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Technology & Semiconductor Equity Commentary
Pinterest's valuation looks capped near term as growth decelerates, until international monetization scales faster to offset ad budget sensitivity. Q2 beat on both lines, with revenue up 18% to $1.18 billion and monthly active users at a record 640 million, but Q3 guidance of $1.19-1.21 billion implies only 13-15% growth. Shares fell 10% after hours; buybacks offer long-term per-share support. x.comÂ
Snap is in a bad position when Pinterest is now the better business of the two. x.comÂ
Pinterest is pretty cheap now, and its struggles stem from its own idiosyncratic issues that predate AI agents, so being long beats not owning it here. That answers @AStevens1969's point that Pinterest still struggles. x.comÂ
Reddit should have a huge 2027. It is a better company than Pinterest both fundamentally and technically, as its financials show. x.com x.com x.comÂ
Snap is one of the worst-run public companies relative to its potential, and CEO Evan has proved he is terrible at creating shareholder value. Stock-based awards to the board and over 5,000 employees dilute shareholders about 4% a year. Per @WOLF_Financial, Q1 EPS missed at -$0.05 versus $0.09 expected, the EBITDA guide fell short and Snap ended its Perplexity deal. It is not a dead company, but there are many better opportunities. x.com x.com x.com x.comÂ
The social-media selloff looks way overblown, because AI makes these companies leaner and more profitable rather than disrupting them. Reddit is the clearest case at about 24x forward EV/FCF with 91% gross margins and 52% growth, despite being down 44.6% this year; Pinterest is down 32.2%. Meta's capex draws bear cases, but forward revenue growth of 30-33% at about 17x forward earnings shows that spending is delivering ROI. These are buys, held with some confusion. x.comÂ
Microsoft and software stocks broadly still look expensive, because AI will get exponentially better over the next two years and the market may reset software valuations much lower. Software valuations have always been ludicrous, and heavy stock-based compensation behind many software revenues is widely ignored. Winners will emerge, but picking them is not worth trying. x.com x.comÂ
Snap has enriched insiders at shareholders' expense, with insiders paying themselves $11 billion since IPO against a market cap of just $8 billion today. Forcing out Evan Spiegel and cutting the endless stock-based compensation would earn it a chance, and the potential to turn the ship around is real. x.com x.com x.com x.comÂ
Social media stocks look worth buying because they trade at a discount while people stay hooked on social media. Usage is now a permanent part of life that cannot be taken away, contrary to @CryptoDan007's prediction that it will come to be seen as a low-class pastime. That makes Meta, Reddit, Pinterest and Snap all candidates to buy. x.com x.comÂ
Workday at about 3x trailing price-to-sales is about as close to a floor as the stock is likely to get. Its stock-based compensation is legitimately comical, a concern @WaterworldCapi1 also raised, but the valuation already looks floor-ish. x.comÂ