired with SuperNova external lasers. The chiplets, which feature micro-ring resonator-based modulation, are designed to be integrated within the packaging of the semiconductor via a multi-chip module approach using normal processes, whether in-house or third-party.

The laser/chiplet combination is designed to support transmission distances of 2 km. Via a post-deadline paper at OFC last year, Ayar reported on a demonstration of a TeraPHY chiplet with eight optical ports providing error-free transmission of 1.024 Tbps at less than 5 pJ/bit. The error-free status was obtained without recourse to forward error correction (FEC). The SuperNova external laser source showed the ability to generate 64 addressable wavelengths based on laser array technology from MACOM.

The company believes its approach can benefit datacom and telecom networking, aerospace and government, and high-performance computing and artificial intelligence applications. An Ayar Labs source told Lightwave at the end of 2020 that he expected the company will begin small volume production perhaps as early as the beginning of this year. Dr. Mark Wade, co-founder and CTO of Ayar Labs, likely will provide updates via the talk he's scheduled to provide on Tuesday (which, as of this writing, remains without an announced title) as part of Tu2A Symposia: Emerging Photonic Interconnects and Architectures for Femtojoule per Bit Intra Data Center Links Session I.

Thursday will see the presentation of “Th1J.1: BTO-Enhanced Silicon Photonics – a Scalable PIC Platform with Ultra-Efficient Electro-Optical Modulation,” from Lukas Czornomaz, co-CEO and founder of Lumiphase AG. “BTO” stands for “Barium Titanate,” which Lumiphase asserts enables low-power, low-optical-loss silicon photonics modulators to enable Mach-Zhender interferometers and other optical processing devices, according to a report in eeNews Europe. In the paper description, Czornomaz touts BTO’s strong Pockels effect, which relates to changes in refractive index – which are very fast in BTO – with the application of an electric field. Lumiphase states on its website that BTO enables “nprecedented piezo- and ferro-electric properties on silicon.”

The company spun out of IBM Europe, which did early work on such devices, at the beginning of 2020. At the time the article appeared last July, Lumiphase was contemplating a Series A funding round for either late in 2021 or at some point this year to help it produce products for the communications, optical computing, and sensing markets. The company has its headquarters in Zurich, Switzerland.

Europe – specifically, France – also is home to SCINTIL Photonics; CEO Sylvie Menezo will discuss the company’s work in silicon photonics Tuesday in “Tu2A.2: (Integrated or Not?) Laser Source for a Few pJ/bit DWDM Links” in the same session in which Ayar Labs’ Wade will speak. The fabless company was founded in Grenoble in November 2018 by Menezo, previously with CEA-Leti, and Chairman Pascal Langlois, former CEO of Tronics Microsystems. SCINTIL Photonics has developed a silicon photonics platform in which it can integrate multi-wavelength lasers. In a 2020 interview with Lightwave, Pascal said that the company can combine silicon, indium phosphide, germanium, and silicon nitride in a CMOS compatible process it calls BackSide-on-BOX. The process sees unprocessed InP/III-V dies bonded on the backside of processed silicon-on-insulator (SOI) wafers, only where it is needed – hence the name. BackSide-on-BOX enables integration of laser arrays and other active and passive components and functions to support applications such as multi-channel 800 Gigabit Ethernet without the need for hermetic packaging.

SCINTIL has secured an agreement with a commercial foundry for PIC production; at the time of the interview, Pascal expressed hope that the company could deliver commercial photonic integrated circuits (PICs) at some point this year.

Finally, Sivers Photonics isn’t a new company – but it has a relatively new name. The company has its roots in CST Global (also known as Compound Semiconductor Technologies), an independent manufacturer of III-V photonic devices that Sivers IMA Holding purchased in 2017. The company provides custom, foundry services in wafer, coated bar, chip device and die on tape formats. Sivers IMA Holding changed its name to Sivers Semiconductors in 2020 – and concurrently changed the name of the subsidiary formed by the former CST Global to Sivers Photonics AB.

Andy McKee, Sivers Photonics, will discuss “Recent Advances in InP Laser Sources for SiPh Hybrid Integration” Wednesday as part of a panel on Progress and Roadmap in Silicon Photonics Foundries and Supply Chains (W1B).

Exhibit floor programming

Two young companies that are delivering commercial products will be among the participants in some of the exhibit hall programming. For example, Lumenisity will attempt to top the splash it made during last OFC with its hollowcore fiber. The company’s nested anti-resonant nodeless fiber (NANF) approach, developed at the University of Southampton in the UK, caught the eye of BT Labs, which conducted several tests and demonstrations of the technology that were discussed around the time of the 2021 show. Lumenisity also announced results of a demonstration of coherent transmission over the NANF hollowcore fiber with Ciena.

Lumenisity, BT, and several other speakers will be back to discuss hollowcore fiber advances on Thursday, March 10, at noon in a panel discussion titled, “Hollow Core Fiber - Ready for Prime Time?” The event takes place in the show floor’s Theater II. Tony Pearson, vice president, sales and marketing, will represent Lumenisity as he discusses “Hollow Core Cable – Delivering Prime Time and…Connecting More Light Faster!”

The next day, at 12:20 pm, POET Technologies Inc. will participate in a Technology Showcase with the presentation, “Hybrid Integration Platform for Co-Packaged Photonics Using POET’s CMOS Based Optical Interposer.” POET develops and sells a variety of optical engines for transceivers, as well as the O-Band LightBar applicable to co-packaged optics (CPO) applications. The products are based on the company’s POET Optical Interposer, which leverages integrated spot-size converters designed to minimize coupling losses and increase laser power efficiency. The approach enables straightforward integration of photonic elements such as waveguides, filters, and gratings, as well as passive alignment of lasers for flip-chip bonding, according to the company.

POET demonstrated these technologies at last year’s OFC. Since then, the company has announced a pair of customers for its optical engines, one of whom is Shenzhen Fibertop Technology Co., Ltd.

Swing by the booth

On the show floor, HyperLight Corp. will be making its OFC debut. The company, co-founded out of Harvard by CEO Dr. Mian Zhang and Head of Product Dr. Christian Reimer, focuses on the use of thin-film Lithium Niobate (LiNbO3) technology as part of an electro-optic photonic integrated circuit (PIC) platform. Zhang told Lightwave last fall that he expects HyperLight’s technology will enable thin-film LiNbO3 modulators that require less than 1-V driving voltages while supporting greater than 100-GHz bandwidth. Working with Nokia Bell Labs, an early version of the platform demonstrated a 700.5-Gbps line rate and 538.8-Gbps net rate with intensity-modulated and direct detect (IM-DD) signals over 10.2 km of single-mode fiber. However, Zhang says the company and Nokia Bell Labs have since demonstrated coherent transmissions up to 1.58 Tbps at 200 GBaud. Both results required only a single thin-film LiNbO3 modulator, he said. A generally available product using the thin-film LiNbO3 technology is still “a couple of years away,” Zhang’s stated during the interview.

Finally, a company whose name may make your brow furrow initially as you pass by its booth is Quantifi Photonics – until you realize that the company used to be called Coherent Solutions (and, before that, Southern Photonics). The test and measurement technology developer, which made its mark in coherent transmission testing, changed its name in the fall of 2020 to signal a wider scope of activities. The New Zealand-based company completed an oversubscribed Series B funding round of $10 million last July designed to fund expansion of its activities in North America.

Of course, there are many factors that combine to determine how familiar a company may be. Whether mentioned here or discovered via a look through the OFC conference schedule or exhibition list, exploring a company whose story is unfamiliar to you could reveal valuable discoveries.

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>>> Lightwave Logic reaches electro-optic polymer materials commercialization with supply license agreement

June 1, 2023


https://www.lightwaveonline.com/optical-tech/components/article/14294661/lightwave-logic-reaches-electro-optic-polymer-materials-commercialization-with-supply-license-agreement


Lightwave Logic, Inc. (NASDAQ: LWLG) has announced its first commercial material supply license agreement for its Perkinamine chromophore electro-optic polymers. The company has been working on electro-optic polymer development for photonic applications since at least 2008.

The company did not identify the customer or how the materials will be used, although Lightwave Logic is known to have worked with Polariton (see, for example, “Lightwave Logic touts stability of its polymer material in Polariton's plasmonics platform”) and startup SilOriX on the use of its organic polymers for optical modulators for fiber-optic communications applications. Lightwave Logic CEO Michael Lebby acknowledged that while its electro-optic polymer technology could be used for a variety of applications, the company has focused its efforts on 1550- and 1310-nm telecom and datacom applications.

Lebby said the deal runs for at least four years. In addition to a license initiation fee, the agreement covers per-unit royalties, minimum royalty levels that increase annually, and minimum sales volume in units.

The deal marks commercial acceptance of Lightwave Logic’s technology and approach, Lebby asserted. He added he is pursuing other license opportunities that may be the subject of similar announcements in the not too distant future. Pursuit of such license agreements is part of what Lebby describes as a three-pronged approach towards commercialization, alongside development of the company’s own chips and technology transfer. He says that examples of Lightwave Logic’s own chips are returning from multiple fabs, setting the stage for additional prototyping efforts. He revealed that significant developments in this area are on tap for later this year.

Meanwhile, he says that the market is beginning to warm to new approaches towards component development as the industry grapples with how to support future optical transmission rates and chip I/O requirements. He pointed to the attention being given to barium titanate (BTO) and thin-film lithium niobate approaches alongside electro-optic polymers as evidence of this trend.

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Nvidia - >>> Exclusive: Behind the plot to break Nvidia’s grip on AI by targeting software


Reuters

by Max A. Cherney

3-25-24


https://finance.yahoo.com/news/exclusive-behind-plot-break-nvidia-110359868.html


SAN FRANCISCO (Reuters) - Nvidia earned its $2.2 trillion market cap by producing artificial-intelligence chips that have become the lifeblood powering the new era of generative AI developers from startups to Microsoft, OpenAI and Google parent Alphabet.

Almost as important to its hardware is the company’s nearly 20 years' worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia's CUDA software platform to build AI and other apps.

Now a coalition of tech companies that includes Qualcomm, Google and Intel plans to loosen Nvidia’s chokehold by going after the chip giant’s secret weapon: the software that keeps developers tied to Nvidia chips. They are part of an expanding group of financiers and companies hacking away at Nvidia's dominance in AI.

"We're actually showing developers how you migrate out from an Nvidia platform," Vinesh Sukumar, Qualcomm's head of AI and machine learning, said in an interview with Reuters.

Starting with a piece of technology developed by Intel called OneAPI, the UXL Foundation, a consortium of tech companies, plans to build a suite of software and tools that will be able to power multiple types of AI accelerator chips, executives involved with the group told Reuters. The open-source project aims to make computer code run on any machine, regardless of what chip and hardware powers it.

"It's about specifically - in the context of machine learning frameworks - how do we create an open ecosystem, and promote productivity and choice in hardware," Google's director and chief technologist of high-performance computing, Bill Hugo, told Reuters in an interview. Google is one of the founding members of UXL and helps determine the technical direction of the project, Hugo said.

UXL's technical steering committee is preparing to nail down technical specifications in the first half of this year. Engineers plan to refine the technical details to a "mature" state by the end of the year, executives said. These executives stressed the need to build a solid foundation to include contributions from multiple companies that can also be deployed on any chip or hardware.

Beyond the initial companies involved, UXL will court cloud-computing companies such as Amazon.com and Microsoft's Azure, as well as additional chipmakers.

Since its launch in September, UXL has already begun to receive technical contributions from third parties that include foundation members and outsiders keen on using the open-source technology, the executives involved said. Intel's OneAPI is already useable, and the second step is to create a standard programming model of computing designed for AI.

UXL plans to put its resources toward addressing the most pressing computing problems dominated by a few chipmakers, such as the latest AI apps and high-performance computing applications. Those early plans feed in to the organization's longer-term goal of winning over a critical mass of developers to its platform.

UXL eventually aims to support Nvidia hardware and code, in the long run.

When asked about the open source and venture-funded software efforts to break Nvidia’s AI dominance, Nvidia executive Ian Buck said in a statement: "The world is getting accelerated. New ideas in accelerated computing are coming from all across the ecosystem, and that will help advance AI and the scope of what accelerated computing can achieve."

NEARLY 100 STARTUPS

The UXL Foundation's plans are one of many efforts to chip away at Nvidia's hold on the software that powers AI. Venture financiers and corporate dollars have poured more than $4 billion into 93 separate efforts, according to custom data compiled by PitchBook at Reuters’ request.

The interest in unseating Nvidia through a potential weakness in software has ramped up in the last year, and startups aiming to poke holes in the company's leadership gobbled up just over $2 billion in 2023 compared with $580 million from a year ago, according to the data from PitchBook.

Success in the shadow of Nvidia's group on AI data crunching is an achievement that few of the startups will be able to achieve. Nvidia's CUDA is a compelling piece of software on paper, as it is full-featured and is consistently growing both from Nvidia's contributions and the developer community.

"But that's not what really matters," said Jay Goldberg, chief executive of D2D Advisory, a finance and strategy consulting firm. "What matters is the fact that people have been using CUDA for 15 years, they built code around it."

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Lightwave Logic -- Re-post - >>> Lebby is the Axe of the entire Industry!! He chairs at the major Industry conferences, he orchestrates the Industry Roadmaps, and if you would have ever come to one of the Executive Forum events you'd know that it is the top dogs of the Tier 1's who find their way over to Lebby for discussions!!

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174089938

At OFC this coming week Lebby will be giving a Keynote address on Hybrid Integration, this is what LWLG's technology won the top award at ECOC 2023 for, and there will be a Panel discussion on the topic the following day as well

1) Lebby's Timeline to Mass Commercialization has remained UNCHANGED in presentations for the last few years, Lebby has told investors that LWLG would come to market at 800Gbs in 2024!!
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172658420

2) Lebby has been making partnering DEALS at least as far back as ECOC 2019 when LWLG presented its META-STABILITY DATA that showed the material systems actually GAINED stability over time!!

3) Lebby's Timeline of 2024 is a PERFECT MATCH to what the industry is now showing to be the FASTEST ADOPTION EVER of a Next-Gen Node Implementation at 800Gbs set for, you guessed it, 2024!!! Check out this chart showing 800Gb adoption to be HUGE at $2 Billion starting in 2024!!! (note 800Gbs is the BLUE SHADED area)
https://investorshub.advfn.com/uimage/uploads/2023/8/19/wwenqIMG_7963.png

4) Lebby in the latest Wall Street Transcript just flat out told investors who the Customers are going to be when this thing ROLLS, which will undoubtably be in 2024 because that is what the INDUSTRY is saying will be the HUGE rollout of 800Gbs, and make NO MISTAKE when you read below who LWLG's Customers are going to be (all under NDA now!!)

TWST: Do you see your ideal customers like Cisco or whoever makes these particular modulation devices? Are they the ones who are going to buy?

Dr. Lebby: Yes, they will — a lot of these larger companies. The Ciscos of this world as well as the Intels and the Cienas, these types of players, Googles and others. A lot of these folks are actually vertically integrated. So they actually do a lot of the things themselves. And some of the parts they send out to foundries or to contract manufacturers.

As I see the business model, you need to be flexible, because some of these guys will want to buy from you direct. And other ones who will say, go work with our contract manufacturer or go work with our foundry, get qualified there, and then we’ll give you the business.

And so, we have to be flexible with these large guys, because they have different working models.

https://www.reddit.com/r/LWLG/comments/15twmqr/interview_with_dr_lebby_august_17_2023/

Ok folks, so Investors now now that the Intel's and Cisco's and Google's ARE THE CUSTOMERS that the Foundries PDK's HAVE BEEN DEVELOPED to serve!!!! Lebby has already told investors that there are PRODUCTION TRIALS in progress for at least the last 6 months but more likely a year or more!!!

PRODUCTION TRIALS!!! Nothing makes short sellers more nervous than finding out that Lightwave Logic’s foundry partners are currently running PRODUCTION TRIALS Why would they do that? “We” were convinced their technology would never scale and the fact that Lightwave Logic has never produced a product in 20 years was proof positive that they would never ever produce any revenue. We even talked to an ex employee who told us there were issues five years ago.

The worst news possible is learning about production runs because reaching that step means both parties want to produce and market this technology. In order to reach agreement on the terms of a license, both parties must be comfortable with the production economics. What level of upfront cash payment is appropriate? What percentage of gross modulator sales makes sense?

One thing is clear to me, the foundries want this technology and are already devoting machine time to be able to price the agreements. If I were short this stock, I would be fargin nervous as hell.

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171355567

. This expansion of our IP moat, paired with our acquisition of the mission-critical IP assets of Chromosol Ltd (UK) to strengthen foundry PDK design capabilities with extremely low temperature ALD Processes, is a part of our ability to advance initial production trials with our foundry partners and secure our first licensing agreements in the near-term.

Corporate Update March 2, 2023

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