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[Tickup @tickupapp]

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[trader joe @hitraderjoe]

A couple important things to note here. LeaderDrive specializes in harmonic reducers. Right now there's an ongoing tug of war on robot actuation architecture.

Western names have leaned towards what they call High-Reduction - which uses smaller motors and a larger reducer. If this style wins, then someone like Leaderdrive is well-placed though new Chinese incomers are quickly driving margins down.

In the East, QDD has been more popular, which is larger motor, smaller reducer. If this becomes more dominant then reducers play a smaller part.

Most humanoids will likely have a mixture of the two design approaches but one will be more prominent.

Also Asia has been way ahead on the humanoids trade and many of the obvious picks and shovels plays are trading at significant premiums as many of them already had a big jump in early 2025. There are a few reasons for this:

Unitree at CCTV’s Spring Festival Gala (late Jan 2025) - Unitree’s humanoid robots performed a folk dance. Millions of Chinese households watching this on the country’s biggest broadcast sent robot names flying. (nothing will match the Beijing Olympics opening ceremony though)

Optimus announcement (early Jan 2025) - Musk said Optimus progress was going well with a 2025 target of several thousand units and, if all went smoothly (which it hasn’t), a 10x increase in 2026

$NVDA “Physical AI” speech (early Jan 2025) - Jensen Huang launched the Isaac GR00T Blueprint for humanoid training at CES 2025

DeepSeek (late Jan 2025) - The release of DeepSeek’s R1 triggered a broad rerating higher of Chinese AI-linked assets, the “China tech is underpriced” story

My research has been focused on companies pivoting into this space, key suppliers that are less visible, and Western based companies that could become more prominent.

[trader joe @hitraderjoe]

Is OpenAI the next WeWork? OpenAI is rumored to announce its IPO soon. Its S-1 filing could have broader implications on AI and tech as a whole.

[trader joe @hitraderjoe]

A look at now vs the 1970s

[trader joe @hitraderjoe]

As the market chases the photonics trade now, we had been covering photonics since last summer with acknowledgement that this was a 2026 trade. Here's what I see as the trade heading into 2027 to start setting up early for now.

How long do you think it took Anthropic, the team behind Claude, to go from $1bn in ARR to $30bn? Turns out, less than a year and a half.

This has helped spark a frenzy in AI stocks. And so far it makes sense. Not only hasn’t there been enough compute available but it turns out that demand has been even higher than expected and so there’s been relentless demand for chips but this isn’t just a $NVDA GPU story.

Not only hasn’t there been enough compute available but it turns out that demand has been even higher than expected and so there’s been relentless demand for chips but this isn’t just a Nvidia GPU story.

Agentic AI coding requires orchestration which CPUs handle better than GPUs and with the explosion of this type of coding with the latest LLM platform updates, there’s been a massive grab for CPUs as well, which $AMD and $INTL specialize in.

And who makes money for essentially every CPU that ships in the world? $ARM, who owns the dominant CPU Architecture IP.

And with all these chips, you need memory $MU storage $SNDK and cooling $VRT. Then power becomes a constraint, so now you need to make chips more power efficient so you move to optical based communication $MRVL $HIMX $POET

You first observe the success in the most direct AI trade, $NVDA, then analyze the supply chain and picks and shovels of the AI trade to find stocks that will likely follow the move before they become mainstream.

That’s an investment approach that can be applied to almost any major trend. So while you could chase the memory, CPU, and photonics trade from here the easy money seems to have been made.. so what’s next?

For me, the natural next wave is AI that’s directly embedded into products. We know, inevitably, that someone will crack seamless real time language translation in a little earbud, humanoid robots are coming, and for better or for worse, AI will be in everything.

I think just like we saw Claude Code upgrades unleashing a wave of cloud compute, breakthroughs in the physical product space will create a surge in on-device compute.

This space is known as Edge AI and Physical AI. While there is some overlap with the existing Cloud-based AI frenzy, there is a whole different set of chips, IP, and bottlenecks associated with actual physical products that have embedded AI in them.

After all, something like an autonomous vehicle or a humanoid can’t just stop processing data if the internet connection is shaky or wait for a request to be shipped to a datacenter and back.

I’ll be posting more about this space over the coming weeks but I always post my research on my Substack first, so find the link in my bio.

[trader joe @hitraderjoe]

We all know that robotics and AI in everything are inevitably coming but it comes down to two questions: What are the best names to invest in? And is it too early to invest now?

Synaptics $SYNA is a picks and shovels play in the Edge AI space that is enabling both Edge AI (on-device) and Physical AI (robotics, humanoids, autonomous vehicles).

As the stock is up 30% from my original post a couple weeks off the back of a strong earnings release yesterday, I’ve removed the paywall on this earnings review on my Substack. In my view, Edge AI and Physical AI are still early themes, similar to where Photonics like $HIMX and $POET were a year ago when I first covered them ahead of the crowd (and which are starting to move notably now)

[trader joe @hitraderjoe]

My current views on Iran can now be found on my latest article (in bio). It’s important to note that risk can still perform even without a ceasefire as long as Iran is able to create a viable system that allows ships to continue through the Strait.

My current playbook below:

1. Targeted ground invasions occur (potentially on a weekend in the hopes that it is reconciled by a Monday open as Trump is in market-sensitive territory)

2. The U.S. takes control of the Isfahan site and other nuclear material sites and destroys enriched uranium (while proving its existence)

3. Iran increases attacks on vital infrastructure in retaliatory response

4. Trump declares victory in stopping Iran from obtaining nuclear weapons and pulls US military presence. No domestic or geopolitical support for Afghanistan 2.0

5. Iran remains de facto in control of the Strait of Hormuz

6. Iran reopens the Strait to ships that pay a fee and require cargo transactions be settled in yuan through a Chinese intermediary - energy prices drop

7. Stocks rebound and the U.S. dollar weakens

[trader joe @hitraderjoe]

My Iran playbook

- A ground invasion occurs on a weekend in the hopes that it is reconciled by a Monday open as Trump is in market-sensitive territory

- The US takes control of the Isfahan site and other nuclear material sites and destroys enriched uranium

- Iran increases attacks on vital infrastructure in retaliatory response

- Trump declares victory in stopping Iran from obtaining nuclear weapons and pulls US military presence. No domestic or geopolitical support for Afghanistan 2.0

- Iran remains de facto in control of the Strait of Hormuz

- Iran reopens the Strait to ships that pay a fee and require cargo transactions be settled in yuan through a Chinese intermediary

- Stocks rebound and the US dollar weakens

Substack article coming soon

[trader joe @hitraderjoe]

https://t.co/RDr4xXvEUw

[trader joe @hitraderjoe]

Iran just elected a controversial new Supreme Leader

[trader joe @hitraderjoe]

Is the software selloff overdone?

[trader joe @hitraderjoe]

The U.S. and Iran are at war and you thought gold should be up. After all, if it’s World War 3 and we’re all going down with the ship we might as well be holding something shiny right?

It’s important to remember that shiny things don’t pay you any interest. In finance speak, if you’re investing in precious metals, your worst enemy is real yields.

Real yield is the nominal interest rate minus inflation. You can think of it as if I invested my money in a bond at 5% but inflation is 5%, my real return is actually 0%.

As interest rates rise, the opportunity cost of holding gold goes up, particularly if you’re not too worried about inflation. Instead of having $1000 in a shiny metal, you could have $1000 paying interest to you at a bank.

From the 2007-2008 financial crisis up until 2022, this relationship largely held in place and real yields were the single biggest driver of gold prices. You can see on this graph here where gold is in blue and the real yield is in white, that as real yields went up, gold tended to go down.

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[trader joe @hitraderjoe]

OpenAI feels like it’s setting up to be the next WeWork.

You have SoftBank continually injecting more and more cash into it at higher valuations, essentially supporting its own “earnings”. OpenAI IPOs in late cycle conditions while Anthropic eats more into OpenAI’s market share and lingering SAAS concerns underlie any software rebound. That doesn’t mean that the IPO flops, but that we see the high in the first month of trading.

https://t.co/NsVPeylKKH

[trader joe @hitraderjoe]

I’ve seen a lot of anecdotal talk about how great Claude is and that friends have been switching over. The latest data from Ramp shows this clear trend, not necessarily of switching, but at least the curiosity to try or the increasing openness to have Claude code as part of enterprise workflows

[trader joe @hitraderjoe]

Should you buy the dip? Why are stocks down?

If you’re more active, I think the key is always weighting by conviction

[trader joe @hitraderjoe]

Clarifying a few points on the Japanese carry trade. Carry trades are based on shorter-term interest rates not the long end (20y+). Typically investors run the carry trade <5yr (at the most).

Point is, when long end JPY yields are rising it's less about the carry trades and more about JPY bonds looking more attractive which reduces the demand of US bonds - foreign/Japanese investors have largely funded the US deficit. As the US deficit continues to grow and JPY bonds become more attractive, the US bond market has less depth which builds risks. The only way the Fed can really control the long end is through QE - tough to do if you're worried about inflation but that's another story (inflation is still mostly cyclical so QE is still on the table if it comes to it).

As for the carry trades, what we see during this market pullback so far is that USDJPY is rising (along with US dollar index, DXY) even as JPY long end yields rise. Meaning what we're seeing currently is broader anxiety and a slow tightening in liquidity as opposed to a carry trade unwound selloff.

USDJPY levels definitely something to watch but we don't really see that being the driver, but also means more pain left there to be had. Short USDJPY has been a key theme for hedge funds and active investors over the last several years which has constantly burned them.

[trader joe @hitraderjoe]

How different industries have performed in November

[trader joe @hitraderjoe]

Are stocks in a bubble (part 4) a brief look at $NVDA chips and data centers $NBIS $IREN

[trader joe @hitraderjoe]

Day 104 of researching a stock a day until I can quit my job. Today we’re looking at PayPal $PYPL

[trader joe @hitraderjoe]

Day 103 of researching a stock a day until I can quit my job. Today we’re looking at GSI Technology $GSIT