Tech Stocks Roundup: Opportunities and Challenges in the Semiconductor and Cybersecurity Sectors

Himax Technologies Is Still A Great 'Buy' (NASDAQ:HIMX)

I initiated coverage of Himax Technologies, Inc. (NASDAQ:HIMX) stock in April 2021 with a "Buy" rating, reiterating it in late December 2023. In my latest thesis update, I stated that HIMX's end markets are also likely to show stronger growth soon and that amid improving margins the stock should thrive. Since then, HIMX has been able to show almost 32.5% in total return, while the S&P 500 index (SP500) (SPY) went up by only 17.8%. Today I think HIMX still has very strong growth prospects in the medium term, thanks to improving market conditions in its targeted markets and quite attractive valuations, although its dividend yield has become much lower. I reiterate my today's "Buy" rating. Himax Technologies, Inc. is a Taiwanese semiconductor firm, focusing on developing display imaging processing technologies. It manufactures touch sensor controllers, timing controllers, and display driver ICs for various electronic devices such as televisions, laptops, mobile phones, automotive displays, 3D sensing optics, and augmented reality devices. Himax's $207.6 million revenues in the 1st quarter of 2024 showed an 8.8% decrease from QoQ but surpassed the anticipated range of -9% to -16%. As a result, it surpassed its top-line Wall Street consensus expectation. In addition, the gross margin of HIMX - the key metric in the company's niche - reached 29.3%, beating the initially expected 28.5%. The after-tax profit came up to $12.5 million, which helped beat a consensus EPS by 2 pennies (that's a lot - 39.9%): Large display drivers' revenue (15.1% of total) dropped by 7.0% QoQ and reached $31.3 million due to soft macro conditions typical of this season and customer procedures regarding inventories. On the other hand, notebook IC sales had significantly risen by 15.1% YoY. The small & medium-sized display driver segment (69.5% of total) recorded an 11.5% decrease (QoQ), due to seasonality, but thanks to strong sales for automotive and OLED tablets this figure came better than expected. So although traditional DDIC and TDDI experienced a single-digit decline in auto driver sales, it surpassed guidance because auto TDDI increased sequentially. Non-driver sales exceeded guidance, increasing by 3.4% from the previous quarter, hitting $32 million as a result of returning orders for large-sized display Tcon products. Overall, better-than-expected financial performance for the first quarter led to a strengthening of the company's balance sheet during this period. Himax reported $277.4 million in cash, cash equivalents, and other financial assets; last year they had $223.8 million, while last quarter we saw only $206.4 million in this item. The increase in the cash balance resulted from continuous destocking efforts, as the notes from the press release explained. However, we know that in Q2 HIMX expects its cash balance to decrease due to lower receivables in Q1 and higher trade payables due to increasing wafer orders in Q1, so it's kind of a cyclical process. Speaking of cyclicality, I think it's worth discussing the company's profitability and debt leverage. Overall, the debt-to-equity ratio is well below 1, which is a positive sign. According to YCharts, HIMX's return on capital employed (ROCE) is at its cyclical bottom at 5.26%, which is unlikely to go lower, given that the company's forecasts look quite positive for a few quarters ahead. In my previous article on the company, I noted that the movement of its stock price is very closely aligned with its fundamentals. This is unlike most other companies in the industry or the market as a whole, where fundamentals often influence the stock price with a time lag; in the case of Himax, we see that this alignment happens very smoothly. For Q2 2024, Himax's management guided for a revenue increase of 8-13% QoQ, with a gross margin between 31.5% and 33.5%, and profit per diluted ADS ranging from $0.13 to $0.17 - these expectations of stronger fundamentals on the horizon has allowed HIMX to rise significantly over the past few weeks: Himax's management noted in its latest earnings call that 1Q sales were the year's likely trough, which should be followed by a marked improvement in 2Q, particularly in the automotive sector. So regardless of the recent industry headwinds, Himax remains bullish about its automotive IC business: The momentum of their business is expected to rise gradually during the 2H 2024 due to "higher sales from automotive and Tcon businesses with improved gross margins." The automotive display IC business is clearly experiencing a trend of expanding quantities, sizes, and sophistication of displays within vehicles, according to Market Mappers Strategy research (proprietary source). The TAM of this market is projected to grow by 6.73% annually from 2024 to 2031, so the potential expansion opportunity seems to be significant going forward. And I believe Himax is well-positioned to capture it, having a strong pipeline of design-win projects in TDDI and local dimming Tcon technologies. The company already leads the Chinese market in large DDIC (Display Driver IC), so considering the high level of competition in China and the rapid growth rate of car production across various body styles, I believe this is a great achievement. The company is also well-positioned to benefit from the emerging trend towards AI PCs in the notebook market. Numerous in-cell TDDI projects for mainstream LCD notebooks as well as DDIC and touch controllers for OLED notebooks are about to enter mass production in the second half of the year, and Himax is a reliable partner and supplier for most manufacturers as far as we can see from the IR materials. Preliminarily, I can say that the price increase that seems to be "pricing in" a potential margin expansion may be justified. The only question is what growth potential is left to newcomers. This question can only be answered by analyzing the company's valuation. According to Seeking Alpha's Quant system, Himax stock's Valuation is rated at "B", which corresponds to a reasonably comfortable valuation, i.e. HIMX's multiples are favorable compared to the median values of the IT sector. Throughout today's discussion, I have repeatedly used the word 'cyclicality.' This is a key term not only for the semiconductor industry but also for many other industries. Regarding HIMX's multiples, we observe that as soon as a company enters a cycle of decreasing profits, its P/E ratio begins to rise sharply. At some point, if the company is not profitable, its P/E may even become negative and not representative at all. Currently, the consensus suggests that next year, Himax's P/E ratio will fall by 39% in just one year, with a continued but less steep decline predicted thereafter. Against this backdrop, the forecast for EPS's growth rate appears surprisingly stable - given these growth rates, I believe that the currently priced-in multiple contractions are overly pessimistic. What do I mean by that? Most likely, the company's P/E ratio will remain at least at 20x by the end of 2025, judging by historical trends and average market standards. What does this tell us? It indicates that Himax has a growth potential of at least 52.5% by the end of 2025, in case the current consensus estimate for its EPS is close to being correct. Considering that consensus forecasts have often fallen short of the company's actual performance in recent years, I believe that the growth potential could be even greater than I have calculated today. So based on everything I wrote above, I decided to reiterate my "Buy" rating for HIMX stock today. Given the cyclical nature of the industry in which the company operates, there's a risk that an economic downturn will occur and the cycle will turn negative again shortly. In such a scenario, the company is probably not undervalued but overvalued today because its future projected net earnings per share would be significantly lower than they are today. There is also a risk that the positive sentiment surrounding the company, which has persisted in recent weeks, could turn negative. As the company is based in Taiwan and investor attitudes towards this region and its companies are constantly changing, it's uncertain how investors will view a Taiwanese company in the near future. In addition, sudden legal restrictions from the US or Europe could affect the company's business activities. I'm also concerned about the conclusions of my technical analysis. Historically, the Himax stock has been subject to strong selling pressure in mid-summer - mid-fall (so the seasonality data is clearly against buying HIMX stock today). Currently, HIMX is near its resistance zone, and if it fails to break through it, it could fall into the $5 to $6 per share range (close to the nearest support level). Moreover, the recent breakthrough of the 52-week moving average could prove to be a false signal, as was the case many times before. Despite the risks described above and the revenue weakness in the first quarter (on a QoQ basis), I believe that Himax still looks quite attractive at its today's price levels. The forecast for the second half of 2024 is significantly better than for the first half, while the company's key end markets and its strong pipeline will likely continue to strengthen, allowing HIMX to remain a leader in its niches. I'm also pleased that the stock's valuation is still quite cheap. According to my calculations, the growth potential could be more than 50% if current EPS projections for 2025 are close to the mark. Based on historical trends over the past few years, the company typically beats forecasts in a positive direction. Therefore, I've decided to reaffirm my "Buy" rating for the medium to long term.

Mastech Digital Is Cheap With Fortress Balance Sheet And Positive Outlook (NYSE:MHH)

Looking for more investing ideas like this one? Get them exclusively at Value Investor's Stock Club. Learn More " As always, I'm looking off the beaten path to dig up small-cap and micro-cap stocks that fly under the radar boasting strong fundamentals and cheap valuations, among other positives. And I do this because these stocks often outperform. This is how I discovered Mastech Digital, Inc. (NYSE:MHH). MHH is an under-followed stock, given also that the most recent article on Seeking Alpha was published about a year ago. I quote from the company's annual report: Mastech Digital, Inc. is a provider of Digital Transformation IT Services. The Company offers data and analytics solutions; digital learning; and IT staffing services for both digital and mainstream technologies. Headquartered near Pittsburgh, Pennsylvania, we have approximately 1,300 consultants that provide services across a broad spectrum of industry verticals. We do not sell, lease or otherwise market computer software or hardware and essentially 100% of our revenue is derived from the sale of data and analytics, IT staffing and Digital Transformation services through our two reportable segments, Data and Analytics Services and IT Staffing Services. Our Data and Analytics Services segment delivers specialized data management, data engineering, customer experience consulting, data analytics and cloud services to customers globally. Each of these services can be delivered using on-site and offshore resources. Our IT Staffing Services segment combines technical expertise with business process experience to deliver a broad range of services in digital and mainstream technologies. Our digital technology services include data management and analytics, cloud, mobility, social and automation. Our Digital Transformation services also include staffing and project-based services around digital learning. Our mainstream technologies services include business intelligence / data warehousing; web services; enterprise resource planning & customer resource management; and e-Business solutions. We work with businesses and institutions with significant IT-spend and recurring staffing needs. We also support smaller organizations with their "project focused" temporary IT staffing requirements. Additionally, we provide offshore staffing services to our U.S.-based clients and local offshore clients, and recently added engineering staffing services to our portfolio of service offerings. However, the company's consultants have gone up over the last months being over 1,700, up from 1,300 in late 2023, according to the latest CC. Although MHH is a small company, it has global clients including Fortune 500 organizations, as quoted below (emphasis added): Mastech InfoTrellis' primary customer geographies are in North America; however, we have customers and prospects in Europe and the Asia-Pacific region. Our target clients are largely corporations with revenues exceeding $1 billion and include Fortune 500 organizations. Our typical project size, excluding our multi-year Center of Excellence contracts, is in the $500,000 to $2.5 million range depending on the scope and duration of the engagement. Our Center of Excellence contracts generally range from $4 million to $83 million."" That said, MHH has exposure to a handful of industries, but most of its revenue (57% in 2023) are coming from the financial and healthcare sectors, as illustrated below: From a vertical perspective, customers in the financial services, retail, healthcare, manufacturing and government segments are significant users of our services. Below is a breakdown of customer revenue percentages for each industry vertical in 2023: Additionally, most of its revenue are coming from the IT Staffing services segment, which has lower gross margin than the Data & Analytics services segment, as illustrated below (Revenues in millions): and: Specifically, when it comes to the gross margin, MHH increased it in Q1 2024 compared to prior year period, thanks mainly to a significant increase for its Data & Analytics services segment, as illustrated below: On that front, the CFO stated in the latest CC linked above (emphasis added): Jack Cronin: Yes, our margins right now are about 46.5%. Q1 of last year was a disaster. It was 38.5%. I wouldn't even use that as a benchmark. We always target 45%, so we're 140 basis points better than our benchmark target. And I would say, about - if I had to split it between utilization improvement and just better margins and better delivery, I would say it's one-third utilization and two-thirds project margins." Actually, this is no surprise. The Data & Analytics segment offers AI consulting services & solutions, which is why this segment has much higher gross margin than the IT Staffing business. Despite the revenue YoY drop and losses in 2023, MHH increased its positive operating cash flow and positive free cash flow in 2023 compared to prior year period, as illustrated below (Amounts in thousands): In Q1 2024, revenues declined by 15% to $46.8 million, compared to revenues of $55.1 million in the first quarter of 2023. However, revenues during the first quarter of 2024 were 2% higher sequentially from the fourth quarter of 2023, and MHH recorded a negligible loss of $161K. Furthermore, operating cash flow and free cash flow were slightly negative in Q1 2024, as illustrated below (Amounts in thousands): However, I project that MHH will generate profitability along with positive operating cash flow and positive free cash flow in 2024, thanks to the factors mentioned in the next two paragraphs. I quote from the company's latest annual report, linked above (emphasis added): Generally, our business outlook is highly correlated to general North American economic conditions, particularly with respect to our IT Staffing Services segment. During periods of increasing employment and economic expansion, demand for our services tends to increase. Conversely, during periods of contracting employment and / or a slowing global economy, demand for our services tends to decline. With economic expansion in 2010 through 2019 activity levels improved. However, as economic conditions strengthened, we experienced increased tightness in the supply side (skilled IT professionals) of our businesses. These supply-side challenges pressured resource costs and to some extent gross margins. As we entered 2020, we were encouraged by continued growth in the domestic job markets and expanding U.S. and global economies. However, with the COVID-19 pandemic surfacing in the first quarter of 2020, we realized that economic growth would quickly turn into recessionary conditions, which had a material impact on activity levels in both of our business segments. In 2021, we were encouraged by the global roll-out of vaccination programs and signs of economic improvement, however, the proliferation of COVID-19 variants have caused some uncertainty and disruption in the global markets. In 2022 and 2023, COVID-19-related concerns seemed to subside, however, increased inflation, challenges in the financial sector related to increasing interest rates, and concerns about a possible recession created much uncertainty and impacted demand for our services in the second half of 2022 and the entire year of 2023. Entering 2024, while economic conditions in North American have shown signs of improvement, a level of uncertainty remains with respect to inflation and the potential of escalations of existing conflicts in the Middle East and Ukraine. Currently, it's difficult to predict how market conditions are going to unfold over the course of 2024 and beyond." That said, I forecast that the company's results will be gradually improved in the coming quarters. Specifically, I project that MHH will announce a sequential increase in revenues, profitability, operating cash flow, free cash flow and earnings throughout 2024. I have drawn this conclusion, based on: 1) The CFO's recent statements below, as quoted from the latest CC (emphasis added): Jack Cronin: Thanks, Jenna, and good morning, everyone. During the first quarter of 2024, activity levels, client spending patterns, and economic conditions have all shown promise for the first time since mid-2022, particularly in our IT Staffing Services segment. While some uncertainty still exists in the marketplace with respect to inflation and economic forecasts in general, we're encouraged by our clients' more optimistic views about their prospects and opportunities in today's environment." Challenging economic conditions weighed on clients' spending practices for most of 2023. As a result, both of our business segments experienced revenue declines during the year. However, during the fourth quarter 2023, our Data and Analytics segment saw a notable uptick in order bookings, and our IT Staffing segment achieved billable consultant headcount growth in October and November, before experiencing the seasonally high project ends of December. We are encouraged by both indicators as we enter the new year. Despite 2023's difficulties, we believe that our businesses remain fundamentally sound and that we are well positioned for a successful year in 2024." and (emphasis added): During the first quarter of 2024, our clients seemed more comfortable with starting new assignments than they were during 2023. Demand for the Company's IT Staffing Services segment noticeably increased in the first quarter of 2024, as we grew our billable consultant base by 6% during the quarter and achieved sequential revenue growth when comparing the first quarter of 2024 to the fourth quarter of 2023." and (emphasis added): The first quarter of 2024 showed encouraging signs of market improvements in both of our business segments. This quarter was the first quarter since the third quarter of 2022 where both of our segments' clients shifted their spending patterns in a positive direction. Additionally, gross margins improved during the quarter by 140-basis points when compared to a year ago, and we successfully reduced S,G&A expenses by 3% from the corresponding quarter of 2023. While there is still more work to be done, we have a more positive outlook on market conditions and our growth opportunities for 2024." and (emphasis added): Vivek Gupta: Good morning, everyone. Thank you, Jack, for the detailed financial review of our operating results for Q1 2024. Clearly, and to Jack's point, we are feeling more positive about the macroeconomic environment today than we were at the end of 2023. During the first quarter of 2024, our clients have shown more comfort with starting new assignments and tackling some of their pent-up IT needs after more than four quarters of reduced spending over economic concerns. While one quarter doesn't make a trend, I'm feeling much better about where the domestic economy is likely headed than I was three to six months ago." and (emphasis added): Vivek Gupta: Hi, Lisa. While, as you know, we don't give guidance, what I can say is that the revenue in Q2 should be better than the revenue of Q1 as a result of this increased headcount. Lisa Thompson: And how has the headcount trended this quarter? Vivek Gupta: Well, so far, we've just finished the first month and again, I can say that it has been positive. We've had some net growth in April, so it's a good sign." 1) Organic growth: MHH took a key growth initiative in Q1 2024. Specifically, it entered into a three-year consulting agreement with Primentor Inc., as quoted below: On January 12, 2024 (the "Effective Date"), Mastech Digital, Inc. (the "Company") entered into a Consulting Services Agreement (the "Consulting Agreement") with Primentor Inc., a California corporation (the "Consultant"), Phaneesh Murthy, the owner of all outstanding equity of the Consultant ("Murthy"), Srinjay Sengupta, a contractor of the Consultant ("Sengupta"), and Sunil Wadhwani and Ashok Trivedi, each a co-founder and director of the Company (together, the "Founders"). Under the terms of the Consulting Agreement, the Consultant will provide the Company with strategic advisory and management consulting services, as well as any other business and organizational strategy services as the board of directors of the Company may reasonably request from time to time (collectively, the "Services")." As quoted above, these consultants will provide MHH with strategic advisory and management consulting services. They have extensive experience and contacts in the industry, with Mr. Murthy being the CEO of iGATE Corporation from 2003 until 2013. On April 27, 2015, French IT services group Capgemini (OTCPK:CGEMY) acquired iGATE for $4 billion. The agreement is for three years or until the sale of the company. Additionally, MHH issued to each of Murthy and Sengupta 192,500 options exercisable at $8.34 per share with a third vesting after each of the three years, as linked above. And here is an additional incentive compensation to the consultants. If the company is sold within the next year, Murthy and Sengupta will each receive from the founders 1.1% of the total number of shares of common stock outstanding on the date upon which the definitive agreement of the sale. After a year if sold but before three years, Murthy and Sengupta will each only receive 0.55% of the total shares. 2) Inorganic growth: MHH has a fortress balance sheet. Specifically, MHH had zero debt and $19.4 million in cash, with its borrowing availability being $24.2 million under its revolving credit facility in Q1 2024. Therefore, MHH can afford to acquire other companies and expand its capabilities. And MHH has acquired several companies over the last years, as quoted from the latest annual report (emphasis added): On June 15, 2015, we completed the acquisition of Hudson Global Resources Management, Inc.'s U.S. IT staffing business ("Hudson IT"). Hudson IT was a domestic IT staffing business with offices in Chicago, Boston, Tampa and Orlando. Hudson IT deployed a branch service business model that targeted clients that are direct end-users of IT staffing services. Additionally, as part of the Hudson IT acquisition, we acquired a digital learning services practice which became one of our technology practices. In 2016, we changed our name to Mastech Digital, Inc. The name change was part of our rebranding initiative that reflects our transformation into a digital technologies company. The rebranding also included a logo change and a refreshed corporate website. In 2017, we added specialized capabilities in delivering data management and analytics services to a global customer-base through the acquisition of the services division of InfoTrellis, Inc. ("InfoTrellis"), a project-based consulting services company with specialized capabilities in data management and analytics. In 2018 and 2019, we significantly expanded our service offerings and capabilities within our Data and Analytics Services segment. In 2020, we launched a new service offering in our IT Staffing Services segment branded as MAS-REMOTE. This new offering allows clients to transcend beyond self-imposed geographical boundaries to gain access to top talent in the U.S. and Canada and reflects learnings from the COVID-19 pandemic that remote workers can be equally or more effective. Also in 2020, we completed the acquisition of AmberLeaf Partners, Inc., ("AmberLeaf"), which enhanced our Data and Analytics Services segment's capabilities with its expertise in customer experience consulting and managed services. In 2021, we added cloud service capabilities to our Data and Analytics Services segment and expanded our IT Staffing Services segment's MAS-REMOTE offering to include offshore staffing services. In 2022, we established a new subsidiary in NOIDA, India to support our offshore staffing services business. In late 2023, we expanded our services offerings to include engineering staffing services." Market cap is approximately $93 million at the current price of $8 per share. As of Q1 2024, cash & cash equivalents are $19.4 million and interest-bearing debt is zero. This means that MHH has negative net debt (net cash position) of $19.4 million and zero leverage. Therefore, its Enterprise Value currently is approximately $74 million. Based on the aforementioned company's growth initiatives coupled with the CEO's and CFO's statements, I estimate that Revenue and adj. EBITDA in 2024 will be about $220 million and $8.2 million, respectively, so EV-to-2024 Revenue and EV-to-2024 adj. EBITDA are estimated to be about 0.3 times and 9 times, respectively. MHH's peers are large-caps, mid-caps and small-caps from the IT Staffing industry and the Data & Analytics industry. And their key multiples are illustrated below, proving why MHH at $8 per share is very cheap: (*): Estimate based on the company's latest quarterly results and guidance and: (*): Estimate based on the company's latest quarterly results and guidance. In 2018, the Board of Directors approved the company's stock purchase plan. On that front, MHH repurchased its stock in 2022 and 2023, as quoted below: For the year ended December 31, 2023 and December 31, 2022, stock purchases under the Stock Purchase Plan totaled 25,646 and 23,789 shares at an average purchase price of $8.03 and $11.53, respectively. At December 31, 2023, there were 466,919 shares available for purchases under the Plan." MHH also repurchased its stock in Q1 2024, as quoted below: During the three months ended March 31, 2024, the Company repurchased 9,222 shares of common stock at an average price of $8.70 per share under this program." Insiders own 6,074,200 shares of common stock, or 48.6%, so their interests are aligned with shareholders', as illustrated below: * Less than 1%. 1) Competition: MHH does not play alone in the field, but it operates in a highly competitive environment, as quoted from the latest annual report: We operate in highly competitive and fragmented industries, with largely low barriers to entry in our IT Staffing Services segment. In our Data and Analytics Services segment, we primarily compete with Cognizant, Tata Consultancy Services, Deloitte, Accenture, as well as with smaller boutique data and analytics firms. Many competitors are significantly larger and have greater financial resources in comparison to us. Our IT Staffing Services segment competes for potential clients with providers of outsourcing services, systems integrators, computer systems consultants, other staffing services firms and, to a lesser extent, temporary personnel agencies. We believe that the principal competitive factors for securing and building client relationships are driven by the ability to precisely comprehend client requirements and by providing highly qualified personnel who are motivated to meet or exceed a client's expectations. We must be able to do this efficiently to provide speed to market with pricing that is competitive and represents value to our clients. The principal competitive factors in attracting qualified personnel are compensation, availability, location, quality of projects and schedule flexibility. We believe that many of the professionals included in our database may also pursue other employment opportunities. Therefore, our responsiveness to the needs of these professionals is an important factor in our ability to be successful." 2) Micro-cap stock: ΜΗΗ's market cap currently is less than $100 million, so this is a micro-cap stock. Additionally, it has low daily volume given that insiders own approximately 49%, as shown in the previous paragraph. Therefore, high volatility is likely and MHH is not for day traders, momentum traders or short-term traders. Instead, the potential buyers need to have a 12-month investment horizon (at least). 3) Acquisition: As shown above, MHH has been very acquisitive since 2015. Thanks also to its fortress balance sheet, it can afford to acquire another company. But the takeover target might not deliver results according to the original expectations, or MHH might experience difficulties in integrating the acquired company. MHH has exposure to two industries, the IT Staffing industry and the Data & Analytics industry, offering AI consulting services & solutions primarily to the healthcare and financial sectors. The company has a debt-free balance sheet with a significant amount of cash coupled with low valuation, based on relative and absolute valuation analysis. In early 2024, MHH also took a key growth initiative to achieve organic growth in the foreseeable future by making a deal with Primentor Inc. And its organic growth could be complemented by inorganic growth thanks to its fortress balance sheet. After all, I believe that Mastech Digital, Inc. at $8 per share is a Strong Buy for investors with a 12-month investment horizon. Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Micron Taught Me 2 Lessons (NASDAQ:MU)

Looking for more investing ideas like this one? Get them exclusively at Envision Early Retirement. Learn More " MU stock: cyclical forces kept surprising me My last article on Micron Technology, Inc. (NASDAQ:MU) stock was titled "Sell Cyclical Stock Near Cyclical High." The article was published a little more than 3 months ago on April 14, 2024, as illustrated by the chart below. At the time the article was published, the stock price was $123, and the article recommended selling MU stock for the following considerations: Micron is expected to benefit from the AI revolution and increased demand for its memory products. I will argue it is near/at its cyclical high under current conditions, judging by the stock price advancements and revenue growth. MU has historically experienced cyclical patterns of rapid growth followed by deep corrections, and I expect the same this round, too. Since the publication of the last article, there have been some new developments. First, the stock prices have shown quite drastic fluctuations and could indicate a market sentiment change. Second, on the fundamental side, the company has released the quarterly earnings (for its fiscal Q3 of 2024). Given these new developments, I think an updated analysis is warranted. In this article, I want to focus on two topics. First, I would like to share two lessons I have learned (or really relearned) on the analysis of cyclical stocks. After being in the market for almost 3 decades, I seem to keep underestimating the potential of cyclical forces. Second, I will provide an updated assessment of the stock valuation relative to its growth potential given the AI tailwinds. And you will see why my assessment leads to a rating upgrade to HOLD from my earlier SELL rating. MU stock: lessons learned I have been investing in cyclical stocks for close to 3 decades. Many investors dislike cyclical stocks due to their large earnings and price volatility. However, my fundamental view is that volatility is not the same as risk. My winning rates with cyclical stocks are far better than my overall investing performance. And the lesson I've learned in the past is that such winning rates are precisely because cyclicality offers overwhelming odds at cyclical peaks and bottoms. However, I kept underestimating how strong cyclical forces can be. Shortly after I published my SELL rating, the stock price went up to an all-time high of around $157, translating into a rally of more than 27% relative to the price at my last writing. In my last article, I correctly argued that MU was well into the expansion phase judging by the revenue growth, as illustrated by the next chart below. At that time, the stock just reported a 57% top-line growth YOY and the stock price has already almost doubled from the bottom level from the contracting phase. Well, fast-forward to now, largely thanks to the strong demand for its dynamic random access and Flash memory (DRAM and NAND), the company's latest earnings report shows an 81% YOY revenue growth (as illustrated by the next chart below, top panel). To recap, the lesson I learned here is to not underestimate the cyclical force, especially when there is a secular tailwind in the background (the AI tailwind in this case, more on this a minute later). The saving grace is that the stock prices have pulled back by about 22% from the all-time-high recently due to various factors, and I will elaborate more on these factors in the risk section. Such roller-coaster movements urge me to reiterate the other lesson I mentioned earlier - volatility is not equivalent to risk. Large price volatility only provides entry/exit opportunities more frequently as long as we have a good grasp of the business fundamentals, as detailed next. MU stock: AI tailwinds and valuation Judging by the information provided in its earnings report, I think Micron is well-positioned to benefit from the spread of Artificial Intelligence ("AI") applications. The expanded deployment of AI means an increase in the need for more computer memory and storage. As a leader in DRAM and NAND, I expect Micron to enjoy robust growth in the years to come. As illustrated by the next chart below, its DRAM revenues have increased by about 76% YOY in Q3 and NAND revenues more than doubled. Furthermore, the projected advancement of High-Bandwidth Memory (HBM) products for use in data centers and devices such as PCs and smartphones, should continue to benefit MU too. MU's arrangement to support Nvidia's newest AI chip (H200) is a strong reflection of such secular tailwinds. Thanks to the agreement, Micron's HBM memory portfolio has been sold out for calendar year 2024 and most of its 2025 supply has been allocated too. I expect these tailwinds to translate into rapid EPS growth and thus attractive P/E ratios (on an FWD basis, that is). As seen in the second chart below, analysts' consensus expects Micron's EPS to grow significantly over the coming years. The consensus estimate is for EPS to reach $1.18 in FY 2024, only to be followed by another strong year of growth to $9.57 in FY 2025. With these projections, Micron's FY2 P/E ratio is about 12.5x, quite attractive considering its leading position in a growing market segment. Other risks and final thoughts Before closing, there are a few downside risks that I'd like to mention. MU's current inventory is at an elevated level, as shown in the next chart, both in terms of dollar amount and days of inventory outstanding ("DIO"). The forward demand mentioned above could reduce the inventory level to historical averages. However, until then, a large inventory entails several risks (e.g., tying up cash, driving up storage and maintenance, creating obsolescence risk, etc.). The memory chip market is competitive (similar in many ways to commodities), with a few major players vying for market share. The competition often boils down to price and can lead to intense margin pressure on MU's products. Finally, MU has a large exposure to China, a market with ongoing trade tensions with the U.S. and unpredictable regulations. The market's fear about export control and Republican Presidential nominee Donald Trump's recent remarks regarding Taiwan are good reflections of this risk (which triggered a correction of close to 5% in MU stock prices in one day, July 17). All told, I think these downside risks are well-balanced by the upside potential under current conditions. And to reiterate, investors should not equivalent price volatility with risks or underestimate the cyclical force, especially when there is a strong AI secular tailwind. The sizable Micron Technology, Inc. stock price pullback from its peak levels, combined with the updated growth outlook, has improved its return potential from that at my last writing. Based on these considerations, I am upgrading my rating to HOLD from my earlier SELL rating. As you can tell, our core style is to provide actionable and unambiguous ideas from our independent research. If your share this investment style, check out Envision Early Retirement. It provides at least 1x in-depth articles per week on such ideas. We have helped our members not only to beat S&P 500 but also avoid heavy drawdowns despite the extreme volatilities in BOTH the equity AND bond market. Join for a 100% Risk-Free trial and see if our proven method can help you too. Envision Research, aka Lucas Ma, has over 15+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management. He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

HIVE Digital: Resilient Miner, But Expect Short-Term Volatility (Rating Downgrade)

Still, opportunities for growth in the HPC (high-performance computing) sector, potential revenue increase, and long-term potential for investors. Since I last covered Hive Digital Technologies (NASDAQ:HIVE) in my bullish piece in December last year, its share price surged by 17% to $5.8 in a market frenzy following regulators approving several Bitcoin (BTC-USD). After several ups and downs, it now trades around $4 as charted below. Nearly seven months later, this thesis aims to provide an update on the crypto miner's production and financial performance in the aftermath of the uncertainty-inducing Bitcoin halving event and assess whether its diversification into HPC or high-performance computing remains on track. At the same time, by factoring both opportunities related to the mining landscape and emerging uncertainties on the political front, I emphasize the need for caution. I start by providing an update on the way HIVE has navigated through the transition to the post-halving event which saw miners being rewarded only 3.125 BTC for each block added to the Bitcoin blockchain compared to 6.250 BTC previously. Resilient Mining Operations and More Efficient Than Peers The immediate effect of halving was the number of Bitcoins produced per day dropping from above seven in March to four in June as shown in the table below. To this end, April constituted more of a transition month as the halving occurred on the 19th which makes it essential to assess production both before and after. The result shows that due to lower mining rewards, monthly production dropped to 119 from 224. Despite this 47% drop, the number of Bitcoins HODLed or produced but not sold, kept increasing from 2,287 in March to 2,496 in June, with the number having grown to 2,503 on July 7. This shows that the company did not have to dispose of its treasury to finance operating costs as other miners have been doing in the wake of the halving. One of the reasons is that it has been able to control operating expenses, namely by keeping administrative costs as a percentage of revenues lower compared to others as charted below. In this case, while the other miners like Marathon Digital (MARA) and Riot Blockchain (RIOT) have also drastically cut costs, HIVE, as seen in the blue chart has seen better success in cost control. Pursuing further, one of the ways to reduce costs is to continuously upgrade the machinery with those bearing the best energy efficiency so that less power is used for production. Thus, as per the President and CEO, 2,150 S21 Pro miners from supplier Bitmain are expected to be installed by the end of July to increase production capacity to 5.5 EH/s. This represents a 22% increase compared to the March capacity (as per the above table) and means that henceforth, monthly production should continue to increase to exceed the 119 BTCs produced in June. Consequently, while suffering from a drop in output like other miners, HIVE has demonstrated resiliency in the way it has tackled Bitcoin halving, but, going forward, from 900 Bitcoins, the total daily Bitcoin production will drop to 450 making efficiency a very important metric to watch out for. For this purpose, the Antminer S21 Pro's advantage is while it boasts a higher productive capacity also boasts a lower energy consumption of 15.0 J/TH compared to 17.5 J/TH for the currently used Antminer S21. This implies that by consuming less energy, it also lowers the cost per bitcoin produced, thereby enhancing its competitive position in the mining industry. Opportunities Due to Lower Mining Difficulty but Volatility Risks have Emerged The company could also benefit from a reduction in mining difficulty from 88 to 79.5 as shown in the chart below. This is due to a decrease in miners participating in (or adding blocks to) the network. This is probably the result of other miners reducing output as operations are no longer financially viable or some are going out of business altogether if financially not strong enough to digest the halving of mining rewards. For investors, this remains a highly competitive industry where miners are competing to be the first to add blocks. Worst, troubled miners have been selling their bitcoin reserves to make up for revenue shortfalls thereby causing supply to outstrip demand which is one of the reasons why digital assets declined by about 4% in HIVE's fiscal first quarter of 2025 (FQ1-2025) which ended in June, compared to a 54% surge in FQ4-2024 lasting from January to March. This means that if HIVE does not dispose of more of its HODLed coins, it should suffer from a QoQ decrease in revenues in FQ1-2025. As a result, it could miss revenue expectations when financial results are announced around August 12. looking at the second half of the year, the overall hashrate or total computing power of the Bitcoin network has gone slightly down from its April peak as per the chart below, indicating a decrease in mining activity. Now, this could be an indication of miners' capitulation or not participating in the mining process to a point where there starts to be a reduction in supply, which would, in turn, mean higher prices as long as demand is sustained. In this connection, according to the blockchain analytics platform CryptoQuant, there are signs of capitulation based on a 7.7% drop in the hash rate. However, the latest 10% surge in the price of Bitcoin during the last five days could be related to two other events. One is the shooting of President Trump as he has expressed support for the cryptocurrency. Second, the U.S. Central Bank has recently shown more signs that it will likely turn dovish as to monetary policy in September after weaker inflation numbers, which augurs well for miners envisaging tapping the debt markets. As a result, HIVE also saw its stock surge to $4.05 but, at the time of writing had retrenched to about $4.01, and it could fall further if there are no clear signals of a sustained reduction in crypto supply. Also, bearing in mind, that a potential Republican administration could impose a 60% to 100% tariff on goods imported from China where the Antminer's supplier Bitmain is headquartered, miners could have to spend more capex for efficiency-led equipment renewals. To provide a rough estimate of the effect of these tariffs, if 60% were applied to the capital expenses of $80 million for FY-2024, this would amount to $128 million, or more than the annual revenues. Furthermore, as shown below, continuously upgrading mining rigs to become more efficient has also resulted in a surge in depreciation costs which in turn impacts profitability, which means that any additional cost element can force the miner to sell more coins to generate sufficient revenues to support investments. In these circumstances, one should expect volatility over the next few months. To further justify my cautious outlook, the company is trading at a forward P/S of 4.56x compared to 3.06x in December last year (chart below), or an increase of nearly 50% while its price has appreciated by only 2%, implying investors are highly optimistic about the future revenue growth. This is not aligned with analysts' revenue consensus estimates for FQ1-2025 of $24.32 million which would represent only 3.18% YoY growth. Worst, for FY-2025, the estimated $104.6 million would represent an 8.6% YoY decline. However, I am optimistic over the long term. Long-term Potential as an Efficient Miner Diversifying into HPC The reason is going purely by the sales metric would ignore the value of the miner's treasury of 2,503 coins which is worth $162.7 million based on a BTC valued at $65K. Assuming that it just unloads $20 million worth of its HODLed BTCs, this could increase the above revenue estimate to $124.6 million. Compared to the $114.5 million obtained in FY-2024, this would represent an 8.9% YoY growth. Moreover, the company's diversification strategy into HPC, initially by using some of its existing A40 GPUs which were initially used for Ethereum mining, and then through the purchasing of newer H100s from Nvidia, is working. Hence, from only generating $229K of trial run-related revenues in the fourth quarter of last year as shown in the table below, this figure has been multiplied by over six times in FQ4-2024 to $1.81 million. This still represents a fraction of crypto sales but HPC's advantage is that it is in high demand thereby representing higher margins than crypto. To this end, HIVE aims to attain over $100 million in revenue with very high operating margins. In conclusion, this thesis has shown that HIVE's mining operations have been resilient to the halving event. Also, with Bitcoin's network hashrate no longer at its April peak, mining difficulty has declined slightly by 9.7% but is still up by more than 50% from one year ago. Learning from May 2020 Bitcoin halving, it was not until difficulty dropped by around 14% that there was an upside in BTC's value as shown below. This is not the case today, and, on the contrary, there are now election-related volatility risks. To be fair, with the elections still about four months away, there is no certainty that President Trump will win a second term and Democrats could retain the White House. Still, risk-averse investors would want to avoid investing in such an environment of uncertainty and prefer to wait for more clarity on foreign trade policy. Finally, for shareholders, with its HODLed coins comfortably exceeding the debt of $30.6 million, and its diversification into HPC translating into more sales in a high-demand marketplace, HIVE should play an important role as a hosting service provider for AI workloads from next year. As a tech-focused industry Research Analyst, my aim is to provide differentiated insights, whether it is for investing, trading, or informational reasons. For this purpose, I am not a classical equity researcher or fund manager, but, I come from the IT world as the founder of Keylogin Information and Technologies Co. Ltd. Thus, my research is often backed by analytics and I make frequent use of charts to support my position.I also invest, and thus, in this tumultuous market, I often look for strategies to preserve capital. As per my career history below, I have wide experience, initially as an implementer in virtualization and cloud, and I was subsequently a team leader and project lead, mostly working in telcos.I like to write around themes like automated supply chains, Generative AI, telcos Capex, the deflationary nature of software, semiconductors, etc and I am often contrarian. I have also covered biotechs.I have also been an entrepreneur in real estate ( a mediocre one), a business owner, and a farmer, and dedicate at least 5 hours per week to working on a non-profit basis. For this purpose, I help needy families by providing sponsored work and contributing peer reviews and opinions for enterprise tech.I have been investing for the last 25 years, initially in mutual or indexed funds before later opting for individual stocks. Got a lot of experience in the 2008/2009 downturn when I lost a lot due mostly to wrong advice. Since then I do my own research and have fallen in love with Seeking Alpha because of the unique perspectives it provides to someone investing hard-earned money as well as access to some of the best analysts. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Initiating CyberArk With A Buy: Boarding The Ark (NASDAQ:CYBR)

I share my thoughts on CyberArk and why I think it will outperform into next year. Investment thesis: I'm initiating CyberArk (NASDAQ:CYBR) with a buy rating pre-earnings for 2Q24. I think CyberArk is an under-the-radar cybersecurity name with a competitive advantage in the PAM market and an attractive risk-reward profile, as most of the negatives from its recent acquisition and guarded guidance have been priced into the stock. I see CyberArk outperforming in 2025 and would advise mid-to-long-term investors to load at current levels. Why I'm buying the panic? The stock saw two moments of disappointment last quarter, in May specifically, on soft guidance and the news of the Venafi acquisition. The graph below shows CyberArk's performance over the past six months against the S&P500 and highlights both moments I mentioned. In my opinion, CyberArk's uninspiring 2Q24 guidance promoted a flat reaction from the market; the company expects total revenue to decline and be in the range of $215-$221 million, a 24% year-over-year growth, versus consensus of $219 million and expects SaaS to "make a bigger portion of our overall subscription mix in the second quarter, impacting recognized revenue in the period." The stock hit a low after earnings on May 2 trading at $227.3 per share, but the panic didn't last long. I believe the negatives of the softer sales this quarter have been priced in already, making little room for more disappointment, as seen below. The company released the news of the acquisition on May 20, causing a sell-off with the stock hitting a low of $225.5 per share, accounting for an over 9% pullback on May 30. The acquisition will cost CyberArk around $1.54 million ($1 billion in cash and $540 million in shares), and some analysts believe they overpaid for it. I understand investor panic; it's warranted, granted CyberArk's size versus the size of the acquisition it ventured into, but I don't share it. I think we're seeing CyberArk face the growing pains of consolidating its position in the cybersecurity market, and it should pay off big time in 2025. According to management, the acquisition is forecasted to add around $159 million in ARR and bring a "strong business model" of 95% in recurring revenue from both SaaS and Term-Based License revenue. Venafi is also expected to expand CyberArk's TAM by $10 billion, making it around $60 billion, but the timeline for that is yet unclear. Management believes the deal will "be accretive to margins immediately, with significant revenue synergies through cross-sell, up-sell, and geographic expansion." CyberArk CEO Matt Cohen didn't have any concerns regarding the news; quite the opposite, he believes that "By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, GenAI, post-quantum world." I believe the company is looking at the big picture and where the future of the Cybersecurity space is going. I don't see further downside risk in the near term, as negatives have been priced after 1 -- management's soft 2Q24 guidance and 2, the risk of the Venafi acquisition being recognized. I see mid-term growth catalysts at play that I will get into in a minute. What do CyberArk's financials tell me? Management has been focused on "profitable growth" and reaped what it sowed in 1Q24 as Non-GAAP operating income was $33 million, a massive jump from a negative $12.6 million in a year ago quarter, "highlighting the operating live beverage in our business model." Non-GAAP earnings per share were also dramatically boosted and reported $0.75 last quarter versus a negative of $0.17 in 1Q23. Cashflow came at $67 million, a dramatic increase from $4 million in the year ago quarter, as seen in the graph below. Management also raised full-year guidance and is now expecting total revenue at $928- $938 million, a 24% year-over-year growth "at the midpoint," versus the previous guidance of $920- $930 million in 4Q23. Full-year operating income is expected to grow to $90.5-$99.5 million, significantly higher than the previous guidance of $75.5- $84.5 million, and non-GAAP EPS between $1.88-$2.7 per share versus the prior guidance of $1.63- $1.81 per share. The company is also increasing ARR to $975-$990 million, a 27% year-over-year increase, and free cash flow to reach $115-$125 million for the full year 2024. The cybersecurity space has been experiencing a number of "secular tailwinds, including the pace of attacker innovation, digital transformation, ongoing migration to the cloud and exponential increase in human and machine identities," and I think the company is well-positioned to ride the said secular tailwinds after its recent acquisition; I believe the market hasn't recognized CyberArk's full growth potential yet. CyberArk came in with "strong first quarter results" and built on the momentum the company had in 2023. The company makes most of its revenue from subscription services and the remaining profits from maintenance and professional services. Subscription revenue made 71% of total revenue in 1Q24 and recorded a 69% year-over-year increase at $156.2 million versus $92.7 million in the year ago quarter. Management credited the outperformance to bookings and an "increase in average contract duration on our self-hosted subscription deals relative to our guidance." Total revenue came at $221.6 million in 1Q24, a 37% increase from a year ago's quarter of $161.7 million. ARR was $811 million in 1Q24, a 34% increase year-over-year, and net new ARR was $37 million, following the same upward trajectory and recording an 8.8% increase from a year-ago quarter at $34 million. Subscription ARR was up 54% year-over-year and was $621 million, making up 77% of total annual recurring revenue. Below are the metrics from the CyberArk 1Q24 presentation. CFO Josh Siegel says these strong results are credited to "the durability of demand for our solutions, the ongoing adoption of our broader identity security platform, and the power of our business model as we scale." This leads me to my next point, which I've discussed in detail in my Okta article. The cybersecurity market is growing at light speed with the recent excessive need for protection against data breaches and hacking incidents, as seen below. The estimated cost of cybercrime is expected to reach $9.2 trillion in 2024 and increase to $15.6 trillion in 2029. This is raising competition in cybersecurity but also increasing demand and opportunity for cybersecurity companies to boost exposure and, in turn, top-line growth. Security services' volume is projected to be $97.3 billion in 2024, a huge jump from ~$50 billion in 2016. CAGR (2024-2029) revenue is expected to witness an ~8% annual growth rate, as seen below. I see this increasing CyberArk's market opportunity and momentum, specifically with its advantage in the PAM space. The term PAM stands for privileged access management, and CyberArk differentiates itself in the space against "traditional PAM competitors" through being able to consistently "tell the story of the spectrum of identity groups and our ability to bring more than one identity, more than just IT onto our platform." This is good for CyberArk as the PAM market was valued at $3.2 billion in 2024 and is forecasted to reach $22.6 billion in value in the next ten years; this is a CAGR of ~21%. The company signed around 200 new customers in 1Q24, the majority of which landed with PAM, and "half of these new logos bought two or more solutions, with many choosing to secure multiple identity groups from day one," which further proves the increasing importance of identity security. The PAM space is expanding beyond "securing high-risk IT personnel" and now includes developers, cloud administrators, etc. Management is most excited about their new relationship with NHS resolution, which is a body of the UK Department of Healthcare and Social Care; the latter "kicked off their relationship with CyberArk with Privilege Cloud and Secure Cloud access" with plans to expand in the future. I believe CyberArk has a competitive advantage in this space, which will work in its favor as it is already ahead of the competition. Valuation CyberArk's price/earnings ratio for C2024 is 130, lower than the peer group average of 203.7. The EV/Sales ratio for C2024 is 11.9, slightly higher than the peer group average of 9.4. I think the stock is fairly valued for its growth potential in the cybersecurity space. I also think the market hasn't had its wake-up moment to CyberArk, unlike CrowdStrike or Okta. CyberArk is better positioned now to actually beat market expectations and improve its financial health as last quarter's operating profits indicated. According to data from Refinitiv, none of the Street analysts covering the stock are sell-rated, and only ~3% are hold-rated, as seen below. Most of the sell-side guys have a strong buy (37.5%) and buy (~59%) ratings on the stock, which shows more investor confidence in CyberArk's growth trajectory. My watch list: CyberArk's next quarter should beat expectations, in my opinion, and I think there are more growth boasters at play. I'm specifically watching: CyberArk MSP console allows CyberArk to "leverage new channel partners, go down market with distributors, continue to push on our SI partnership and our SI relationship," according to CEO Matt Cohen. By providing MSP with "a single command center, this console is a key step in helping our MSP partners build managed services that secure their customers' human and nonhuman identities." Data from Gartner shows that 40% of security customers "are expected to consume solutions to managed service by 2026," and I believe this will reflect positively on 2Q24 top line and customer retention. CyberArk also achieved FedRAMP High Authorization for its endpoint privilege manager and workforce identity, which are the two leading SaaS offerings for CyberArk. I believe this helps CyberArk expand and "opens up not just the civilian side, of the federal market, but also the DoD side and frankly also helps us at the state level with the state side of the government organization," according to management. The company is also investing in a PAM FedRAMP certification and is expecting to get it in the "time ahead." CyberArk is prioritizing the government verticals since they believe they can capture a bigger piece of the market "in the federal space" through their ability to "institute core security controls, lock down the endpoints that have a bigger version of - or bigger story of identity beyond MFA SSO." I share management's positive sentiment and see this accelerating growth in the mid-to-long term. I'm a retired Wall Street PM specializing in TMT; my educational background is a bachelor's in Finance and Economics, and an MBA from Columbia, after which I directly began my career on Wall Street. Since kickstarting my career, I've spent over two decades in the market navigating the technology landscape, focusing on risk mitigation through the dot com bubble, credit default of '08, and, more recently, with the AI boom. In one word, what I'd like my service to revolve around is momentum. I channel years of experience at top-ranked institutional sell-side and buy-side firms and first-hand experience in retail, biotech, and technology sectors to provide data-driven insights to capture momentum. I deep dive into market trends, scrutinize company fundamentals, and assess the disruptive potential of emerging technologies and growth opportunities. My service aims to act as a tool to maneuver the market landscape so that you can know when momentum begins and, equally important, when it'll end. My investment strategy is simple. I specialize in tech sector investments, emphasizing risk management. I diversify within the sector, focusing on companies with solid fundamentals and innovative products; while I focus on European and U.S. stocks, I also informally cover Asia-based names that I believe have reasonable risk-reward profiles. My equity-focused approach aims to optimize returns in the tech landscape. I've built my wealth by navigating the technology landscape and am looking to extend my knowledge of the industry to help advance the retail guys' investment journey. I firmly believe that technology's exponential growth has reached a disruptive peak, with consumer demand for innovation soaring. This convergence presents a prime window of investment opportunity. The retail investor is becoming more curious and conscious of these developments, and I'd like to add to the knowledge in the field, helping guide their investments. As a contributor on Seeking Alpha, my motivation is to share my insights, research, and investment ideas with a wider audience of like-minded individuals. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.