Tech: AI innovations, market disruptions and emerging opportunities
Technology
The themes SPR will be focusing on in 2025 include 1) AI related: (a) AI applications move to the edge - benefitting the likes of Ciena, Arista and Crown Castle. (b) AI networking transition to ethernet vs. InfiniBand, benefitting Arista, Cisco, Juniper and Extreme. (c) AI use cases that are delivering strong ROI vs. others that are not, despite strong sales efforts by vendors - impacting renewals for Salesforce, ServiceNow, and others. 2) In cyber security, areas of growing priority include SOC automation and Next Generation SIEM. 3) More vendors bypass distribution and sell via the CSP marketplace or direct, negatively impacting large distributors. 4) BEAD - despite delays, this program will drive meaningful revenue. 5) Vendors benefitting from the rapid growth in DevOps / DevSecOp.
Edition: 202
- 10 January, 2025
QuidelOrtho (QDEL) & Extreme Networks (EXTR)
Healthcare & Technology
Alumbra Research specialises in identifying high conviction short selling opportunities with clear near-term catalysts and longer-term structural issues. Recent successful calls include:
QDEL - share price collapsed 32% on 14th Feb after the company reported disappointing 4Q23 results citing weaker than expected Covid / flu-related revenues. Tim Rickert had previously raised concerns that consensus revenue / EBITDA growth expectations appeared overly optimistic considering the likely non-recurring benefits from normalising excess backlog, settlement gains and government-contract revenue during the first nine months of FY23.
EXTR - share price dropped 27% last month after management issued a profit warning citing weaker than expected revenue in the quarter, before later significantly reducing its FY24 revenue guidance as well. Derek Aherne had been flagging EXTR’s declining backlog coverage (which the firm had recently stopped disclosing) and excess channel inventories (e.g. DSO at EXTR’s top distributor had increased to 94 days (1Q24) vs. 69 days (1Q22)).
Edition: 180
- 23 February, 2024