In my initial initiation report back in March 2024 , I indicated that business trends were deteriorating and I was cautious about the quarters to come. This new report will assess recentHello readers! Passionate about technology, my focus will be on finding and analyzing companies that can play a relevant role in today's geopolitics, leverage their IP, and eventually, with time, become new leaders. Therefore, the investment style will correspond to growth companies with a bias on the mid-cap segment. The ma ...

In my initial initiation report back in March 2024 , I indicated that business trends were deteriorating and I was cautious about the quarters to come. This new report will assess recentHello readers! Passionate about technology, my focus will be on finding and analyzing companies that can play a relevant role in today's geopolitics, leverage their IP, and eventually, with time, become new leaders. Therefore, the investment style will correspond to growth companies with a bias on the mid-cap segment. The ma ...

Market Performance - Shares in Europe and Asia advanced following a surge on Wall Street, driven by hopes that the Federal Reserve will soon cut interest rates [2] - The S&P 500 futures gained 0.3% and the Dow Jones Industrial Average futures rose 0.2% [2] - In early European trading, Germany's DAX and France's CAC 40 both increased by 0.2%, while Britain's FTSE 100 edged up 0.1% [2] - The Nikkei 225 in Tokyo rose 1.9%, while South Korea's Kospi gained 2.7%, supported by a 3.5% increase in Samsung Electronics [2] - The Russell 2000 index of the smallest U.S. stocks jumped 2.1%, indicating a strong performance among smaller companies [2] Economic Indicators - Mixed economic data has led traders to bet on an 83% probability that the Fed will cut rates in December [2] - U.S. retail sales in September were lower than expected, and consumer confidence worsened more than anticipated in November, suggesting the economy may need support from lower interest rates [2] - A report indicated that U.S. wholesale inflation was slightly worse than expected in September, although a closely tracked underlying trend showed improvement [2] Company-Specific Developments - Kioxia shares dropped 14.9% due to reports that Bain Capital plans to sell $2.3 billion of the company's shares [2] - Alibaba's shares fell 1.9% after reporting profits that fell short of forecasts, despite stronger-than-expected revenue for the latest quarter [2]

Even if the EU were to agree on countermeasures to China’s recent curbs on computer chips and rare earths, it is not clear that they would work https://t.co/xk8pPWLRGw ...

Geopolitical Implications - EU officials urge strong measures against China following new export restrictions on rare minerals [1] - The restrictions impact rare minerals used in computer chips and advanced technologies [1] Trade Restrictions - China imposed fresh export restrictions on rare minerals [1]

Group 1 - The focus is on identifying and analyzing companies that can play a significant role in today's geopolitics and leverage their intellectual property to become future leaders [1] - The investment strategy targets growth companies, particularly in the mid-cap segment, with a focus on sectors such as biotechnology, computer chips, cloud technology, energy, and commodities [1] - A systematic balance sheet analysis will be conducted, as many growing businesses often struggle with funding, while a stress test will be used to evaluate the robustness of each business model [1] Group 2 - Long-term capital appreciation is prioritized over short-term speculation, indicating a strategic investment approach [1] - The analyst has a background in communication and an MBA, enhancing the depth of analysis provided [1] - The analyst aims to provide extensive coverage on the relevant themes and welcomes feedback to improve the quality of insights shared [1]

Group 1 - ASM International issued an outlook cut for FY25 due to weaker near-term conditions in cyclical markets such as power and analog [1] - There is a noted caution among logic and foundry customers impacting ASM International's performance [1] Group 2 - The investment focus is on growth companies, particularly in mid-cap segments, with an emphasis on sectors like biotechnologies, computer chips, cloud technology, energy, and commodities [1] - A systematic balance sheet analysis will be conducted to assess the financial health of growing businesses, as many may struggle with funding [1] - Long-term capital appreciation is prioritized over short-term speculation in investment strategies [1]

Core Viewpoint - Amazon is positioned to significantly benefit from the growth in data center spending and artificial intelligence (AI), potentially surpassing a $3 trillion market cap by 2026 due to its strategic partnerships and revenue growth in various segments [2][12]. Group 1: Amazon's Strategic Partnerships - Amazon has a cloud and computer chip deal with AI start-up Anthropic, which is expected to drive growth in its AWS segment [2][6]. - Anthropic's annual recurring revenue (ARR) has surged from $1 billion to $5 billion, with AWS as its key cloud partner [6][7]. - AWS is focused on generating positive returns, which may explain its slower deal wins compared to competitors like Oracle [5]. Group 2: AWS Performance - AWS revenue grew 17% year over year, reaching an ARR of over $123 billion, although it is growing slower than competitors like Google Cloud and Microsoft Azure [7]. - AWS has maintained strong operating margins of 37% over the last 12 months, contributing positively to Amazon's overall earnings growth [7]. Group 3: AI Integration in E-commerce - Amazon's e-commerce and media business will also benefit from AI, particularly in its advertising segment, which is growing at 22% year over year [8][9]. - A new AI tool for building advertisements has been released, allowing small businesses to create ads for various Amazon platforms, expanding the addressable market [9]. - AI can enhance Amazon's operations in robotics, delivery systems, and customer search, improving profitability in retail, which currently has a profit margin of 7.5% [10]. Group 4: Future Earnings Potential - Amazon's EBIT reached $77 billion in the last 12 months, with expectations for it to exceed $100 billion by 2026 as revenue growth accelerates and margins expand [12]. - A valuation multiple of 30 times trailing EBIT suggests a market cap of $3 trillion based on projected earnings [13].

Core Insights - The focus is on identifying and analyzing companies that can play a significant role in today's geopolitics and leverage their intellectual property to become future leaders [1] - The investment strategy emphasizes growth companies, particularly in the mid-cap segment, across sectors such as biotechnology, computer chips, cloud technology, energy, and commodities [1] - A systematic approach will be employed, combining top-down and bottom-up analyses, with a focus on balance sheet evaluations and stress testing to assess the safety of business models [1] - Long-term capital appreciation is prioritized over short-term speculation [1] Sector Analysis - Key sectors of interest include: - Biotechnology - Computer Chips - Cloud Technology - Energy - Commodities [1] Investment Strategy - The investment style is geared towards growth companies with a mid-cap bias [1] - A systematic balance sheet analysis will be conducted, as many growing businesses struggle with funding [1] - Stress tests will be utilized to evaluate the robustness of investment theses [1]

Core Viewpoint - The focus on Nvidia in the AI market may lead investors to overlook other opportunities, particularly Amazon, which is positioned to leverage AI across multiple business lines and is considered a strong investment in the AI sector [2][13]. Group 1: AI Implementation in Amazon - Amazon is deploying hundreds of thousands of robots in fulfillment centers, enhancing efficiency with generative AI technology [4]. - The advertising division of Amazon generates $56 billion in annual revenue, utilizing AI to improve sponsored listings and advertisements, which could lead to significant returns on investment [5]. - AI enhancements for consumers, such as the AI assistant Rufus, are expected to improve customer experience and increase spending on the e-commerce platform [6]. Group 2: Amazon Web Services (AWS) Growth - AWS is benefiting from the demand for AI software tools, with revenue growth of 19% year-over-year and $107 billion in revenue last year [7]. - AWS maintains a high operating margin of 37%, contributing significantly to Amazon's overall operating income, with expectations for continued strong margins despite potential future declines [8]. Group 3: Financial Comparisons and Projections - Amazon's forward price-to-earnings (P/E) ratio is 32.4, compared to Nvidia's 26.6, suggesting that Amazon may offer better long-term value despite Nvidia's current edge [9]. - Amazon's operating margin was 10.75% in 2024, with potential to increase to nearly 20% as AWS grows and AI efficiencies are realized [11][12]. - Projected revenue growth for Amazon from $638 billion to $800 billion could result in annual earnings of $160 billion, compared to $68.6 billion in 2024 [12].