Chip Stock Investor Podcast

In 2000, venture capitalists funded 200 semiconductor companies. By 2015, that number had fallen to single digits. The cost of designing a chip went from $33 million in the late 1990s to over $200 million today, and it takes four or more years to complete. There are not enough engineers. The timelines are too long. The investment risk is too high.Faraj Aalaei has spent three decades watching this problem build. He co-founded Centillium Communications and took it public on Nasdaq in 1997. He co-founded Aquantia, took it public in 2017, and sold it to Marvell Semiconductors in 2019. He then spent several years investing in AI companies before recognizing that generative AI could do for chip design what it has done for software — compress timelines, reduce cost, and open the field to a much wider group of contributors.In 2024, he founded Cognichip with a straightforward but ambitious vision: everybody should be able to be a chip designer.Nick sits down with Faraj for a wide-ranging conversation that covers the full landscape — why the semiconductor industry has a structural problem that EDA companies like Synopsys and Cadence cannot solve alone, why generic large language models fall flat when applied to chip design, how Cognichip trains physics-informed models on proprietary synthetic data without touching any customer IP, and what actually happens to the semiconductor industry when design timelines collapse from years to months.The implications are significant. Hyperscalers like Google, Meta, and Microsoft could design more bespoke ASICs faster and cheaper. Foundries like TSMC would see shorter cycles between customer signup and first wafer revenue. Startups that today cannot raise funding because the design cost is too high would suddenly become investable. And companies like Nvidia — which already iterate faster than anyone in the industry — could move faster still.The conversation also covers Cognichip's differentiation from agentic workflow competitors, the fundamental reason why physics-informed models are necessary for semiconductor design in a way they are not for software, and — at the very end — the IPO question.What we cover:— Why chip design went from $33M to $200M+ and VC funding collapsed— The engineer shortage and why semiconductors lose to software for talent— Why the 6-year chip design lag is a fundamental problem for AI progress— EDA companies and AI — complementary rather than competitive— How Cognichip trains models without using customer IP— Physics-informed AI vs. generic LLMs — why the distinction matters— The vision: anyone can design a chip — what that actually means— What happens when design timelines collapse — impact on Nvidia, startups, foundries— Cognichip vs. agentic workflow competitors — the fundamental model difference— Hyperscaler ASIC strategies and CapEx implications— Manufacturing yield improvement and AI's role— The IPO questionDisclosure: Cognichip is a private company and is not publicly investable at this time. This content is for general information only and is not individual investment advice.chipstockinvestor.com

Over a year ago, CSI did a three-part deep dive on co-packaged optics after Nvidia dedicated an entire segment of its GTC keynote to the technology — naming Lumentum and Coherent as the primary beneficiaries. The analysis was right. They did not buy.That mistake is now worth talking about directly.Lumentum just reported fiscal Q3 2026 revenue up 90% year over year. Q4 guidance implies triple-digit year-over-year growth. Nvidia made a $2 billion investment in both Lumentum and Coherent, and separately announced a major fiber optic cable manufacturing expansion with Corning. Co-packaged optics products have not even begun shipping in volume yet — that catalyst hits in December 2026. The case for Lumentum continues to build.But this is CSI, and true conviction in a business means covering what could go wrong as well as what is going right. There is a significant dilution story unfolding that every Lumentum shareholder needs to understand before adding to a position.When the stock was trading at roughly one-tenth of its current price, Lumentum raised cash by issuing convertible notes — a type of debt that converts to equity when the stock reaches certain price milestones. The stock has now blown through those milestones. All of that convertible debt is now eligible to convert into stock at terms that are extremely favorable for the debt holders and extremely expensive for existing shareholders. The result: shares outstanding are expected to increase by approximately 20% over the next two quarters. Nick and Kasey explain the full mechanics clearly — why it happened, what it costs, and whether the revenue acceleration can outrun the dilution.Also covered: the Qorvo fab acquisition in North Carolina that adds indium phosphide manufacturing capacity in two to three years, and what operating leverage looks like when a company goes from negative margins to all-time highs in the span of a few quarters.What we cover:— Why CSI did the deep dive on co-packaged optics and still did not buy — the honest lesson— Lumentum fiscal Q3 2026: 90% revenue growth — what drove it and what comes next— Q4 guidance: triple-digit YoY growth before CPO products even ramp— Nvidia's $2B investment in Lumentum and Coherent — the supply chain signal— Nvidia and Corning fiber optic expansion — Nvidia's hands all over the supply chain— Co-packaged optics — the December 2026 catalyst that has not landed yet— Operating leverage in action: from negative margins to all-time highs— Convertible notes explained: why ~20% share dilution is coming in 2026— Qorvo North Carolina fab acquisition — InP capacity coming in two to three years— The bottleneck in laser module manufacturing and why Lumentum dominates itSponsored by fiscal.ai — 25% off any paid plan through May 14 only. Use our link: fiscal.ai/csiDisclosure: Nick and Kasey hold positions in Lumentum and Coherent. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Intel stock is up big over the last year. On the stock price, CSI was wrong — and they are saying so directly.On the business analysis, they are standing firm.AMD is steadily taking data center CPU market share from Intel. The driver is availability — both companies rely on TSMC for their most advanced chiplets, but AMD has used that availability more effectively in a CPU shortage environment where demand is outpacing supply. After AMD's most recent earnings, the trajectory is clear: if things continue, AMD could pass Intel in data center and AI revenue as early as late 2026 or sometime in 2027.Intel's client segment — the portion of the business keeping the lights on — continues to face market share pressure from AMD. The turnaround story is real and the early innings are genuinely encouraging. But Intel at 104x forward earnings needs everything to go right, and a lot still needs to go right. AMD at 48x, with cleaner data center momentum and a more consistent growth trajectory, remains the cleaner pick — even after being wrong on Intel's stock price.This episode also covers two important supporting stories. Lattice Semiconductor is quietly back — up 42% in its most recent quarter, with record revenues possible as early as Q2 2026, and an AMI software acquisition adding roughly $1 billion in annualized revenue by year end. And AMD's embedded FPGA segment, inherited from the Xilinx acquisition, remains a highly profitable cushion even through its current growth trough.The close leaves listeners with one more thing to watch: the Vera CPU, coming later in 2026.What we cover:— Why CSI was wrong on Intel's stock price — and why the business analysis still holds— AMD vs. Intel data center CPU market share — the trajectory and what drives it— The CPU shortage and AMD's TSMC availability advantage— Intel client segment — profitable, but losing ground quarter by quarter— Intel at 104x forward P/E vs. AMD at 48x — what each multiple actually implies— Lattice Semiconductor: +42% quarterly, record revenues in sight for Q2 2026— Lattice AMI acquisition — $1B annualized revenue run rate by year end— AMD Embedded (Xilinx): profitable through the trough, modest growth returning— Intel Altera FPGA — now 51% private equity, no longer in the income statement— The Vera CPU — a teaser worth watching as 2026 developsSponsored by fiscal.ai — 25% off any paid plan through May 14 only. Use our link: fiscal.ai/csiDisclosure: Nick and Kasey hold positions in AMD. They do not currently hold Intel. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Almost nothing in semiconductor land is cheap right now. First Solar might be the exception — and that is worth paying attention to, even if you have never thought of a solar panel manufacturer as a chip stock.First Solar trades at 12.7x forward earnings and 12.7x forward free cash flow. It carries over $2.4 billion in cash with almost no debt. It just reported record Q1 2026 revenue of just over $1 billion, up 24% year over year, with expanding profit margins. It manufactures domestically in five US facilities — a sixth is under construction in South Carolina. It benefits from Inflation Reduction Act tax credits through 2029. And it has just launched a new manufacturing process called CuRe — copper replacement — that increases panel lifetime energy yield by up to 8% and extends panel lifespan.Everything checks out. Until you look at the guidance and the backlog.Full year 2026 revenue is expected to come in flat to slightly down versus 2025. The order backlog, which peaked above 70 gigawatts in 2023, has now declined to under 48 gigawatts. First Solar is working through existing orders faster than it is winning new ones. A sizable cancellation from customer LightSource BP in 2024 and 2025 accelerated that decline. These are the hallmarks of a value trap — a stock that looks cheap because the future earning power is genuinely uncertain, not because the market has mispriced it.The potential inflection point is a pending Section 232 investigation into whether crystalline silicon solar panel imports — primarily from China, where state-subsidized price dumping has been a recurring competitive tactic — constitute a national security risk. If the ruling lands in Q2 2026 and tariff protections follow, First Solar's order book could refill rapidly. If it does not, the backlog decline continues and the cheap valuation has every reason to stay cheap.CSI walks through the full picture: the thin-film cadmium telluride technology edge, the CuRe manufacturing upgrade, the domestic supply chain advantage, the backlog reality, and a reverse DCF that shows the bar First Solar needs to clear is genuinely low — only 7% annual profit growth over five years with a 0% terminal rate gets you to today's price. The conclusion is honest: mildly interested, but the hallmarks of a value trap are present. Patience is the strategy.What we cover:— Why a solar company qualifies as a chip stock — and where First Solar fits in the supply chain— First Solar Q1 2026: $1B+ revenue, record margins, $2.4B cash, minimal debt— Thin-film cadmium telluride vs. crystalline silicon — the technology difference that matters— The CURE manufacturing process: launching now in Ohio, targeted across all facilities— Domestic US manufacturing as a competitive and geopolitical advantage— The guidance problem: flat to down revenue in 2026— The backlog decline: from 70GW in 2023 to under 48GW and still falling— Section 232 tariff investigation — the binary catalyst expected Q2 2026— Reverse DCF: 12.7x earnings, 7% growth, 0% terminal rate— CSI verdict: mildly interested, but patient — the value trap signs are realDisclosure: Nick and Kasey do not currently hold First Solar. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Prediction markets have been easy to dismiss as a gambling product dressed up in financial language. That became harder to do when Intercontinental Exchange — the company that owns the New York Stock Exchange — quietly took a 25% stake in Polymarket. And when Robinhood partnered with Susquehanna to acquire a MIAX exchange platform that is already regulated and cleared specifically for prediction markets trading.The finance industry has a long habit of showing up wherever money is moving and taking a cut. It is showing up here now. The question for investors is not whether prediction markets will become a legitimate financial product — Nick and Kasey think that trajectory is clear. The question is which publicly traded companies are best positioned to benefit, and how to think about the difference between a short-term hype cycle and a genuine secular growth theme.In this episode, CSI steps outside its core semiconductor focus to cover the full prediction markets landscape and compare Robinhood and Interactive Brokers head-to-head on their Q1 2026 earnings — because the way those two businesses generate revenue tells you almost everything you need to know about which one is built for the long run.Robinhood reported $1 billion in revenue, up 15% year over year, with EPS up just 3% — slower than investors expected. The stock dipped on the report. But the MIAX acquisition is genuinely interesting: a regulated, cleared prediction markets exchange that could morph from a retail gambling product into a professional risk management tool for investors hedging real portfolio exposure against real-world outcomes.Interactive Brokers reported $1.68 billion in revenue, up 17% year over year, across 4.75 million accounts. The revenue chart tells a different story — smooth, consistent, institutional. Net interest income has grown to exceed transaction revenue over the past decade. ForecastEx, their prediction markets product, launched in 2024 and is already aimed at professional investors rather than retail gamblers.The comparison matters. One business is built around hype cycles and transaction spikes. The other is built around compounding institutional trust. Both are in prediction markets now. Only one of them looks like Interactive Brokers fifteen years from now.What we cover:— The prediction markets landscape: Kalshi, Polymarket, Robinhood, CBOE, NASDAQ, ICE— ICE owns 25% of Polymarket — what institutional validation means for the industry— Robinhood Q1 2026: $1B revenue, EPS +3% — the MIAX acquisition explained— Why prediction markets become risk management tools, not just gambling— Interactive Brokers Q1 2026: $1.68B revenue, smooth institutional revenue model— HOOD vs. IBKR: boom-bust vs. compounding — what the revenue charts actually show— The finance flywheel: why Wall Street always finds a way to monetize a new cycle— Our current positions and how we're thinking about this as a portfolio diversification playDisclosure: Nick and Kasey hold positions in Robinhood. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Seagate just reported its best free cash flow in a decade. EPS is up 115% year over year. Revenue grew 44%. Management is calling it a structural shift — the idea that nearline hard disk drives have permanently broken out of their long secular decline thanks to AI data center demand.The numbers are real. The demand from hyperscalers is real. The Mozaic 4 platform shipping at 40-plus terabytes per device is real, and the Mozaic 5 roadmap targeting over 50 terabytes in late 2027 is genuinely impressive. When AI inference needs to recall vast quantities of stored data almost instantaneously, nearline HDDs are exactly the right tool, and Seagate is the dominant supplier. The $1.1 trillion in remaining performance obligations that cloud providers have committed to accelerated compute infrastructure means there is a multi-year demand runway here that is not in dispute.What is in dispute is whether calling this a structural shift — rather than a very powerful cyclical upswing driven by a once-in-a-generation CapEx surge — is accurate. Hard disk drive technology is mature. NAND flash and SSDs will continue taking market share over a long enough time horizon. And Seagate, for all its current dominance, is still a price-taker in a commodity memory market. The party is real. The question is how long it lasts and what you do while it's happening.In this excerpt from a Semi Insider live Q&A session, CSI works through every layer of Seagate's Q3 FY2026 results and close with something genuinely useful for investors: a three-part framework for handling a commodity stock that is over-earning in a cycle without knowing exactly when it ends.What we cover:— Seagate Q3 FY2026: $3.1B revenue (+44% YoY), 47% gross margin, EPS +115%— Best free cash flow in a decade: $953M and the operating leverage story— Q4 FY2026 guidance: $3.45B revenue (+41% YoY), EPS of $5 (+123% YoY)— The structural shift thesis: what management is claiming and what history says— Nearline HDD explained: why AI inference changed the demand equation— Mozaic 4 shipping now, Mozaic 5 roadmap to late 2027— Data center revenue: $2.5B of $3.1B total — hyperscaler dependency— The $1.1T cloud RPO and Seagate's multi-year runway— Reverse DCF: 56% EPS growth over three years — what it implies at $687— Three frameworks for handling an over-earning commodity stock— The 2028 risk: debt paydown, shareholder returns, and the inevitable washoutMembers of Semi Insider get the full live session including extended Q&A and the complete research. Join at chipstockinvestor.com🎉 fiscal.ai is running a 25% off sale starting May 7 for one week only — the platform behind all our financial charts. Use our link: fiscal.ai/csiDisclosure: Nick and Kasey are Seagate shareholders. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Many investors were not aware of Advantest. This Japanese company quietly controls roughly 70% of the global semiconductor test equipment market — the quality assurance layer that every AI chip, every HBM memory module, and every packaged GPU must pass through before it ships to a customer. As AI chips have gotten more complex and more expensive, the cost of shipping a faulty one has risen dramatically, and the demand for Advantest's equipment has followed.The stock reflects that. Up 450% in the past year. Up roughly 250% since CSI first wrote about Advantest eleven months ago. Analyst earnings per share expectations have roughly doubled in twelve months — that is what drove the run. Advantest just reported FY2025 results of $7.1 billion in revenue and guided FY2026 to approximately $9 billion, a 26% year-over-year increase. In a test equipment market the company itself sizes at $12.5 to $13 billion for 2026, that would put Advantest's global market share approaching 70% — a level of dominance that is genuinely rare in any industry.Nick and Kasey cover the full picture in CSI's first public video on Advantest: how it became the undisputed leader, why the test equipment slice of the $140 billion wafer fab equipment market is small but critical, what the 47x forward earnings and 56x forward free cash flow multiples actually imply, and why some analysts are already flagging a potential cycle downturn starting in 2027 even as the bulls hold firm.The close is pure CSI. Radical moderation. Patience is a strategy. Stay in the game and survive.What we cover:— Advantest FY2025: $7.1B revenue and dominant market share vs. Teradyne and Aehr— FY2026 guidance: ~$9B — approaching 70% of a $12.5–13B global TAM— Why AI chips and packaged modules require testing — and why it is getting more expensive— Test equipment as a slice of the $140B WFE pie — small, critical, and cyclical— Valuation: 47x forward P/E and 56x forward FCF — what the re-rate means now— Analyst EPS doubled in twelve months — the mechanics of why the stock ran— The 2027 cycle risk: bear vs. bull analyst expectations laid out clearly— Radical moderation: the CSI framework for parabolic stocks and surviving the cycleSponsored by fiscal.ai — the platform behind CSI's research charts. Get 15% off at fiscal.ai/csiDisclosure: This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com

Two years ago, Nick called out GE Vernova when the profit margin was still near zero and the company had just been spun off from GE. The thesis was straightforward: free of the conglomerate, management could finally allocate capital productively, margins would expand, and the company would be perfectly positioned for the AI-driven build-out of the electric grid and data center power infrastructure.That thesis has now fully played out. GE Vernova just reported Q1 2026 earnings — nearly $5 billion in free cash flow, raised revenue guidance to $44.5–45.5 billion, higher EBITDA and FCF margins, and an essentially debt-free balance sheet even after completing the Prolec acquisition in February.In this excerpt from a Semi Insider live research session, Nick breaks down every number that matters: what drove the free cash flow surge, how to correctly read the Prolec accounting effects, why the unregulated data center power market is GEV's most important growth driver right now, and what the reverse DCF at current prices is actually telling investors. Not cheap. Not absurd. Closer to fair value than the deep discount it represented two years ago — but still a compelling hold if you already own it.Nick also tackles the macro question head-on: is power really the bottleneck for the AI data center build-out? Jensen Huang said yes on the Dwarkesh podcast. Nick said essentially the same thing last November. The regulatory environment for utility companies, the unregulated opportunity in dedicated data center power generation, and the timeline reality of building power plants and expanding grids all factor into the answer.What we cover:— GEV Q1 2026: orders, backlog, revenue, and EBITDA all significantly up year over year— Free cash flow of ~$5B — separating the Prolec accounting effect from the underlying business— The Prolec acquisition: what GEV inherited and what it means for the balance sheet— 2026 guidance raised: $44.5–45.5B revenue, higher margins across the board— The unregulated data center power opportunity — why this changes GEV's growth profile— Wind power: offshore still stalled, onshore orders starting to recover— Reverse DCF at ~$1,100/share: 12% growth — our current verdict on valuation— The Axon Enterprise connection and what the reindustrialization thesis really looks likeThis is an excerpt from our Semi Insider live research session. Members get the full analysis, extended valuation discussion, and live Q&A on GEV and the rest of the energy infrastructure stack. Join at chipstockinvestor.comDisclosure: Nick and Kasey are GE Vernova shareholders. This content is for general information only and is not individual investment advice. All investing involves risk.chipstockinvestor.com