Ashraf Eassa
Long/short equity, contrarian, independent research, tech

Applied Micro's Bullish Thesis Ignores Significant Structural Problems

It is my view that shares of Applied Micro (NASDAQ:AMCC), a small semiconductor firm most widely known for its upcoming X-Gene "server on a chip" product, are highly overvalued.

It is my belief that the bull case, as well as management's own public statements, myopically overlook significant competitive pressures in what is unlikely to be a particularly large business with respect to X-Gene. In addition, it is my view that management is setting unrealistic expectations for this upcoming family of products from a competitive and market-share perspective, particularly as many of the claims either appear to be - either intentionally or unintentionally - deceptive. I further believe that the company's existing business, which consists primarily of fairly commoditized,...

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