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Saturday, November 7, 2026

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@convequity 1 click

Convequity on X

3D chips could create more room for specialist EDA startups. We are not convinced that more difficult chip design automatically translates into a large revenue windfall for $SNPS, $CDNS and Siemens. Fine-pitch stacking changes decisions that used to be made within one die. Put a circuit upstairs and its wires may get shorter, but its heat affects the circuit below. Placement, signal timing and power delivery have to be optimized together across the stack. That creates a reason for $AVGO and $NVDA to build custom tools around their architectures. Broadcom already describes a proprietary design flow built on industry-standard tools. Nvidia publishes its own research on assigning connections across tiers in 3D chips. Our inference is that the chip designers will keep some of the most differentiating optimization work in-house. A startup that solves a costly gap in cross-die planning or optimization could also win business without replacing an entire EDA suite. The incumbents still supply implementation, verification and manufacturing sign-off tools, and they are developing 3D capabilities themselves. Internal tooling is evidence that customers need more than the standard flow; it does not establish that incumbent spending falls. We see a more interesting startup opportunity where a tool can shorten repeated design iterations or improve the resulting chip enough to earn a separate budget. That is the part of the 3D transition we would investigate before assuming the largest EDA vendors capture most of the upside.zz
@convequity

Convequity on X

The Information reports that Anthropic has an unannounced multiyear cloud contract with $IREN. Our view is that it is most likely a contract IREN has already announced and already counts. On 27 August, in its FY26 results, IREN said it had signed a new multiyear AI cloud contract with an unnamed "leading frontier AI lab". In the same release it put contracted annualised run-rate revenue (ARR) for its 2026 capacity at $4bn, against $1bn of ARR operating on 26 August, and said its 2026 capacity was largely sold out. The Information gives no size or term, and neither IREN nor Anthropic has confirmed the deal. If Anthropic is the August lab, the report names a customer but adds nothing to the $4bn. It would only be new revenue if IREN raised that figure, and IREN has not said it will.
@kevin__mak

Kevin Mak on X

$SPHR Update on my old friend Sphere. The recent sell off seems to be directly related to some sell-side rerating of the stock based on "soft data". I find that kind of interesting because the data has been soft for many months (see daily ticket sales chart below), and among investors that I talk to, this isn't a "surprise". (Realistically that's why the stock traded down from $170 to $130). So this "surprise, the data is weak, stock rerates down 25%" is interesting to me, but also reminds me: it's always extremely hard to figure out what the market has or hasn't "priced in". The issue with the "soft data" is that my (and many) original projections was that WoZ would trough at around 1.4-1.6m/day of sales in 2027. By the summer we observed levels of ~1.2m so that likely wasn't going to happen. Towards the end of the year, the data has inflected upwards, we're down YoY (expected, given less hype than the launch a year ago). Some of this is likely due to LV weakness in general, but I think that's a relatively small fraction of the story. Personally, I find this data interesting because A) I think it's largely meaningless to value the company B) I think the market overreacts to it I think the Sphere business is humming along extremely nicely. The concert business is consistently improving (higher numbers, better acts, more utilization). The ads and bookings businesses are healthy/growing, there are 2 (and probably more unannounced) additional Spheres working through production. What WOZ did was prove that a "hit film" could generate enormous interest/revenues/visitors to the Sphere. Whether it "levels off" at $1m/day, or $1.2m/day or $1.4m/day, doesn't matter that much because the longer term model is to consistently launch NEW films launch and generate $1.5-$2.5m/day. And they have somewhere between 2-3 new films coming out next year, and probably another 2-3 films in 2028. AI is cutting their speed (and cost) of making films dramatically. Overall I'm a buyer at these $100-$120 price levels (We're long via some short Nov $120P's that are currently in the money). Given recent price action, it's hard to say how the market reacts to the November earnings release, but I think the earnings picture has stabilized from here and the stock is setup for good fundamental catalysts driving earnings growth in 2027.

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Axon 3Q26 Business Update

Axon cut full-year guidance after delayed federal Dedrone contracts slowed 3Q revenue growth to 28%, while software and services grew 43%.

AXON $31B
Speedwell Memos 3 clicks
AAP · long

Advance Auto Parts INC

Advance Auto Parts, AAP, is presented as a long idea following prior write-ups at $48.81 per share in January 2025.

AAP $2.9B
Value Investors Club 1 click

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