Mentioned
Micron Technology, Inc.
MU
-59.26 (-6.08%)
918.14
918.46
International Business Machines Corporation (IBM)
IBM
2.14 (0.88%)
244.97
245.25
IONQ Inc
IONQ
0.9500 (2.59%)
37.75
37.78
Baichuan Li
Baichuan Li
United Kingdom
4mo
Hi all Quick update for this month. I closed off another substantial portion of my position in $MU (Micron Technology, Inc.), leaving about 1/3 of the initial investment, due to my belief that it is now overvalued. This is after over 10x in gains since I invested in Micron at around $40-50 a share, as the stock market finally catches on to the "sell shovels in a gold rush" thesis. However, contrary to popular belief, I do have the opinion that cyclicality in semiconductor stocks still very much exists. The massive ramp in Capex and capacity expansion of memory makers could prove to be an oversupply risk in the long term. I have invested the proceeds from sale of Micron stock in Xiaomi, $IBM (International Business Machines Corporation (IBM)) and IONQ at a ratio of 10:10:1. The IONQ position is small and purely speculative as I believe trapped ion quantum computers have an innate advantage over superconducting qubits (what IBM focuses on). IBM is a mainframe as well as a quantum play, and I believed that they were very well-valued with an excellent dividend yield and growth prospects. In fact, it has gone up 30% since I invested due to a very well-timed quantum foundry agreement with US Govt about a week ago. Our position in $IONQ (IONQ Inc) is also up around 50% (quite shocking!). Our position in Xiaomi is down 12.67% since opening this month. This is due to gross margin compression as DRAM and NAND costs in smartphones skyrocket. With a traditionally low-margin operating structure it is more prone to raw material cost rises such as this. However, my view in Xiaomi is long-term. I belive this is truly a company worth buying as their products offer a value proposition like no other company in the world. In addition, their rapid expansion across multiple industries will 1. allow Xiaomi to offer a wide and diverse portfolio of products and access to bigger markets over time, as well as 2. attract consumers to eventually join a "Xiaomi ecosystem" where it is able to harness greater brand loyalty over time (akin to what Apple has been doing). With a low debt-equity ratio and strong free cashflow, I believe it is very well positioned to take advantage of the AI boom and currently offers an excellent value proposition as well. Lastly (and I had a few questions about this), I will be keeping the entire position in Intel as I believe they still offer excellent value. Intel is just getting started and while the stock has moved a decent amount, I believe its potential won't be fully realised until close to 2030. This is still a long-term play.
Not investment advice. The author may have financial interests in the mentioned instruments.
3 Mentioned
Micron Technology, Inc.
MU
Micron Technology, Inc.
International Business Machines Corporation (IBM)
IBM
International Business Machines Corporation (IBM)
IONQ Inc
IONQ
IONQ Inc
1 reply
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