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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.

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.

11.08.2022

Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12^th 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.

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.

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.

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/

28.01.2025

Maker Is Seen Down to $1000

Maker (MKR) is down 3.2% this week to $1,180, recovering from a low of $1,114 on Monday—its weakest level since 5 November, when the altcoin initiated a 116% rally following Donald Trump’s election victory. The recent decline has been partly driven by Trump's announcement of tariffs on Colombia and plans to introduce additional tariffs on chips, pharmaceuticals, and metals imported into the United States.

Another key factor weighing on MKR is the emergence of DeepSeek AI, which reportedly runs on cheaper chips. This has undermined the valuations of major chip manufacturers like Nvidia and prominent AI developers, leading to a 5.2% drop in the Nasdaq 100 on Monday. The stock market's downturn has exerted additional pressure on the broader crypto market, including Maker.

Although a further significant decline in the stock market seems unlikely, Maker’s price remains vulnerable and could fall to $1,000. Even if market conditions stabilise, MKR is unlikely to reverse its current downward trend in the short term.

MKRUSD

850

Rafael Quintana Martinez

28.01.2025

Boeing Is Ready to Lift Off

Boeing (BA) shares dropped by 31.5% last year, closing at $170, partly recovering from the earlier 44.5% plunge when prices bottomed out at $138 per share. Donald Trump's election victory provided a boost to the stock, pushing it up by 26.6% to $175. This marks the third recovery in the past five years, though the scale of this rebound is likely to be more modest than previous instances.

The bullish outlook is supported by a reverse head-and-shoulders pattern, with the neckline nearing a breakout. If this breakout materialises, it could significantly accelerate the stock's upward momentum.

My price target for Boeing is $230–$240 per share, representing an approximate 35% upside from current levels. The recommended entry point lies within the $170–$180 range, with a stop-loss set at $130 to manage risk effectively.

550

Rafael Quintana Martinez

27.01.2025

OMG Is Freefalling to $0.250

OMG Network (OMG) is down 11.2% to $0.289, underperforming the broader crypto market, where Bitcoin (BTC) has dropped 6.4% to $97,696, marking its lowest level since 16 January. The market is reeling after Donald Trump threatened Colombia with a trade war unless it accepted deportation flights. Colombia has since capitulated, agreeing to receive deportees, leading investors to speculate that similar strategies might be employed with other nations, potentially prompting the Federal Reserve to adopt a more hawkish stance.

OMG lacks any fundamental drivers to counter these negative developments. Should the broader market pressure continue, OMG prices could plunge further, with $0.250 being the next likely target.

OMGUSD

781

Bash

24.01.2025

NVIDIA's Heading to $180, With $200 On the Table

Just confirming my very positive way of NVIDIA stocks' further outlook. I think I'll hold my full stake in NVIDIA until $175 or $180, and hold the rest of it till reaching $200 or even higher after some profit-taking.

A short-lived wave to regress within a week after another record high above $153 per share on January 7 has been spawned only by some reports about delays experienced by NVIDIA's major customers in delivering its cutting-edge Blackwell-equipped racks for creating the generative artificial intelligence infrastructure in big data centers. Leaks cited alleged troubles or glitches with chip connectivity. Still unconfirmed sources, quoted by all the major news agencies, stated that Microsoft, in particular, had to shift to an older generation of NVidia chips, which was the H200, when building its Phoenix data center due to the delays. They also claimed that technical setbacks affected other NVIDIA's partners like Amazon Web Services (AWS), Google cloud division and Meta Platforms. Let me remind you here that NVIDIA CEOs recently projected a multiple increase in revenue from the advanced Blackwell series, saying about a "several billion dollars" contribution of these Blackwell chips into the current quarter's sales, which followed NVIDIA's absolutely successful Q3 financial indicators at the end of November (see my post from that time for more details). As for the technical characteristics, the Blackwell series of chips is at least four times more energy efficient and productive than their Hopper predecessors. At the same time, no one ever questioned the exponentially growing demand for NVIDIA chips, especially for the new series, or NVIDIA's ability to fulfil vast orders, and only the factor of actual delivery time was discussed. And even the leaking information reported that large customers of NVIDIA may even reconsider to increase their orders as soon as NVidia and its supply chains resolve the issues.

NVIDIA shares now quickly bounced back above $147 from strong autumn support around $ 130 per share. It was enough for the upside move that its CEO Jensen Huang mentioned his optimism about continuing deliveries to China after U.S. president Trump's inauguration, despite various obstacles from the previous White House administration for reasons of national security. Trump's $500 billion joint venture, named Stargate, to build extensive AI data centers and electricity generation facilities in Texas over the next four years became a more important and specific driver for NVIDIA climbing this week. The Wall Street crowd immediately remembered the fundamental reason under hitting NVIDIA's all-time record prices in the beginning of the year, which were related to unveiling the firm’s latest line of RTX 5090 graphical processing units (GPUs) at the Consumer Electronics Show in Las Vegas during the first week of January. RTX 5090 will possess at least twice the performance of their predecessors, which was the RTX 40 series. By the way, Jensen Huang in his trademark black leather jacket also said at the same event that Blackwell AI chips were in full production to underscore NVidia's next wave of earnings growth. That was to spite the ill-wishers, one might say. He also presented NVidia's "in-house" AI models to run locally on the firm's chips, while emphasizing the strength of "AI agents" to handle domain-specific tasks and saying that the AI agents create another "multi-trillion-dollar opportunity". NVidia even launches a desktop AI supercomputer, named Project Digits. Even in the field of useful quantum computers which are at least more than a decade from now, all potential NVIDIA's competitors are working together with NVIDIA.

NVDA

1147