The Contrarian Investor Podcast – Page 6 – The Contrarian Investor Podcast gives voice to those who challenge a prevailing narrative in global financial markets

The Search for ‘Undiscovered’ AI Chip Stocks

Published May 21, 2024

This blog post was originally published as part of today’s Daily Contrarian.

Recent market activity shows investors don’t want to wait for Nvidia (NVDA) earnings tomorrow to bid up AI chip stocks. Marvell Technology (MRVL) was one of the biggest winners yesterday. Smaller AI names like Soundhound AI (SOUN) also put in rallies, as did the usual suspects AMD (AMD), Micron (MU), Super Micro Computer (SMCI), Broadcom (AVGO), and Taiwan Semiconductor (TSM).

Here’s an idea for an ETF: small AI hardware names. Limit it at, say $5 billion market cap companies. The focus on hardware would (presumably) allow for a margin of safety. It would also weed out names like the aforementioned Soundhound, C3.ai (AI), FARO Technologies (FARO), and others including companies that just plaster the term ‘AI’ all over their marketing materials to attract attention.

Unfortunately, this doesn’t leave much. The Contrarian did a preliminary search and found just a few such companies, almost all of them suppliers to the semiconductor industry. Of course, ‘undiscovered’ is a bit of a misnomer here. Investors have picked through any and every stock even remotely related to AI. Still, it’s fair to say these securities are certainly under-covered by Wall Street.

Names include ACM Research (ACMR), Camtek (CAMT), FormFactor (FORM), Ichor Holdings (ICHR), Kulicke and Soffa Industries (KLIC), Photronics (PLAB), Ultra Clean Holdings (UCTT), and Veeco Instruments (VECO).

It’s likely the AI hype story is already priced in to these stocks (didn’t check). But it may be worth putting these names in an index to track them, to the extent that somebody hasn’t done it yet. If nothing else this could give us an idea of stocks to buy when (if) there is a pullback in AI chip names.

There are obviously private companies as well, including Anthropic (OpenAI rival), Graphcore, Cerebras, SambaNova, Groq.

The Contrarian does not hold any of these stocks.

Update June 4, 2024: ACM Research will be removed from this list as the company does most of its business in China.

The Specter of Stagflation Still Looms (Szn 6, Epsd 8)

Published May 13, 2024

With Ayesha Tariq, Macro Visor

Ayesha Tariq, founder of Macro Visor, rejoins the podcast to discuss her views on the economy, markets, and where investors should look for opportunities.

The macro set-up and why people are talking about stagflation (1:56);
The K-shaped economy and the damage being done (3:31);
Fed Chair Jerome Powell claims there’s no stag and no flation. Is he wrong? (It wouldn’t be the first time) (8:50);
Faced with this backdrop, what does one do as an investor? (13:03);
China: There are still reasons to worry, even though the bleeding from the property market has abated a bit… (15:58);
India: long term growth story. Also copper, oil, and Japan (17:11);
The guest’s favorite areas for opportunity right now: UK and India (21:07);
A long-term concern is the fiscal situation in the US (22:00).

For more about the guest, visit her firm’s website MacroVisor.com or follow her on Twitter/X.

Quick Video Highlights from our YouTube Channel

Trend-Following Strategies for the New World Order (Szn 6, Epsd 7)

Published April 24, 2024

With Dr. Doug Greenig, Florin Court Capital

Dr. Doug Greenig of Florin Court Capital joins the podcast to discuss his worldview — one where the US is no longer the sole superpower — the situation in the Middle East, US fiscal concerns, artificial intelligence, and trends in commodities.

And of course how this all impacts his trading strategy.

Content Highlights

The world has undergone many changes with the US emerging as its lone superpower. That era is over (2:09);
China is a legitimate competitor to the US. It’s just having a bad moment due to the property market. But China is not going anywhere as an economic or military power (6:07);
The guest’s trend-following model trades 500 assets and seeks to capture medium-term changes. What he looks for to enter and exit trades (16:52);
One trend is lower electricity prices in Europe (19:19);
Populism and the latter stage of democratic government make for a potentially bearish outlook for US stocks (27:15);
Background on the guest (41:04);
Iran is still a force in the Middle East and beyond. Discussion of the weekend drone attack on Israel, which may have been an attempt at making a point (48:40);
As Russia’s economy illustrates, sanctions are hard to enforce. There may be inherent bias in many pro-Western analysis… (53:03);
US fiscal problems are real. The guest says it has “something like five years” before this takes a serious toll. Artificial intelligence may postpone this however (55:45);
Hypersonic missiles: One area where Russia and China have an edge over the US (57:45).

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