I just stumbled across a January 2023 Karim Rahemtull stock teaser pitch about what he’s calling “The #1 U.S. Stock to Soar From 2-Nanometer Chips.”
According to Rahemtull, this “little-known chip stock” could “soar 525% within the next couple of years.”
“I wouldn’t be here pounding the table on this company if I didn’t fully believe it could easily soar 525% within the next couple of years…”Source: https://web.archive.org/web/20230726011248/https://pro.monumenttradersalliance.com/p/CHINATO99TPULT2YRDSWARWARLTOMT/ETPUZ631/Full
That’s quite a bold claim… but I wanted to know what stock he was referring to without joining the service he was pitching (Trade of the Day Plus – $49/year).
So I analyzed his clues and did some sleuthing to see what I could uncover.
And I think I know what he’s teasing.
Unpacking Karim Rahemtull’s Teaser
The essence of Karim Rahemtull’s teaser is that China’s trying to control what he calls the world’s “most important resource” (semiconductor chips) and that the fate of the “American Dream” lies in the “hands of a group of American companies.”
As the story continued, Rahemtull pointed out that 92% of the world’s most advanced semiconductors come from Taiwan. And as you may know, China wants to claim Taiwan as its own, which Rahemtull claims could be devastating for the U.S. economy.
Here’s how he put it:
“92% of the entire world’s advanced semiconductors come from Taiwan.
“We’ve neglected to support U.S.-based chip manufacturers and have allowed virtually all of the world’s chip production to move to Taiwan.
“And this is the single biggest threat facing America today…
“Because if China invades Taiwan, they will essentially gain complete control of nearly the entire global supply of semiconductor chips.
“And this will give them ultimate power over the U.S. economy.”
Is that actually true?
I can only speculate as to what would happen if China invaded Taiwan, other than pointing out the obvious – it wouldn’t be a good thing (lol).
But yes, according to Forbes, Taiwan is responsible for 92% of the production of logic semiconductors, which are chips that have components smaller than 10 nanometers.
And, while I always recommend taking these teasers with a pinch (or two) of salt because they are ultimately just glorified sales pitches… semiconductors are important to the U.S. economy. And it’s presumably not a good thing that the U.S. is so reliant on Taiwan to acquire them.
But does that mean the stock Rahemtull’s pitching is a good idea?
Nevertheless, according to Rahemtull, the solution to all of this is “good old-fashioned American ingenuity.” And he says there are a handful of companies building a massive, state-of-the-art chip industry in America as we speak.
“The only way we can stop China in their tracks is through good old-fashioned American ingenuity.
“And that’s what’s underway right now.
“In short… a handful of companies have created a plan to build an entire massive, state-of-the-art chip industry right here in America.
“Over the past few months, these chip companies have been aggressively building new factories and developing new projects…
“And by doing that, they are set to ruin China’s plot to destroy America.”
The “handful of companies” Rahemtull is referring to seem to include Micron, IBM, and Intel, as these were companies he mentioned in the presentation directly.
But these don’t appear to be the companies he’s actually recommending.
Instead, he’s teasing one small “under the radar” company that he claims will be “crucial to virtually every new chip factory around the world.”
“While each of those American chip companies is a solid investment bet right now… there is another company that I believe is going to be crucial to virtually every new chip factory around the world.
“This one small company is just a fraction of the size of Intel, IBM and Micron…”
So with that said, let’s dig into the clues to see what he’s pitching!
What Is Rahemtull’s #1 U.S. Chip Stock?
The first tangible clue Rahemtull shared about his pick was that it “owns 128 patents” on products that include “innovative components that allow chipmakers to keep their equipment clear of any contaminants.”
“It owns 128 patents on products including…
“Innovative components that allow chipmakers to keep their equipment clear of any contaminants…”
For context, prior to sharing the above clue, he talked about how one “speck of dust” can ruin millions of chips. So it sounds like the company he’s teasing helps chipmakers avoid that kind of problem.
And apparently, the “top chipmakers around the world” have tasked this company with “ensuring that no major accidents shut down operations in their facilities.”
From there, he started hyping up “2-nanometer chips,” which are basically super small semiconductor chips that are both better and more energy efficient. And he said that Intel is “expected to be the first to mass-produce them” in the U.S.
But according to Rahemtull, the “real money” is in the “$32 company” he’s pitching.
“Listen… if you want to buy Intel to take advantage of this, you can.
“But the real money is in the smaller company that’s providing the technology that makes these chips possible.
“Because I believe their technology will be used not just by Intel… but by virtually every chipmaking company around the world.
“Without this small, $32 company…
“Chipmakers simply wouldn’t be able to bring chip manufacturing home to American shores…”
What else did he say?
Well, for one thing, he revealed who the company works with:
“Lam Research, Applied Materials and ASML also are adding hundreds of millions of dollars to this small company’s business…”
He also said that it’s involved in “every stage of the chipmaking process.”
“It is involved in every stage of the chipmaking process…
“From factory construction… to equipment buildout… to ongoing production support across the entire new chip industry.”
And finally, he shared the following clues that include a quote from a Zacks report about the company, a hint about the company’s CEO, and who’s invested in the company.
“And as Zacks reports, ‘The company has been continuously attracting big tech companies like Intel due to its capability to meet delivery schedules even during severe supply chain constraints.'”
“The CEO is actually a former executive of Applied Materials”
“… Invesco recently added over 336,800 new shares, making it their largest new position…
“BlackRock built up a $208 million position in this stock…
“Vanguard bought up another $106 million…”
Based on all of that, I think his pick is Ultra Clean Holdings Inc (UCTT).
The main clue that gave that away was the Zacks quote, which led me to this Yahoo Finance article (authored by Zacks Equity Research) about Ultra Clean Holdings.
Next, I looked at a chart of the company’s stock, which was trading at around the $32 mark in January 2023 (the month Rahemtull’s presentation was published):
Furthermore, BlackRock, Invesco, and Vanguard are all listed as institutional holders on the Yahoo Finance website. And according to the company website, the CEO (Jim Scholhamer) was the Corporate Vice President and General Manager at Applied Materials.
So, it looks like Ultra Clean Holdings is a match.
What does the company do?
Ultra Clean Holdings is a California-based company that, according to its website, develops and supplies “critical subsystems, components, parts, and ultra-high purity cleaning and analytical services,” mostly for the semiconductor industry.
Is it a good investment?
I can’t advise you on that as I’m not a financial advisor, nor do I provide stock tips. I’m just a guy that researches different stock teasers and posts what I find on this blog.
That said, I did find this Motley Fool article that makes the “case” for Ultra Clean Holdings, which you may find interesting. I also found an article on simplywall.st about the company, which is a lot more recent (July 2023) than the Motley Fool article.
You can also see Karim Rahemtull’s take on (what appears to be) Ultra Clean Holdings in his report called “Defeating China: The #1 U.S. Stock to Soar From 2-Nanometer Chips,” which comes with a $49 subscription to his Trade of the Day Plus service.
Recommended: Go here to see my #1 rated stock advisory of 2023
Time will tell if Karim Rahemtull’s semiconductor thesis plays out or not, but I wouldn’t expect ANY company to make you “525% within the next 2 years,” which is what he believes will happen, according to the presentation.
In my opinion, trying to predict such short-term moves is a fool’s errand, which is why I prefer to think longer term. But then again, I’m just a guy with a blog… so it’s probably best that you do your own research and form your own opinion.
In any case, I hope you found this post helpful. And if you’d like to share your two cents on any of this, feel free to chime in below. Thanks for reading!