'Last stock standing' crumbling in recent days (before rebounding) now is a take others now have on our 'Generals last to retreat to the trenches' with the troops already there. That view ('last man standing') describes what might be more of a process than a singular washout event, but even that will vary. 

Unsplash

It will vary because individual issues (Semiconductors are the best example) and their unique prospects (if they have specialty products) describe what we see as a time for 'active rather than passive' approaches to market trading. In a sense that's why we believed value stocks would perk-up often while those 'grand dames' of the preceding era that masked distribution, caved-in. 

The near-term really doesn't matter (barring complete catastrophe), as stocks are mixed with conditions and prospects, but many are constructing lows for a presumed rebound of some sort after a period of digestion. The bears tend to be correct about debt issues and the risks of digital currency and so on, but of course we all know those issues (including Government) so one should take into account that peak pessimism is either behind or advanced in a process. 

Semiconductors might as well represent the situation, take today AEHR was up and then down when -coincidental or not- WOLF's CEO noted contracting demand (which we all know about) for semiconductors, and this time while it seems the Wall Street crowd is awaiting a recession, a few are starting to see the 'carving-out aspect'. I'm referring to EV expansion, like it or not all along.

I'm not focused on 'operational performance' of most stocks now, but looking ahead into 2023 and even 2024. If a company stakes a decent foothold next year, they will probably extend that into the following year. And that's true for those that can -or cannot- deliver 'quality' reliable Silicon Carbide chips. 

So even with business in-general slowing (and not universally, while areas like Housing are dead for the moment), when it comes for EV's, not dormant at all, quite the opposite is coming. That was also the take-away from WOLF today as the CEO emphasized (reinforced my own belief in what I've said) a need to ramp-up for 'Silicon Carbide that meets qualification standards'. My gosh, Qualification means 'burn-in testing'... that 'qualifies or rejects' wafers.

So sure, 'eventually' there will be more reliable wafers that might need lesser testing at levels to prevent critical failures. But that time is not soon, hence at the moment (and the next couple years or longer) we envision fabrication and other firms will require superior wafer and high-voltage testing, and that's for now led by AEHR. Yes volatile and it swings, but if not now, soon, we'll see a new additional client coming into their fold. They won't disclose but notably I have mentioned ON, WOLF and others like Texas Instruments or ST Micro with the possibility even of Infineon (which has tried to simplify the process). Clearly we'll see, but aside the swing trading we anticipate holding AEHR for a good while longer, slightly similar to how we treated AMD a few years ago.

More By This Author:

Market Briefing For Monday, Oct. 31
Market Briefing For Thursday, Oct. 27
Market Briefing For Wednesday, Oct. 26