professor smol cap

Discovering multi-bagger small cap opportunities in this crazy time.
Former tech executive and b-school professor of practice. Member @MicroCapClub.

[drillr.ai @drillrai]

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[professor smol cap @prof_smol_cap]

TJX analog thesis meets the 10-K: Five Below FY26 filing raised inventory risk to ~17% of assets from ~15% prior year. Gross margin compressed 383 bps to 32.0% in two years. Shrink still above historic levels — third annual filing in a row. What normalizes Wednesday? $FIVE

[professor smol cap @prof_smol_cap]

Gap Q1: per the 10-Q, $263M of the $445M OI was a net litigation settlement. Adjusted core OI ~$182M, below $260M from one year prior. Management bought $361M in stock at $23.71 before the 17% selloff. $599M buyback authorization still live. Does the board accelerate here? $GAP

[professor smol cap @prof_smol_cap]

Headline: Uber COO says AI spend lacks ROI. Per Q1 FY26 10-Q: operating income +57% y/y to $1.92B while R&D rose just 17% — operating margin 14.6%, best in four years. The productivity is in the numbers, not the COO narrative. What are analysts missing? $UBER

[professor smol cap @prof_smol_cap]

This sounds insanely interesting!

[Kaifu Zhang @zhangkaifu314]

https://t.co/eA1jMuwHUi

[professor smol cap @prof_smol_cap]

@Rod69X Very good question. I think it is a right thesis, but valuation is high indeed. It can be argued that it is priced in.

[professor smol cap @prof_smol_cap]

Cohu +20% in 5d on HBM order surge. Form 4s filed May 20-22: CEO Muller, CFO Jones, two directors sold $3.65M combined at $44-47 — stock had just peaked near $51. Orders up 57% YOY. When 4 insiders exit $3.65M in 3 days at the high, what changes for the bull thesis? $COHU

[professor smol cap @prof_smol_cap]

Nvidia China recovery thesis rests on H200 export license approvals. Per Q1 FY27 call: zero H200 China revenue to date and management cited uncertainty over whether imports will even be permitted. US export clearance and Beijing import clearance are two different sovereign gates. $NVDA

[professor smol cap @prof_smol_cap]

Dell gross margin compressed 608 bps as everyone cheered: 23.8% in FY24, 17.8% in Q1 FY27. Per FY26 10-K, "shift in mix towards AI-optimized server offerings" drove it. AI racks are thin-margin pass-throughs; pricing power lives in storage and CSG. When does mix normalize? $DELL

[professor smol cap @prof_smol_cap]

Vishay $VSH +31% in a week. The number behind it: semiconductor book-to-bill hit 1.47 in Q1 — orders 47% faster than shipments. Per Q1 2026 call, management cited "strong share gain from competitor supply constraints" in AI data centers. Backlog $1.6B, 5.7 months of revenue.

[professor smol cap @prof_smol_cap]

$TTWO guided $8B net bookings for FY27 -- analysts expect $9B. What is in that $8B? Recurring consumer spending is guided flat YoY, at 65% of total. The entire incremental from $6.6B to $8B is one title. Per Q4 FY26 call.

[professor smol cap @prof_smol_cap]

$ARM +46% in 5 days. The setup was in the fundamentals: FY25 FCF collapsed to $178M (4.4% margin) on $4.0B revenue — investment-year trough. FY26 recovered to $979M FCF on $4.9B revenue, per 10-K. Trough FCF on steady revenue growth tends to foreshadow re-ratings.

[professor smol cap @prof_smol_cap]

$NVDA headline — 85% YoY growth — buried the structural story. China Hopper revenue fell from $4.6B to zero in one quarter. Enterprise/sovereign/AI cloud absorbed it: up 31% QoQ to $37.4B, now matching hyperscale dollar for dollar. Per Q1 FY27 10-Q.

[professor smol cap @prof_smol_cap]

Quick addendum: the fuel cost headwind ($175M in Q4 FY26 per the earnings call) should partially normalize if energy prices ease. The underlying demand signal from gross margin stability 8 quarters in a row is the more durable datapoint.

[professor smol cap @prof_smol_cap]

$WMT fell 7% on guidance, but the margin data tells a different story. Gross margin held in a 58-bps band (24.6%-25.2%) for 8 consecutive quarters. The guidance miss traces to $175M in absorbed fuel costs, per Q4 FY26 call. Input cost headwind, not consumer demand erosion.

[professor smol cap @prof_smol_cap]

Addendum: Q2 FY27 guidance puts revenue at $1.26B midpoint — that would be 5.7% YoY growth. Management specifically flagged AI-related workloads (Zoom Workplace, AI Companion) driving upsell velocity in enterprise accounts. Per Q1 FY27 call.

[professor smol cap @prof_smol_cap]

Zoom ($ZM) +7% AH after Q1 FY27. The overlooked number: this is the 5th consecutive quarter of revenue growth acceleration — 2.9%, 3.9%, 4.4%, 4.7%, 5.3%, now 5.5% YoY. Not a one-off beat.

[professor smol cap @prof_smol_cap]

The tension: operating margins compressed 640 bps from Q2 to Q4 FY26 (26.4% to 20.0%). Q1 FY27 will tell whether AI investment is absorbing margin or the expansion thesis is stalling. Per FY26 filings.

[professor smol cap @prof_smol_cap]

Meanwhile the company bought back 06M in shares in FY25 vs 3M in FY24 — a 9x acceleration — on 61M free cash flow. EVP Kelley sold 34,000 shares at ~90 in February. The record print today at 41M with raised guidance is the first clean look since then.

[professor smol cap @prof_smol_cap]

Nordson just reported record Q2 sales and a backlog up 18% year-over-year. Nobody is talking about it. They make precision dispense and X-ray inspection equipment for AI chip packaging — the layer directly under the GPU.

[professor smol cap @prof_smol_cap]

January Q1 call: CEO Nagarajan said X-ray test and inspection was 'starting to inflect.' Today's backlog +18% is the confirmation. ATS is 50% semiconductor revenue — AI capex, one layer below the GPU headline. Per Q1 call + today's Q2 press release.