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?

In this earnings announcement, the position of being clearly established as a 'winner' was secured by the world's largest foundry. $Taiwan Semiconductor (TSM.US)$ 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 $Advanced Micro Devices (AMD.US)$ Ya $Teradyne (TER.US)$ 、 $ASML Holding (ASML.US)$ 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 stocks
Regarding 'The Magnificent 7', although the stocks with price volatility below 5% have halved, we have decided to publish all stocks for your reference (* $NVIDIA (NVDA.US)$ is scheduled to announce earnings on November 21st).

$Tesla (TSLA.US)$ The unexpected improvement in the gross profit margin led to a sharp rise. There was also an impression of being in the 'losing group' due to the poor 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 company x was lackluster. On the other hand, the stock price reaction appears more restrained compared to others. It also seemed to have shifted from the 'winning group' to the 'losing group'. $Meta Platforms (META.US)$ and $Microsoft (MSFT.US)$ It became so.

Selection of 3 stocks for trend following
$Taiwan Semiconductor (TSM.US)$
◇ Against the backdrop of strong demand, the company has once again revised upwards its full-year revenue outlook for 2024. Amid concerns about the sustainability of AI demand, the CEO stated, "The demand is real. I believe we are just getting started."
◇From the earnings report of Amazon.com, it was revealed that the demand for custom semiconductors is rapidly expanding against a solid AI demand. It is expected to be a significant benefit for the company, which has the world's top market 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.

$Amazon (AMZN.US)$
◇The earnings report this time 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 as high as expected, 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 is significantly below the five-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.
◇Both the results for July-September and the outlook for October-December exceeded market expectations. Strong performance is being supported by robust sales of AI products. With the ongoing 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 5-year average of 16.8 times. Although it is considered expensive, considering the forecasted performance expansion backed by AI contributions, there may be a possibility of valuation increasing in the future.

Three contrarian stock selections
$Microsoft (MSFT.US)$
◇The performance for the July-September quarter exceeded expectations, but the revenue from the Azure cloud division is expected to slow down slightly in the October-December quarter, with an increase of 31% to 32% compared to the previous quarter. The management's reiteration of expanding investments in AI was also poorly received.
◇While expanding capital expenditures, the growth rate of the cloud division is expected to decrease slightly, becoming a short-term drag on the stock price. On the other hand, based on the company's past performance, investments in AI are expected to boost performance in the medium to long term.
◇The valuation with an expected PE ratio of 29.4 times is at the same level as the 5-year historical average (29.4 times). While there is no significant undervaluation, the investment attractiveness in the medium to long term may have increased.
Related Articles:Microsoft's earnings summary: Despite increased revenue and profit growth driven by cloud expansion, concerns are growing for the second quarter outlook.

$Advanced Micro Devices (AMD.US)$
◇Based on this earnings report, the momentum of performance is not as strong as the previous quarter, and in the short term, the pace of performance expansion is expected to fall below market financial estimates.
◇The company is strengthening the acceleration of product cycles and supply expansion, so it is likely that the pace of performance expansion will accelerate in 2025.
◇The valuation has an expected PE ratio of 32.8 times, which is below the five-year average of 35.1 times, suggesting a slight 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 period and the revenue forecast for October-December period exceeded market expectations, but the enterprise data segment fell short of expectations, pressured by profit-taking sales. On the other hand, considering the past performance, the sharp drop in stock price may be somewhat of an overreaction. The benefits of AI are expected to continue in the future.
◇Valuation with an expected pe ratio of 38.6 times is approaching the 5-year average (37.6 times). The significant drop this time may have significantly alleviated the sense of overvaluation.

Please refer to the following for more information on the earnings reports of other stocks in the 'Magnificent 7'.
◇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.