What to Do about Russia’s Tech Brain Drain, Tesla’s Split, and Chip Companies

0 | By Strategic Tech Investor Staff

Sector Watch: The U.S. and Global Tech Sector Could Get an Unlikely Boost

We all know about the Western sanctions designed to cut off Russia’s access to new communications, aerospace, manufacturing, and telecom technologies; the West simply doesn’t trust Vladimir Putin not to wage a wider, more aggressive war with these. But the country is also experiencing an increasing “brain drain.” Highly educated, successful tech workers and entrepreneurs are fleeing Putin’s increasingly draconian restrictions. The New York Times estimates as many as 200,000 skilled tech workers may flee the country this year alone, and that as many as 70,000 had already done so by the end of March. Many of these folks will end up in the European Union, but even more are projected to come to Silicon Valley. Since World War II, the U.S. tech sector has benefited from an influx of tech talent – it’s just one reason why American tech companies are a global economic engine and profit catalyst for investors.

Earnings to Watch

Tesla Inc. (TSLA) will announce its first-quarter earnings Wednesday, April 20, after the close. The date could be a dig at the massive regulatory reaction to Musk’s 2018 tweet saying he’d “[take] Tesla private at $420.” We’re expecting fairly good results, and good post-earnings performance from the stock.Musk and his board should soon announce more details on the impending TSLA split – and the impending TSLA dividend. Tesla’s looking increasingly likely to land on the Dow Jones Industrials.

Michael has mentioned IBM (IBM) as a buy in the past and they announce earnings tomorrow. Now, this didn’t make many headlines, but IBM just partnered up with multinational bank HSBC to explore quantum computing applications for HSBC and the financial sector. The partners believe quantum computing can boost pricing and portfolio optimization and slash all kinds of downside and even fraud risk. IBM is a solid buy for a quantum computing play, but we think this small company could be even better. We expect it’ll go public in the second half of 2022. There is one potentially fantastic play in the quantum space and you can learn more here.

Lockheed Martin Corp. (LMT) announces earnings on April 21. Michael has mentioned this stock several times in the past as one of the bedrock holdings in any defense and technology portfolio. Lockheed has had an extremely strong run in 2022; it’s come up more than 31%, year-to-date. Unsurprisingly, more than half that performance, about 18%, has been put on the board since Russia invaded Ukraine. That said, there’s much more to talk about in aerospace. Michael pointed out one company with incredible growth potential in this sector – details on that one here. The stock has been very strong this year which started at $388 and now about $469 but a key point LMT has surged 18.5& since the Russian invasion started. And, this is another company you need to keep your eye on here.

Strategic Tech Updates

This Semi-Conductor Company Beat Earnings Estimates

U.S. Commerce Secretary Gina Raimondo drew an intriguing line between inflation and the persistent shortage of semiconductors, saying, essentially, that the shortage of chips was shrinking the supply of those products that contain chips. These products, in turn, are being chased by more money, and have therefore become more expensive. The thing is, the semiconductor shortage could become even tighter before it improves – bad for consumers, bad for many industries, but good for chip makers’ bottom lines. Take Taiwan Semiconductor Mfg Co. (TSM), for instance. Sales rose 36% year over year and 12% since the previous quarter – and next quarter could be even better. See what else we like in the semiconductor space here.

Cheers and good investing,

The Strategic Technology Investor Team

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