Pivot Point Capital
Long $MRVL and $ALAB @ $87.4 & $223.08 Think we should not view $AMD news as a standalone, but as a gradual shift towards alternative GPUs/custom silicon. Custom silicon adoption & disaggregated SoCs, alongside an acceleration in AI inference workloads which…
Cut $ALAB @ $209 for -6% on OpenAI <> Broadcom’s AI accelerator deal.
The AI accelerators will use AVGO’s ethernet-based switches, likely scale up ethernet (SUE). With AVGO’s stronghold on custom silicon, their networking architecture will likely become the industry’s primary architecture.
This is not good for $ALAB’s PCIe-based switches as I think it’s a winner-take-all market. ALAB’s valuation is also on the high side and much of that is dependent on the growth of their switches.
The AI accelerators will use AVGO’s ethernet-based switches, likely scale up ethernet (SUE). With AVGO’s stronghold on custom silicon, their networking architecture will likely become the industry’s primary architecture.
This is not good for $ALAB’s PCIe-based switches as I think it’s a winner-take-all market. ALAB’s valuation is also on the high side and much of that is dependent on the growth of their switches.
Pivot Point Capital
$INTC +7% on news of talks to add AMD as a foundry customer. What’s a billion $ to AMD? So far we’ve gotten the news order quite right with the exception of $TSMC: NVDA > AAPL > AMD. Let’s have a little fun, I think next one will be $TSLA, or $AVGO for its…
With the amount of excess overflow coming out of OpenAI — as seen from $AMD and $AVGO lately — I think $INTC may potentially catch an OpenAI deal too.. maybe something to do with their idle advanced packaging capacity.
Pivot Point Capital
Thank you for your attention to the matter!!
Digging deeper into the rare earth element (REE) topic, I now believe that China isn’t using it solely for geopolitical leverage, but also to protect its dwindling domestic supply.
The recent REE export ban in October has primarily targeted heavy REEs, which are extremely scarce even within rare earth carbonate mines. The second image shows the average REE distribution across the world’s five largest REE mines.
Ionic clay deposits, which have a higher concentration of heavy REEs compared to mines, have therefore become critical to meeting global demand. However, China’s domestic supply has started to fall short as many of its richest clay deposits have been depleted after decades of exploitation. In recent years, China has begun sourcing heavy REEs from abroad. It initially turned to Myanmar, but supply there has been disrupted by political unrest and armed conflicts. Now, China is turning to Malaysia, Brazil, and Laos as alternative sources.
TL;DR: The REEs that China is banning are genuinely rare, and likely in short supply within China itself too. It will likely be much harder to get China to fully reverse the REE export ban, and the U.S. will have to accept that reality in future trade negotiations. U.S. REE plays (like $MP and $USAR) may be driven by overly-hyped headlines. At Mountain Pass (under MP’s control), the share of the REEs that is actually scarce and banned by China amounts to only 1.42%. The remaining 98.6% of MP's mine are light REEs, which are not even heavily restricted by China. However, not planning to short these REE stocks as retail has fully adopted this narrative.
Also might be totally off as I’m far from an expert on the subject, but thought it was something interesting to share!
The recent REE export ban in October has primarily targeted heavy REEs, which are extremely scarce even within rare earth carbonate mines. The second image shows the average REE distribution across the world’s five largest REE mines.
Ionic clay deposits, which have a higher concentration of heavy REEs compared to mines, have therefore become critical to meeting global demand. However, China’s domestic supply has started to fall short as many of its richest clay deposits have been depleted after decades of exploitation. In recent years, China has begun sourcing heavy REEs from abroad. It initially turned to Myanmar, but supply there has been disrupted by political unrest and armed conflicts. Now, China is turning to Malaysia, Brazil, and Laos as alternative sources.
TL;DR: The REEs that China is banning are genuinely rare, and likely in short supply within China itself too. It will likely be much harder to get China to fully reverse the REE export ban, and the U.S. will have to accept that reality in future trade negotiations. U.S. REE plays (like $MP and $USAR) may be driven by overly-hyped headlines. At Mountain Pass (under MP’s control), the share of the REEs that is actually scarce and banned by China amounts to only 1.42%. The remaining 98.6% of MP's mine are light REEs, which are not even heavily restricted by China. However, not planning to short these REE stocks as retail has fully adopted this narrative.
Also might be totally off as I’m far from an expert on the subject, but thought it was something interesting to share!
👍5❤1
Pivot Point Capital
Memory players got a few sell-side upgrades this week; bears being converted slowly. I think market is still undervaluing how important memory/storage will be, especially when considering how much of a supply glut there is for HBM and NAND (partly because…
Also exited $MU long @ ~$190 and added to $SNDK long @ ~$126
Pivot Point Capital
With the amount of excess overflow coming out of OpenAI — as seen from $AMD and $AVGO lately — I think $INTC may potentially catch an OpenAI deal too.. maybe something to do with their idle advanced packaging capacity.
Strong set of results from $TSM
- double beats on rev and eps
- price/wafer crossed record high again
- all end-markets up DD% q/q
- “AI demand is insane”. Mgmt’s conviction on AI demand is incremental
- planning on building out more capacity to meet future demand; including acquiring second U.S. site in U.S.
- talking to customers’ customers (vs just customers previously) to understand AI market requirements
Overall demand picture remains really healthy all around, across all end-markets (and likely to be the case through 2026). Capacity is also expected to remain relatively tight. If there was ever a good time for someone else to start another external foundry..
- double beats on rev and eps
- price/wafer crossed record high again
- all end-markets up DD% q/q
- “AI demand is insane”. Mgmt’s conviction on AI demand is incremental
- planning on building out more capacity to meet future demand; including acquiring second U.S. site in U.S.
- talking to customers’ customers (vs just customers previously) to understand AI market requirements
Overall demand picture remains really healthy all around, across all end-markets (and likely to be the case through 2026). Capacity is also expected to remain relatively tight. If there was ever a good time for someone else to start another external foundry..
❤2😁1
Pivot Point Capital
Added to $TGEN @ 9.37-$9.54. Still a moonshot low cap play
Moonshot play $TGEN finally starting to move after a long consolidation.. +35% from avg cost of $9.06 to $12.25
Moving on no news though is kind of strange. Not sure if it’s insider front running or just a small cap rerating. Hopefully $VRT just buys it out one day.
Moving on no news though is kind of strange. Not sure if it’s insider front running or just a small cap rerating. Hopefully $VRT just buys it out one day.
Pivot Point Capital
Long $MRVL and $ALAB @ $87.4 & $223.08 Think we should not view $AMD news as a standalone, but as a gradual shift towards alternative GPUs/custom silicon. Custom silicon adoption & disaggregated SoCs, alongside an acceleration in AI inference workloads which…
Cut $MRVL @ $89.5 for +2% gain
Pivot Point Capital
Also exited $MU long @ ~$190 and added to $SNDK long @ ~$126
Shifted $MRVL allocation to re-add $MU long @ $199.56.
St is finally acknowledging the idea of a lengthened memory cycle. UBS just upgraded the stock, let’s see if that’s enough fuel for the stock to power through ATH
St is finally acknowledging the idea of a lengthened memory cycle. UBS just upgraded the stock, let’s see if that’s enough fuel for the stock to power through ATH
Pivot Point Capital
Lastly also added to $INTC ~$37. Nothing much else to say about this, you probably already get it. Have a great weekend!
BOOM
Rumoured to be $MSFT Maia 2 chips. If this is accurate, it’s IFS’s first external customer. History happening!
Rumoured to be $MSFT Maia 2 chips. If this is accurate, it’s IFS’s first external customer. History happening!
❤3
Pivot Point Capital
The semi-passive long-only portfolio continues its outperformance over the past month (+15.1% vs SPY 3.1% and NDX 4.9%). Compounding all of the returns generated over the past year since we introduced the semi-passive portfolio, the net unlevered return stands…
The semi-passive long-only portfolio returned +10% over the past month, vs SPY +0.5% and NQ +1.6%.
Compounded returns since 4 Dec 2024 stand at +113.7%, vs SPY +10% and NQ +11.7%. Given the macro volatility from recent tariff developments, I’m very pleased with the 10% gain.
Furthermore, our high-conviction basket (+6.6%) was the primary driver of performance, versus mid-conviction (+3.7%) and moonshots (-0.3%). We identified this area for improvement in the previous month, so I’m glad to see tangible progress. Imo, it reflects better alignment between trade conviction and position sizing.
Moving forward, we are removing some of the US neoclouds and power plays as I think the risk profile of those stocks have risen. Replacing them are memory, custom silicon, and China AI DC buildout plays.
Compounded returns since 4 Dec 2024 stand at +113.7%, vs SPY +10% and NQ +11.7%. Given the macro volatility from recent tariff developments, I’m very pleased with the 10% gain.
Furthermore, our high-conviction basket (+6.6%) was the primary driver of performance, versus mid-conviction (+3.7%) and moonshots (-0.3%). We identified this area for improvement in the previous month, so I’m glad to see tangible progress. Imo, it reflects better alignment between trade conviction and position sizing.
Moving forward, we are removing some of the US neoclouds and power plays as I think the risk profile of those stocks have risen. Replacing them are memory, custom silicon, and China AI DC buildout plays.
❤7
Pivot Point Capital
Shifted $MRVL allocation to re-add $MU long @ $199.56. St is finally acknowledging the idea of a lengthened memory cycle. UBS just upgraded the stock, let’s see if that’s enough fuel for the stock to power through ATH
$MU and $SNDK crossed ATH again last night, with $MU closing @ $208.75 and $SNDK @ $149.64, +23.8% and +30.5% respectively from when we first went long.
Meta also announced yesterday at OCP that they were prioritizing QLC NAND adoption in its data centers to reduce costs, which may have been a driver. All things considered, the supply picture for DRAM/NAND appears to be very tight through 2026, pointing to an extended memory cycle. I guess the big qn on investors' mind however is whether "this time its different?". Could the excess driven by AI spend change the pre-AI cycles of memory?
Tbh, I have no clue given my generalist background. I try to approach highly cyclical companies with more caution. However, it's also worth noting that we have barely moved into inference demand, and hence the current memory/storage demand could just be the beginning of many future AI drivers that will be exponentially more memory intensive.
From Seagate's earnings rephrased: "in the entire last 150 years, 15 billion images were created. With AI, that same number of images were created only in the past 1.5 years. The resolution of the images are incredibly high as well. Beyond that, a typical 1 minute video consumers 100x more data than one high-def image."
Excluding image and video generation (which is an incredible driver on its own), I believe to make AI truly useful (imagine GPT as a PA), it needs to have context on who you are and what you want. No one wants a PA that acts like a new-hire everyday. That requires memory. As the ability of agentic AI scales, more tasks can be handled autonomously and data can be processed faster — that requires memory/storage. For robotics to be truly useful, we need to collect and process petabytes of data from the real world with cameras and sensors everyday — that's memory/storage. For edge AI to be fast, data needs to be duplicated and stored at locations closest to where its consumed — that requires storage.
All in all, I think the long-term case for memory is very strong. Along the way however, there will be pullbacks as I think the rally will be similar to climbing a wall of worry. Any small fluctuations in memory spot pricing, no matter how short term it is, will dent confidence. However, I think the pullbacks will be BTD oppys.
Meta also announced yesterday at OCP that they were prioritizing QLC NAND adoption in its data centers to reduce costs, which may have been a driver. All things considered, the supply picture for DRAM/NAND appears to be very tight through 2026, pointing to an extended memory cycle. I guess the big qn on investors' mind however is whether "this time its different?". Could the excess driven by AI spend change the pre-AI cycles of memory?
Tbh, I have no clue given my generalist background. I try to approach highly cyclical companies with more caution. However, it's also worth noting that we have barely moved into inference demand, and hence the current memory/storage demand could just be the beginning of many future AI drivers that will be exponentially more memory intensive.
From Seagate's earnings rephrased: "in the entire last 150 years, 15 billion images were created. With AI, that same number of images were created only in the past 1.5 years. The resolution of the images are incredibly high as well. Beyond that, a typical 1 minute video consumers 100x more data than one high-def image."
Excluding image and video generation (which is an incredible driver on its own), I believe to make AI truly useful (imagine GPT as a PA), it needs to have context on who you are and what you want. No one wants a PA that acts like a new-hire everyday. That requires memory. As the ability of agentic AI scales, more tasks can be handled autonomously and data can be processed faster — that requires memory/storage. For robotics to be truly useful, we need to collect and process petabytes of data from the real world with cameras and sensors everyday — that's memory/storage. For edge AI to be fast, data needs to be duplicated and stored at locations closest to where its consumed — that requires storage.
All in all, I think the long-term case for memory is very strong. Along the way however, there will be pullbacks as I think the rally will be similar to climbing a wall of worry. Any small fluctuations in memory spot pricing, no matter how short term it is, will dent confidence. However, I think the pullbacks will be BTD oppys.
❤1👍1
Pivot Point Capital
Fully exited remaining $RDDT @ $257, for +75%. Overall an excellent trade that put me back in tune with the market
Re-added a $RDDT long @ $205.36. Stock has retraced 20% from when we exited at $257.
Think r/r is decent now to give the upcoming print a shot — given that the DAU growth concerns are now known and “priced in”. Also partly a rotation move away from AI infrastructure as mentioned yesterday.
Think r/r is decent now to give the upcoming print a shot — given that the DAU growth concerns are now known and “priced in”. Also partly a rotation move away from AI infrastructure as mentioned yesterday.
Pivot Point Capital
Exited $U @ $45.2 Been cutting a lot of risk lately — want to be safe than sorry
Re-added $U long @ $36.68 and $APP long @ $560.12
Similarly a rotation move to AI software beneficiaries.
APP’s e-commerce launch also seems to be going well, and stock has actually done fairly well up till the SEC investigation. Investigation seems like part of a routine process rather than findings-based, so for now I think it’s not significantly negative.
Similarly a rotation move to AI software beneficiaries.
APP’s e-commerce launch also seems to be going well, and stock has actually done fairly well up till the SEC investigation. Investigation seems like part of a routine process rather than findings-based, so for now I think it’s not significantly negative.
$GLD taking quite the beating today after a monstrous run.. wonder if the outflows can positively spill over into $BTC $IBIT.
Pivot Point Capital
Added $IBIT @ $63.58
Also added some short-dated $MSTR calls for $350 strike.
Let’s see if the genius of financial engineering can save MSTR from its mNAV decompressing below 1
Let’s see if the genius of financial engineering can save MSTR from its mNAV decompressing below 1
Pivot Point Capital
Also added some short-dated $MSTR calls for $350 strike. Let’s see if the genius of financial engineering can save MSTR from its mNAV decompressing below 1
Cut $IBIT @ $62 & $MSTR calls for small L. Don’t like gold’s move yesterday, esp when there’s no rotation into $BTC.
Momentum stocks have also been unwinding which is concerning, so want to be more selective with plays.
Momentum stocks have also been unwinding which is concerning, so want to be more selective with plays.
❤1
Pivot Point Capital
Added $CAVA short @ $62.9-$63
Added $SHAK short @ $92.31
Same logic as $CAVA - want to be short on high-income consumer spending. Looking for more idiosyncratic/low beta short ideas that are focused on weak fundamentals/structural decline/mgmt issues/overvaluation. Avoiding high-beta retail names as shorts for the time being, even if they might be grossly over-valued.
Current short basket include $FIVE @ ~$145 avg, $CAVA @ ~$64.5 avg, $CRCL @ ~$127 avg, $SHAK @ $92.31 avg
Same logic as $CAVA - want to be short on high-income consumer spending. Looking for more idiosyncratic/low beta short ideas that are focused on weak fundamentals/structural decline/mgmt issues/overvaluation. Avoiding high-beta retail names as shorts for the time being, even if they might be grossly over-valued.
Current short basket include $FIVE @ ~$145 avg, $CAVA @ ~$64.5 avg, $CRCL @ ~$127 avg, $SHAK @ $92.31 avg