In today’s briefing:
- Why Is Michael Burry So Bearish on Alibaba (And Other Major Chinese Tech Stocks)?
- Tencent (700 HK): Strategies to Navigate Low Volatility and A Flat Term Structure
- TSMC (2330.TT; TSM.US): TSMC’s Arizona Subsidiary Sent a Letter in Response to the U.S. Authorities.
- (Mostly) Asia-Pac M&A: Xanadu Mines, Reject Shop, ESR Group, Shibaura Elect., Jamco, Tsuruha/Welcia
- Palantir Technologies Is on Fire with U.S. Growth and AI Momentum—But One Risk Could Derail It All!
- Itron Is Capturing Utility Market with Smart Grid Revolution—Is It the Ultimate Energy Infrastructure Play?
- Lumen Technologies: Recent Divestiture Of Consumer Fiber Business To AT&T
- Microsoft Just Sent a Message to the Market: Cloud, AI, and Cash Are King!
- ON Semiconductor: A Tale Of Restructuring & Non-Core Business Exits For Long-Term Growth & Profitability!
- InterDigital Just Secured 80% of Smartphone Market—Will $500 Million in Recurring Revenue Become A Reality?
Why Is Michael Burry So Bearish on Alibaba (And Other Major Chinese Tech Stocks)?
- It recently became publicly available that Michael Burry (CEO of Scion Asset Management) started buying put options on numerous Chinese stocks including Alibaba Group Holding (BABA US).
- We highlight four major reasons why Burry may have turned bearish on Chinese tech names (tariffs, delisting threats, increasing hostile political pressure on China, and China’s 30 year bond yield).
- Although we do not know exactly know how Burry has changed his position in 2Q25, he is likely to have reduced put options on major Chinese tech stocks in April/May.
Tencent (700 HK): Strategies to Navigate Low Volatility and A Flat Term Structure
- Implied Volatility Trends: One-month implied volatility is currently cheap, trading in its 14th percentile, while Tencent (700 HK) approaches its twelve-months high.
- Skew and Term Structure Dynamics: A pronounced skew smile and a relatively flat term structure make spreads and calendar / diagonal spreads attractive strategies.
- Open Interest Distribution: Liquidity can be found in the monthly May expiry and the Quarterly expiries. The historically low implied volatility facilitates longer term positions.
TSMC (2330.TT; TSM.US): TSMC’s Arizona Subsidiary Sent a Letter in Response to the U.S. Authorities.
- The U.S. Department of Commerce’s Bureau of Industry and Security (U.S. BIS) recently released a series of public consultations regarding Section 232 related to semiconductors.
- TSMC stated that any import measures should not create uncertainty for existing semiconductor investments.
- Any measures taken by the U.S. government should not undermine the national security policy objectives of the U.S. government, including advanced semiconductor production at TSMC Arizona.
(Mostly) Asia-Pac M&A: Xanadu Mines, Reject Shop, ESR Group, Shibaura Elect., Jamco, Tsuruha/Welcia
- I tally 46 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
- Just one new deal was discussed on Smartkarma this week: Bastion’s off-market Offer for Xanadu Mines (XAM AU).
- Key updates/news took place on: Reject Shop (TRS AU),ESR Group (1821 HK), Shibaura Electronics (6957 JP),Jamco Corp (7408 JP), and Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP).
Palantir Technologies Is on Fire with U.S. Growth and AI Momentum—But One Risk Could Derail It All!
- Palantir Technologies entered 2025 with first-quarter results that underscore both the power of its artificial intelligence portfolio and the hurdles that still shadow its global ambitions.
- Revenue climbed 39% year over year to roughly $1.02 billion, led by a 55% jump in the United States, where commercial sales surged 71% and government revenue rose 45%.
- Management highlighted that U.S. commercial activities have crossed a $1 billion annualized run rate and that uptake of its new Artificial Intelligence Platform is “racing ahead” across healthcare, financial-services, and industrial clients.
Itron Is Capturing Utility Market with Smart Grid Revolution—Is It the Ultimate Energy Infrastructure Play?
- Itron’s first quarter of 2025 financial results demonstrated a robust performance characterized by strong margin expansion and earnings growth that surpassed expectations.
- The company delivered a revenue of $607 million with an adjusted EBITDA of $88 million, indicating a solid operational quarter.
- Non-GAAP earnings per share reached $1.52, representing a substantial year-over-year increase, while free cash flow doubled from the previous year to $67 million.
Lumen Technologies: Recent Divestiture Of Consumer Fiber Business To AT&T
- Lumen Technologies’ latest earnings reveals a company engaged in an ambitious transformation, illustrated by both promising developments and notable challenges.
- The organization executed well on its strategy to drive operational efficiency, enhance its AI infrastructure, and transition its telecommunications model to a cloud based system.
- These areas contributed to better-than-expected financial outcomes for the first quarter of 2025.
Microsoft Just Sent a Message to the Market: Cloud, AI, and Cash Are King!
- Microsoft Corporation’s latest quarterly results delivered a strong rebound in investor confidence, with all major business segments exceeding internal forecasts and analyst expectations.
- The company posted $70.1 billion in revenue, marking a 13% year-over-year increase.
- Operating income reached $32 billion, coming in 6% above consensus estimates, and net income stood at $25.8 billion, or $3.46 per diluted share, well ahead of the expected $3.22.
ON Semiconductor: A Tale Of Restructuring & Non-Core Business Exits For Long-Term Growth & Profitability!
- ON Semiconductor reported a performance that reflects both ongoing strategic maneuvers and the challenges posed by the current economic landscape.
- The company delivered first quarter 2025 revenues of $1.45 billion, slightly exceeding the midpoint of their guidance, and achieved non-GAAP earnings per share of $0.55.
- The non GAAP gross margin was reported at 40%, highlighting the impact of their operational strategies amid a challenging environment.
InterDigital Just Secured 80% of Smartphone Market—Will $500 Million in Recurring Revenue Become A Reality?
- InterDigital, a company specializing in technology development and licensing, reported a strong start to 2025, surpassing expectations with its first-quarter financial results.
- The company achieved revenue of $211 million for the quarter, exceeding both the initial guidance range of $116 million to $206 million and the prior year’s revenue of $264 million, which had been bolstered by a significant Samsung TV license.
- This performance was primarily driven by newly signed licensing agreements with Vivo Mobile, a major smartphone manufacturer, and HP, which license personal computers to InterDigital’s WiFi and video decoding technologies.
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