Investing in AI & Big Data 2020

Published on 01/14/20 | Saurav Sen | 1,846 Words

The BuyGist:

  • We missed out on ASML, even though we had identified it as a comfortable company.
  • Having said that, our AI & Big Data investments have generated good returns.
  • But can we find some other lateral ways to play AI & Big Data?
  • We review the AI & Big Data landscape.
  • We identify some semiconductor equipment manufacturers.
  • This sets us up to find a possible investment in that list.

ASML Envy?

This update to our growing collection of AI & Big Data writeups was instigated by our 2019 Performance Review. One of our big regrets was a mistake of omission.   We missed out on ASML stock’s fantastic run in 2019. This is a company we had identified as supremely comfortable but at an uncomfortable price. We’ve dug deep into ASML twice, and each time we came out thinking, “it’s fairly priced”. Maybe we were right. But this semiconductor equipment manufacturer has no competition and holds the key to innovation in AI & Big Data over the next 5 years. So, maybe we should have valued it differently.

Here’s a recap: ASML makes Extreme Ultraviolet Lithography (EUV) machines, which have just recently entered the semiconductor manufacturing process at the biggest chipmakers of the world: TSMC, Samsung and Intel. Why? EUV is the only credible way to extend Moore’s Law. This is big. Only ASML makes EUV machines, so progress in AI & Big Data depends heavily on them.

First, let’s set up the AI & Big Data landscape as a reminder. And then – as is customary at The Buylyst – we’ll try to find ways to invest. Investing is always our true north.

I’ll keep this one short and crisp.

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