To The Moon

Here’s a recap of the weekly gains and key highlights for the top stocks that were in focus last week.

Tesla $Tesla Motors(TSLA)$ (+21.97%)

• Tesla's stock rose 21.97% last week on earnings beat.

• However, its year-to-date return of 8.33% remains the worst among the Magnificent Seven.

• While the earnings surprise is encouraging, it is not a game-changer; the main investment thesis is that Tesla will launch new car models in the first half of 2025.

• Currently, Tesla is my least favorite stock among the Magnificent Seven. I believe much of the optimism is already priced in, and there will be better accumulation opportunities ahead.

ARM $ARM Holdings Ltd(ARM)$ (-6.06%)

• ARM's stock fell 6% last week due to a legal dispute with $Qualcomm(QCOM)$ .

• ARM issued Qualcomm a 60-day notice to cancel its use of ARM's chip design standards.

• In 2022, ARM sued Qualcomm over its acquisition of Nuvia, arguing that Nuvia's license to use ARM's architecture was not transferable to Qualcomm.

• Qualcomm accounted for 11% of ARM's revenue in 2023, so ARM's revenue will be impacted if Qualcomm stops using its architecture.

• I see the license termination as a leverage tactic to push Qualcomm back to the negotiating table before the December 16 trial.

• They will likely reach a compromise, making any short-term drop in ARM's stock a good accumulation opportunity.

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Nvidia $NVIDIA Corp(NVDA)$ (+2.57%)

• Nvidia's Blackwell AI chips are sold out until the end of 2025 due to skyrocketing demand.

• Four Nvidia customers—$Meta Platforms, Inc.(META)$ ,$Alphabet(GOOG)$ ,$Microsoft(MSFT)$ and $Amazon.com(AMZN)$ —are announcing earnings this week. If they report higher-than-expected capex spending, Nvidia's stock could rise further.

• Bank of America recently increased Nvidia's target price from $165 to $190 while maintaining a buy rating. More research firms may also raise their target prices after hyperscalers provide their capex outlooks in their earnings calls this week.

TSMC $Taiwan Semiconductor Manufacturing(TSM)$ (+1.32%)

• TSMC continues to rise despite potential violations of US export controls.

• Reports indicate that TSMC has been producing AI chips designed by Huawei, which placed orders through a third-party company, even though Huawei is restricted from buying TSMC's chips.

• It's no surprise that TSMC is on a bull run, having emerged as the top contract chipmaker. Competitors like Intel have slashed capex, making it difficult for them to keep up with TSMC's investments. Meanwhile, Samsung's foundry operations face low yields and have lost major customers to TSMC.

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