6 selected US stocks related to AI and semiconductors! What will happen to M7, the "momentum" and "contrarian" stocks that became visible after passing the earnings?

AI相場が2年近く続いているなか、決算ごとに新たな「勝ち組」と「負け組」が浮上and 「勝ち組」と「負け組」の入れ替わりIt is also happening. In this earnings announcement season, there has been a movement to “sort out” the winning and losing groups based on the earnings results.

今回は、決算発表を終えたAI・半導体関連の米国株の中からまずは、その「勝ち組」と「負け組」を確認する。そのうえ、決算内容や業績見通しから「順張り」と「逆張り」銘柄をセレクトした。中には注目の大型テック株に限らず、中小型の「隠れAI株」Also included in etc.

Even in this earnings call, the position of the world's largest foundry as a 'winner' was clearly established. $Taiwan Semiconductor (TSM.US)$ で、「負け組」から「勝ち組」に浮上する可能性が示されたのは $Lam Research (LRCX.US)$ となった。一方、「負け組」の顔ぶれには $Advanced Micro Devices (AMD.US)$ $Teradyne (TER.US)$ 、 $ASML Holding (ASML.US)$ が並ぶ。「勝ち組」から「負け組」へ転じたように見えたのは、 $Monolithic Power Systems (MPWR.US)$ .

M7 stock
Regarding "The Magnificent Seven," the number of stocks with price volatility of less than 5% has decreased to half, but for reference, we have decided to list all stocks (※ $NVIDIA (NVDA.US)$ November 21 is scheduled for earnings reports).

$Tesla (TSLA.US)$ Unexpectedly, the gross profit margin improved and surged. There was an impression of being in the "losing group" due to the downward performance trend. $Amazon (AMZN.US)$ glass emerged as the 'winning group.' $Alphabet-A (GOOGL.US)$ microsoft also released better than expected earnings reports. On the other hand, there are high expectations for its emergence as the 'winning group.' $Apple (AAPL.US)$ The performance of X was lackluster. On the other hand, the stock price reaction seemed more restrained compared to others. It also appeared to have transitioned from the "winning group" to the "losing group". $Meta Platforms (META.US)$ and $Microsoft (MSFT.US)$ .

Selection of 3 stocks for trend following
$Taiwan Semiconductor (TSM.US)$
◇ Against the backdrop of strong demand, the company has once again raised its full-year revenue forecast for 2024. Amid concerns about the sustainability of AI importance, the CEO of the company stated, "The demand is real. I believe we are just getting started."
◇From the earnings reports of Amazon.com, it has been revealed that the demand for custom semiconductors is rapidly expanding against the backdrop of strong AI demand. It is expected to be beneficial for the company, which holds the world's top share in AI semiconductor foundries.
◇The valuation with an estimated PE (price-earnings ratio) of about 27 times exceeds the 5-year average of 22 times, but considering the growth prospects, it may not be significantly overvalued.

$Amazon (AMZN.US)$
◇This earnings report exceeded market expectations. Both the main online store and AWS performed well, and the significant increase in operating profit due to the accelerated growth of AWS, which was not expected to be so high, became a positive factor.
◇There is also a possibility that Amazon could once again create a growth story. Along with the contribution to performance through the introduction of AI services, indicating an intention to expand capital investment can be considered as a point of evaluation.
◇The valuation with an expected PE ratio of 27.9 times significantly below the 5-year average of 42.5 times. Considering the performance and outlook of this time, it seems to have a sense of undervaluation.
Related articles:[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as well!

$Corning (GLW.US)$
◇With a history of 170 years, the world's largest glass product manufacturer. Currently, expanding its business focusing on optical fibers and displays. To meet the connection demand of AI servers, they have developed small optical fibers and small connectors. They have started shipping optical connection products developed for AI generation from this year.
◇Results for July-September and the outlook for October-December both exceeded market expectations. The strong performance is supported by the favorable trends in AI products. Amid the continued construction boom of AI data centers, it is expected that the benefits to the company will continue in the future.
◇The valuation with an expected PE ratio of 21.1 times exceeds the five-year historical average of 16.8 times. While there is a sense of overvaluation, considering the outlook for performance expansion backed by AI contributions, there could also be a possibility of valuation increasing in the future.

Three contrarian stock selections
$Microsoft (MSFT.US)$
◇The performance for the July-September period exceeded financial estimates, but the revenue from the cloud department's Azure is expected to increase by 31% to 32% in the October-December period, causing a slight slowdown compared to the previous quarter. The management's reiteration of expanding investments for artificial intelligence also contributed to the negative sentiment.
◇While expanding capital investments, it is expected that the revenue growth rate of the cloud department will decrease slightly, which could weigh on the stock price in the short term. On the other hand, considering the company's past performance, investments in artificial intelligence are expected to boost performance in the medium to long term.
◇The valuation with a pe of 29.4 times forecasted earnings per share is at the same level as the 5-year average (29.4 times). There is no significant undervaluation, but the attractiveness of long-term investments may have increased.
Related articles:【Financial Results Summary】microsoft, increase in revenue and profit due to cloud growth, but concerns are growing for the second quarter outlook.

$Advanced Micro Devices (AMD.US)$
◇Based on the earnings reports this time, the performance momentum is not as strong as the previous quarter, and in the short term, the pace of performance expansion is expected to fall below market expectations.
◇The company is strengthening the acceleration of the product cycle and expansion of supply, so there may be a possibility of accelerated pace of performance expansion in 2025.
◇The valuation has an expected pe of 32.8 times, which is below the five-year average of 35.1 times, indicating some degree of undervaluation.
Related articles:[Earnings Summary] AMD, AI semiconductors performing well! Nvidia's footsteps are still far away. Expecting an acceleration in pace by 2025.

$Monolithic Power Systems (MPWR.US)$
◇Providing high-performance electrical solutions based on semiconductors. The company offers products in a wide range of fields such as computers, datacenters, automobiles (ADAS related, etc.). It has maintained strong performance expansion, achieving positive growth even during the industry's downturn.
◇In this earnings report, both the performance for July-September and the revenue forecast for October-December exceeded market expectations, but the enterprise data segment fell short of expectations, leading to profit-taking selling. On the other hand, considering the past performance, the sharp drop in stock price may be seen as a somewhat excessive reaction. The benefits of AI are also expected to continue in the future.
◇The valuation is approaching the expected PE ratio of 38.6 times, which is close to the 5-year average (37.6 times). It may be said that the significant drop this time has largely alleviated the sense of overvaluation.

*For a summary of the earnings of the rest of the "Magnificent 7", please refer to the information below.
◇Alphabet:[Earnings Summary] Google, 35% growth in cloud business due to AI investment! Hit record high with strong earnings, up nearly 6% in after-hours trading!
◇Meta:[Earnings Summary] Meta, despite increased revenue and profit, drops more than 3% in after-hours trading. Expected significant increase in AI investments.
◇Apple:[Earnings Summary] Apple, while seeing improvement in iPhone sales, continues to struggle in China. Uncertain outlook leads to a lackluster performance in after-hours trading.