If anyone other than me 'n Paul are invested in SIMO, it's definitely not a "value" play at the current ~$90 share price. It's outlook for at least the next 12-18 months still looks very nice, and it should put up nice sales growth reaching all time high in sales in Q4 2025, with an outlook for sales growth in 2026.
But.........
It's still 80%-90% or so selling chips into consumer products (PCs, cell phones, gadgets), and that market segment generally DOES NOT get a premium valuation.
I'm still holding mine, planning to start selling some off when SIMO approaches $110 or so. But if you're conservative in terms of valuation, reducing any SIMO position above $90 is not a bad idea.
I sort of like to have a shot at 100% gain in a stock pick over 12-18 months if everything goes well. I'd be pretty shocked if SIMO is able to get to $180 in ~18 months. But ya never know. Somehow SIMO has caught the "AI buzz", and it moves up a decent amount on days like today when many of the AI stocks are rallying. SIMO has a future product which targets AI data centers, but so far the indication that the product is doing well (or selling at all) are pretty minimal. Maybe it will take off in 2026 and SIMO will rocket higher, but then it's a growth story with a majorly premium valuation, not the value story it has tended to be when I've pushed it. |
