Dan Niles | Personal

Founder of Niles Investment Management, Tech Nerd, Bad Tennis Player, Proud Dad. Posts are for information purposes only & never investment advice.

[Dan Niles | Personal @DanielTNPersonl]

CPI has likely changed the debate from if Fed will raise to how many times. Last “one & done” was during internet buildout in Mar-1997 to 5.5% vs only 3.75% today. Bonds now pricing in 2 hikes this yr & 3.5 by Jun-2027. But W.H. wants rates lower. No win situation for Fed nxt wk.

[Dan Niles | Personal @DanielTNPersonl]

S&P resilience has been impressive given Iran w/ Brent back over $100. But US Treasury buying back only $6B today in long-dated bonds after threatening to use TGA which has ~$900B has sent 5/10yr bond ylds to new 52wk highs & 30yr threatening multi-decade highs. Straw meet camel?

[Dan Niles | Personal @DanielTNPersonl]

“Don’t Fight the Fed.” Warsh at Jackson Hole: “Price stability is not self-executing… 65 months of sustained, elevated inflation sits squarely with the Central Bank.” Probability of rate hikes just went up going into mid-terms which historically see more than avg downside risk.

[Dan Niles | Personal @DanielTNPersonl]

SK Hynix missed consensus by 6% for CQ2 rev & operating profits while guiding FY26 capex 11% below. While I have outlined before my case for a near-term AI “speedbump” (which can still be quite ugly like in late 1995/97 for internet buildout,) this is certainly ammo for THE TOP.

[Dan Niles | Personal @DanielTNPersonl]

Awesome that @JensenHuang is now on X. Great commentary on Openweights. Interesting that $META & $MSFT (owns ~27% OpenAI) is in the list of logos but OpenAI, Anthropic & the two other big public cloud hyperscalers, $AMZN & $GOOGL are not. Seems like battle lines have been drawn.

[Dan Niles | Personal @DanielTNPersonl]

$INTC vs consensus reported ~2x the EPS & beat revs by 12%. They raised capex (18%) much like their customers did yesterday but unlike their customers their Q3 EPS is going up by ~40%. I like infrastructure beneficiaries w/ expanding margins of all that spend, not the spenders.

[Dan Niles | Personal @DanielTNPersonl]

$IBM -pre is a great example of my AI “speedbump” concerns. Customers spending on AI, cut spending late in the qtr to IBM mainframe & related software (but ~80% is supposed to be re-occurring) . Given software is a back-end loaded business, I doubt this is the last casualty.

[Dan Niles | Personal @DanielTNPersonl]

“Speed bump” (6/20, 6/28, 7/5 post for details) continues w/ the reaction to Samsung CQ2 results. Objectively spectacular but not relative to consensus. "Only" 2% rev beat (+126% y/y) & 6% op profit beat (19x y/y). Remain wary given AI related names not close to oversold.

[Dan Niles @DanielTNiles]

It was an eventful wknd surrounding Greenland following Venezuela earlier in the yr. Looking forward to discussing whether that disrupts my belief in a solid start to the yr due to easy money fiscal & monetary policies w/ @cvpayne @FoxBusiness 2:15PM EST today.

[Dan Niles @DanielTNiles]

On @CNBC ~11am EST w/ @davidfaber @saraeisen on 2026 outlook. I think it will be choppy given AI trade is getting more discerning as we enter yr 4 but new Fed chief in May will want to cut by at least 100 bps keeping the easy money flowing. Also talking Top5 Picks for 2026.

[Dan Niles @DanielTNiles]

Last wk, S&P -0.6%, Mag7 -2.0%, AI index -3.7% but EW S&P +0.7% & R2K +1.2%. Fed starting “QE light” sparked S&P rally on 12/10. S&P edged higher on 12/11 despite $ORCL -11% on poor results but was hit hard on 12/12 w/ $AVGO -11% despite ostensibly beat & raise results.

The $GOOGL related companies declined 4% last wk driven by the decline in Broadcom while the OpenAI related companies declined 7% driven by Oracle.

The reaction to the Broadcom results were particularly disheartening following the lowered bar set by Oracle results the prior day. Oracle 1) missed total revs & cloud expectations for the qtr, 2) had much higher than expected $10B in FCF burn for the qtr, 3) raised capex to $50B from $35B for FY26 while revs went up by only $4B for FY27 and 4) gave minimal clarity on how OpenAI was going to finance their ~$300B in spending commitments.

For Broadcom, forward street estimates for FY26 revs/EPS both went higher by 7%/5% respectively but investors seemed to be more focused on a combination of 1) AI racks having lower margins, 2) some concerns that management could have pushed back even harder on concerns that Google in the future could take TPU designs in house and 3) no formal guidance update for AI revenue growth for FY26 though it is clearly going higher.

This upcoming week has the non-farm payrolls report on Tuesday and the CPI report on Thursday for November. Remember that we had no standalone October reports of either due the government shutdown so these numbers will be scrutinized even more closely for their impact to the Fed’s future policy.

As for AI datapoints, $MU reports on Wednesday and everyone knows a beat and raise quarter is coming from this high-bandwidth memory supplier. As I always say though, the reaction to the data is probably more important than the data itself. For the past three quarters despite strong beat and raise results, the stock has declined the following day.

So what can we expect as we enter the last two full weeks of the year? Historically, the market typically rallies during the last 5 trading days of the calendar year plus the first two of the upcoming year for a combined returned of 1.3% on average and a high hit ratio of over 70%. This is of course called the Santa Claus rally.

But as a reminder, this past week the equal weighted S&P and broader R2K rallied but there were declines in the overall market, the Magnificent 7 and the AI names in general.

Looking forward I will just repeat what I wrote in my post last Sunday and “recommend a diversified basket of stocks for the positions held versus just AI or Magnificent 7 names.”

Happy holidays to everyone and invest in that which is most important, family and friends.

[Dan Niles @DanielTNiles]

I have said $PI (Impinj) in interviews earlier this year could have the best growth profile of any tech company over the next 5-10 years. Currently about half their revenues come from the apparel market that is an ~80 billion unit a year market. My belief was based on them entering the food & beverages category which has over 1 trillion units. $WMT (Walmart) and $KR (Kroger) are now publicly announced as rolling this out.

Impinj did beat revs and EPS in Q3 and guided above the street consensus for Q4. The sell the news price action of the stock which declined 15% today was after a huge YTD gain of +67% leading into results driven recently by the announcement of Walmart and Kroger as customers in food.

But I wanted to point out something that I think many have overlooked on the earnings conference call last night. Arthur Valdez joined the board at Impinj. Looking at his Linkedin profile, he worked for 16 years at $AMZN as VP World Wide Operations till 2016. This was not mentioned on the Impinj conference call.

I find it interesting that the CEO of Impinj yesterday said he “intentionally” mentioned e-commerce for the first time as an opportunity just as Arthur joins the board but does not mention his background at Amazon. Amazon used Impinj at their Just Walk Out store inside the Seattle Kraken hockey stadium back in 2023. Both Impinj and Amazon are headquartered in Seattle and Amazon seems to have admitted by their actions that their version of walkout tech without RFID for their stores is not adequate. It makes me wonder if Amazon becomes a broader Impinj RFID customer in 2026 after this opportunity in e-commerce is mentioned in 2025 by Impinj.

To be clear, this stock is very volatile and risky. NOTHING may come of this given Amazon and Impinj have been talking to each other for a very long time. It also may not be Amazon that Impinj is talking to today and I have put these pieces together incorrectly. Impinj also has a high PE multiple which many potentially high growth tech stocks do which increases the risk if there is a disappointment. The stock as a reminder was down 75% from its intraday peak in October of 2024 to its intra-day low in April of 2025 on the tariff threats and the disruption to its business caused by an inventory correction by customers.

But to me, given RFID is now entering the trillion unit market of food & beverages and logistics companies like FedEx and UPS are also end-customers, this would make logical sense for RFID to end up in e-commerce. With also the push to robot automation and AI by Amazon, tracking all items more efficiently is a logical step as well.

Impinj mentioning e-commerce as an opportunity for the first time on this call is like them mentioning the food opportunity in 2024. And now in 2025, that opportunity hits with Walmart and Krogers both publicly announced and ramping late next year.

This is the section from the conference call where the company talks about the e-commerce opportunity in reply to a question.

Impinj CEO: “Then turning to e-commerce, I use that word intentionally. Yeah. I don't want you to read too much into it right now, but we are seeing two significant trends.

One is an interest across many of our customers -- enterprise end-customers for a direct from DC or warehouse to consumer, and that's in the retail space, in supply chain and logistics and other areas.

And the second one is 3PL opportunities. And so, these enterprises acting as 3PLs for other enterprises. The net of those I'm using is a broader e-commerce term.

You are correct, it's the first time I've meaningfully used that term, and it was intentional, and expect us to push forward hard into that e-commerce and attempt to expand and grow there.”

[Dan Niles @DanielTNiles]

On @CNBC 10:10AM ET discussing: 1) cockroaches vs rate cuts, 2) expectations of solid Q3 earnings, Fed easing & AI strength still making me optimistic till at least Thanksgiving, 3) best Mag7 ideas but 4) concerns that retail demand has been pulled forward in front of holidays.

[Dan Niles @DanielTNiles]

W/ @CarlQuintanilla @SaraEisen 10:10am ET: 1) “prudent irrational exuberance” due to 3 Fed rate cuts by YE, 2) hopes that a Q1 pull forward in demand is burned off before the holidays 3) thoughts on Mag7, 4) favorite risk adjusted investment, & 5) my favorite idea long-term idea.

[Dan Niles @DanielTNiles]

Following the asset sale by $COMM which helped drive their stock up by 86% yesterday & $ADTN by 8%, Adtran disappointed investors on their earnings today. As I wrote before, when Adtran pre-released revs 4% better than consensus, I was looking for asset sales to alleviate the balance sheet pressure (much like with Commscope yesterday) and that did not happen. This is key for a highly leveraged balance sheet which was one of my reasons to own the name. In addition, margin guidance was below expectations despite rev upside for the 3rd qtr in a row. This adds to the poor execution issues that have already been piling up this year. I am hopeful that the punishing decline in the stock today of ~15% intraday which has the stock down 3% YTD gets management to deleverage the balance sheet even if the prices are not exactly what they want.

While the industry recovery in telecom capex spending is playing out as I expected after two down years, Adtran seems to not be able to capitalize on it with profits delivered to the bottom line. This is despite upside to revenues. It is hard enough to get the big picture correct as an investor without having those benefits go away through poor execution.

I try to admit when I am wrong and move on from investments. If I get 60%+ of my investment ideas correct, I feel like I am doing well. Adtran looks increasingly like it is in the other 40%. The key is sizing the winners and losers appropriately. I wrote earlier, my conviction is certainly lower due to the mis-steps but not gone. Today, with execution issues continuing for the third quarter in a row, my plan is to continue to wait for an asset sale to boost the stock, admit I was wrong and move on.

[Dan Niles @DanielTNiles]

Looking forward to this.

[Dan Niles @DanielTNiles]

$ADTN pre-released revs 4% better than consensus. CEO: "Business conditions have continued to strengthen during Q2 of 2025, and were supported by improved market conditions and growing customer demand for our products and services.” Adtran was one of my Top5 Picks entering the year and following some execution issues recently, this is a nice step in the right direction. Asset sales should be next positive datapoint which would alleviate the balance sheet pressure.

[Dan Niles | Personal @DanielTNPersonl]

kek np ga adil ya

[Dan Niles | Personal @DanielTNPersonl]

kadang suka heran aku

[Dan Niles | Personal @DanielTNPersonl]

knp ya org ada yg bruntung banget, ada yg apes bgt