ADOBE: THE STOCK KEEPS FALLING
The other day, after the market closed, Adobe announced its quarterly results
And in my opinion, they were excellent
The company is showing accelerating growth in revenue, earnings, and free cash flow
However, the stock is down -10%, following the news that the company will be changing its CEO
With free cash flow increasing while the stock price is falling, the company is now trading at a historically low P/FCF multiple, below 11
On the other hand, the company continues to aggressively buy back its own shares, and now it can do so at even better prices
That clearly benefits long term investors
For now, it does not look like a company that is being killed by AI
TSMC: THE ULTIMATE COMPOUNDER?
In my view, one quiet compounder is Taiwan Semiconductor Manufacturing Company
Even though we often talk about companies like Nvidia or Apple, we rarely remember that almost the entire world of advanced chips passes through TSMC 🇹🇼
A few numbers worth looking at
1️⃣ Revenue has skyrocketed from $26B in 2015 to over ~$120B today (CAGR around 17%)
2️⃣ Free cash flow per share has increased almost 3x during the same period
3️⃣ Dividends have been growing at roughly 15% per year
The High Performance Computing segment (AI chips, data centers, etc.) has grown by roughly 170% in recent years
And all this with:
• 60% gross margins
• 50% operating margins
For a company that sits at the core of the most important technological infrastructure in the world
Personally, I plan to keep a very close eye on this company.
Micron Technology: New Factory!!
As we also discussed in a video on the channel, the demand for memory chips is unprecedented
That’s why Micron Technology has announced the construction of a second factory in Taiwan to boost its DRAM production
According to estimates, the facilities are expected to be ready by 2028
DRAM is becoming increasingly valuable for artificial intelligence, and Micron is perfectly positioned to benefit from all this demand
Now yes, companies like Micron are cyclical, but analysts estimate that memory demand will keep growing until 2030
It is definitely something we will be watching closely
The stock has already recorded an impressive +313% gain in one year
For those interested, Micron will also announce its quarterly earnings this Wednesday after the market closes
What do you think about Micron as an investment?