Daily Brief Equity Bottom-Up: What Are the Arguments in Favor and Against an AI Bubble? and more

• Review of the conventional arguments (Bloomberg article): the timing gap between Capex and Revenue is the real issue.
• Review of history of Tech Bubbles (Krugman): not clear if AI is a bubble, it could keep going for years, but if it bursts it will be worse than 1999-2003.
• Best AI comp is Cloud Computing. Both enable new data analytics, new applications. Both are platforms. US Cloud Computing revenues increased 25x in 10 years (2015 to 2024).

• BYD’s monthly sales volume decreased YoY for the first time in September.
• We expect the revenue growth rate will slow down to 16%, but op margin will rise in 2026.
• We believe the stock price is overvalued, whether measured by time-series or cross-sectional methods.

• NVIDIA Corp (NVDA US) is setting up an offshore headquarters in Taipei, and is currently in the process of acquiring land.
• Taiwan’s central government is currently ruled by the Democratic Progressive Party (DPP), while Taipei City is governed by a mayor from the Kuomintang (KMT), creating political complications.
• Politics often takes precedence over economics, yet in a democracy, politics is driven by competing parties—inevitably leading to conflicts of interest.

• NSE dominates market as it maintains a near-monopoly (∼90% share) in equity cash and dominates the booming derivatives segment.
• NSE’s Revenue and PAT are 5-9x larger than BSE’s, with a much higher PAT margin (68% vs. 44%).
• NSE Holds appreciating, strategic minority stakes in high-potential financial infrastructure companies which can be seen as hidden value for NSE.

• The decision to invest a large sum of money to increase Hong Kong and Mainland China banking exposure, seems oddly timed
• There is no exceptional discount to drive this decision, and there is unlikely to be any major resumption former times
• Granular data on credit metrics from HSB shows marked weakness, deterioration, and with privatization, we may only see this data one more time.

Key points (machine generated)

• IonQ, valued at $12 billion, is shifting focus from quantum hardware to software and hybrid solutions amid industry challenges.
• The company reported only $3.1 million in hardware revenue last quarter, indicating a decline, alongside $4.5 million from consulting and cloud services.
• Investor sentiment is cautious, reflected by a short interest of 14.8% and a borrow cost of 0.5%.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Kuros Biosciences is rapidly transitioning into a high-growth, profitable medical device company, driven by the commercial success of its MagnetOs bone graft portfolio.
• Compelling Level 1 clinical data for MagnetOs, demonstrating superiority over the current gold standard (autograft) in challenging spinal fusion procedures, serves as a powerful commercial driver and solidifies its competitive advantage.
• Having recently achieved its first operating profit and positive EBITDA, the company is at a financial inflection point, with a clear path to sustained profitability and cash flow generation, significantly de-risking the investment profile.

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• Singamas is a major global container manufacturer facing a cyclical industry downturn, characterized by overcapacity and pressure on container prices.
• Despite challenging market conditions, the company maintains a strong balance sheet, an asset-light model, and is diversifying into higher-margin specialized containers, such as Energy Storage Systems (ESS), and growing its leasing business to provide more stable revenue streams.
• The company offers a compelling dividend yield, supported by a stated policy of returning value to shareholders, but faces significant risks from global trade tensions, economic slowdowns, and intense competition.

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Key points (machine generated)

• FnGuide, established in 2000, is a leading provider of market data and equity indices in South Korea.
• The company operates in three segments: financial market data, equity indices, and fund ratings, with the latter having limited market share.
• FnGuide’s ‘Value-Up’ plan focuses on improving stability, profitability, and growth, positioning it alongside global competitors like Factset and S&P Global.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• In this edition: • AMG Critcal Materials | sells Graphit Kropfmühl to Asbury Carbons • SBM Offshore | entering AI partnerships with SLB and Cognite • Nexperia | Dutch government has taken control • Dutch politics | has GroenLinks/PvdA peaked too soon?