Quantum AI Tech Stocks Portfolio Investing At Bear Market Lows

By: Nadeem_Walayat

I made lots of small across the board buys earlier in the the week with my main focus on Nvidia, HPQ, Logitec and Arrow, and 1 big buy - Samsung. Current state of my portfolio is 71% invested, 29% cash. Remember as stock prices go up so does the percent invested, similarly when stock prices fall the percent invested naturally drops.

Table Big Image - https://www.marketoracle.co.uk/images/2022/Sep/AI-stokcs-9th-Sept-big.jpg

I have reorganised the AI portfolio, relegated Apple to secondary status because it is an over valued giant corporation that I cannot see out performing to the upside, so off it goes to become a secondary stock, cutting my maximum exposure to Apple in half and distributed amongst the likes of AMD, TSMC, Qualcom and others as Apple is no longer a primary AI Tech stock, not because it won't continue to innovate, it's just that its future stock price prospects will likely see it under perform most others. And thus AMD takes second place which has the potential for huge growth over the coming years given that AMD's market cap is just $137 billion, 1/20th that of Apples $2.6 trillion, it is far easier for the AMD stock price to DOUBLE from here than Apples! Thus it is likely that Apple will continue to sink lower in my table over the coming months. Especially given the extent of Apple buy backs, which I would much rather see go to acquisitions as buy backs do not generate future revenues and also what happens when Apple runs into difficulties and needs to raise cash as has happened to Apple several times in it's history, much better to have a huge cash mountain instead of buy backs which makes the corporation less robust.

I have also upped my target exposure to some high risk stocks (Feb 2022), of note is GFS that is on track to join it's brethren in the AI stocks portfolio, this stock is definitely one I would not mind being well over exposed to once more as I was on it's recent dip to below $40 which saw my exposure explode to 150% invested, then heavily trimmed on the subsequent rally to above $62, any dip to below $49 will have me accumulating once more.

I continue to aim to get the job done and get to at least 75% invested in key target stocks that remain pending, that's Google, Broadcom, and ASML In respect of ASML I constantly hear how TSMC rules the world due to it's CPU Fab dominance, completely oblivious to the fact that it is not TSMC that runs the world but actually it is Dutch ASML without which TSMC, Intel, Samsung and Micron would literally be decades behind as there is no competitor to ASML that supplies the EUV machines that etch the circuits onto the silicon wafers at extremely short wave lengths of ultraviolet light, said to be the most complicated machines ever designed by man, each costing over $200mln, which is why despite it's relatively high PE of 28 (down form 48) I have got to get to target exposure in ASML Technology that the US is going to great lengths to block from going to China including the CIA suspected torching of an ASML EUV factory in Germany a few years ago that was said to be linked to Huawei.

So next time you hear someone banging on about how TSMC is at the cutting edge of CPU manufacturing, remind them that the actual machines that etch the circuit patterns onto the wafers are made by ASML. Of course there is a symbiotic relationship as TSMC are by far ASML's largest customer and so exposure to both stocks is warranted.

Funds

I get often asked in the comments section is SOXX a good ETF to gain exposure to AI tech stocks, yes it is but I have not included in my funds list because one cannot buy it within a UK tax free wrapper. However, SMGB.L appears to be very similar in performance to SOXX, so I have now added SOXX for US and SMGB .L for UK into which I will personally be investing should an opportunity arise, buying levels are given for both funds.

SOXX Top 10 Holdings

SMGB.L Top 10 Holdings

Note for me funds are a side salad, in total probably less than 7% of total portfolio.

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By Nadeem Walayat

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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

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