It’s official. AEM’s market capitalization raced past the $1 billion mark after AEM share price stormed past $4.00 following the release of a stellar 1HFY2020 result. Question now is: will AEM share price hit $5.00 in the coming days? This is the stock price that would take the market capitalization of AEM to USD1 billion, a level that would pave the way for a Nasdaq listing. Is this stock worth $10 in the long-run?
The comeback of AEM share price is certainly impressive as it came on the back of the epic Intel fiasco. The US chip maker had recently announced a six-month delay in its 7-nm chips. That news knocked the wind out of AEM share price, which plunged as much as 7% the following day. But damage control is made as management announced an upward revenue guidance to be in the range between $460 million to $480 million.
Given that AEM had previously guided on 6 May 2020 that revenue would be $430 million to $445 million, the latest revenue guidance suggested that the Intel fallout had been contained, presumably due to the latest acquisition. It should also be noted that the May 2020 revenue guidance had set AEM share price on fire. On this basis, I foresee AEM share price to hit $5.50 in the coming days.
Despite the bullish form of AEM share price, it has not been a bed of rose for investors in the past couple of months. The Huawei ban, Apple ditching of Intel chips and the Intel chip production delays combined to thrash AEM share price to as low as $3.00. But I had always maintained that the end-game for AEM is a Nasdaq listing, which could potentially turbo-charge AEM share price to $50.00.
The Intel incident only vindicates that AEM share price is capable of self-imploding. This is not a laughing matter and management must diversify its revenue sources expeditiously. Otherwise, the long-term growth of the company might be affected.
Admittedly, none of the analysts has been so aggressive with AEM share price as I have been. In fact, DBS previously set a conservative target price in $2.47 in April 2020. The problem with this counter is that most people tend to underestimate the potential of AEM share price. This is because it is not easy to understand the company products and the company’s competitive advantages. In this article, I will share my insights on the outlook for AEM share price.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter (holding 10,000 AEM shares at $3.35), so my views on AEM share price may be biased.
AEM share price in new era
For sure, the game-changer for AEM is a listing in Nasdaq. That is where AEM should belong as it is where its purported major customer, Intel, resides. On the basis of the current form of AEM share price, that would not be a far-fetched dream. With two global investment banks (Morgan Stanley and UBS) holding major stakes, it is only of matter of “when” and not “if” that AEM got listed in Nasdaq (investment banks typically hold 3-5% stake in companies that they list).
I also firmly believe that this is the vision shared by Executive Chairman, Loke Wai San. He is not the founder. Instead, he is a venture capitalist who rescued AEM from the brink of collapse in 2011 when the former management was embroiled in corruption charges. As a typical venture capitalist, Loke Wai San will definitely have an exit strategy, but only after he unlocked the full value of AEM share price.
And the major catalyst would be [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]SG55 Special Offer!
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