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Stock Analysis Compilation
Royce IP on Applied Optoelectronics $AAOI US
Thesis: Applied Optoelectronics thrives on AI-driven demand for optical components, making it a standout opportunity in the micro-cap universe
(Extract from their article) https://t.co/yaDjrcIdXT
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Royce IP on Applied Optoelectronics $AAOI US
Thesis: Applied Optoelectronics thrives on AI-driven demand for optical components, making it a standout opportunity in the micro-cap universe
(Extract from their article) https://t.co/yaDjrcIdXT
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AkhenOsiris
RT @SouthernValue95: “lurking beneath the surface is the uncomfortable truth that more supply — especially if it is near-unlimited, near-free supply — has to manifest somehow. Stark example: air — a highly valuable commodity, yet typically free due to near-unlimited supply” - John Mihaljevic on AIs risk to $CRM $ADBE $HUBS
John’s analogy is very flawed.
Firstly, AI is not free, like air, and incremental model breakthroughs like test-time compute require significant inference compute (cost / capital) to get the most value, suggesting AIs biggest gains could accrue to the large companies who can afford to really spend to get the best intelligence, and then integrate it, deliver it, service it, etc. AI isn’t “air.”
Second, even if AI was like Air, it’s not just about replacing basic functionality of your current app, or replicating 75% of it for a lower price (which might occur for very small / simple businesses). For a large enterprise, you have to replace the functionality of the software app but also make sure the 1k or even 10k other systems and teams and critical functions inside your company that rely on it run smoothly without a hitch when you change over. It would be like replacing all of your internal organs to get this new “air” and hoping you didn’t suddenly die in the changeover. And you have to bet those new organs function today, tomorrow, in 20 years, in unexpected conditions, when you are confronted by bugs and diseases, etc. Important to remember the cost to implement a new CRM or ERP can often run 3-4x the annual cost of the system and takes years, and rarely is pulled off without issues. This is what gave $ORCL $SAP 20 years to respond to disruption from the cloud, plenty of time to ultimately turn cloud into a business tailwind, not a disruptive risk, despite a very slow start. Today’s software incumbents are generally eyes and wallets wide open, investing aggressively to be well positioned for how AI might impact their business.
AI is a disruptive innovation and software companies cannot stand still and rely solely on legacy moats to preserve their market position. But it’s also not as simple as: existence of AI means anything using 0s and 1s is now “free and unlimited,” therefore doomed. What pays for the power, the DCs, the compute, the memory, the cooling, the networking, the infrastructure software? Who steps in to accept the risk of failure? Who will be online when something built by AI breaks? Who will be liable when it causes loss? Best of breed dedicated service providers will still have a role to play in an AI world and it may turn out, for some, that role is bigger and more valuable.
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RT @SouthernValue95: “lurking beneath the surface is the uncomfortable truth that more supply — especially if it is near-unlimited, near-free supply — has to manifest somehow. Stark example: air — a highly valuable commodity, yet typically free due to near-unlimited supply” - John Mihaljevic on AIs risk to $CRM $ADBE $HUBS
John’s analogy is very flawed.
Firstly, AI is not free, like air, and incremental model breakthroughs like test-time compute require significant inference compute (cost / capital) to get the most value, suggesting AIs biggest gains could accrue to the large companies who can afford to really spend to get the best intelligence, and then integrate it, deliver it, service it, etc. AI isn’t “air.”
Second, even if AI was like Air, it’s not just about replacing basic functionality of your current app, or replicating 75% of it for a lower price (which might occur for very small / simple businesses). For a large enterprise, you have to replace the functionality of the software app but also make sure the 1k or even 10k other systems and teams and critical functions inside your company that rely on it run smoothly without a hitch when you change over. It would be like replacing all of your internal organs to get this new “air” and hoping you didn’t suddenly die in the changeover. And you have to bet those new organs function today, tomorrow, in 20 years, in unexpected conditions, when you are confronted by bugs and diseases, etc. Important to remember the cost to implement a new CRM or ERP can often run 3-4x the annual cost of the system and takes years, and rarely is pulled off without issues. This is what gave $ORCL $SAP 20 years to respond to disruption from the cloud, plenty of time to ultimately turn cloud into a business tailwind, not a disruptive risk, despite a very slow start. Today’s software incumbents are generally eyes and wallets wide open, investing aggressively to be well positioned for how AI might impact their business.
AI is a disruptive innovation and software companies cannot stand still and rely solely on legacy moats to preserve their market position. But it’s also not as simple as: existence of AI means anything using 0s and 1s is now “free and unlimited,” therefore doomed. What pays for the power, the DCs, the compute, the memory, the cooling, the networking, the infrastructure software? Who steps in to accept the risk of failure? Who will be online when something built by AI breaks? Who will be liable when it causes loss? Best of breed dedicated service providers will still have a role to play in an AI world and it may turn out, for some, that role is bigger and more valuable.
I can’t share directly bc John has blocked me for disagreeing with his take on enterprise software being imminently and completely disrupted by AI. But below, @GSpier suggests @salesforce $CRM is a Ponzi scheme because they consistently raise prices and have “high churn” (it’s ~8%). Meanwhile he says $SPOT is the opposite…
1) Kindof a wild take to call software price increases a ponzi
2) What has been % increase in $SPOT price over last 3yr and what is their annual churn? $SPOT has raised prices more and has higher churn. - SouthernValuetweet
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Stock Analysis Compilation
Polen Capital on Tetra Tech $TTEK US
Thesis: Tetra Tech's leadership in water infrastructure and environmental consulting positions it perfectly for today's rising demand—learn how it’s capitalizing on global challenges
(Extract from their Q3 letter) https://t.co/qHGaFrMHMh
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Polen Capital on Tetra Tech $TTEK US
Thesis: Tetra Tech's leadership in water infrastructure and environmental consulting positions it perfectly for today's rising demand—learn how it’s capitalizing on global challenges
(Extract from their Q3 letter) https://t.co/qHGaFrMHMh
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Startup Archive
RT @m_franceschetti: So good, so true
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RT @m_franceschetti: So good, so true
Hire for Drive by @pmarca https://t.co/J4GnBmfAZM tweet
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Stock Analysis Compilation
Artisan Partners on MGM China Holdings $2282 HK
Thesis: MGM China's robust gaming growth and disciplined margins highlight its strength amidst macro challenges—explore its cash flow-driven dividend potential
(Extract from their Q3 letter) https://t.co/ldrFjqYIoX
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Artisan Partners on MGM China Holdings $2282 HK
Thesis: MGM China's robust gaming growth and disciplined margins highlight its strength amidst macro challenges—explore its cash flow-driven dividend potential
(Extract from their Q3 letter) https://t.co/ldrFjqYIoX
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InsideArbitrage
Smart Share $EM Global Receives Buyout Proposal from Trustar Mobile Charging and Affiliates -
🔋The proposal offers to buy all outstanding shares, including ADS, for $0.625 per share or $1.25 per ADS.
🔋Trustar's affiliates include Smart Share's CEO Mars Guangyuan Cai, Director and President Peifeng Xu, Chief Marketing Officer Victor Yaoyu Zhang, and CFO Maria Yi Xin.
🔋The board has formed a Special Committee comprised of three independent directors—Conor Chia-hung Yang, Jiawei Gan, and Benny Yucong Xu—to evaluate and consider the proposal. Conor Chia-hung Yang will serve as Chair of the Special Committee.
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Smart Share $EM Global Receives Buyout Proposal from Trustar Mobile Charging and Affiliates -
🔋The proposal offers to buy all outstanding shares, including ADS, for $0.625 per share or $1.25 per ADS.
🔋Trustar's affiliates include Smart Share's CEO Mars Guangyuan Cai, Director and President Peifeng Xu, Chief Marketing Officer Victor Yaoyu Zhang, and CFO Maria Yi Xin.
🔋The board has formed a Special Committee comprised of three independent directors—Conor Chia-hung Yang, Jiawei Gan, and Benny Yucong Xu—to evaluate and consider the proposal. Conor Chia-hung Yang will serve as Chair of the Special Committee.
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InsideArbitrage
BM Technologies, Inc. $BMTX announced that their shareholders voted to approve it's acquisition by First Carolina Bank at the special meeting held on January 03, 2024. https://t.co/s3bsKpvD8E
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BM Technologies, Inc. $BMTX announced that their shareholders voted to approve it's acquisition by First Carolina Bank at the special meeting held on January 03, 2024. https://t.co/s3bsKpvD8E
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InsideArbitrage
$UBER enters into $1.5 billion accelerated share repurchase program with Bank of America
🏎️ This is part of its prior $7 billion share repurchase authorization which was announced in Feb last year
🏎️ During the three and nine months ended September 30, 2024, the company repurchased 5.3 million and 10.1 million shares of common stock, respectively, for $375 million and $701 million, respectively
🏎️As of September 30, 2024, $6.3 billion remained under its share repurchase program
CFO: "Our stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result. This ASR represents a value-enhancing deployment of capital, retiring over one percent of our market cap."
https://t.co/OGzKUFPY4x
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$UBER enters into $1.5 billion accelerated share repurchase program with Bank of America
🏎️ This is part of its prior $7 billion share repurchase authorization which was announced in Feb last year
🏎️ During the three and nine months ended September 30, 2024, the company repurchased 5.3 million and 10.1 million shares of common stock, respectively, for $375 million and $701 million, respectively
🏎️As of September 30, 2024, $6.3 billion remained under its share repurchase program
CFO: "Our stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result. This ASR represents a value-enhancing deployment of capital, retiring over one percent of our market cap."
https://t.co/OGzKUFPY4x
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Startup Archive
Elon Musk: “Technology does not automatically improve”
“People are mistaken when they think that technology just automatically improves. It does not automatically improve. It only improves if a lot of people work very hard to make it better. And actually it will I think—by itself—degrade.”
Elon continues:
“If you look at the progress in space, in 1969 we were able to send somebody to the moon. Then we had the Space Shuttle. The Space Shuttle could only take people to low-earth orbit. Then the Space Shuttle retired and the United States could take no one to orbit.”
This is why he believe SpacEx’s mission of making humans a space-faring civilization is so important. It’s not inevitable, and it will require a lot of talented people working really hard to make it happen.
“You look at great civilizations like ancient Egypt, and they were able to make the pyramids, and they forgot how to do that. And the Romans, they built these incredible aqueducts. They forgot how to do it.”
Video source: @TEDTalks (2017)
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Elon Musk: “Technology does not automatically improve”
“People are mistaken when they think that technology just automatically improves. It does not automatically improve. It only improves if a lot of people work very hard to make it better. And actually it will I think—by itself—degrade.”
Elon continues:
“If you look at the progress in space, in 1969 we were able to send somebody to the moon. Then we had the Space Shuttle. The Space Shuttle could only take people to low-earth orbit. Then the Space Shuttle retired and the United States could take no one to orbit.”
This is why he believe SpacEx’s mission of making humans a space-faring civilization is so important. It’s not inevitable, and it will require a lot of talented people working really hard to make it happen.
“You look at great civilizations like ancient Egypt, and they were able to make the pyramids, and they forgot how to do that. And the Romans, they built these incredible aqueducts. They forgot how to do it.”
Video source: @TEDTalks (2017)
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