Seeking Alpha

Alex Cho

 
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  • AMD Gains Graphics Market Share In Q2, Driven By Kaveri APU
    Wed, Aug. 20 INTC, NVDA, AMD 63 Comments

    Summary

    • AMD gains market share, and also enters into the SSD marketplace.
    • Kaveri drives market share gains, but I think that the performance advantage will be temporary.
    • Broadwell CPUs for laptops should be ready over the next two quarters, which will diminish the positive impact that Kaveri has had for AMD.
  • Sell AMD: Traditional Markets Will Do Damage
    Tue, Aug. 19 INTC, TSM, AMD 143 Comments

    Summary

    • AMD's sales mix weakened results in its visual segment, which was in-line with my expectations.
    • Further deceleration in traditional CPU/GPU market share will most likely continue.
    • Broadwell will continue to diminish AMD's competitiveness in the standard CPU channel, and assuming there's further deterioration in this market, AMD's consolidated results will disappoint.
  • Intel Is Finally At Qualcomm's Doorstep
    Tue, Aug. 19 QCOM, INTC 129 Comments

    Summary

    • Intel Broadwell M significantly improves upon power consumption and performance.
    • Qualcomm has a lot of short-term solutions in store to keep Snapdragon 810 competitive with Broadwell M.
    • However, the added competitive pressure definitely weighs on Qualcomm and puts Intel in a significantly better position to gain mobile wins.
  • Google's Acquisition Of JetPac Is A Step In The Right Direction
    Tue, Aug. 19 GOOGL, GOOG 3 Comments

    Summary

    • Google has acquired JetPac.
    • The app's advanced AI offers recommendations that are far more contextual.
    • Google's acquisition spree will continue, and while JetPac isn't earth shattering, it can integrate into Google's pre-existing navigation app.
  • How Investors Should React To The Windows 9 Preview
    Mon, Aug. 18 MSFT 30 Comments

    Summary

    • According to industry insiders a Windows 9 preview event will occur in the next two months.
    • The Windows 9 preview event will confirm speculation over "One Microsoft." Basically a united ecosystem between mobile, console and desktop/laptop.
    • Windows 9 may reverse projections of declining desktop/laptop shipments, which has obvious ecosystem benefits to upstream suppliers and downstream OEMs.
  • iPad Refresh Will Boost Shipment Figures
    Mon, Aug. 18 AAPL 47 Comments

    Summary

    • Apple is experiencing an influx of new Apple iPad buyers.
    • When I add the impact from refresh, assuming a three-year cycle, I expect shipment growth in excess of 50%.
    • I think gen 6 iPad will be the major catalyst that causes older generation iPad owners to upgrade.
    • Apple shouldn't have difficulty with beating its own guidance, assuming the combined impact from refresh and organic growth.
  • Groupon Looks Well Positioned; Lack Of Earnings Is A Symptom Of An Investment Year
    Mon, Aug. 18 GRPN 7 Comments

    Summary

    • Mobile growth is a strong indicator for future success.
    • New initiatives like genome and pages lead to cross-sell opportunities, and ecosystem benefits.
    • Earnings are deflated due to an investment year.
    • Free-cash-flow should improve as a result of closing non-performing segments, paired with greater economies of scale.
  • eBay May Have 10.2% Upside Until Year-End
    Mon, Aug. 18 EBAY 31 Comments

    Summary

    • eBay has experienced difficulties with cyber attacks and competition.
    • Despite these short-term difficulties, the stock is slightly undervalued and growth rates in its payment business are robust.
    • I forecast that eBay will trade at $58.05 by the end of 2014, and I also believe the growth trajectory of the business is intact.
  • Chromebooks Won't Rule The Future
    Fri, Aug. 15 GOOG, GOOGL 21 Comments

    Summary

    • Chromebook market share will not amount to much in the future.
    • NPD sales channel figures may have over-estimated Chromebook demand, based on Gartner figures.
    • Chromebook is a niche device as the device will have 1.7% global market share by year-end.
  • Broadwell Exceeds Expectations: Intel Remains Competitive
    Thu, Aug. 14 INTC 24 Comments

    Summary

    • Intel released details on its next generation 14nm process.
    • 14nm CPUs are now in production; second gen FinFet comes with significant performance advantages.
    • The reaffirmation of its product launch-cycle, paired with improving cost efficiencies on a per-transistor basis, has boosted investor confidence.
    • Broadwell will secure some mobile wins on top of cementing Intel's dominance in server, desktop and laptop.
  • Yahoo Stakes Its Future On Programmatic Ads
    Wed, Aug. 13 YHOO 15 Comments

    Summary

    • Yahoo's core display business struggles to grow.
    • Yahoo thinks that it can stimulate growth through an ad-exchange, which is referred to as programmatic advertising.
    • Programmatic advertising has benefited advertisers in the early stages, but as fewer publishers compete in the marketplace, I think the dynamics of pricing will no longer favor advertisers.
    • Assuming Yahoo can generate both volume and higher pricing on a CPM basis, the business may recover, but it's too premature to determine that.
  • Sell King Digital Entertainment: It's Way Too Speculative
    Wed, Aug. 13 KING 6 Comments

    Summary

    • King Digital's declining user engagement metrics sparked a massive sell off in the after-hours.
    • It's likely that active user metrics will continue to decline, which will eventually result in declining top-line sales.
    • Because the business has such unique risk factors, the business has become extremely hard to quantify.
    • The added level of uncertainty will cause significant discounting, therefore investors should avoid King Digital.
  • Twitter Joins The Herd With Video Ads
    Wed, Aug. 13 TWTR 5 Comments

    Summary

    • Twitter has launched a beta test for promoted video.
    • Videos are easier to monetize, and have much higher CPM.
    • This bodes well for Twitter shareholders as more efficient monetization will boost top-line revenue growth.
  • The Netflix Blitzkrieg - Here's What Topped HBO
    Tue, Aug. 12 TWX, NFLX 9 Comments

    Summary

    • Netflix surpassed HBO's subscription revenue.
    • Netflix may become more profitable than HBO as it increases the pricing of its subscription and scales the service internationally.
    • Surpassing HBO is just a minor pit stop to "world domination."
  • Facebook: Big Business Means More Business
    Tue, Aug. 12 FB 9 Comments

    Summary

    • Facebook diminishes its emphasis on small business ads.
    • Building a greater experience demands fewer advertisers, but will require higher quality ads.
    • Sustained growth in ad-pricing will sufficiently sustain revenue growth.
  • Putting Microsoft's Surface-Related Losses Into Perspective
    Tue, Aug. 12 MSFT 58 Comments

    Summary

    • Microsoft Surface Pro lost $1.7 billion, with most of it driven by inventory-related charges.
    • These problems aren't insurmountable, and while the Surface is losing money currently, the device is necessary in order for Microsoft to offer a complete product ecosystem.
    • Going forward, a better managed supply chain paired with falling variable costs will allow Microsoft to at least break-even or even earn profit.
  • Facebook Is Serious About Unbundling
    Tue, Aug. 12 FB 8 Comments

    Summary

    • Facebook has made it a requirement for users to download the messenger app to message friends.
    • In the process, users have had quite colorful feedback.
    • However, in light of Apple's upcoming smart watch launch, unbundling becomes a natural progression of Facebook's core strategy as a social company.
  • When It Comes To iPhone 6 Think About The Ecosystem
    Mon, Aug. 11 AAPL 54 Comments

    Summary

    • Apple iPhone 6 launch event anticipated to be on September 9th.
    • The iPhone 6 won't offer revolutionary features, but it will still be best in class.
    • The iPhone 6 will convert more users to the Apple ecosystem and through incremental sales in other product categories Apple's growth trajectory will be maintained.
  • Sell Sprint And Buy SoftBank
    Mon, Aug. 11 TMUS, S, SFTBY 22 Comments

    Summary

    • Sprint and T-Mobile merger won't happen.
    • Sprint dilution will diminish returns significantly.
    • SoftBank offers much more upside in this instance.
  • Zynga Could Go Both Ways: Non-Directional Trade Makes Most Sense
    Fri, Aug. 8 ZNGA 5 Comments

    Summary

    • Zynga lowered guidance range and reported a miss on revenue.
    • Going forward further deceleration in the core business may occur, however in the unlikely event, engagement figures/revenue improves, the stock could rally significantly.
    • Since no one can anticipate the direction this could go, a non-directional option trade makes the most logical sense.
  • Apple's Boring Quarter Still Produced A Beat
    Wed, Jul. 23 AAPL 12 Comments

    Summary

    • Apple reported earnings that beat consensus analyst estimates; basic EPS of $1.29 versus estimates of $1.23.
    • Apple drove bottom line performance due to higher than expected gross margins.
    • This was driven by iPhone becoming a larger percentage of the sales mix.
    • The quarterly earnings conference doesn’t offer meaningful guidance; investors should turn their attention to the next quarterly earnings conference.
  • Facebook And Google Create Natural Monopolies: Both Create Their Own Barriers Of Entry
    Mon, Jul. 21 FB, GOOGL, GOOG 7 Comments

    Summary

    • Google and Facebook operate monopoly-like businesses by creating businesses that create natural barriers of entry into the market.
    • Being able to re-create this type of success is difficult, and it helps to explain why Google and Facebook have not been able to diversify their businesses as significantly.
    • Facebook and Google have a built-in durable advantage in two new business categories (Android, WhatsApp) that are still in the early stages of rapid growth.
    • Both companies have growth trajectories that are extremely sustainable given qualitative factors.
  • Why I'm Reiterating My Netflix Buy Rating
    Thu, Jul. 17 NFLX 29 Comments

    Summary

    • Netflix retains high market share, and higher saturation of the global market should result in meaningful subscriber growth.
    • On global aggregate, Netflix has plenty of room to grow, as indicated by the total number of internet users.
    • The combined impact of added users, paired with better monetization per user drives revenue growth and margins.
    • I believe that Netflix will fetch a market capitalization of $150 billion or so in the next five to ten years.
  • Raising My Price Target To $39.42 On Intel
    Thu, Jul. 17 INTC 54 Comments

    Summary

    • Intel reported earnings that were well ahead of expectations but more importantly guidance indicated that Intel may sustain the current quarter’s performance.
    • After creating a pro-forma income statement using the materials from guidance, net income may grow by 14.24% year-over-year, and EPS may grow by 22% year-over-year.
    • Assuming that’s the case, I’m moving my price target to $39.42.
  • Stratasys Trades At A Reasonable Value Despite Market Volatility
    Wed, Jul. 9 INTC, SSYS 3 Comments

    Summary

    • A high P/S or P/E ratio is not necessarily indicative of a stock being overvalued.
    • After doing a comparison study using Intel as a comparable benchmark, I have concluded that Stratasys, despite carrying a higher P/S ratio, should not be considered overvalued.
    • I believe that if the underlying business model were to change, and through that change the growth rate were to decline even further, the valuation may contract.
    • Given the growing number of applications, plus residual revenue from 3D printing, growth is highly sustainable.
  • 5.5-Inch iPhone Will Offset iPad Cannibalization
    Mon, Jul. 7 SSNGY, AAPL 43 Comments

    Summary

    • Apple is having added difficulty with differentiating its core product line-up.
    • Despite these difficulties, I expect the iPhone 6 to have a successful launch.
    • Cannibalization from a larger form factor device may be offset with the $100 price differential.
    • Assuming demand for the iPad Mini declines due to the phablet, top line sales may be impacted, but gross profit will still improve.
  • Apple's Big Year Will Be 2015, So Here's My $120 Price Target For 2015
    Mon, Jul. 7 AAPL 90 Comments

    Summary

    • Improving sentiment, share buy-backs, new product categories, and stabilizing ASPs will push Apple's stock price higher.
    • Using two different methods, I have found that net income can in fact grow to $47 billion. It deviates from the historical trend line, but the reasoning is justified.
    • I believe that if Apple can grow net income by 23.67% year-over-year between FY 2014 and FY 2015 the stock will trade at around $120.
  • Amazon Fire Needs To Sell Like Crazy Because App Sales Won't Cut It
    Wed, Jun. 25 AMZN 37 Comments

    Summary

    • Even if Amazon lowers prices on its phone, the company will not break even.
    • This is because application revenue will have an insignificant impact on Amazon's bottom line.
    • I estimate that losses will exceed a billion dollars, regardless of what Amazon does from this point forward.
  • Twitter Jumps On Low Hanging Fruit - Features, Features, Features
    Wed, Jun. 25 FB, LNKD, TWTR 25 Comments

    Summary

    • Twitter is experimenting with longer Twitter posts, and may extend the length to 280 characters.
    • The extended length may help in conversations where people "retweet" comments.
    • Assuming that's the case, average engagement per user may improve, which directly boosts ad revenue.
  • Apple's iWatch May Have A 37% Net Profit Margin
    Wed, Jun. 25 AAPL 70 Comments

    Summary

    • The criticism towards Apple's new product category is unwarranted.
    • Apple should have no problem with clearing 50 million in iWatch inventory.
    • I estimate that the iWatch will have a 36.74% net profit margin, and $5.5 billion contribution to net income.
  • Netflix Has A Future: Here Are 4 Reasons Why
    Tue, Jun. 24 NFLX 65 Comments

    Summary

    • Netflix's business model has further room to grow, as market saturation is unlikely based on the number of internet users globally.
    • Netflix’s subscription model is vastly superior to the ad plus free content model.
    • The business already scales very effectively, but I expect profitability to improve once Netflix is able to generate revenues in the range of $20-$40 billion.
    • Netflix’s current content collection already has mass-appeal in foreign markets. Creating comparable content requires massive film budgets, which don’t often occur in foreign markets.
    • Netflix will grow along with other video-on-demand services, and it’s likely that consumers will eventually purchase a bundle of video applications over standard TV channels.
  • Bitcoin/Litecoin Miners Leave AMD And Nvidia In The Dust
    Editors' Pick • Tue, Jun. 24 AMD, NVDA 110 Comments

    Summary

    • GPU demand is expected to decline significantly going into Q2 2014.
    • The development of custom semiconductor solutions for crypto-currency mining renders mass-market GPUs like the Radeon R9 series ineffective.
    • AMD will report weakening results; to what extent is the mystery as the company doesn’t break-down results.
    • Nvidia looks like a more compelling alternative as the company is better diversified, and has great product execution.
    • Mainstream PC demand is expected to peak; Nvidia can offset the decline in demand, and also has a better product mix when compared to AMD.