On Lumentum’s earnings call earlier this month (https://lnkd.in/eCHAbvqg), a couple of matters, one ignored, and one addressed, potentially reveal other implications for the supplier. Unlike at previous conferences, starting with the one related to the acquisition of Cloud Light, in which there was discussion by the supplier on optical switching, undoubtedly connected to Google (please see: https://lnkd.in/emqFuy3G), the topic was totally disregarded this time. A reasonable conclusion is that given the highly sensitive nature of the work that Lumentum is providing to the hyperscaler on its OCS, that the important customer may have been perturbed with the attention on this topic by the corporate leadership at the manufacturer – please see: https://lnkd.in/eNu3ASTk. (At least, fibeReality was able to discover that the pretense of a “secret” relationship (please see: https://lnkd.in/ehWnRdVr), did not prevent one investment analyst from Barclays, making a direct connection publicly between Cloud Light and Google, as pointed out at https://lnkd.in/eCjzY_qc on the 9th of this month.) Then, although 3D sensing for consumer applications was brought up by Lumentum in the usual, cursory way, it did go to the trouble of stressing guidance (albeit unimpressive) for the next couple of quarters. According to fibeReality’s latest intelligence gathering, there could be a sign of at least a limited bright spot, for the two incumbent facial recognition chip vendors to Apple, including Coherent (please see: https://lnkd.in/eNFxi9cR), resulting from the price war. Pricing has dropped to the point that high yield is essential to ensuring profitability, which would only result from historic intimacy with the design/manufacturing of the solution. Moreover, we understand that just those vendors with that experience would be able to take advantage of lowered cost through less inspection for quality at the customer (please see: https://lnkd.in/eVYVMHxF). We have also learned that once there is a dramatic alteration in the module design, then that significant barrier to entry for a third player, apparently like Sony, would be eliminated (please see: https://lnkd.in/erSwYjTw). At the time of the publication of this post, fibeReality was unsure whether the expected changes in 2026 with Apple’s phones would fall into that category.
fibeReality, LLC’s Post
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On double digit multiple of sales, growth needs to be not just good, it needs to be parabolic. Back in 2000 a lightning strike on a chip factory in New Mexico disrupted production for both Nokia and Ericsson. The subsequent profit warning from Ericsson triggered a chain of events that ultimately led to its share price dropping 95%. Back then, they were the 'picks and shovels' of the Internet and Telecom gold rush, along with stocks like Cisco that traded on 40x Sales. Fast forward a generation and its AI, where the clear parallel in Nvidia. Great company, great story, but everything has to go right when you are on 40x sales... https://lnkd.in/e_C6G5_4
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Former Investment Director at Mattioli Woods plc. Experienced Investor with over 25 years experience in UK Equity looking for a new challenge
I’m sure many investors (as I have) have spent a lot of time thinking about the latest technology rally and its AI leader Nvidia. Technology is likely to outperform over the longer term but entry point for investors is crucial. The below comment and attached article are worth a read (and the article includes one of my favorite investment quotes by Scott McNealy of SunMicrosystems.) In the short term, the bulls are winning but in the medium to longer term, can anyone be sure?
On double digit multiple of sales, growth needs to be not just good, it needs to be parabolic. Back in 2000 a lightning strike on a chip factory in New Mexico disrupted production for both Nokia and Ericsson. The subsequent profit warning from Ericsson triggered a chain of events that ultimately led to its share price dropping 95%. Back then, they were the 'picks and shovels' of the Internet and Telecom gold rush, along with stocks like Cisco that traded on 40x Sales. Fast forward a generation and its AI, where the clear parallel in Nvidia. Great company, great story, but everything has to go right when you are on 40x sales... https://lnkd.in/e_C6G5_4
Lightning Strikes and Butterfly WIngs
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We are driving progress in connectivity and beyond! Want to learn more? Dive into the highlights from our MWC Barcelona 2024 panel with thought leaders from Intel, AWS, Cal Poly, WWT, and ESNet as they explore the future of wireless
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Arista Networks and Jayshree Ullal had a great opportunity on the 4Q23 earnings call to further elaborate why Ethernet will absolutely dominate vs. Infiniband/NVLINK in the Ai interconnect debate. Beyond wining 4/5 of use cases against infiniband with most prominent customers— hello sellside bother asking if any of these 4 wins are different from MSFT and META, hello GOOG/AWS?— beyond the scale of the Ethernet ecosystem, beyond component supply and supplier competition, the simple, and most critical, reason why Ethernet will scale is the significant lack of expertise and skillset among network engineers in troubleshooting Infiniband/NVLINK. No Cloud Titan or Enterprise will deploy billions of capex on a technology platform where it doesn’t enough skilled engineers to troubleshoot infiniband or NvLINK. NVDA also does not have enough support staff to assist enterprise customers. In light of this, I believe Chuck Robbins and Cisco have a great opportunity to bring their massive GTM machinery to help NVIDIA reach the enterprise.
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Had a chance today to get some more color on NVIDIA earnings and what's happening with its Networking products, specifically. Revenues up over 100% YoY and 16% per quarter, and Ethernet for AI revenues doubled. Great momentum, driven not only by AI infrastructure but also steady and continuous demand for high performance computing infrastructure. What I find curious is that if I search on "top networking companies" NVIDIA never comes up. And yet, with $3.7B in quarterly revenues, NVIDIA's networking business is larger than all but a few of the best known enterprise networking brands. Thanks to Kevin Deierling, Gilad Shainer, and Kristine Neufeld for the session! NVIDIA #networkingforAI https://lnkd.in/ezU_HQ9C
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📸 EPYC moment with Lisa Su! 🎉 In 2014, AMD was on the verge of bankruptcy, with its stock trading at just $3. Fast forward to 2024, under Su’s visionary leadership, AMD has achieved a remarkable transformation—now valued at $259 billion and capturing a record 34% of the global server market by Q2 2024. This month, she celebrated 10 years at AMD, helping the company achieve a record 34% global server market share and grow its data center business to $2.8 billion, contributing 50% of AMD’s revenue. With the release of the 5th Gen EPYC processors, AMD is set to lead the AI revolution, slashing TCO by over 60% and delivering exceptional performance across cloud, AI, and enterprise workloads. At the Advancing AI 2024 keynote, Su shared: "I feel incredibly fortunate to be part of this industry where everything that we do means so much and is essential to every aspect of our daily lives. You can count on all of us at AMD to continue to push the envelope on high-performance computing and AI. And we are just getting started!"
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SMCI, also known as Super Micro Devices, is set to report their Q1 earnings today (30.04.2024) after the market closes. Historically, they've preannounced strong results in 7 out of the last 8 quarters. However, this time they didn't, which reads kind of bearish. SMCI is focused on the datacenter market, and we've seen robust capital expenditure (CAPEX) in this area, particularly driven by AI datacenters. My take - SMCI is likely to beat expectations for this quarter's results, but guide inline or maybe even lower. How come if Datacenter spending strong?! We think NVDA is giving the datacenter business to SMCI competitor DELL and that I speculate the reason why SMCI did not preannounce and Guidance can disappoint vs expectations. Jensen and Michael Dell are close friends* We are short SMCI into the earnings ang long DELL. *This is not an investment advice*
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Surround yourself with good people. Don’t be afraid to ask for help. Never, ever ever stop learning.
Sharing from Forbes — Motorola Solutions is poised for strong Q2 earnings, driven by its Land Mobile Radio (LMR) and Video Security businesses. MSI reported a significant increase in revenue, particularly in North America, with robust growth across its LMR, Video Security, and Command Center software sectors. The Products and Systems Integration segment saw a 12% sales increase, while Software and Services grew by 13%, highlighting strong demand for Motorola's offerings. The company also announced record backlog levels and improved full-year revenue and earnings guidance. For more details, check out the full article on Forbes: LMR and Video Business Will Drive Motorola Solutions Q2 Earnings @ https://lnkd.in/egRhJr4u
LMR And Video Business Will Drive Motorola Solutions Q2 Earnings
social-www.forbes.com
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I.T. Professional, Senior System Administrator, Healthcare Analyst, Teacher, Calligrapher and a person who enjoys running.
NVidia News... If you haven't heard, NVDA filed their 8K quarterly report to the SEC on May 22, 2024. In the report, it states the following: NVIDIA Announces Financial Results for First Quarter Fiscal 2025 • Record quarterly revenue of $26.0 billion, up 18% from Q4 and up 262% from a year ago • Record quarterly Data Center revenue of $22.6 billion, up 23% from Q4 and up 427% from a year ago • Ten-for-one forward stock split effective June 7, 2024 • Quarterly cash dividend raised 150% to $0.01 per share on a post-split basis As a shareholder of NVDA, I am ecstatic about the news. I am also a shareholder of DELL. They are partnering with NVDA to use the new Blackwell GPU in their datacenter servers. Market opens at 6:30 AM PST. I can't wait to see the run up on NVDA and Dell. Again, being realistic, it's only gains on paper unless I sell. I doubt if I will sell either one.
