Chip Stock Investor

Caution Against Additional Buying After 40% Run Up

"We're no longer buying Lam.. We thought it was cheap in 2023, obviously with all the other fab equipment providers. we thought it was still cheap in 2024 and through most of 2025, but then, 40% ish run up in the last couple of months. We're now saying be patient with LAM Research. We're not selling, we still have our position in Lam. It's part of our Fab five basket and the larger basket we have in the wafer fab equipment companies. But maybe just after the runup, as of late exercise, a bit of patience. But the upshot here is, and we'll, we'll monitor this, but it does seem that maybe, some of these forward valuations are implying not as good earnings growth in calendar year 2026 as Lam might actually be gearing up for."

The speaker advises investors to exercise patience with Lam Research after a significant 40% run up, suggesting that while their current position is maintained, the elevated valuation implies caution on further buying until clearer earnings growth materializes in 2026.

GE Vernova: Reasonable Long-Term Buy on Profit Margin Expansion

-1.77%current return

"So it's not nearly as cheap as it was. Uh, yeah, to say the least. When we did the initial deep dive last June or July and called it out as a top energy grid, data center power idea. It was obviously mispriced after getting spun off of leftover GE Aerospace. So that cheapness is gone, but thanks to the profit margin expansion, the use of the net cash balance to make some key acquisitions and integrations in that electrification business, this still could be a reasonable buy for the long term. This is one we still like, especially for those of you that are still looking for big industrialist companies to incorporate into your portfolio. Looking for some way to invest in the power grid data center, power, all that good stuff. We still like GEV here."

The speaker outlines GE Vernova's evolving growth strategy driven by profit margin expansion through key acquisitions and integration efforts in its electrification business. Despite a higher valuation compared to its earlier mispricing, the company is positioned as a reasonable long-term buy due to its strategic use of net cash and margin improvements, making it an attractive play for investors interested in industrial and energy grid opportunities.

Caution on Astera Labs Due to High Valuation and Cyclical Risk

"For Astera specifically, it's just a high valuation. Sometimes the coin lands on tails, not just heads day in and day out. So any reason to panic? I don't know if you zoom out. I think you have a lot of reason to be happy with your investment even in spite of recent turbulence in the last couple of weeks."

The speaker comments on Astera Labs' currently high valuation, exemplified by its roughly 30x forward price-to-sales ratio derived from a previous 60x multiple. Despite strong revenue growth and profitability improvements, the cyclical nature of hardware sales and potential moderation in margins raise concerns that could lead to a valuation correction. The overall tone encourages long-term investors not to panic over short-term volatility.

Netskope IPO: Small Bet Opportunity in a Rapidly Growing SASE Market

"We haven\'t bought any of the stock yet, but why are we continuing to follow it? It\'s a fast growing industry. Cybersecurity is a secular growth trend. Netskope is a small company, but laser focused on one of the fastest growing portions of that fast growing industry, SASE."

The hosts discuss Netskope, a recent IPO in the cybersecurity space, highlighting its focus on SASE, which combines network security with cloud service delivery. They note the company\'s strong revenue growth (over 30% sequentially) alongside ongoing challenges including GAAP net losses, negative free cash flow, legal disputes with competitors like Fortinet, and a complex dual-class share structure. While not recommending an immediate purchase, they indicate that Netskope could serve as a small, strategic bet in a secular growth market if the company converts to free cash flow positivity.