The business model is already broken. Generative AI start-ups are busily raising money at ludicrous valuations based on the idea that they will be able to charge $20 per month to access their service but I suspect the reality is that it will end up being more like $20 a year. OpenAI, Midjourney, and Microsoft have set the bar for...
More like Qualcomm than Nvidia. SoftBank has made public the F-1 for the IPO or Arm which is a fair appraisal of the company, but it does not read like the filing of an AI company which may affect SoftBank’s ability to convince the market to pay $64bn for the shares. Highlights of the filing include: First, Financials where Arm...
SoftBank leaves no stone unturned in the hunt for $64bn. The latest transaction between SoftBank and Vision Fund I is an attempt to put a market value down for a valuation of $64bn but no one has explained why Arm is more valuable now than it was in June when SoftBank itself valued it at $45bn. SoftBank has purchased the...
Peloton is not for the faint of heart. Peloton is a fallen angel whose shares I resoundingly hated (see here) when it was flying high but it has now been treading water for a year at all-time lows meaning that there is a valuation case to be made for taking a 3rd look at the stock. The story of Peloton...
China is now a deeply contrarian investment. Disappointing results from Tencent combined with the worsening economic outlook and disappearing data make China a deeply contrarian trade and there is no immediate catalyst to pull it out of its nose-dive. Tencent reported Q2 2023 revenues / EPS of RMB149.2bn / RMB2.70 short of revenue forecasts of RMB151.7bn as gaming revenue...
One of the trickiest IPOs for many years. SoftBank’s difficulties are increasing after the Chinese economy has hammered the valuation at which it could exit Alibaba and the knock-on impact on the smartphone market has hit Arm’s financial performance at precisely the worst time. SoftBank has applied to the NASDAQ to readmit Arm to the public markets in September...
Ford moves deeper into services. Ford continues to demonstrate its understanding of the opportunity that it needs to address with the migration of its business model to subscription and the recruitment of Peter Stern from Apple to run its Integrated Services division. Ford is taking a leaf out of Tesla’s book and will offer its BlueCruise advanced driver assistance...
Nobody wants to know. Alibaba reported good results beating expectations and the moribund Chinese economy but even at depressed valuations and with a large share buyback, sentiment towards China remains so bad that no one cares. FQ1 2024 revenues / ADJ-EPS were RMB234bn / RMB2.36 nicely ahead of estimates at RMB226bn / RMB1.83. Revenues grew by 14% YoY and critically...
USA cuts off capital to three sectors. The USA will place limits on US investment in 3 Chinese technology sectors in a move that is not really targeted at the Chinese military but further acts to limit China’s rise as a technology power that could lead to it challenging the USA in the geopolitical arena. The US White House has...
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
Nvidia & Peloton – Chalk and cheese
Two very different sets of results. Nvidia Q2 2023 – As good as it gets. Despite results that substantially beat expectations, the shares jumped much less than they did last quarter in an indication of just how much good news is already built into the valuation. Q2 2023 revenues / EPS were $13.5bn / $2.70 significantly ahead of expectations of...