Trading the tech boom: The Committee's top strategies
The Investment Committee debates trading the tech boom, with divergent views on Apple's valuation but agreement on AI momentum. They highlight the semiconductor sector as the key beneficiary of massive AI capex, and single out Marvell and Synopsys as under-the-radar plays. Stephanie finds Apple overvalued and prefers other tech names.
- Apple hit a record high and is the top mega-cap performer in May, with WWDC as a catalyst.
- Joe is aggressively buying Apple, expecting AI-driven consumer upgrades.
- Jim rides Apple's momentum but plans to trim when it fades, citing overvaluation.
- Stephanie avoids Apple due to high valuation relative to growth.
- The semiconductor sector is benefiting from $761B in Mag-7 AI capex this year.
- Marvell is highlighted for its optics and custom ASIC growth, with a Google partnership.
- Synopsys is mentioned as an off-radar beneficiary of rising chip complexity.
- The committee notes a rotation from Mag-7 into semiconductor beneficiaries.
Идеи
Apple AI catch-up trade with momentum.
Apple is at the beginning of finally embracing generative AI and agentic AI, delivering tangible consumer experiences. The iPhone 18 and Siri improvements will drive a catch-up trade. Despite mid-30s valuation, the growth justifies it. I bought at 252.5 and will continue to buy as it moves higher.
Marvell growth in optics and ASIC.
Marvell has strong growth in optics (50%) and custom ASIC (20%, expected to double by FY28). It is less cyclical than Micron, has a Google Anthropic partnership, and earnings power north of $6. Despite a 150% YTD run, the valuation at 35x forward is not expensive given the growth. I bought at 165 and expect any pullback to be bought.
Semiconductor beneficiary of AI capex.
The semiconductor sector is the primary beneficiary of Mag-7 AI capex, which is $761 billion this year and set to exceed $1 trillion next year. Earnings growth for XLK was 50% last quarter, with 90% of revisions from semiconductors. Investors are selling the Mag-7 and buying the beneficiaries.
