In today’s briefing:
- 2023 High Conviction – Chainlink, Bridging Blockchain with Real-World Data Source
- Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.
- Nitro Software: Potentia Matches KKR’s $2.00/Offer
- Elastic NV: Improvements To The Elastic Search Platform & Other Drivers
- What Is ChatGPT and What Does It Bring to the Table?
- PagerDuty Inc: Major Drivers
- Smartsheet Inc: Acquisition of Outfit & Other Drivers
- Snowflake Inc: Investment In OpenAP & Other Drivers
- Splunk Inc: Acquisition of TwinWave Security & Other Drivers
- Ambarella Inc: Major Drivers
2023 High Conviction – Chainlink, Bridging Blockchain with Real-World Data Source
- Chainlink provides essential data-feeding services for blockchains, providing a bridge between blockchains and real-world information and data sources for both crypto and non-crypto use cases.
- LINK token captures Chainlink’s network value, and new tokenomics 2.0 introduce staking further improve the supply & demand dynamic.
- LINK price is supported by the growing usage of Chainlink network as onchain activity continues growing despite the bear market.
Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.
- This model seeks companies that are potentially “overearning”, defined as companies with unusually high margins relative to their own history or relative to the industry.
- The reasons for the margin increases are sometimes unsustainable or fraudulent. The critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and/or the stock’s valuation.
- These shorts tend to have moderate to higher betas, higher valuations due to recent strong results and good short responses to subsequently disappointing earnings.
Nitro Software: Potentia Matches KKR’s $2.00/Offer
- Potentia Capital has bumped its Offer for Nitro Software Ltd (NTO AU) to A$2.00/share, matching KKR’s earlier Offer.
- Potential’s proposal – which also boasts a scrip alternative for those investors wishing to remain invested – is open for tendering, and has no minimum acceptance threshold.
- Nitro’s board has yet to provide a view on Potentia’s revised terms.
Elastic NV: Improvements To The Elastic Search Platform & Other Drivers
- Elastic NV managed to deliver an all-around beat in the last result as it continues making progress across innovation.
- The company has recently announced innovations over the Elastic Search platform, the prominent data analytics platform for search-powered solutions for transforming the way organizations observe, search, and protect their data.
- This quarter, Elastic expanded business with RDD, the leading supply chain, print, packaging, and marketing solutions provider.
What Is ChatGPT and What Does It Bring to the Table?
- OpenAI, a US-based AI firm set up by Elon Musk and Sam Altman, released the preview version of a chatbot model called ChatGPT (Chat Generative Pre-Training).
Immediately, the model took the internet world by storm, as the chatbot produced accurate, human-like answers (most of the time) to questions and commands.
- In a nutshell, the model was trained using a form of supervised fine-tuning called reinforcement learning from human feedback (RLHF).
PagerDuty Inc: Major Drivers
- PagerDuty performed well in the last quarter despite the relatively uncertain environment and delivered an all-around beat.
- The company saw a good performance in financial services, tech retail, and other verticals.
- Total paid and free customers on its platform grew, and consumers continued to adopt more products and services and expand users.
Smartsheet Inc: Acquisition of Outfit & Other Drivers
- Smartsheet gave a solid performance in the quarter that reflected narrower-than-expected losses and durable growth.
- The company added many new customers this quarter, like Bonterra, Monster Energy, and Arizona Beverages.
- On the innovation front, Smartsheet launched various Smartsheet experiences and capabilities at the September ENGAGE conference and also its WorkApps portfolio.
Snowflake Inc: Investment In OpenAP & Other Drivers
- Snowflake delivered yet another all-around beat as the company continues to achieve robust growth along with improved unit economics, operational profit, and free cash flow.
- Despite the weakening global macro context, Snowflake’s data strategy for contemporary businesses and institutions has helped it survive.
- Besides, the Snowflake Data Cloud continues to be well-received by major businesses and institutions.
Splunk Inc: Acquisition of TwinWave Security & Other Drivers
- Splunk delivered strong third-quarter results surpassing Wall Street expectations on all fronts.
- The company increased total revenues by 40% year over year to $930 million and cloud revenues by 54% to $374 million.
- Most of their customers continue to recognize the long-term benefits of moving to the cloud, despite being costly and resource-intensive.
Ambarella Inc: Major Drivers
- In this quarter, Ambarella experienced material headwinds from the industry-wide semiconductor cyclical downturn.
- Also, the content in the products of the customers continues to rise as it leveraged its historical success with optimized processing for high bandwidth sensing.
- We provide the stock of Ambarella with a ‘Hold’ rating with a revision in the target price.
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