ALGM
Allegro MicroSystems, Inc. Common Stock
stock NASDAQ

The picks and shovels framing is useful, but huge TAM stories are exactly where I would get stricter about unit economics, customer concentration, capital intensity and actual returns on reinvested capital. Battery companies are a good reminder that essential technology does not automatically create a great business. I use Moon for shorter term price ideas but for something like ALGM or AMPX the long term thesis has to survive without relying on the chart going up.

ALGM is interesting but trading at depressed revenue after losing a major auto customer. What's your read on their actual ROIC trajectory? The humanoid robot thesis is speculative until we see real volume orders flowing through.

For picks-and-shovels compounders I'd look at companies like Monolithic Power Systems in power management - proven unit economics, high ROIC, and riding the same electrification/automation wave with less binary risk than Amprius.

No position in any of these currently.

Amprius is particularly interesting because it has the potential to **reinvest capital at very high returns into a massive TAM**. The business also benefits from a learning curve and **data flywheel**, while demand is supported by something fundamentally necessary: energy. On top of that Amprius sits at the intersection of several **powerful trends**, including the rapid growth of drones and other energy-intensive applications
This raises a broader question- which other small companies have a similar setup?
One example I see is Allegro Microsystems (ALGM). The key secular trends here are industrial automation and humanoid robots. Like Amprius, ALGM has a substantial reinvestment runway - if the number of robots increases dramatically, there is significant room to deploy capital into a large and growing market. The difference is that ALGM already has a business model with proven unit economics; the main question is when industrial demand begins to accelerate..
In that sense, both Amprius and ALGM are essentially picks-and-shovels businesses positioned to benefit from potentially very large technological shifts.
**What other similar companies that are well positioned to benefit from future secular trends can you think of? I think the mindset here is clear we need proven business model/unit economics before anything else. Small/mid cap only**