Lorraine Tan

The speaker identified Tencent as a buying opportunity, seeing "maybe a little bit more" than ~20% upside to its intrinsic value. She stated its underlying economic model is solid, it will benefit from AI in reducing programming costs, and its strong platform (WeChat) is a defensive moat. The recent selloff in software names has been indiscriminate. Tencent's core gaming and social media businesses are stable, and its vast user network and IP position it to monetize AI advancements and improve productivity, which is not fully reflected in its current price. LONG due to a combination of valuation upside, resilient core business, and strategic positioning to capitalize on AI efficiency gains. Disappointing earnings results or increased regulatory scrutiny from Chinese authorities impacting its growth plans.

Lorraine Tan said longer-term chip plays like TSMC and TDK are more interesting with more potential upside versus risks compared to memory players. TSMC and TDK are involved in chip manufacturing and components with less exposure to memory cycle volatility, benefiting from structural demand in technology. Long TSMC and TDK as they offer better risk-reward profiles in the semiconductor sector. Geopolitical tensions or economic slowdown could reduce chip demand.

Alibaba is a preferred name because it has underperformed and has long-term AI monetization potential through integration of AI into its e-commerce platform, despite near-term headwinds in e-commerce and cloud.

Lorraine Tan said she is favorable on gaming companies like Tencent, Sanrio, and Kobe Tecmo, which have pulled back on AI risk concerns but have competitive advantages. The selling was indiscriminate, and these companies have time over the next five years to strengthen their positions, offering good value. Long Tencent, Sanrio, and Kobe Tecmo as they are undervalued due to market overreaction. Changes in consumer preferences or regulatory issues in gaming industries.

The speaker maintains Sell calls on both Samsung and SK Hynix, stating they are "still seeing them to be 25%-30% above where we want their share prices to be." The view is based on expecting the memory price cycle to come off as new capacity comes online. The current high memory prices are cyclical. Significant new capacity is planned and will come to market, likely depressing prices and earnings for these dominant memory producers in the coming years. SHORT (or AVOID) based on anticipated cyclical downturn in memory prices, making current valuations unattractive despite recent pullbacks. Sustained, stronger-than-expected demand for memory (e.g., from AI servers) that outpaces new capacity additions, prolonging the cycle's peak.

The speaker maintains Sell calls on both Samsung and SK Hynix, stating they are "still seeing them to be 25%-30% above where we want their share prices to be." The view is based on expecting the memory price cycle to come off as new capacity comes online. The current high memory prices are cyclical. Significant new capacity is planned and will come to market, likely depressing prices and earnings for these dominant memory producers in the coming years. SHORT (or AVOID) based on anticipated cyclical downturn in memory prices, making current valuations unattractive despite recent pullbacks. Sustained, stronger-than-expected demand for memory (e.g., from AI servers) that outpaces new capacity additions, prolonging the cycle's peak.

The speaker named Nintendo as a specific buying opportunity created by the recent selloff, citing it as a company that has "been weak on a relative basis this year." Nintendo owns strong intellectual property (IP). The selloff appears overdone relative to its solid underlying economic model and the durable value of its IP, which provides a competitive advantage. LONG as a valuation play on a quality name with valuable IP that has been sold off disproportionately. A significant downturn in consumer spending on gaming or a major product cycle failure.