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Best Ideas 2012: Gilder Is Gaga For Holy Land Tech Stocks

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You can keep up with George's ideas regularly on his Gilder Telecosm Forum.

George Gilder

Gilder Telecosm Forum

The dim gentility of my brain is currently brimming with Israel's genius after a ten day trip to this fabulous technology scene and a thirteen-hour ride on El Al, landing me this morning.

EZchip (EZCH) still comes first as the leader of the pack headed for the fiberspeed video internet paradigm.

Following closely, with Eyal Waldman in the cockpit, cruising into the cloud on Infiniband and moving to Ethernet, is Mellanox (MLNX). It may not have the best technology but it has the most irrepressible and temerarious CEO, and that counts for a lot of nebulation in the future.

Then let's all bow before Evogene (EVGN.TA), which is public in various elusive forms, perhaps with its head in the cloud and its nose in the dirt. (The gymnastic posture that Feynman associates with genius: "Einstein could do it but the rest of us have to choose".) Evogene has just persuaded Monsanto , (MON) the world leader in AG science, to move its key R&D to Israel and make a further investment of $35M. (Evogene has $60M in cash--half its market cap of $120M, and has applied its parent Compugen's technology to agricultural predictive genetics in silico.)

Evogene's manifest success portends well, someday, for Compugen (CGEN), since it uses CGEN's model of the genetic cascade, and this puts CGEN in my noggin despite the lack of significant news.

Broadcom (BRCM) has plighted its troth to Israel in wireless backhaul and put its program under the sway of Provigent (in which I invested before the merger). Broadcom is taking over the wireless backhaul market with a billion dollar business as of now, expanding rapidly. Wireless backhaul is slated to be huge, with the predicted 16-fold increase in wireless data predicted by 2015. With nine Israeli acquisitions, BRCM is in the process of becoming an Israeli company.

Intel (INTC) is already a product of Israel's genius and it is rumored to be contemplating its Israeli VP D. Perlmutter as the successor to Ottelini as CEO. Their PE is 10 and if necessary they can have a successful career as the leading US and Israeli foundry.

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The leading independent Israeli foundry is TowerJazz (TSEM) and it is depressed by a financial imbroglio and convertible overhang. But under CEO Russell Ellwanger it has been executing well an ingenious analog strategy that makes it a good way to play the analog paradigm. (The more digital traffic the greater the need for analog interfaces, which gain the bulk of the profits.)

Audiocodes (AUDC) is an overlooked player in the ascendant session (layer five) paradigm, behind Acme Packet (APKT). Both have Session Border Controllers and AUDC also commands important intellectual property in high definition voice.

And finally, there is my own Wave (WAVX) (I'm on the board), which has bought the Israeli security firm Safend and is now partly Israeli, and handily makes the list.

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