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04.08.2022
Ethereum’s Most Important Update

ETH is a native token for the Ethereum blockchain and is one of the two most reliable digital assets in the market along with Bitcoin. Ethereum is the first platform that became a hub for thousands of blockchain apps and other digital solutions. The recovery of ETH prices to November 2021 peaks at $4,900 would bring investors 190% profit.

Second layer solutions (Layer2) were introduced to improve stability and effectiveness of the Ethereum blockchain. These are blockchain network add-ons that are added on top of the primary blockchain. The most popular add-ons are Arbitrum, Loopring, Immutable X, and Polygon that have recently partnered with Meta (Facebook owner). In other words, the Ethereum blockchain network has a much broader use than the native blockchain itself.

Ethereum developers promise to release a new Proof-of-Stake (PoS) consensus protocol in late 2022. This protocol will allow miners to stake tokens to a special deposit to mine blocks. Some networks within the Ethereum blockchain have moved to PoS protocol this summer, while others are expected to move to this protocol in the middle of September.  This move will allow for the increase of processing capacity of the network to almost 100,000 transactions a second from the existing 30 transactions and lower commissions. This would also allow for ETH to switch to the deflation model when coins are algorithmically burned, while some coins would be removed from circulation as they would be blocked by staking - more than 13 million ETH or 10% of overall coins in circulation are blocked by staking. The problem is that coins are blocked for a long period of time and cannot be sold or exchanged for fiat currency.

11.08.2022
Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12th position by market cap with $7.8 billion, which is 4% less than Ethereum’s market cap. AVAX prices dropped by 82% of its peak values, allowing investors to buy it at early 2021 prices. Avalanche’s infrastructure consists of three logically isolated networks, each of these with their own processing, validators, and own set of rules.

This platform is often compared to the existing internet web infrastructure with core connection protocols like HTTP, surrounded by a huge number of networks to their apps. Avalanche allow for the creation of public and private systems as a blockchain or DAG (Directed Acyclic Graph) and for the use of different virtual machines for apps, including EVM engine (Ethereum Virtual Machine) that allows Enthereum network programs to be developed.

Avalanche includes C-chain to create smart contracts that are processed on an advanced EVM engine, P-Chain that coordinates validators that process transactions and also allows for the creation and management of new subnetworks, and X-Chain which is a directed acyclic graph regulating issuance and trade of cryptoassets. DAG systems record new transactions on top of the old ones, allowing for processing speed to be increased and for capacity substantially. It is quite different to other blockchains, where transactions are compiled in blocks in order to be processed.

The advantage of Avalanche is that it provides anyone with the opportunity to create his or her own isolated blockchain with its own set of parameters, including access to apps and the programming language with which it will work. Every subnetwork can process around 4,500 transactions per second compared to 14 processed by the Ethereum network.

26.04.2023
Diversification Inside Tech Sector: Taiwan Semiconductor

TMS is the most valuable semiconductor producer in the world. Its stock went down by 40% during the recent market correction, and rebounded slightly after a strong Q1 2023 earnings report. The company reported an operational margin at 45.5% as production of 5 nm and 7 nm chips is increasing. The company continues to generate profit despite decreasing demand for personal computers after surging during the pandemic in 2020-2021. Its financials are looking much stronger than its major peer Intel. In the worst-case scenario TSM’s operational margin is expected to decline to 40%, while Intel is expected to deliver a 39% operational margin with a negative net cash flow in Q1 2023. Taiwan Semiconductor is planning to spent between $32 billion to $36 billion on CAPEX this year, while Intel has cut CAPEX to $20 billion despite being 30% co-funded by the U.S. government.  On the negative side, the company is quite vulnerable to geopolitical risks as tensions between China and Taiwan are mounting. Although, it is hard to believe that Beijing will take the island by force, these threats could not be discounted. China is building its image as a global peacemaker while promoting its roadmap to establish peace between Russia and Ukraine, and the recent China-brokered agreement between Iran and Saudi Arabia. Economic ambitions of China are also a major hurdle for a military solution of the long-lasting conflict as the destruction of the chip production facilities of TSM will make such military operations pointless in the economic sense. In other words, TSM stocks may interest very optimistic investors that are seeking extra profit amid recovering demand for chips in the second half of` 2023.  

15.09.2022
Safe Haven Assets for Long-Term Investments: Broadcom

Broadcom is an American semiconductor and infrastructure software development company. Soon it is expected to close a merger deal with VMware, a cloud computing and visualization company, that will open new cross-sales opportunities for Broadcom to boost its revenues. Broadcom stocks are now 25% off their peak values.

According to the Q3 FY 2022 financial report that ended July 31, consolidated revenues grew by 25% year-over-year to $8.46 billion, and EPS went up by 40% to $9.73 per share. The semiconductors segment, that added 32% year-over-year, was the primary driver for the company’s profit. The company’s free cash flows (FCF) topped $4.3 billion, allowing it to spend $1.7 billion on dividends and 1.5 billion on the shares repurchase program. The company is planning to continue spending at least 50% of FCF on dividends that added 43% every year on average since 2016. 

According to the Q4 FY 2022 forward guidance, the company is expecting its revenues to go up by 20% year-over-year to $8.9 billion and for EDITDA to go up by 25% to $5.6 billion. Broadcom has great experience in expanding its product portfolio by M&A operations, and apparently it will continue on this way. The company is also expected to benefit greatly from the $52.7 billion CHIPS bill in the United States.


16.06.2022
Not Every Tech Stocks are Equally Strong: SAP

SAP stocks have lost 30% since the beginning of 2022. The German tech company develops enterprise software and solutions to manage business operations. For example, one of its services can be used  to manage all business travel financial activities and related spending. In other words, it is quite a routine company with  a stable and strong cash flow. Once SAP software is installed on a corporate level it is hard to do without it as it is deeply integrated into the business core processes. Moreover, SAP is restructuring its business model around its subscription base and this will allow for cash flows to be even more predictable and balanced through the financial year. Such a model is in favourable to Wall Streel investors.

The war in Ukraine has a 300-million-euro negative effect on SAP business, and it is only a marginal 1% of the overall revenue base for the company, while its dominance in the ERP segment is secure. The revenues added 11% year-on-year to 7.08 euros in Q1 2022. The revenues grew by 6% in  Q4 2021.

The company has made some successful M&A deals, acquiring Qualtrics, a cloud-based subscription software platform, that delivered +48% revenue in Q1 2022. This company had a gross margin above 90% in 2021 while SAP’s gross margin was at 70% for the same year.

SAP management promised to triple its cloud-based business by 2025, and boost revenues to 22 billion euros, while operational profit is forecasted to grow by 40% from the current 8.4 billion euros. This is a very extensive growth for the company that has a high P/E ratio at 17. The company may not perform very high growth rates as its younger tech sector peers, but it may certainly recover to new all-time highs in the long-term perspective. However, the sector may require several quarters to recover, and the recovery would be headed by such reliable companies as SAP with a low risk profile.

B
Amazon Looks Better than Apple Again

Let's now come back to benchmarking between the two powerful megacaps: Amazon and Apple. Which of the two has better chances for further upside? I feel our discussion on this subject as a fine tradition, which can become long-standing and perfectly suited for February, as both firms reported for the ending quarter  to expose their major weaknesses and strengths. What is more important, this is exactly the moment when the crowd clearly shows its attitude to the balance of those pros and cons. IMHO, just like in February 2024, investing in Amazon looks preferable.

Shares of the largest e-commerce platform in the world traded around $170 nearly a year ago, then rose 18% over the next five months and now are about 35% higher year-over-year. This great move happened despite a brief loss of widely expected pace in the delivery of cloud storage capacities, which led to losing upside momentum in early August with a technical rollback even below the starting levels. But the overall annual growth of Amazon stock still exceeded similar achievements of Apple, whose value eventually provided investors with 25% of income. Besides, Apple declined gradually until April 2024 before recovering later, so that the iPhone-maker did not provide any tangible income to its shareholders until mid-summer.

At the first half of 2025 the history could repeat itself. Why does it seem so? Apple came under notable pressure once again, as massive profit taking had started immediately after its share price jumped by nearly 4% to follow the upbeat quarterly report. The next wave of a volatile market's response even pushed Apple share price 5% down from above $247 to as low as $225.70 when the dust settled. This pullback completed more than 13% of Apple stock's cyclic correction from all-time highs detected around $260 in the pre-Christmas time. Meanwhile, Amazon is still shining, just holding the heights about a 5.5% away from its corresponding historically record peaks, which were detected only several days ago. A relative weakness in Amazon's cloud segment, called Amazon Web Services (AWS), is responsible for a moderate retracement of the stock again. However, the market is already aware of this pitfall from the movements in 2024, and so the majority on Wall Street no longer perceives this reason as a serious obstacle in 2025.

The company's cloud unit reported a 19% rise in sales to $28.79 billion, which was only slightly falling short of analyst pool's estimates of $28.87 billion. AWS could be growing even faster, "if not for some of the constraints on capacity, and they come in the form of chips from our third-party partners coming a little bit slower than before," Amazon CEO Andy Jassy commented. When there is no decline in demand, but there are delays in capacity due to counterparties, then this is a completely different matter, isn't it? Again, Amazon joined the club of smaller cloud paces headed by other leading providers, including Microsoft and Google, but both of them showed a more notable difference between elevated hopes and actual cloud numbers. Thus, Amazon is still a clear winner in this race compared to its major competitors.

Again, the sun of the holiday shopping season boosted Amazon's retail numbers to offset the cloud shadows from what one may interpret as weakness. E-commerce provided sales growth of 7% in the quarter to reach $75.5 billion, which was $1 billion above consensus estimates of $74.5 billion. The total Q4 revenue of Amazon was $187.8 billion, compared with the average pool bets on $187.3 billion. Its Q4 EPS (earnings per share) of $1.86 went far through the roof of $1.47 in average Wall Street projections. Amazon is investing heavily in AI software, which strategy probably began to bear fruit. AI is "probably the biggest technology shift and opportunity in business since the [appearance of] internet", as "virtually every application" currently in existence today is on track to be "reinvented" by AI technology, according to Jassy.

As to Apple's AI strategy, it now looks less convincing. Apple is positioning AI features like fast drafting emails or transcribing phone calls, but it is still rolling them out too slowly in most regions beyond the U.S. Apple has not yet defined and secured a constant partner to release AI features in China through the regulation and language barriers. In markets where we have "rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available," its CEO Tim Cook admitted. He added that Apple Intelligence is still coming in French and German in April, with no timeline so far for when it would be available in China.

That's why iPhone quarterly sales dropped from $69.70 billion a year earlier to $69.14 billion, compared with the $71.03 billion that analysts were expecting, but iPhone sales decreased by 11% to $18.51 billion in Greater China vs $20.82 billion in the same quarter of 2024 and $21.5 billion of consensus analyst projections. The results are very poor amid rising competition from Chinese makers of quality gadgets. And that's why the Wall Street crowd became so sceptical of new investment into Apple right here and now, despite all Apple's widely expected records on earnings of $2.42 per share and total revenue of $124.3 billion, thanks to Apple Pay and App Store offerings, which gained by around 14%.

Wearables, home & accessories unit reported sales of $11.75 billion, also below estimates of $11.95 billion, and only Mac and iPad contributions with a new M4 chip were better at $8.99 billion and $8.09 billion respectively, beyond consensus estimates of $7.94 billion and $7.32 billion. The explanation here turned out to be very simple. AI features are more widely available on Apple Macs and iPads because their larger size allows using more powerful chips to create a "very key compelling reason for people to upgrade," according to Tim Cook again.

Apple suggested total sales for the current quarter might rise "in the low- to mid-single digit range" vs a 5% sales surplus expected by the analyst pool from January to March. The upbeat forward guidance was exactly what helped the stock to spike shortly in the night of the report. However, these are all again promises and projections, and the near future is often in doubt when there are unresolved problems in the present. Actually, no honours came here and now, as iPhone sales in 2024 were below previous achievements, so the 12-month average analyst target for Apple is only 6.8% above the current price, being at $252 now. Meanwhile, similar average estimates are at nearly $265 for Amazon, which is almost 15% higher than the current price range.

Above I cited analyst estimates compiled by Reuters. But if you ask my own opinion, I personally believe that Apple can repeat or exceed $260 for a while, but more waves of profit taking on any solid upticks will follow. As to Amazon, it is better positioned and may well technically hit $280 or higher. So, I plan to increase my stake in Amazon, taking advantage of the additional small pullback, but I will wait at least another six months to buy new Apple shares.

604
A Jump of Intel, What's Next?

The market price of Intel Corporation (INTC), which had lost up to 72% from its peaking value in spring 2021, suddenly spiked by 11% over the past 24 hours, including a 6% jump within the regular Wall St session on February 11 and another 5% in pre-market trading the next day. Intel's "deep" value still exists, even though its core CPUs (central processing units) segment clearly gives way to more advanced GPUs (graphic processor units), being forced to step aside in favour of increasingly sought-after AI (artificial intelligence) chips by NVIDIA and other flagship-level rivals. Intel shareholders were tired of dreaming but the 40-year-old U.S. vice president JD Vance's speech at the AI Action Summit in Paris brought them a glimmer of hope.

JD Vance only shed some light to the stance of the new White House dwelling team on supporting AI manufacturers, which did not give up their efforts on establishing major production processes within the U.S. jurisdiction. He defined an updated American policy on AI as going forward, adding that the Trump administration "will ensure that the most powerful AI systems are built in the U.S. with American-designed and manufactured chips". That's exactly the point which is easy to say, not easy to do. Investors should be aware that the services of programmers and developers, and especially assembling pieces in the Asian region, for example, are much cheaper than in any of the G7 countries. If so, keeping AI regulations light is only a necessary first step, which should include ending the self-killing practice of banning advanced chip exports to China under an invented pretext of some safety measures. JD Vance said the U.S. is going to ''ensure that AI systems developed in America are free from ideological bias'', whatever this could mean, while aiming at other governments for ''tightening the screws'' on U.S. tech firms. Yet, we think that tax benefits may also be an integral part of the plans, since the financial component of such kind of production in the U.S. raises a lot of reasonable doubts right at the moment.

As to Intel's story, it has not been one of success in the past 30 years, as the firm's market cap is still below $100 billion. This is very close, or you may even say on par with old levels of 1996. One can call it fully sustainable, with only acquisition rumours citing a possible Intel's drop into the bucket for larger tech giants like Microsoft, Amazon or Qualcomm partially supporting Intel's share price from further sliding down. However, it was Intel Corporation announcing its plans as early as spring 2024 to invest some $100 billion into U.S.-located factories. The investment would predominantly be accomplished through building "the largest AI chip manufacturing site in the world" in the state of Ohio, according to Intel's CEO Pat Gelsinger, who also shared conceptions of Intel's existing factory modernization in New Mexico, Oregon, and Arizona. Bold plans on U.S. soil, and that was the reason why Wall Street rallied exactly on Intel after JD Vance enthusiastic declarations.

The words of Trump team members could support everything for the first time. Yet, specific financing measures are needed to achieve a more reliable trend in yesterday's underdogs like Intel. Even Tesla stock, led by Trump's main ally Elon Musk, failed to maintain its post-elections hyping highs around $480 per share to move closer to $300 over the next weeks. And Tesla is definitely much more successful as an EV maker compared to Intel as a chip seller. It is one thing if Intel would be confirmed as getting financial injections of tax cuts like in the case of the famous program on building data centers, which was already widely advertised under Trump. In this positive scenario for Intel, it would be back to $50 in no time, compared to just above $22 at the time of this writing. In all other cases, however, unless the Republican White House and Capitol Hill help Intel with the well-done merger deal or/and proper tax cuts, protective import tariffs for foreign rivals are unlikely to be enough. Then any words will be cheap, and Intel shares will slide into another pothole in the road once again.

824
Rafael Quintana Martinez
Money Manager de alto rendimiento, con una sólida formación académica, profesional y de campo. Más de 9 años de experiencia especializada en el comercio de mercados financieros internacionales. La devoción, la fiabilidad, la responsabilidad y la ética impulsan mi vida. Actualmente me desempeño como Analista Senior para Metadoro. https://metadoro.com/es https://mx.investing.com/members/contributors/235587671/ https://es.tradingview.com/chart/EURUSD/rE9gVips/
Ethereum May Dive Lower Before Going Up

Ethereum (ETH) is up 3.9% this week to $2,627, outperforming Bitcoin (BTC), which has gained 1.0% to $96,119. Despite this, ETH has lost most of its Trump-driven rally gains from January and February, while BTC remains resilient. Some analysts believe this 21% pullback could set the stage for a strong rebound.

Institutional interest in ETH is growing, with large investors actively accumulating the asset. This also applies to spot ETFs, such as those linked to World Liberty Financial, reportedly controlled by Donald Trump.

From a technical perspective, Ethereum is resting on a strong support zone between $2,000 and $2,500, reinforced by trend support. However, BTC’s reluctance to correct and relieve overbought conditions is keeping ETH from rallying. This dynamic raises the risk of further downside for ETH before a potential reversal to the upside.

1171
Rafael Quintana Martinez
Money Manager de alto rendimiento, con una sólida formación académica, profesional y de campo. Más de 9 años de experiencia especializada en el comercio de mercados financieros internacionales. La devoción, la fiabilidad, la responsabilidad y la ética impulsan mi vida. Actualmente me desempeño como Analista Senior para Metadoro. https://metadoro.com/es https://mx.investing.com/members/contributors/235587671/ https://es.tradingview.com/chart/EURUSD/rE9gVips/
Chiliz Is Struggling to Recover

Chiliz (CHZ) is up 8.8% this week to $0.0612, outperforming the broader crypto market, where Bitcoin (BTC) is adding 3.0% to $98,033. While BTC is nearing its all-time high of $109,974, Chiliz is trading at levels last seen in February 2021. The token has erased all its gains from the Trump-driven rally and fallen below key uptrend support.

Although the overall uptrend is not yet broken, CHZ is approaching a critical point. If the support at $0.0500 fails, the token could drop by 50% to $0.0250—a level that may attract buyers but risks undermining investor confidence if such a deep correction occurs.

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