⁠Antonio Linares
$AMD has a new $200B business than no one is talking about 👇

Since the Xilinx acquisition, $AMD has been positioning itself to dominate what is expected to be a $200B+ market by the end of this decade: AI at the edge.

This is made possible by FPGAs (field programmable gate arrays), the key technology onboarded via the Xilinx acquisition that allows chips to reconfigure themselves on the go.

Going forward, AI will extend its reach beyond data centers and make its way into billions of devices at the edge, and running AI on devices requires unique operational functionality–namely, much higher levels of energy efficiency and overall versatility.

FPGAs excel at this function like no other kind of chip can, and Xilinx is the undisputed leader.

The acquisition has therefore set $AMD apart from traditional competitors, making it practically impossible for them to compete in this emerging space over the next five years.

Going forward, AMD’s FPGA business promises to evolve into something like datacenter GPUs for $NVDA at present.

In the graph below you can see how, just three years before the acquisition, Xilinx had a global FPGA market share of 52%, far ahead of Intel’s 35%.

Intel also acquired their way into this space when picking up Altera in 2015, which, at the time, was competing head to head with Xilinx. However, with Pat Gelsinger now leading Intel AMD’s dominance may be challenged.

Experts explained to me repeatedly over the years why FPGAs would not work for AI inferences.

Yet, in Q1 2024, we saw $AMD announce its second generation Versal Adaptive SOC (system-on-chip), claiming that this will now enable customers to “rapidly add highly performant and efficient AI capabilities to a broad range of products.”

As I anticipated, it seems that AMD discovered the secret sauce.

$AMD has gotten FPGAs to work for AI and is able to deploy them at a marginal cost via its chiplet architecture, which makes connecting different compute engines relatively easy.

Notably, hypothetical competitors need to not only surpass AMD’s FPGA technology but also its interconnect technology (Infinity Fabric) if they want to seamlessly connect FPGAs with any other compute engine.

AI at the edge is $AMD's big opportunity to shine.
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⁠Brandon Beylo
I don’t own enough PGMs.

#PGMs

#China State Council has issued the 2024–2025 Energy Conservation and Carbon Reduction Action Plan, which includes several significant measures:

1. Accelerating the phase-out of old vehicles.
2. Raising the energy consumption threshold standards for commercial vehicles.
3. Gradually lifting restrictions on the purchase of new energy vehicles across various regions.
4. Implementing policies that facilitate the use of NEVs.
5. Promoting the electrification of public sector vehicles and orderly introduction of new energy medium and heavy-duty trucks to develop zero-emission freight fleets.
6. Advancing the scrapping and renewal of outdated transport vessels and initiating pilot projects for the electrification of coastal and inland river vessels.

By the end of 2025, these initiatives aim to reduce carbon dioxide emission intensity in the transportation sector by 5% compared to 2020 levels. - CN Wire
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⁠Dimitry Nakhla | Babylon Capital®
Monster Beverage $MNST has posted ANNUAL sales GROWTH since 2003 💸

#stocks #investing https://t.co/1Is08tdXmM
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Aswath Damodaran (Youtube)
Session 26: The Fat Lady is Singing!
In this session, I used the results you got from the corporate financial analyses of your companies to review the class, starting with corporate governance, wending my way through hurdle rates and topping off with capital structure and dividend policy.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/ProjSumm24New.pdf
Corporate Finance Project numbers: https://pages.stern.nyu.edu/~adamodar/pc/cfanalysis/cfspr24.xlsx

Aswath Damodaran (Youtube)
Session 26 (Val MBAs): The Grand Finale!
In this final session for the class, I use your valuation/pricing of companies as a vehicle to review the class, from intrinsic valuation to pricing to real options.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/valclosespr24.pdf
Project valuations: http://www.stern.nyu.edu/~adamodar/pc/eqrec/spr2024.xlsx

Aswath Damodaran (Youtube)
Session 28 (Val Undergrad): Closing the sale!
In this final session for the class, I use your valuation/pricing of companies as a vehicle to review the class, from intrinsic valuation to pricing to real options.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/valUGclosespr24.pdf
Project valuations: http://www.stern.nyu.edu/~adamodar/pc/eqrec/sprUG2024.xlsx

⁠Dimitry Nakhla | Babylon Capital®
Did you know Old Dominion Freight Lines $ODFL is more than just a trucking company?

They're also a REAL ESTATE powerhouse, owning vast land parcels across the country, so as a long-term shareholder of $ODFL you benefit from the value of the land (inflation hedge) & competitive advantage emanating from land ownership, among other things.

And here's the thing: land assets are typically valued on a balance sheet at original purchase price, not current market value as this is an objective amount that can easily be audited, whereas market value is subjective and may be difficult to determine.
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#stocks #investing #logistics #RealEstate
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AkhenOsiris
RT @BenBajarin: Sifting through survey data on cloud workflows/AI via CIO data. Few interesting nuggets/stats:

- Currently 5% of public cloud spending is related to AI /
ML

- a fifth of respondents have not done anything yet with AI.

- 36% of AI / ML budget today coming from net new IT budget dollars

- this points to ~50% of AI capex being additive today and in 3 years, with the remaining ~50% coming from across the IT budget today.
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AkhenOsiris
RT @ScroogeCap: JPM Desk has interesting tidbit from $CRM:

An incredible flip in the tone here. Reminds you of $PANW how they got away with 1 bad quarter and then got totally obliterated the next time.

Market forgives you once, not twice.
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⁠Dimitry Nakhla | Babylon Capital®
~3 weeks ago I shared my “sober valuation analysis 🧘🏽‍♂️” on $ACN stating:

“As you can see, we’d have to assume >25x earnings for $ACN to have double digit CAGR potential (a multiple slightly above its 10-year average & above what’s arguably justified given its growth rate)

Today at $306💵 it appears that $ACN is a wonderful company trading at a fair price

I’d reconsider $ACN closer to $285💵 or at ~22.78x forward estimates (~7% below today’s price) where I can possibly expect near double digit return potential assuming a 23x end multiple in 2026”

Since then, $ACN dropped ~7% & is currently trading at $285💵 as my research suggested

Tomorrow I will share an updated analysis on $ACN 💯

#stocks #investing
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.

𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲."

A sober valuation analysis on $ACN 🧘🏽‍♂️

•NTM P/E Ratio: 24.50x
•10-Year Mean: 23.98x

•NTM FCF Yield: 5.42%
•10-Year Mean: 5.20%

As you can see, $ACN appears to be trading near fair value

Going forward, investors can expect to receive ~2% LESS in earnings per share & ~4% MORE in FCF per share🧠***

Before we get into valuation, let’s take a look at why $ACN is a quality business

BALANCE SHEET✅
•Cash & Equivalents: $5.12B
•Long-Term Debt: $71.64M

$ACN has an excellent balance sheet, an AA- S&P Credit Rating & 174x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2018: 54.2%
•2019: 42.1%
•2020: 30.8%
•2021: 32.0%
•2022: 38.2%
•2023: 33.8%

RETURN ON EQUITY✅
•2018: 41.2%
•2019: 37.9%
•2020: 32.1%
•2021: 31.9%
•2022: 32.6%
•2023: 28.5%

$ACN has great return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $28.56B
•2023: $64.11B
•CAGR: 8.42%

FREE CASH FLOW✅
•2013: $2.93B
•2023: $8.99B
•CAGR: 11.86%

NORMALIZED EPS✅
•2013: $4.21
•2023: $11.67
•CAGR: 10.73%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 713.34M
•LTM Shares Outstanding: 637.95M

By reducing its shares outstanding ~10.5%, $ACN increased its EPS by ~11.7% (assuming 0 growth)

PAID DIVIDENDS✅
•2013: $1.62
•2023: $4.48
•CAGR: 10.70%

MARGINS✅
•LTM Gross Margins: 32.6%
•LTM Operating Margins: 15.8%
•LTM Net Income Margins: 10.9%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~2% LESS in EPS & ~4% MORE FCF per share

Using Benjamin Graham’s 2G rule of thumb, $ACN has to grow earnings at a 12.25% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (12.25%) required growth rate:

2024E: $12.17 (4.3% YoY) *FY August
2025E: $13.20 (8.5% YoY)
2026E: $14.83 (12.4% YoY)

$ACN has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $ACN ends 2026 with $14.83 in EPS & see its CAGR potential assuming different m[...]