| | | I don't think this BofA guy understands SIMO and tech stocks well, but I've never met him.
"Similar to memory chipmakers, SIMO could also benefit from strongly growing sovereign AI investments by selling eSSD controllers/boot-drivers (known as MonTitan series)," Woo added.
Mon Titan is not part of SIMO's boot drive solution with NVDA. The boot drive product for NVDA's coming in H2 2025 Bluefiled 3 DPU is part of SIMO's Ferri product line. Mon Titan is an enterprise SSD controller. The Bluefield 3 DPU has capacity to connect to 30 enterprise SSDs, and SIMO is trying to win the controller design slot for those potential enterprise SSDs using their Mon Titan chip, but it is not the boot drive (the chip used to launch the Bluefield 3 DPU when ya turn it on)!
What's a "sovereign" AI investment? I know what a sovereign wealth fund is - used to work at one.
"Our new PO of US$90 is derived from 3.8x 2025-26E P/B (was 2.4x)," Woo said. "This is close to the upper band of the historical range (2.0-4.0x in 2015-24) due to new growth opportunities with AI data centers."
This is the only analyst I know that upgrades a semiconductor stock for various reasons, and then says it deserves a higher price to book value than it used to. Most valuation processes for tech stocks use EPS or sales, but ..... price targets don't mean too much anyways.
The key message is SIMO's legacy sales (PC and cell phone controllers) are going up over the next 2-3 years, and SIMO has a few sexy AI / enterprise / auto sectors that - if they do well - may go up for 5-10 years.
What's that worth today? Not sure, but it will be fun to sit and watch to see how the stock market wants to value this sales growth - both legacy "dull" segments and new "interesting" segments. Cuz both are coming. |
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