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Silicon Motion looks cheap for its forward growth after crushing earnings. Hedgeye, which counts it among its top long ideas, says its guidance beat Bloomberg consensus by 23 percentage points and calls it a relatively unknown storage play that should be more resilient in the volatile memory cycle. x.comÂ
Silicon Motion, which makes the controller chips that manage how data moves, reads and writes inside flash memory, is holding its quarterly moving averages on the weekly chart. Nvidia's earnings should start the next leg up in it and similar names. x.comÂ
Silicon Motion sells the NAND controller nobody can design around, as wafer output is allocated into 2027 and every die needs one. Qualification with Micron, SK hynix and hyperscalers takes years per socket, so won share moves slowly, though Phison and in-house teams fight for each design. Latest-quarter revenue grew 127% with 48% gross and 22% operating margins, net cash and a 0.70 PEG at 14.9x forward. The risk: top-five customers dominate revenue and NAND is brutally cyclical. x.comÂ
Silicon Motion is an underappreciated beneficiary of Micron's capex through its flash controllers and AI boot drives, which grew 1,600% last quarter. It raised $1B of 0% convertible debt to buy NAND for the boot drives, locking in prices, and the drives are going into data-center racks and sampling with Google. Lower oil and yields would help; with the 30-year yield at 6%, financing everything would be tough. x.comÂ
Silicon Motion, a pure-play NAND controller maker, benefits as NAND heads to the moon, and the stock has doubled in three months. Even @jukan05, who had dismissed NAND controller stocks, now says they could benefit more than expected. x.com x.comÂ
Silicon Motion's merchant-controller moat is widening, making it one of the cleanest growth-at-a-reasonable-price semiconductor plays. Gross margins held near 46.5%, insulated from NAND spot swings, and Edge AI is speeding a shift to higher-priced PCIe Gen5 and UFS 4.0 controllers. Enterprise SSD wins are on schedule, and NAND makers moving capex to HBM are cutting controller R&D, handing SKUs to Silicon Motion. It trades near 15 times ex-cash forward earnings with no debt. x.comÂ
Tech and semiconductor bounces are mainly driven by less urgent hedge-fund selling rather than fresh buying. Per Goldman Sachs, tech is still being sold amid very low activity; there is no sign risk has been added yet. The unwind may be nearing its end, especially as hyperscalers stick to capex plans and Q3 semiconductor earnings look likely to be positive. Less crowded positioning and more normal multiples leave a healthier base for a longer-term rebuild. x.comÂ
Silicon Motion is a buy on a huge EPS beat, great cash flow, a small float and EPS growth. The stock swung from 140 to 180 after the report. x.com x.comÂ
Semiconductor earnings will be good, supporting a likely run into Q3 results. The group looks oversold, and the Anthropic/CoreWeave news is noise. x.com x.com x.com x.comÂ
Semiconductor fundamentals have improved as SpaceX and Meta say spending will rise further, while rates have come down. Earlier caution rested on fears that megacaps could not sustain spending and rising rates would slow AI investment; neither worry has played out. Today's selling feels more like stops being hit and investors giving up. x.com x.comÂ