Impax Asset Management, an investment management company, released its “Impax US Sustainable Economy Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q3 2025, the portfolio lagged behind the Russell 1000. Similar to the second quarter, the US equity markets favored a risk-on approach, benefiting high-risk, high-momentum, and lower-quality factors. Although the portfolio’s focus on relatively modest, lower-risk, and high-quality factors contributed to the underperform ...

Core Insights - Broadcom Inc. is a key player in the semiconductor and infrastructure software sectors, with a diverse product range that positions it for future growth [1] - The average price target for Broadcom has increased from $369 to $442.5 over the past year, indicating growing confidence in the company's market position [2][4] Strategic Partnerships and AI Focus - Broadcom's collaboration with OpenAI and its emphasis on AI technology, particularly custom AI chips, are significant growth drivers [2][4] - The partnership with OpenAI involves a 10-gigawatt project, which is expected to yield substantial financial benefits [5] Financial Outlook - Broadcom projects a revenue of $17.4 billion in Q4 2025, representing a 24% year-over-year increase, with a significant contribution from AI semiconductor solutions [3][5] - AI semiconductor solutions are expected to generate $6.2 billion, reflecting a 66% year-over-year increase [5] Market Sentiment and Analyst Confidence - Analysts have raised the price target for Broadcom to $442.5, with some, like Christopher Rolland from Susquehanna, setting a target as high as $680, reflecting strong confidence in the company's future performance [4][6] - Despite concerns about potential margin pressures and customer concentration risks, Broadcom is considered a 'top pick' on Wall Street due to its strategic positioning in the AI industry [6]

Core Insights - Credo Technology Group Holding Ltd (CRDO) has experienced significant revenue growth, driven by strong demand for high-speed connectivity solutions despite facing tariff challenges and macroeconomic uncertainties [1][3][10] - The company's operating margin expanded by 2,500 basis points in fiscal 2025, indicating effective operational discipline and profitability improvements [2][10] - CRDO anticipates revenues exceeding $800 million in fiscal 2026, representing over 85% year-over-year growth, with a projected non-GAAP net margin approaching 40% [4][10] Revenue Growth - CRDO's revenues nearly tripled from the first to the fourth quarter of fiscal 2025, showcasing its ability to adapt to market shifts [3][10] - The company has seen strong growth in its HiWire Active Electrical Cables (AECs), optical products, and retimer products, with a robust pipeline for future offerings [3][4] Operational Efficiency - Operating expenses for CRDO grew at a significantly slower rate than revenues, contributing to a substantial increase in profitability [2][10] - The company is strategically aligned with AI and data center trends, enhancing its operational excellence [4] Market Position and Competitors - CRDO's share price increased by 41.4% year-to-date, outperforming the Electronics-Semiconductors industry, which grew by 13.1% [11] - The forward 12-month price/sales ratio for CRDO is 19.63, significantly higher than the sector's average of 8.67, indicating strong market positioning [12] Earnings Estimates - The Zacks Consensus Estimate for CRDO's earnings for fiscal 2026 has seen significant upward revisions over the past 60 days, reflecting positive market sentiment [13][14]

Core Insights - Broadcom reported strong Q2 fiscal 2025 results, with revenue of $15.0 billion, a 20% year-over-year increase, and adjusted earnings of $1.58 per share, up 44% year-over-year, surpassing analyst expectations [2][3] Revenue Growth - The growth was primarily driven by strong demand for AI semiconductor solutions, with AI revenue increasing by 46% year-over-year to over $4.4 billion in Q2 [3] - Broadcom's revenues have grown at an average rate of 24.7% over the last three years, compared to a 5.5% increase for the S&P 500 [16] - The company's quarterly revenues grew 20% to $15 billion in the most recent quarter from $12.5 billion a year ago [16] Profitability - Broadcom's adjusted EBITDA margin expanded by 700 basis points year-over-year, reaching 66.7% in Q2 [3] - The company reported an operating income of $20 billion over the last four quarters, representing a high operating margin of 34.8% [16] - Broadcom's net income for the last four-quarter period was $13 billion, indicating a high net income margin of 22.6% [16] Financial Stability - Broadcom's balance sheet appears strong, with a debt figure of $67 billion and a market capitalization of $1.2 trillion, resulting in a low debt-to-equity ratio of 5.5% [16] - Cash and cash equivalents amount to $9.5 billion of the total assets of $165 billion, yielding a cash-to-assets ratio of 5.8% [16] Market Outlook - The outlook for Q3 is promising, with anticipated sales of $15.8 billion and expected growth in AI semiconductor revenue to $5.1 billion [4] - Despite strong results, AVGO stock saw a 4% decline in after-market trading, attributed to its high valuation [4][5] - Broadcom's current valuation metrics indicate it is expensive compared to the S&P 500, with a price-to-sales ratio of 21.5 and a price-to-earnings ratio of 95.1 [9]