6/12/24 - $arm - avoid: worst R/R in semi's >$150, shorting soon

6/12/24 - vrockstar - ARM - interesting move in the last few sessions by the world's most interesting pitch deck /sarc.

basically this one was the split without the split in terms of nominal price paid. there's a "unit bias" with having to pay >$1000 w/ NVDA (not anymore) and the next best that just crushed tonight AVGO (to go 10-1 as well sending it back to a reasonable price per share. while share splits don't add any intrinsic value, they certainly mean higher liquidity and more degens ape'ing on calls (more affordable thrills).

with that being said, ARM is simply too expensive. there's no way to wrestle valuation in the >$150 area. EPS is not growing 50% a year. it's growing 20-30%? at best? you're going to pay 50x on 2027 earnings (TODAY!?). fascinating. when you're in the land of the blind, but with one eye open... i suppose you must check that eye.

the co's AI-initiatives are 1 yr in arrears. the only two buyable AI-chip stocks are NVDA, AVGO, period. there are some private co's, yes ARM *is* doing things, AMD too (which is far superior to ARM valuation wise - and still i don't own it).

just be careful here so you know what you're buying. i would even struggle to own ARM north of $100. $150 is comical and i think comes from the flows to chips, ATH's on risk, etc. etc.

also don't forget softbank's involvment. i'll be polite. lotta dog and pony with this owner. (anyone remember the unicorns presentation?? x.com/benterrett/status/1466787928781299712)

i'll probably be looking to short this tmr after the AVGO result pulls the whole space higher in the coming days into month end. probably using put's rolling them over etc. will update if/when/how i decide to do this.

but for now - if you own it - would you mind explaining why? or counterpoint the above. this one is an obvious (and i mean OBVIOUS) stay away you are way out of the risk/reward owning at this point >$150.

V