Monday, January 18, 2016

Invest or Trade?

A three day weekend has provided us with a good respite from the turmoil in the financial markets.  Not that the turmoil is going to subside anytime soon - we just needed a break.  We needed a break to clear the fog and tune out the noise.

World economies are growing at a snail's pace so questions about end demand have technology investors on the edge of their seats.  News about Apple grabs the center stage each and every day.  Until Apple releases their quarterly the purported weakness in iPhone sales will haunt a good portion of the chip sector.

When Intel reported last week very few were expecting strong numbers.  There were indications from the motherboard houses that PC and notebook builds were waning.  The datacenter group continues to lead the charge but even growth rates in that segment slowed (granted, there were tough comparisons against the previous year but slower is slower no matter how you slice it).  Intel's memory business is growing nicely but it's not a needle mover.  If all the production issues are put to bed 3D XPoint will take the center stage in the last half of this year.  3D XPoint is much, much more important than the memory that comes off today's production line.

A good summary of the Intel earnings report can be found here:

Here's a decent piece on 3D XPoint as presented during this year's Industry Strategy Symposium:

Not to be forgotten, the next quarterly report will shed some light on the integration of Altera's $400 million quarterly run rate.  Not much was said on the conference call other than things seem to be moving forward.  FPGA sales are tightly linked to growth in the economy,  Keep that in mind.

As the end markets for smartphones and PCs mature the IoT has become the next big driver for all things semiconductor.  IoT encompasses just about anything you can fathom and one can only surmise that it is in the nascent stage of implementation.  The biggest players in the chip business are screaming from the rooftops but Wall Street seems reluctant bite on the hype (I tend to agree).      

A couple of links for posterity:

Intel's IoT hoopla was all over the news during CES:

Global Foundries foresees a Golden Age (seriously?):

And Marc Andreesen grabs on to the 3rd technological revolution, aka, "Sensorization":

I could probably create a Drudge-like page and fill it with stories hyping the IoT.


Does one belly up and buy chip stocks, Intel, on this weakness?  Volatility in the markets is exceptional right now so opportunities to trade, if one has such an inclination, are available on a daily basis.  Given how I am viewing the coming year I feel as though trading seems like the right strategy.

Of course, I reserve the right to change my mind at the drop of hat.


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