u/Aggravating_Share761

This post might come off as unconventional, as many investors are piling money into semiconductors during "AI euphoria", I want to bet against this complacency.

First, I want to mention that these short positions are not levered and at no borrowing cost. I admit that I am wrong when I lose 2x my original short position, and it a financial loss that I can accept. Second, I am not against AI, I have been incredibly successful investing in Google, NVIDIA, Broadcom, AMD, Marvell, ASML, Lam Research, TSMC, Caterpillar, and MU.

Right now, HBM is being priced like a scarce, premium product because AI demand is strong and supply is tight. Samsung, SK Hynix, Micron, and others are pouring capital into expanding memory and HBM capacity. Once those factories and packaging lines ramp, the current shortage could ease. The supply will increase dramatically, Samsung is reportedly planning to increase HBM production capacity by about 50% in 2026

Memory are inherently moatless, there are no (STANDOUT) competitive advantages meaning there will be a lack of pricing power leading to margin pressure. Valuations today are lofty and overextended, because these companies lack competitive quality. This is the core principle of economic moats.

I am willing to hold this short position for longer term to see my thesis play out.

Company Name	Ticker	Total Equity Value	AVG Price Bought
Alphabet Inc.	GOOG	$2,404.80	$165.00
Amazon, Inc.	AMZN	$5,998.96	$215.00
Broadcom Inc.	AVGO	$5,590.00	$332.00
Caterpillar Inc.	CAT	$2,692.35	$721.00
GE Aerospace	GE	$2,377.20	$305.00
Meta Platforms, Inc.	META	$3,048.15	$603.00
Microsoft Corporation	MSFT	$1,660.48	$370.00
NVIDIA Corporation	NVDA	$3,012.80	$181.00
Northrop Grumman Corporation	NOC	$1,648.56	$660.00
S&P Global Inc.	SPGI	$3,360.96	$462.00
Sterling Infrastructure, Inc.	STRL	$2,956.80	$417.00
Taiwan Semiconductor Manufacturing Company Limited	TSM	$4,116.90	$255.00
The Goldman Sachs Group, Inc.	GS	$1,872.96	$828.00

Portfolio Summary: ($4K cash)

I have to say, adding Sterling Infrastructure after seeing so many suggestions from this subreddit turned out to be a huge win. That stock absolutely exploded.

Some buys I still think are underrated: NVIDIA around $180, CAT around $721, and Microsoft around $370. My biggest miss this year has been Northrop Grumman, where my average is around $660. I’m still holding it long term.

Right now, I have 11 stocks in my main account, excluding STRL and MSFT. I want to add one final high-quality long-term holding. I’m expecting a correction around mid-May and would like to buy dips in late May.

I’m currently leaning toward GE Vernova as a $2K–$3K addition if it pulls back below $1,000 during a correction. I’m bullish on gas turbines and think there is still a lot of long-term room to run. I also like Eaton because its business model feels wide-moat, with high switching costs and a strong service-fee component, somewhat similar to GE Aerospace. That said, the recent earnings report rubbed me the wrong way for some reason.

For the main portfolio, I’m also looking to buy dips in Google around $360, Broadcom around $360, Goldman Sachs under $900 for one share, Meta around $600 for one share, and S&P Global around $1,000, which I think looks way too cheap.

My junior account is more for intuition, conviction plays, and shorter-term trades. It made no sense to put MSFT in there, but I bought it at such a good price that I might as well hold. Sterling Infrastructure was an amazing buy, and I plan to take profits on roughly half of the position next week. At this point, the stock has more than doubled, so the remaining position will basically be profit.

For the junior account, I’m also watching Arista Networks around $130 and Arm Holdings around $180.

ANET is my cleaner AI infrastructure trade. AI is not just GPUs; data centers also need faster networking, switching, ethernet, and cloud infrastructure. Arista fits that theme well. Around $130, I think the risk/reward gets more interesting.

ARM is the clear winner in data center CPUs. The fact that it has 99% market share in smartphones stemming from energy efficiency prove how wide the moat is. I want to highlight that x86 CPUs (Intel, AMD) simply cannot compete on engineering as it a COMPLETELY different product, almost you have to start from the ground up against IP and patents owned by ARM. Offering 30-40% energy efficiency (Amazon Graviton) over x86 to me it senseless why any giants would prefer x86 in a world where CPU supply is not constraint (projected 50% data center CPUs will be based on ARM architecture). In a perfect world with no constraints, compute will simply be ran by NVIDIA (GPUs) > AMD, TSMC (foundry) > Intel, ARM CPUs > x86. Some problems could be valuation is ridiculous. The licensing business model is growing fast, but the valuation can only be justified with the fabless model making their own chips rather than royalty on design with ARM AGI CPUs. Another risk could be supply constraint by TSMC 3nm (booked out). Nonetheless, we clearly see demand for ARM AGI CPUs, if that business takeoff with this thesis above, the company could double. I will buy dips at $180.

I would love if some of you guys could suggest momentum play for my junior account but have respective qualities not meme stocks. Hopefully, some diversification from semiconductors like financials, industrials, tech, etc. Let me know thank you.