Ideas
Nvidia undervalued as AI demand persists
Nvidia is now about 10% of the fund and is viewed as undervalued because it trades around 20x forward earnings, remains the mission-critical GPU supplier for the AI race, has a CUDA software moat, is capital-light, generates large free cash flow, and should benefit if the roughly $300 billion of Big Tech AI capex is sustained or enterprises start spending. Headline risk from Trump potentially weaponizing GPU exports and US reshoring costs creates volatility, but Nvidia should be able to pass on higher costs if it remains mission critical.
Silicon sovereignty supports equipment demand
The fund has large exposure to semiconductor equipment names including Lam Research, Applied Materials, and ASML. Stephen thinks silicon sovereignty and government/tax subsidies will push more foundries outside Taiwan, supporting demand for equipment, and Lam Research in particular looks cheap despite its historically cyclical consumer electronics end market.
Broadcom benefits from custom AI chip demand
Broadcom is a fund holding and benefits from Big Tech's in-house AI GPU/ASIC efforts, making it an indirect competitor to Nvidia. A surprise $10 billion buyback after the tariff-driven selloff indicated management sees such a strong AI development pipeline with customers like Google and Meta that tariffs or a global slowdown should not derail its earnings trajectory.
AI arms race favors infrastructure suppliers
Stephen remains predominantly invested in AI infrastructure within tech, through Nvidia, Broadcom, and semiconductor equipment, because Big Tech's spending on AI is an existential arms race rather than a discretionary trend. That spending supports demand for AI infrastructure suppliers even if the exact winners among mega-cap platforms are unclear.
Exited Meta on digital ad slowdown
Stephen exited Meta because, although he likes its AI story and three billion users, Meta's entire top line is digital advertising, which is highly cyclical and likely to slow in a global downturn or US recession. The removal of the de minimis exemption may also reduce aggressive ad spending from Chinese e-commerce merchants such as Temu, adding pressure.
Avoid digital advertising amid recession risk
Stephen wants to avoid digital-advertising-dependent tech companies in a tariff-driven global slowdown or recession because advertising budgets are among the first things companies cut. Consumer-facing tech is more exposed than assumed, and conversion rates and advertiser spending would fall if consumers feel poorer.
Netflix defensive, tariff-insulated entertainment demand
Stephen does not own Netflix but finds it interesting because it is not part of the tariff regime. In a weaker economy where consumers feel poorer or lose jobs, they may stay home and subscribe to Netflix for entertainment, making its demand relatively defensive.
Mission-critical bioprocessing tools carry pricing power
Danaher is a fund holding with mission-critical equipment exposure to biologics and biotech. Because its products are critical, represent a small part of customers' costs, and are not easily substituted, Stephen believes Danaher can pass tariff costs to customers. He sees that as real pricing power.
Tesla overvalued despite autonomous driving premium
Stephen has never owned Tesla and views it as overvalued even after a roughly 50% decline. Tesla's EV business faces intense competition from South Korean, Japanese, and Chinese automakers such as BYD, not everyone needs a Tesla, and the premium for Elon Musk's potential autonomous-driving breakthrough is hard to underwrite because it has not been cracked and may take longer with more competition.
Sold Microsoft on AI capex margin risk
Stephen sold Microsoft completely after it had been a top holding for years. While Microsoft remains entrenched through Office 365, Azure, and Teams, he doubts its ability to monetize AI/Copilot enough to justify the huge investment. Much AI spending has been capitalized, but depreciation will increasingly hit the P&L, and if incremental revenue does not cover it, margins and return on invested capital will compress.
This The David Lin Report video, published April 29, 2025,
features Stephen Yiu
discussing NVDA, LRCX, AMAT, ASML, AVGO, AIQ, META, Digital advertising, NFLX, DHR, TSLA, MSFT.
10 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Stephen Yiu
· Tickers:
NVDA,
LRCX,
AMAT,
ASML,
AVGO,
AIQ,
META,
Digital advertising,
NFLX,
DHR,
TSLA,
MSFT
