Momentum crushes valuation. Zoom reported outstanding results driven by the work from home trend that has been triggered by the pandemic but as usual, the real question is whether the shares are worth 49x 2021 sales and 165x 2021 PER. Q2 2021 revenues / EPS were $663.5m / $0.63 which were miles ahead of estimates at $500.4m / $0.37. This...
China does Facebook et al a favour. China’s move to obstruct the sale of the international operations of TikTok is a self-defeating move that increases the likelihood of TikTok being shutdown opening the way for alternatives. On Friday, August 28th, China updated its list of controlled exports for the first time since 2008 to include “personalised information recommendation services based...
India is a blow upon a bruise. India’s move to stop Indian operators from using Chinese telecom equipment vendors looks bad for Huawei but it is quite possible that the latest move by the US (see here) has already put the company into its death throes. India is a big loss for Huawei. Firstly, because it is the world’s no....
Arm looks to be off the table. The reorganisation of Arm that was announced last month (see here) has been cancelled in what I think is a sure sign that SoftBank has given up trying to sell it. This is good news for all concerned because Arm will maintain its crucial neutrality in the wireless semiconductor industry and SoftBank now...
Valuation is reasonable. Governance is not. There is no doubt that Ant Group is a powerhouse of digital financial services and while the valuation is reasonable, little if any attention is being paid to the great governance risk being taken by smaller shareholders. Ant Group was founded by Jack Ma and from a very strong position in e-commerce payment processing...
A rush of IPOs is a warning signal. The sudden rush of technology IPOs is indicative of a sector where valuations are becoming stretched and which bear little resemblance to reality even including a pandemic-related revenue bump. The list is impressive. Palantir, Airbnb, Snowflake, Unity, Asana are all rushing to go public as the IPO window is wide open and...
Apple is somewhat on the backfoot. Apple and Epic have both upped the ante in their fight over app store fees, but there are signs that Apple is somewhat on the back foot meaning that there are limits to the aggressiveness with which it can take the fight to its much smaller protagonist. In its reply to Epic’s suit, Apple...
No FOMO here. Alibaba reported good results as it continued to benefit from the same trends that have driven Amazon during the pandemic. Alibaba sells far more stuff than Amazon but it is little known outside of China which combined with increasing hostility means that it is unlikely to grow outside China foreseeable future. However, investors are being asked to...
Brute force is not the answer. NVIDIA reported excellent results as it is the main supplier to an industry where difficulties in evolving its technology have forced it to rely on ever-increasing compute power for progress. This is not a sustainable position as RFM research (see here) indicates that many of the new techniques being explored to advance AI use...
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.
Google and Samsung – Engineering disease pt. IV
Samsung inches towards a cure. Not only are Google and Samsung in discussions for Google to have a bigger role on Samsung handsets (see here) but there have been a string of departures from the Bixby team further indicating how poor Samsung’s AI really is. Many of these defections are members of the original Viv Team that Samsung acquired and...