To The Moon

GlobalFoundries reported Q3 FY24 results and outlook earlier this week, leading us to believe there's a U-turn underway for the stock. GlobalFoundries' Q4 guidance surpasses consensus, boosting investor confidence and driving a 27% stock increase in two days. Having said that, GFS's outperformance will remain closely linked to the Smart Mobile Devices segment, which should see recovery next year but remains lackluster for 2024. GFS benefits from U.S. foundry status and CHIPS Act funding, with potential further support under the Trump administration in 2025. We now think GFS is better positioned to outperform but don't expect to see a material sustained level of outperformance in the near term. chinaface/E+ via Getty Images We're upgrading the stock to hold after a long, bearish stance post

We're upgrading PayPal after Q3 FY24 earnings results and outlook pulled back the stock. Q3 results show promising profitability shift, with transaction margin growing to 46.6% and profits up 14% Y/Y, confirming management's on the right track for profitable growth. PayPal also remains cheap relative to the peer group. We think sustained active account growth and better user monetization with partnerships should support the next leg of outperformance. Paper Boat Creative We're upgrading PayPal (NASDAQ:PYPL) to a buy after Q3 FY24 earnings results' revenue miss and higher-than-expected operating expenses dragged the stock price lower and brough

Summary We remain buy-rated on Microsoft, anticipating an AI payoff in 2025. Our belief is that Microsoft’s next leg of material outperformance will come from its heavy AI-related investments turning into AI monetization. We think the company is uniquely positioned to stand on that leg next year due to its positioning with Copilot sticky integration and better Azure growth as macro headwinds ease. We expect Microsoft to be an outperformer for 2025. PM Images/DigitalVision via Getty Images We're maintaining our buy rating on Microsoft (NASDAQ:MSFT), but updating our investment thesis. The stock fell after reporting its Q4 results

Summary We're downgrading NetApp to a hold as the positives from the memory/storage recovery are already priced in, with the stock near historical highs. We don't see any near-term catalyst at play to boost top line growth, and hence we see a higher risk profile for NTAP in the 2H24. We recommend reducing exposure to memory/storage names as the recovery appears fully priced into the peer group. NTAP is relatively cheap compared to peers, but near-term risks and lack of catalysts suggest it won't outperform the S&P 500 in 2H24. Henrik Sorensen We're downgrading NetApp (NASDAQ:NTAP) to a hold as we think the positives from the memory/storage recovery have been priced into the stock, with the stock valued near historical highs. We last up

Summary Advanced Micro Devices, Inc. announced its $4.9B acquisition of ZT Systems as a strategic move in the AI market, but we see things differently. We think AMD holds a higher risk profile after the acquisition inflated AI-related growth expectations further with little fundamental basis. We're also seeing multiple expansions for AMD, making the stock expensive relative to semi-peers and increasing the risk of a price correction. Investor confidence in AMD's AI growth is misplaced; the acquisition will likely only delay a bigger (disappointing) confrontation between AMD's real AI capabilities and Wall Street's AI expectations. Sunny Advanced Micro Devices, Inc. (NASDAQ:AMD)

Summary We continue to expect more upside for Taiwan Semiconductor before the AI tailwind gives out. We think TSMC is uniquely positioned in the foundry market in terms of share and technological advantage to benefit from high demand for AI and potential end demand rebound in 2025. Trump's comments and the geopolitical concerns about the chip wars between the U.S. and China undermine the potential upside for TSMC. We expect TSMC to comfortably outperform expectations and the S&P 500 in 2025. Blackstation/DigitalVision via Getty Images Taiwan Semiconductor Manufacturing Company (NYSE:TSM) continues to be one of our semi-favorite picks during the AI rally; the stock is up ~85% since we

Summary We're downgrading Micron Technology stock as we think the positives of DRAM and NAND recovery have been priced in. The memory market began to recover this year due to better demand-supply dynamics and AI-led demand for HBM; we think the good news from this recovery was priced into MU's stock. We see limited room for outperformance at the back end of the year as the end demand environment for PC, smartphone, and AI server unit growth remains soft. We recommend investors stay on the sidelines for the near term until a more favorable risk-reward profile appears for 2025 tailwinds. PM Images We're downgrading Micron Technologies (NASDAQ:MU) to a hold. Simply put, we think the DRAM and NAND price recovery has been priced in for 2024. MU's

Summary AMAT's 3Q24 results and outlook lead us to believe that the stock will see a soft back end of the year before material outperformance in 2025. Our previous expectation of a 2024 WFE rebound was premature; instead, we now expect the rebound to take place in 2025, supported by unit demand recovery and AI-led demand. We think the downside from sales to China shrinking as a percentage of total revenue will be priced in by the market in 2H24 and won't spill into 2025. We expect AMAT to outperform in 2025 as leading-edge WFE spending for foundry/logic and DRAM recovers. Jorg Greuel/DigitalVision via Getty Images Applied Materials (NASDAQ:AMAT) reported its

Summary ASML reported its 2QFY24 results and outlook earlier this week causing a pullback on disappointing Q3 guidance. We say buy the dip. Management guided for a 7-17% Q/Q growth to €6.7B-€7.3B, missing consensus estimates of €7.67B. Our upgrade is based our belief that the higher risk profile of an expanded U.S. export ban and geopolitical tensions has been priced in. Now, ASML is better positioned to outperform on increased industry adoption of EUV for DRAM and logic used in AI servers and edge AI devices. We expect ASML to outperform the peer group in 2025 and believe the stock has been de-risked at current levels. Mordolff/iStock via Getty Images We're upgrading ASML (NASDAQ:ASML) to a buy after a long, neutral stance. The company re

Summary We’re hold-rated on Analog Devices stock. 4Q23 results and outlook confirm ADI will continue to experience top-line deceleration and gross margin contraction due to the industrial and auto correction through 1H24. We see no near-term catalyst offsetting the softer end-demand in all ADI’s end markets. Additionally, we don’t believe the weakness has been fully priced into the stock yet. We recommend investors remain on the sidelines as we see ADI being an in-line performer into 2024. Ghulam Hussain/iStock via Getty Images We’re maintaining our hold rating on Analog Devices (NASDAQ:ADI). We don’t think the bottom is here yet; we continue to expect the auto and industrial correction to cause top-line deceleration and gross margin contra