Hi All
Welcome to our brief overview of portfolio news from the past few days.
Advanced Micro Devices
AMD’s EVP of Data Center Solutions participated in Goldman Sachs conference. MI450 is launching next year, which they believe will be their "Milan moment", the point where they have a product which can compete for any AI workload, training or inference. Starting with the MI300 series, AMD offered a competing product in terms of inference and now expanding into training with MI400 series.
This is the exact strategy they used to win massive share from Intel in the CPU market. It shows a clear plan to catch the competition. They are focused on becoming a meaningful player (targeting >20% market share) by delivering superior TCO. Assuming $7 billion of annual Data Center GPU revenue and $147 billion for Nvidia, AMD’s market share today is less than 5%.
Lululemon
Lululemon reported Q2 earnings last week. While EPS of $3.10 beat expectations, revenue of $2.5 billion (+7%) fell short. The big story is the weakness in the Americas, where comparable sales fell 3% on a constant currency basis. International sales remained strong, up 22%. The company lowered its full-year guidance on both revenue and profits, citing the US underperformance and the impact of tariffs as well as the removal of the de minimis provision.
The US weakness is a real concern and the reason the stock is trading at 52-week lows. Management admits they let some core casual products get "stale" and are now focused on bringing in newness. Given the low valuation (forward EV/EBIT multiple of 8.2x) as well as the extraordinary impact of tarriffs on the overall industry, we're neither sellers or buyers here, but we will be watching their execution in the coming quarters.
Adyen NV
Speaking at a Goldman Sachs conference, the CFO explained that while growth from their existing customers slowed in H1, their ability to win new customers and expand "share of wallet" remains strong. The 2025 cohort of new customers is actually developing faster than in past years. They see a massive opportunity in Platforms, which is growing over 50%.
ASML
In a surprise move, ASML announced it is investing €1.3 billion for an 11% stake in French AI startup Mistral AI. This is an unusual move for ASML, whose core business is centered on highly specialized lithography equipment (EUV and DUV). It immediately raises questions about capital allocation and how a direct investment in an AI model developer will directly benefit ASML's core business.
Amazon
Made a strategic investment in the Colombian delivery startup Rappi. They acquired a $25 million convertible note with the option to take up to a 12% stake. This expands their footprint in Latin America and gives them access to Rappi's last-mile delivery network.
That's a wrap. See you soon.
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