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Strategies & Market Trends : The Art of Investing
PICK 44.56-2.8%Nov 4 4:00 PM EST
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To: Sun Tzu who wrote (8282)3/19/2024 1:48:38 PM
From: Trader J2 Recommendations

Recommended By
Lou Weed
Sonali

  Read Replies (3) of 10513
 
And that talk applies even more so to NVDA and much more so to SMCI. Why much more so to SMCI? Because as NVDA ramps up production, and as all the cloud providers bring in their own AI chips, there will be fewer reasons for SMCI to exist.

I can't get there myself but it doesn't mean that the thesis is incorrect. But that won't be known for some time in my estimation. If I was as negative as you are on the company, "long on conviction" as I say, it would be nearly impossible for me to not play the looming downside I expect.

For myself, I look for opportunities wherever they exist, at least when it comes to trading. Most of my portfolios are all invested for the long term either based on income needs or a balanced diversification for growth in the IRAs and Roth.

It's really going to come down to their performance over the next few quarters and I always try to stay 100% objective in my analysis. The SMCI hardware has been impressing in efficiency and they do win as NVDA wins but to a lesser degree. Their financial performance was great last quarter but under the hood, they do need cash and they are going to have to continue issuing shares to raise capital. This also means that they will need a high share price which could play into the shenanigans concerns you have.

I learned long ago not to use absolute terms (will/won't/can't/never/always) when it comes to investing. As soon as those words get used, you've lost objectivity and I rarely do well when my objectivity is gone.

Thanks for the discussion. I'm going to be intrigued as this story plays out. It's fascinating.

J
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