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Feb 12, 2026
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LONG
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Cisco's margins are "really hurt by this crunch, this unprecedented crunch in memory chips... That crunch has sent prices skyrocketing." One company's cost crunch is another's margin expansion. If memory prices are skyrocketing due to shortages, the manufacturers of those chips possess immense pricing power and will see earnings beats. Long the suppliers of memory. Sudden drop in AI/Data center demand resolving the shortage. |
Bloomberg Markets
Stocks Climb; Nuveen to Buy Schroders; Anthro...
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Feb 12, 2026
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SHORT
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Stock down ~8% pre-market. "Margins are really hurt by this crunch... unprecedented crunch in memory chips." Cisco is on the wrong side of the hardware inflation trade. They are a buyer of expensive components, and while sales are okay, profitability is being squeezed by input costs they cannot fully pass on immediately. Short/Avoid on margin compression. Company successfully passes costs to customers faster than expected. |
Bloomberg Markets
Stocks Climb; Nuveen to Buy Schroders; Anthro...
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Feb 12, 2026
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LONG
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"Fastly is going to be one of those companies that is really benefiting from the tailwinds of AI." The market is looking for "catch-up" trades or second-derivative AI plays beyond the Mag-7. Management is successfully pivoting the narrative to AI edge compute. Long speculative AI rotation. Execution failure; AI benefits turn out to be marketing fluff rather than revenue. |
Bloomberg Markets
Stocks Climb; Nuveen to Buy Schroders; Anthro...
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