GPGPU growth in 2026 — primarily driven by NVIDIA's Rubin — will face delays and a high base effect. In contrast, ASICs will show much stronger growth.

Summary: Rubin delays weigh on NVDA 2026 GPGPU growth vs ASICs; bullish Wistron assembly quality, MediaTek TPU co-design, Alchip/Marvell Trainium3 backend, and Unimicron as rising high-end substrate winner.

Recent Trends and Future Outlook in the AI Server Sector By WT

NVIDIA’s GB200 NVL72 shipments are ramping steadily. Shipments reached around 0.5K cabinets in Q1 2025. WT forecasts Q2–Q4 shipments of 4.0K, 8.1K, and 11.3K cabinets respectively — totaling about 24K units for 2025, aligning with market expectations of 21–26K. WT's research indicates ODM shipments are stabilizing, but CSP design revisions have hindered rapid volume increases. Currently, only Corewave, OpenAI, and Oracle are receiving shipments smoothly. Thanks to accumulated experience, 3231 Wistron has significantly better quality in sub-L10 assembly than peers. Also, some CSPs are still struggling with minor design revisions.

Rubin hasn’t taped out yet, but foundries expect mass production to begin in Q2 2026. Estimated wafer starts for 2026 are 340–350K. The CoWoS-L reticle area is increasing from 3.5X to 5.5X, and HBM count per package will rise from 8 to 12. HBM4 12hi will be adopted, with no hybrid bonding in the initial phase, pushing capacity to 576GB. Based on current validation, Samsung’s participation is unlikely. With these wafer volumes, only 1.2 million Rubin chips may be available in 2026 — equivalent to around 16–17K VR144 cabinets. However, ODMs likely won’t receive the chips until late 2026, and CSP customers may not receive VR144 servers until 2H 2027 or even year-end. Rubin chips require second-gen CoWoS-L packaging and 12 HBM4 stacks. WT expects foundries to delay output, pushing VR144 availability to late 2027.

Cloud service providers are also beginning volume production of in-house ASICs. Google’s TPU V6p is shipping this year, though some industry insiders believe it’s been rebranded as V7. Volume production will begin in 2H 2025 with about 2–3 million units expected for the year. For 2026, TPU V7 or V8 may be co-designed with 2454 MTK. However, due to unresolved issues with Google, no tape-out has occurred yet. If resolved, 2026 TPU shipments could exceed 3 million units, driven by Gemini-related applications. AWS's Trainium2 is expected to ship around 1.7 million units in 2025, with a small contribution from the minor Trainium2.5 update by year-end. Mass production of Trainium3 is expected by Q2 2026; it has recently taped out and will be produced by Annapurna, with backend handled by 3661 Alchip and Marvell. Total 2026 shipments are expected to reach 2.3–2.5 million units. Meta's MTIA 1 will begin shipping in Q4 2025, with 1.5 million units projected for 2026, and MTIA 1.5 launching mid-2026 using Andes RISC-V. Microsoft’s Maia200 recently taped out, with mass production expected in early 2026 — as this is Microsoft's first ASIC chip, market expectations remain limited.

In conclusion, GPGPU growth in 2026 — primarily driven by NVIDIA’s Rubin — will face delays and a high base effect. In contrast, ASICs will show much stronger growth.

In NVIDIA’s substrate supply chain, Ibiden holds 65–75% market share, 3037 Unimicron holds 15–25%, and 3189 Kinsus has 5–10%. Japanese leader Ibiden has nearly all its high-end capacity allocated to NVIDIA. 3037 Unimicron has a strong track record with Blackwell substrates and high-end OAM HDI server boards. It has also demonstrated flexibility in substrate line adjustments and continuous upgrades to its HDI and PCB lines, significantly improving its operational foundation and optimizing its product mix. This positions Unimicron as a true high-end substrate provider, which will be reflected in its future gross margin performance. As we enter the ASIC era, Unimicron's competitive advantage will increasingly stand out.

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https://t.co/CMrR2CZzJv


3231 Wistron has significantly better quality in sub-L10 assembly than peers


TPU V7 or V8 may be co-designed with 2454 MTK


backend handled by 3661 Alchip and Marvell


structural marker; pre-classified as canonical yfinance ticker


Unimicron's competitive advantage will increasingly stand out... This positions Unimicron as a true high-end substrate provider, which will be reflected in its future gross margin performance


Summary: Shares Goldman Sachs Samsung Electronics summary: Buy maintained, ₩74,000 PT despite 14% EPS cut; Q3 recovery expected on HBM3E ramp and memory price recovery.

Samsung Electronics Q2 2025 Earnings Summary and Key Interpretations (Goldman Sachs)

- Q2 2025 operating profit was ₩4.6 trillion, falling below GS's estimate of ₩5.5 trillion and the market consensus of ₩6.1 trillion.

- Reasons for Underperformance: Weak profitability in memory, including HBM, and larger-than-expected losses in Foundry/LSI.

- Memory Business: Incurred one-off costs (inventory valuation losses). HBM3E is currently undergoing customer qualification, with shipments in progress.

- Foundry Business: Operating losses widened due to low utilization rates, primarily in mature nodes, and the impact of inventory losses.

- Display Business: Met expectations.

- Smartphone Business: Exceeded expectations due to product mix and foreign exchange effects.

- CE Division: Underperformed expectations due to weak TV demand.

1. Factors Expected to Drive Earnings Improvement from Q3 2025

- Full-scale shipments of HBM3E to multiple customers, and expected progress in HBM4 qualification.

- Increased memory (especially DRAM) shipments and price recovery.

- Gradual recovery of Foundry utilization rates → Expected reduction in losses.

- Quarterly earnings improvement across OLED, Smartphone, and Home Appliance divisions.

- Potential for QoQ increase in profits across all divisions.

2. Key Focus Points for Q2 2025 Earnings Conference Call

- HBM3E 12Hi and HBM4 customer qualification and timeline.

- 2025 HBM revenue target and initial 2026 outlook.

- Rising memory spot prices and whether they are driving general memory demand.

- Potential changes in Foundry and Memory Capital Expenditure (Capex) outlook.

- Scale of inventory losses in Memory/Foundry.

- H2 smartphone demand and OLED competitive environment.

- Capital allocation strategy (M&A, shareholder returns, etc.).

3. Profit Estimates and Target Price

- 14% downward adjustment of 2025E~2027E EPS.

- Slight downward revision of DRAM/NAND ASP, reflecting reduced HBM shipments.

- Partially offset by improved smartphone profitability.

- Target price remains ₩74,000, with 'Buy' investment opinion maintained.


Summary: Goldman Sachs bullish on GDS and VNET for H2 recovery driven by REITs-led deleveraging and improved AI chip supply in China.

China Data Centers: Deleveraging and Improved Chip Supply Expected to Drive Stock Price Rebound
Goldman Sachs (T. Zhao, 25/07/04)

Goldman Sachs maintains a positive outlook on the Chinese data center industry, anticipating that with deleveraging progress and improved chip availability, the performance and valuations of GDS and VNET are likely to recover in the second half of the year.

GDS and VNET Stock Prices Suppressed by Financing and Macro Disruptions, But With Significant Valuation Upside
GDS and VNET's stock prices have consistently underperformed the market over the past three months. This is primarily due to dilution from convertible bonds and equity financing (GDS issued $550 million in bonds and an additional $142 million in equity; VNET issued $430 million in bonds), geopolitical tensions, and weaker capital expenditure from Chinese cloud vendors.

REITs Issuance to Drive GDS/VNET Deleveraging, Expected to Improve Valuation and Cash Flow Structure
GDS plans to issue C-REITs on the Shanghai Stock Exchange on July 14th. This issuance implies a 2026 EV/EBITDA multiple of 16.9x, which is higher than the current 13.5x valuation for GDS's China segment (excluding DayOne). This move is expected to generate approximately RMB 1.6 billion in net proceeds, aiding in deleveraging. VNET has also received approval to issue RMB 860 million in private REITs/ABS, and its future progress is worth monitoring.

Improved Chip Supply Expected to Drive Order and Revenue Rebound in H2
Although maintaining a cautious stance on cloud vendor capital expenditures for Q2 2025, Goldman Sachs believes that with improved supply of AI chips in China, spending is expected to rebound in the second half of 2025. Despite being affected by the H20 ban, NVIDIA is developing B30 chips for the Chinese market, with annual production potentially exceeding 1 million units. GDS and VNET have high requirements for customer chip allocation and deployment pace, so improved chip availability will drive an increase in order volumes and accelerate revenue and EBITDA growth in 2026.


Taiwanese ODMs exceeded market expectations: Quanta (+16%), Wistron (+20%), Wiwynn (+38%), and Inventec (+3%)... hardware ODMs are expected to maintain momentum in Q2

Summary: UBS bullish on Taiwanese ODMs (Quanta, Wistron, Wiwynn, Inventec, Hon Hai) and Supermicro into Q2/2H25 on Blackwell rack ramp and HGX demand expansion.

Quanta Computer listed on TWSE as 2382.TW

UBS APAC Technology (May 7)

1. UBS AI Market Outlook and Implications for the Asian Supply Chain

Unlike Taiwanese ODMs, Supermicro has shown mixed quarterly results in recent quarters. While Supermicro and HPE were hit earlier this year by a reduction in Hopper product volumes, Taiwanese ODMs continued to deliver solid growth.

In Q1, Taiwanese ODMs exceeded market expectations: Quanta (+16%), Wistron (+20%), Wiwynn (+38%), and Inventec (+3%). Hon Hai met expectations.

Q2 also started strong, with positive outlooks from companies such as Wistron and Delta. As Blackwell rack deployment gradually improves and demand increases for HGX for B200, hardware ODMs are expected to maintain momentum in Q2.

Factors contributing to this growth include Taiwan's limited exposure to Hopper downsizing, the ability to supply H20 products before Chinese export restrictions, Wiwynn’s expansion in ASIC servers, and tariff cuts on iPhone and notebook assembly.

2. Supermicro’s Position and Relationship with Taiwanese ODMs

Supermicro supports clients like xAI and Coreweave and focuses on second- and third-tier supply chains that serve mid-sized data centers and channel customers. This structure is shared with OEM partners such as Wistron and, to some extent, Gigabyte.

UBS believes Wistron is producing AI server motherboards on an outsourced basis, while final assembly is handled by Hon Hai. Sales of GB200 racks are expected to visibly ramp up starting in Q2 2025.

3. Rack Deployment and Growth Outlook for 2H25

GB200 rack shipments were around 1,000 units in Q1 2025 but are expected to rise to over 5,000 in Q2, with further expansion projected in the second half. GB300 is expected to enter pilot production in Q3 and move into full production in Q4.

Demand for HGX systems is also increasing. Supermicro is supplying these in the form of B200 HGX racks, and further volume expansion is expected for Inventec and Wistron.

The next momentum driver is Computex in early June, followed by increased capital expenditure from hyperscalers in Q2, which will drive further supply expansion to meet demand.

4. Tariff Impact and Supply Chain Volatility

Key variables include the timing of the reinstatement of Section 232 semiconductor tariffs and resolution of the delayed mutual tariff adjustment (90-day delay).

In the AI supply chain, the USMCA exemption for Mexico remains a major protective factor. Although volumes are relatively small, the high-value nature of these products may lead to accelerated relocation of assembly to the U.S. if needed (comment by Randy Abrams).


hardware ODMs are expected to maintain momentum in Q2... positive outlooks from companies such as Wistron


hardware ODMs are expected to maintain momentum in Q2... Wiwynn's expansion in ASIC servers


further volume expansion is expected for Inventec and Wistron

Inventec Corporation 2356.TW Taiwan server ODM


Sales of GB200 racks are expected to visibly ramp up starting in Q2 2025


Supermicro is supplying these in the form of B200 HGX racks, and further volume expansion is expected


AI demand is driving robust growth...price target has been slightly lowered from $112 to $98...stock price could potentially return to the high range of $112–$140

Summary: Shares Morgan Stanley's bullish MU view: EPS upgrades, AI revenue >1/3 of sales by Q4 2025, PT $98 with upside to $112–$140.

Morgan Stanley’s Evaluation of Micron $MU

1. AI Demand: AI demand is driving robust growth, with AI-related revenue (HBM and LPDDR) expected to increase by 2 to 2.5 times over the next three quarters. By Q4 2025, AI revenue could account for more than one-third of total sales, significantly boosting DRAM average selling prices (ASP).

2. Earnings Forecast Upgrade: The EPS forecasts for the August and November quarters have been raised by 25% and 15%, respectively, compared to market expectations. However, the 2026 forecast has been revised downward to reflect macroeconomic risks. The price target has been slightly lowered from $112 to $98.

3. Data Center Demand Surge: Strong demand for AI inference, combined with tight inventory levels, is driving substantial growth in data center demand. As a result, pricing is expected to remain supported even in the face of macroeconomic or trade-related disruptions.

4. Current Valuation: Micron’s current valuation is considered to be at a mid-cycle level. If EPS exceeds $2.5, the stock price could potentially return to the high range of $112–$140.


if AMZN joins MSFT and META as the third-largest customer, shipment volumes will expand further. More importantly, investors are watching the MI400 rack-scale solution's release timing and performance jump… if realized smoothly, it will deliver breakthrough market share and revenue growth for AMD

Summary: Shares UBS bullish thesis on AMD (MI400 ramp/new customers), MRVL (ASIC TAM upside to $8-9B), and MU (HBM scarcity supports above-consensus EPS in FY26/27).

Semiconductor Brief: AMD / Marvell / Micron
UBS (T. Arcuri, 25/06/08)

As AI compute demand accelerates, vendors such as AMD, Marvell, and Micron will face significant growth opportunities amid tight supply and demand for GPUs, custom ASICs, and HBM.

• AMD: AI new-product push and MI400 on the horizon

AMD will spotlight the MI355X at this week’s AI launch, slated for deployment in 3Q25, offering performance comparable to NVIDIA’s Blackwell B200/B300 at more competitive pricing. The key point is that if AMZN joins MSFT and META as the third-largest customer, shipment volumes will expand further. More importantly, investors are watching the MI400 rack-scale solution’s release timing and performance jump: a dual Active Interposer Die architecture, each package containing 288 GB of HBM4, with an in-house UA Link interconnect, expected to enter mass production as early as end-2026; if realized smoothly, it will deliver breakthrough market share and revenue growth for AMD.

• Marvell: Custom ASIC outlook and TAM expansion

Marvell had originally planned an AI Investor Day in June, later changed to an online seminar on June 17, and is expected to raise its 2028 TAM forecasts for accelerated-compute ASICs and the data-center market (2028 TAM: last MRVL forecast was $43 billion for ASICs and $75 billion for data centers). The company will reaffirm its target share above 20% and showcase progress on multiple SKUs in collaboration with AMZN on custom network accelerators. If Marvell can lift its 2028 custom-ASIC revenue from the Street’s $4.5 billion estimate to $8–9 billion, there is clear upside for the share price.

• Micron: HBM supply–demand stress scenario simulation

Micron simulated new AI compute deployment scenarios for C 2026 and found that if GPU shipments exceed the baseline by 20%, overall HBM supply–demand will be in shortage; if driven solely by XPU growth, a 75% increment is required to cause shortage; and under a 70% GPU / 30% XPU mix, roughly a 35% increment will tighten the HBM market. This outcome underscores HBM’s scarcity over the next two years, supporting Micron’s FY 2026 EPS above $4 and FY 2027 EPS above $5, and providing a rationale for valuation premium.

• Industry consensus and key points

Under AI-driven acceleration of hardware refresh cycles for GPUs and custom ASICs, demand for high-bandwidth memory (HBM) is rising in tandem. Advanced nodes such as TSMC’s 2 nm (N2) will also scale up due to flagship SoC and server-chip migrations. Investors should monitor: the release timing and customer-base expansion for AMD’s MI400 and Marvell’s custom ASICs; HBM capacity ramps and price trends; and foundry N2 capacity expansion along with mature-node price resilience. These factors will determine semiconductor vendors’ market positions and profitability in the AI and high-performance computing wave.

$AMD $MRVL $MU


If Marvell can lift its 2028 custom-ASIC revenue from the Street's $4.5 billion estimate to $8–9 billion, there is clear upside for the share price


supporting Micron's FY 2026 EPS above $4 and FY 2027 EPS above $5, and providing a rationale for valuation premium


Summary: Citi names TSMC and MediaTek top long-term beneficiaries of AI ASIC/system integration trend; downgrades GUC to Sell; keeps Alchip Neutral; Broadcom leads ASIC market.

GPU vs. AI ASIC: Intensifying Differentiation in AI Systems, TSMC and MediaTek Have the Greatest Long-Term Potential

Citigroup (L. Chen, 25/07/02)

Citigroup believes that GPUs will continue to dominate the AI chip market, but as AI systems become increasingly complex, ASICs show significant growth potential. Long-term value growth will be driven by performance improvements and higher Average Selling Prices (ASPs). Companies with strong system integration capabilities will be the ultimate winners.

AI System Design Needs to Focus on Full-Stack Efficiency, ASIC Success Beyond the Chip Itself

Citigroup points out that CSPs (Cloud Service Providers) are accelerating the development of in-house ASICs to achieve differentiation and cost advantages. However, the real challenge lies in system-level design, including efficient interconnects and packaging, a competitive CUDA software stack, and low-latency, low-power system integration. Manufacturers with end-to-end system capabilities will stand out, and TSMC and MediaTek are considered the best beneficiaries in the Taiwanese semiconductor sector.

AI Chip Volume Growth Slows but Value Growth Accelerates, ASIC Still Has High CAGR Potential

Starting from the second half of 2026, AI GPU/accelerators will migrate from N5/N4 processes to N3, driving significant increases in single-chip ASP and performance. Citigroup expects GPU shipment growth of approximately 10% in 2026, and AI ASIC shipments of 4.5 million units (slightly lower than market expectations of 5 million units). However, driven by ASP increases, the overall AI chip value growth CAGR (Compound Annual Growth Rate) can still exceed 40%.

Broadcom Leads in ASIC Market Share, TPU v8 and Meta's In-House Chips are Future Catalysts

Broadcom maintains its lead in the ASIC market thanks to its TPU project. TPU v7 shipments are expected to remain stable in 2026, with TPU v8 beginning to ramp up in late 2026 and continuing to grow in 2027. Meta's self-developed AI accelerator is expected to enter mass production from late 2025, with shipments potentially reaching 0.5 million to 1 million units in 2026, depending on its supply chain readiness.

AWS Trainium Project Faces Potential Delay, Trainium 3 May Be Pushed to H2 2026

Due to the design complexity of N3 and the difficulty of SerDes/IO implementation, Trainium 3 may be delayed longer than expected. Citigroup believes that Marvell and Alchip will be responsible for back-end services and collaboration with TSMC, respectively, while Trainium 2's lifecycle will be extended to 2026. Trainium 2+3 shipments are expected to be flat year-on-year, but due to the N3 migration, Trainium 3 will bring higher ASPs and larger die sizes.

GUC Downgraded, Alchip Maintained Neutral, MediaTek More Advantageous Due to Advanced Process and SerDes Capability

In the design service segment, Citigroup has downgraded GUC's rating to "Sell/Neutral," citing slow progress in customer mass production and system ecosystem development. Alchip maintains a neutral rating, awaiting clear progress on customer chip redesigns. MediaTek, with its design capabilities in advanced nodes and SerDes, is expected to enter a period of AI ASIC revenue realization in late 2026 and see further growth in 2027.


Broadcom maintains its lead in the ASIC market thanks to its TPU project


Alchip maintains a neutral rating, awaiting clear progress on customer chip redesigns


Summary: Shares Citi note on Astera Labs; PCIe Gen 6 retimer leadership, NVLink Fusion chiplet opportunity, and UA Link positioning support significant 2025/2026 revenue growth.

Astera Labs: Scorpio Series and Open Interconnect Strategy Position Company to Capitalize on AI Networking Growth

Citi (A. Malik, 06/04/2025)

During a recent visit to Silicon Valley, Astera Labs’ management detailed how its Scorpio product family, featuring the industry’s first PCIe Gen 6 retimer, is enabling large-scale AI network expansion. The company expects significant revenue growth in 2025/2026 driven by this initiative. Key themes included chiplet compatibility with NVLink Fusion and UA Link, multiple AI product roadmaps, customer diversification plans, and IP strategy flexibility.

⸻

• NVLink Fusion Integration & Chiplet Compatibility

Astera explained that in NVLink Fusion deployments—where hyperscale data centers adopt NVIDIA’s cluster racks and switches—existing ASICs must connect to the NVLink protocol via an I/O chiplet.
While customers may use NVIDIA’s in-house chiplets, Astera’s compatible chiplets offer an alternative when customers’ ASICs lack native NVLink integration.

Beyond NVLink, Astera emphasized the monetization potential of its UA Link stack, which spans from retimers to PCIe switches, while also supporting PCIe and Ethernet for flexible, high-value system designs in large-scale deployments.

⸻

• Diverse AI Product Roadmaps & Market Strategy

Astera was first to market with a PCIe Gen 6 retimer over a year ago and is now undergoing validation with NVIDIA’s Blackwell platform, with no competing products currently in sight.
Management expects AI hardware refresh cycles to accelerate, resulting in a faster Gen 6 to Gen 7 transition.

The retimer content is similar across NVIDIA’s B200 and B300, while the Taurus series is positioned to gain additional market share. Astera has partnered with cable manufacturers to ensure supply chain resilience at scale.

For Intel’s next-gen Leo CPU platform, CXL interconnects are expected to ramp in 2026. The base Scorpio SKU has already passed GB200 validation, and Scorpio X is on track for mass production in 2026.

In NVIDIA’s ecosystem, each Hopper GPU contributes ~$50 in chiplet content, but this could rise to hundreds of dollars in the Blackwell era, supporting the projection that Astera’s sales could see ~10% contribution from this segment by 2025.

⸻

• UA Link & Open Interconnect Value Proposition

Astera believes UA Link matches NVLink in performance at 200G/s but offers the advantage of being open-standard, mitigating risks of vendor lock-in.

Compared to a single Ethernet switch supporting both east-west and north-south scaling, Astera advocates dedicated low-latency interconnects like UA Link or NVLink for AI node-to-node communication.

Astera plans to sample the first UA Link platforms shortly after large-scale Ethernet switches reach the market, with full-scale deployment expected between late 2026 and 2027, addressing the hyperscaler need to balance cost and performance in AI cluster expansion.

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• Customer Concentration & Diversification Strategy

Currently, Astera primarily serves a single hyperscaler, but management aims to align its customer base with its AI market positioning, adding a second hyperscale cloud provider to its production pipeline to diversify risk and expand market reach.

The company is also targeting further penetration into traditional data center supply chains to diversify its revenue base.

⸻

• SerDes IP Strategy & Flexibility

Astera has not yet developed in-house SerDes IP, but it shares high-quality IP from partner firms that is competitive with industry standards.

The company does not rule out developing its own link-layer IP if needed, but will weigh cost vs. performance when deciding whether to continue using third-party IP.

This multi-source IP approach gives Astera agility across projects, enabling it to meet diverse customer needs in bandwidth and latency performance.

$ALAB


MRVL's data center business growth expectations are significantly underestimated by the market, with its long-term potential possibly far exceeding current forecasts… MRVL's 2028 EPS could reach USD 8, or even USD 10 under more optimistic assumptions, nearly double the current expectation of USD 4.25

Summary: Shares UBS note: MRVL data center EPS massively underestimated (2028E $8-$10 vs consensus $4.25); US semis face Section 232 tariff risk with final ruling ~Dec 2025.

U.S. Semiconductors: Tariff and VEU Change Risks Persist, MRVL Data Center Growth Expectations Underestimated by Market

UBS (T. Arcuri, 23/06/25)

Despite waning investor attention, the Section 232 investigation is still progressing and may impose comprehensive tariffs on electronic products. Simultaneously, MRVL's data center business growth expectations are significantly underestimated by the market, with its long-term potential possibly far exceeding current forecasts.

Section 232 Tariffs Still Pose Risks, Final Decision Expected by Year-End

Although investor enthusiasm has waned, UBS notes that the Section 232 tariff investigation is ongoing. The final outcome could be a uniform tariff on all electronic products, initially without exemptions for U.S.-produced content due to high administrative costs. Once rules are established, U.S. companies will seek exemptions, but the outcome is uncertain. Given that the investigation began on April 1st, a final ruling is expected around December 2025, which may bring a series of negative news in the interim, potentially leading to a 25% tariff framework similar to the automotive industry.

Revocation of VEU Exemptions Has Limited Impact on Korean and Taiwanese Manufacturers, Status Quo Largely Maintained

Regarding rumors of VEU license revocations for Samsung, SK Hynix, and TSMC, UBS believes the impact will be limited. VEU licenses already require per-transaction approval with only slight simplification, and relevant factories are currently operating normally. Due to EUV restrictions, SK Hynix's Wuxi plant has remained at the 1a nm process with limited investment and will shift towards its Yongin plant in Korea in the future. Samsung's Xi'an plant also has limited investment, and both companies plan to transfer production capacity. Therefore, the institution believes the overall situation will maintain the status quo.

MRVL Data Center Revenue Severely Underestimated by Market, Long-Term EPS Potential Up to 2x

In its latest event, MRVL raised its 2028 data center TAM to USD 94 billion (previously USD 75 billion), with custom accelerated computing accounting for USD 55 billion and a target market share of over 20%. If this target is achieved, data center revenue could reach USD 19 billion (of which custom computing is USD 11 billion), far exceeding current market expectations of USD 11 billion and USD 5 billion. Although UBS remains somewhat cautious, believing cloud vendors have limited willingness to deploy ASICs, if based on the company's guidance, MRVL's 2028 EPS could reach USD 8, or even USD 10 under more optimistic assumptions, nearly double the current expectation of USD 4.25.


Section 232 tariff investigation is ongoing… may bring a series of negative news in the interim, potentially leading to a 25% tariff framework similar to the automotive industry

US semiconductor sector proxied by SMH ETF


Summary: JPM relayed: prefer long NVDA positioning into earnings; SMH put-call skew flags hedging pressure on semis ETF.

J.P. Morgan – May 28: Equity & Macro Narrative

It appears that the macro environment is setting the stage for a potential melt-up.
(i) The Bank of Japan (BOJ) stabilized the JGB market, leading to lower bond yields and triggering a global bond rally, which strengthened demand at the 2-year U.S. Treasury auction.
(ii) The “short America” narrative has temporarily paused (or ended?), resulting in a stronger U.S. dollar.
(iii) Expectations heading into NVIDIA’s earnings are relatively low.

On the micro level, however:
(iv) Put option volume surged yesterday, with 121,000 puts traded on SMH (versus the 20-day average of 43,000), while call volume was only 19,000 (below the 20-day average of 26,000).
(v) Retail investors were net sellers throughout the day, dumping around $1.2 billion in equities—equivalent to a -3.7z move—and particularly sold off NVIDIA stock.

Despite this, we continue to prefer positioning for market upside around earnings.

⸻

Before diving into the full preview, here are two perspectives worth considering:

1. Page Hanson (Industrials)

AI, TMT (Tech/Media/Telecom), and ex-TMT led today’s rally.
High-beta names like VRT, which is still trading below levels seen before the bearish sentiment surged earlier this year (mostly among tech investors), rose +5.4%, leading the way.
This is an interesting move given the sharp AI rally over the past six weeks and NVIDIA’s upcoming earnings.

As the broader market strengthens, supportive data continues to emerge behind the AI trade.
Historically, NVIDIA and AI stocks often rallied sharply before earnings, only to weaken just ahead of the report as bulls took profits and de-risked.
Given that my colleague Josh Myers scores current market positioning at 7/10 (10 = max overbought), the continued rally right before earnings feels somewhat surprising.

⸻

2. Manish Sinha (Delta One)

He views NVIDIA’s earnings not just as company-specific, but as a warning for the broader market—one that could impact the ongoing growth narrative.

He specifically raised concerns about beta exposure, which he believes is beginning to show signs of exhaustion.
He notes that flows into NVIDIA from both retail and institutional investors have started to drop sharply.
Historically, when both flows and sentiment have turned down like this, NVIDIA’s stock has declined 15% to 20%.

Here are the earnings expectations for NVIDIA from the sell-side and buy-side:
• Sell-side (consensus estimates):
• Q1: $43.1 billion
• Q2: $46.6 billion
• Individual firm estimates:
• Morgan Stanley: Q1 $42.2B / Q2 $43.5B
• UBS: Q1 $44.0B / Q2 $44.6B
• HSBC: Q1 $43.5B /


Put option volume surged yesterday, with 121,000 puts traded on SMH (versus the 20-day average of 43,000), while call volume was only 19,000


Summary: Shares Morgan Stanley bullish thesis on MU: HBM/LPDDR driving AI revenue share to 30%, margin convergence with SK Hynix, stock has upside elasticity.

Micron: Rapid Increase in AI Revenue Share Drives Performance Inflection Point, Valuation Has Upside Elasticity

Morgan Stanley (J. Moore, 06/20/25)

The firm notes that Micron's AI business is growing significantly, with HBM and LPDDR demand driving ASP and gross margins higher. Although the valuation is not low, the stock still has upside potential given the continued AI dividend.

- HBM and LPDDR drive AI-related revenue share from 14% to 30%, gross margin expected to converge with SK Hynix

Micron's AI-related business is growing rapidly. HBM revenue in the August quarter is expected to increase by 54% quarter-over-quarter to $2 billion, with LPDDR and eSSD pricing also recovering. AI server demand is driving high-capacity DIMM growth, and the AI revenue share is expected to rise to 30% in the November quarter, leading to an overall ASP increase of about 30%. SK Hynix's AI revenue share has already reached 30%, with a gross margin close to 60%. The firm believes Micron is likely to converge in the coming quarters.

- Consumer products and NAND drag factors weaken, gross margin improvement enters acceleration phase

Market concerns were raised in the May quarter guidance due to drag from consumer products and NAND. However, starting from the May quarter, eSSD volume ramp-up combined with rising NAND prices will significantly reduce the proportion of consumer products. NAND utilization rates are expected to increase, diluting fixed costs, and DDR4 spot prices have risen by 150% year-over-year. Although it accounts for a small proportion of revenue, it still contributes marginally to profitability.

- Risks from changes in HBM supply-demand dynamics and smartphone inventory fluctuations

Samsung still faces challenges in the high-end HBM market, which is beneficial for Micron in the short term. However, if Samsung's market share rebounds, it will compress market profit margins. Simultaneously, premature inventory build-up by end customers like iPhone could lead to a temporary demand decline in early 2026, requiring attention to inventory adjustment risks.

- AI drives DRAM with clear logic, but free cash flow remains weaker than NVIDIA

Although the AI trend will continue to drive HBM growth, Micron's capital expenditures still exceed 40% of its revenue, resulting in approximately $4 per share in free cash flow, significantly lower than NVIDIA. While both benefit from the AI wave, NVIDIA is more attractive in terms of free cash flow and valuation alignment.

$MU


Summary: Bearish INTC: modeled server CPU share loss from 70% to 50% implies 7-11% revenue decline and 10-20% operating profit drop.

@Mojo_flyin According to my modeling, a decrease in Intel's server CPU market share from 70% to 50% is expected to result in a 7-11% reduction in Intel's revenue and a 10-20% decrease in its operating profit. I'm quite concerned about this.

@Jukanlosreve Lisa Su has done an incredible transformation at $AMD. She also fully capitalized on the mistakes at $INTC.


Summary: Shares UBS Buy on NVDA with PT cut to $175; expects Q1 beat, stable Q2 guidance, and 2H reacceleration despite H20 ban and margin headwinds.

NVIDIA: 1Q25 Earnings Preview
UBS (T. Arcuri, 2025/05/12)

Due to the impact of the H20 export ban (estimated ~$800 million), Nvidia is still expected to slightly exceed its Q1 revenue guidance of $43 billion. For Q2, revenue guidance is expected to remain flat or increase slightly to around $44.6 billion. This shows unexpected stability amid widespread investor expectations of a downward revision. With GB300 rack shipments starting in late Q3 and China possibly resuming deliveries of modified Blackwell products, revenue growth in the second half is expected to reaccelerate. However, the continued use of the Bianca board design will weigh on gross margin, while the higher-margin Cordelia board won’t be adopted until next year’s Rubin platform.

• FQ1 Revenue and Segment Breakdown:
1Q (April) revenue is expected to reach approximately $44 billion, surpassing the $43 billion guidance. Data center revenue is estimated at $39.7 billion, including $36.3 billion from compute and $3.4 billion from networking. The H20 ban drags non-GAAP gross margin down to approximately 58.5%, well below the original guidance of 71%.

• FQ2 Revenue Guidance Stability:
Guidance for Q2 is expected to be flat or slightly up at around $44.6 billion. Despite the uncertainties caused by the export ban, this “stable” outlook should boost market confidence, especially as nearly half of investors anticipated a sequential decline.

• 2H Acceleration Logic:
With GB300 racks expected to enter volume shipment in late Q3 and China possibly resuming shipments of a modified Blackwell SKU, revenue growth in the second half should notably rebound.

• Gross Margin and Board Strategy:
Due to continued use of the Bianca board, management is likely to remain cautious about gross margins in 2H. The rollout of the high-margin Cordelia board is delayed until the Rubin platform launches next year.

• Valuation and Outlook:
FY2026/CY2025e EPS is revised down to $4.22. UBS maintains a Buy rating but lowers the target price from $180 to $175, reflecting risks from the H20 export ban and gross margin pressure.


Supply chain operators state that the order visibility from Apple, NVIDIA, AMD, plus the large demand from ASIC armies, extends to 2027. This forms the strongest foundation for TSMC's exceeding performance outlook.

Summary: Bullish TSMC: advanced packaging (CoWoS, WMCM, SoIC) demand locked in through 2027 across Apple, NVIDIA, AMD and ASICs; AI accelerator revenue doubling in 2025.

Report: TSMC's WMCM and SoIC Dual Support Ensures Apple's Presence in Advanced Packaging

Advanced packaging continues to be a hot topic, and the industry is closely watching not only NVIDIA's large orders with TSMC, but also Apple's entry into the fray, with clear plans for collaboration with TSMC in advanced packaging.

It is understood that the monthly production capacity for Wafer-level Multi-chip Module (WMCM) packaging is estimated to reach 10,000 wafers by 2026, to be used for the A20 processor in the next-generation iPhone. Concurrently, Apple's proprietary AI server chips are, as expected, gradually beginning to adopt TSMC's 3D wafer stacking SoIC (System-on-Integrated-Chips) packaging technology.

WMCM technology is understood to be an upgraded version of TSMC's InFO-PoP (Integrated Fan-Out Package-on-Package) technology, integrating advanced packaging techniques such as CoW (Chip-on-Wafer) and RDL (Redistribution Layer). By horizontally packaging logic chips and DRAM, it replaces the traditional vertical stacking method, achieving significant improvements in heat dissipation and performance. This is also an advanced packaging technology jointly developed by TSMC and Apple, specifically for Apple, becoming another highlight in addition to the A20 processor's adoption of the 2nm process.

To support its major client Apple, TSMC has even set up a dedicated production line at its P1 factory in Chiayi. The partnership between the two companies is rock solid, with mass production expected to begin in 2026. If Apple introduces its first foldable phone and enhances AI features, the market anticipates it will trigger another wave of device upgrades. Apple's proprietary AI server chips are gradually adopting SoIC packaging, with TSMC's AP6 factory in Zhunan serving as the mass production hub.

TSMC's advanced packaging technology, along with its advanced process technology, continues to break through the Moore's Law bottleneck faced by next-generation chips. Supply chain operators state that the order visibility from Apple, NVIDIA, AMD, plus the large demand from ASIC (Application-Specific Integrated Circuit) armies, extends to 2027. This forms the strongest foundation for TSMC's exceeding performance outlook.

TSMC's CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging capacity remains in short supply, with major AI GPU and ASIC manufacturers having already reserved capacity for the next two years. Supply chain operators also confirmed that TSMC continues to expand CoWoS capacity, though the pace has slightly slowed due to a downward adjustment from previously ambitious targets. It is estimated that CoWoS monthly capacity will be around 75,000 wafers by the end of 2025, and between 105,000 and 115,000 wafers by the end of 2026.

After resolving production bottlenecks, NVIDIA's GB200 is entering a stable large-scale shipment phase, and the GB300 chip platform has also begun sending samples to major CSP (Cloud Service Provider) manufacturers, with mass production expected to begin after Q2. The GB300 server rack solution is anticipated to ramp up quarter by quarter starting in Q4. NVIDIA is progressing according to its established roadmap, and TSMC Chairman C.C. Wei has also clearly stated that revenue from AI accelerators will double in 2025, and the company is working to double its full-year CoWoS-related capacity.

Panel-level packaging is becoming TSMC's important weapon for the next generation. In fact, CoPoS (Chip on Panel on Substrate), which replaces wafers with panels, arranges chips on rectangular substrates, and then connects them to the underlying interposer through a packaging process, allows multiple chips to be packaged together. In fact, international packaging equipment manufacturers, material distributors, and others have reportedly received inquiries and plans from TSMC.

The "turning circles into squares" concept of CoPoS is estimated to be the future trend of advanced packaging. It is expected to enter full mass production at the AP7 factory in Chiayi by 2029, with major clients rumored to be NVIDIA and Broadcom.

Looking ahead, the advancement of 2nm technology combined with advanced packaging will continue to drive the operational growth of TSMC's "Grand Alliance" partners. This includes companies like Topco, Giga Solution, Taiwan Speciality Chemicals, InnoLux, Kuniang, and Hermes Microvision, whose order visibility for related equipment and material supply chains is expected to extend without issues until 2027.

$TSM $AAPL

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https://t.co/XOJecq5w6s


Summary: Expects TSLA to trade sideways/down if Trump-related benefits fizzle; AAPL pressured by tariff uncertainty overriding fundamentals.

A Quick Take: What Is Trump Afraid Of?

Yesterday, Trump and Musk had an incredibly fierce war of words. Who would have ever thought the relationship between these two ambitious, powerful figures, who once seemed so close, would come to this?

But amidst it all, what really stood out to me was how triggered Trump got by Musk's claim that he was on the Epstein list.

And it got me thinking:

What is Trump truly afraid of?

The one answer that immediately comes to mind is this: He's afraid of becoming a meme. Specifically, a meme that ridicules him.

I'm not saying Trump dislikes all memes related to him. On the contrary, he seemed to enjoy his strongman image being consumed as a meme, and he even launched a memecoin.

Let's think about this lightly. Why does Trump hate being ridiculed?

Of course, who likes to be mocked? But I see it this way:

“Trump wants to be feared by the people; he does not want to be a laughingstock.”

From a political science perspective, leaders have always maintained power by being objects of fear. The moment they become objects of ridicule, they become a lame duck. It's just like the saying, "Power grows out of the barrel of a gun."

That's why I think he got so furious when people started calling him "TACO" (Trump Always Chickens Out). The moment he becomes the subject of a meme, his power risks crumbling like a sandcastle.

I believe Musk's claim about the Epstein list was another way to drag Trump into the realm of memes, ridicule, and scandal. And that's likely why Trump reacted so angrily and lashed out at Musk.

So, has he already become a lame duck?

I believe he has, to some extent. What's the definition of a lame duck, after all? It means you give orders, but those below you don't carry them out properly.

Although Trump still has a lot of his term left, his words are clearly losing their impact. As we can see from the "TACO trade," the market doesn't seem to be taking him seriously anymore. The general attitude is, "He'll throw a fit and then get over it."

Of course, Trump will never admit he's a lame duck and will likely escalate the intensity of his statements to try and shake the market. That's why, in the short term, I expect both Tesla and Apple to trade sideways.

Specifically, if we want to "predict" the future impact on Tesla:

The reason Tesla was rallying since late last year was based on the logic that it would benefit from a Trump administration, right?

But if things like the approval for autonomous driving or subsidies get delayed or fizzle out due to Trump's pressure, it will inevitably have a direct impact on Tesla.

Of course, if Musk manages to overpower Trump, the stock could rise.

As for Apple... hmm. It's directly exposed to tariffs, which are Trump's most powerful card. For that reason, I'm taking a wait-and-see approach with Apple.

Tariff policy is symbolic of Trump and his strongest weapon. The more cornered he feels, the more fiercely he will struggle. By constantly brandishing the sword of tariffs, Apple's stock price will likely be moved more by external variables like policy than by the company's own fundamentals.

I'm not sure about semiconductor stocks. During the Trump-Musk conflict, the S&P 500 didn't show a major drop, aside from Tesla, so it seems we need to watch a bit longer for now.


Apple's stock price will likely be moved more by external variables like policy than by the company's own fundamentals


Summary: JPM/Harlan sees HBM supply tight, bullish MU despite noise; NAND weakness is negative for SNDK.

Micron - JPM

Micron's stock price has fallen due to concerns stemming from a competitor's (Edgewater) research findings, with the key points being:

Potential HBM (High Bandwidth Memory) oversupply – Specifically, there's speculation that NVIDIA holds a significant amount of HBM3E inventory and may have overbooked its volume for next year. This could be one reason why they haven't entered into supply agreements.

NAND does not appear to be in shortage – This is negative for SanDisk (SNDK), which indeed dropped 4%. These two issues are resonating with investors I've spoken with, and some believe they connect with related data points.

The first point differs somewhat from our outlook. We anticipate Ultra demand to be stronger than expected, but we've sufficiently highlighted the negative feedback we've heard in the market regarding MU (Micron). The second point aligns more with what we've previously mentioned: the NAND market has still not recovered and continues to pose a persistent risk.

Conversation with Harlan Regarding Memory-Related Noise:
It's difficult to believe the talk that NVIDIA won't purchase any HBM3E next year – Several individuals have also commented that this might just be noise generated during supply contract negotiations.

Companies like AVGO (Broadcom), which previously requested HBM supply from Samsung, are now urgently trying to secure HBM3E from MU (Micron) and SK Hynix, with MU stating it has no additional supply.

Harlan still believes supply is very tight.

$MU


NAND does not appear to be in shortage – This is negative for SanDisk (SNDK), which indeed dropped 4%


TSMC plans to significantly expand its 2nm production capacity… from approximately 40,000 wafers per month by the end of this year to 100,000 wafers per month next year… and then double it again to 200,000 wafers per month by 2027

Summary: TSMC 2nm capacity tripling by 2027 on strong demand from Apple/AMD/Intel/NVIDIA/Qualcomm/MediaTek; supply shortages signal durable revenue tailwind.

• TSMC: The 2nm process is scheduled to enter mass production as planned in the second half of this year. According to industry sources, demand from primary customers like Apple, AMD, and Intel is very strong, and with Qualcomm, MediaTek, and NVIDIA also planning to successively adopt the 2nm process, TSMC's 2nm supply is facing severe shortages.

• In response, TSMC plans to significantly expand its 2nm production capacity. Specifically, it plans to increase 2nm production capacity from approximately 40,000 wafers per month by the end of this year to 100,000 wafers per month next year (a 1.5x increase), and then double it again to 200,000 wafers per month by 2027.

• It is anticipated that as early as 2027, the 2nm process will become the largest production volume node among TSMC's advanced processes below 7nm.

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https://t.co/zUNoPnKQsZ


Summary: Shares Goldman Sachs analysis flagging $12–17.5B revenue upside and $0.30–0.45 EPS upside to NVDA from expected H20 China export ban lift.

Goldman Sachs) Implications of H20 China Export Resumption and Our View

Our analysis suggests upside of $0.30 and $0.45 to CY2026 non-GAAP EPS in Bull #1 and Bull #2 scenarios, respectively.

While we are not changing our base case estimates, which assume zero China contribution, we provide an updated bridge chart below that includes potential upside scenarios from the expected lift of the ban. In conclusion, all else being equal, we believe the expected lift of the ban this time could add $12.0 billion and $17.5 billion to 2026 revenue and $0.30 and $0.45 to non-GAAP EPS in our Bull #1 and Bull #2 scenarios, respectively.

$NVDA


Summary: Shares Digitimes report of Broadcom's $10B ASIC win + pipeline from Apple, xAI, OpenAI, ByteDance; analysts see AVGO as credible Nvidia challenger.

Exclusive: Broadcom secures US$10B ASIC win, Apple and xAI next in line - Digitimes

Broadcom delivered strong earnings guidance with its latest results, as CEO Hock Tan revealed a US$10 billion ASIC mass-production order from a major new customer outside the core hyperscale cloud service provider segment.

DIGITIMES sources indicate that further orders from ByteDance, Apple, and Elon Musk's xAI are already in the pipeline, a development analysts see as reinforcing Broadcom's position as a credible challenger to Nvidia.

OpenAI deal targets 2026 production
Industry sources say OpenAI's custom ASIC is set for mass production in 2026, positioning it as Broadcom's fourth confirmed large-scale ASIC customer. Although neither company has commented, insiders familiar with Broadcom's roadmap confirm the order is genuine, echoing long-standing reports of OpenAI's chip ambitions.

OpenAI's chip project first surfaced in 2024, when the company began developing custom silicon to meet rising AI workloads, mirroring strategies of other hyperscalers. Sources said the process encountered few hurdles, enabling the design to pass specification tests quickly.

With OpenAI racing to expand its AI infrastructure, a 2026 production start aligns with market expectations, though ramp-up could begin in the second half of the year or slightly earlier.

Major players queue for custom chips
Beyond OpenAI, Broadcom has confirmed ASIC orders from Google, Meta, and ByteDance, with Google's demand described as the largest.

Additional contracts are expected as projects advance, including ByteDance's second-generation ASIC, xAI's cloud-focused chip, and Apple's custom silicon. Production is slated for 2026 and 2027, with ByteDance likely leading in 2026, followed by xAI and Apple in 2027.

Google and Meta are developing successive ASIC generations scheduled for mass production between 2027 and 2028. ByteDance and OpenAI are also advancing next-generation designs, with rollout expected after 2028.

Strengthening market position
The influx of orders underlines Broadcom's strong ASIC pipeline, explaining Tan's optimism during the earnings call. His upbeat stance contrasted with Marvell's more cautious outlook. Successful execution would solidify Broadcom's leadership in cloud ASICs.

MediaTek has secured AI inference ASIC orders from Google and Meta, while competitors, including Marvell and Alchip, supply AWS, Microsoft, and Intel. Broadcom, however, is viewed as holding a stronger and broader customer roster, anchored by contracts with OpenAI, Google, and xAI.

Analysts say booming demand for cloud ASICs makes Broadcom one of the few credible challengers to Nvidia's dominance in AI chips.

Industry insiders caution that while GPUs and ASICs overlap in some applications, the two markets will remain complementary. Nvidia and Broadcom are likely to dominate their respective domains, with fiercer rivalry expected in networking chips than in direct GPU–ASIC competition.

$AVGO

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https://t.co/Hvqw1yjul0


Summary: Micron announcing 20%+ DRAM/NAND price hikes; DDR5 rising fastest on CSP demand, NAND rebound driven by enterprise SSD orders — bullish for memory pricing into Q4.

Just in: Micron Notifies Memory Price Hike

Micron has announced a price increase of over 20% across DRAM and NAND.

Its strategy is to “focus on the big accounts (抓大放小),” meaning higher hikes are being applied to server RDIMM DRAM and enterprise SSDs, both high-value products.

 •    DDR5 average price increase: 15–20%
 •    DDR4 average price increase: 10–15%

In other words, DDR5 is rising more sharply than DDR4, reflecting Micron’s confidence in CSP customers’ strong demand for DDR5 in 2026.

⸻

NAND Flash — Rebound Driven by CSP SSD Demand

NAND price hikes have also begun.

• While consumer demand remains weak, CSPs have placed large short-term orders for high-capacity SSDs, triggering a sharp rebound in the market.

• Major NAND suppliers are allocating capacity toward high-margin SSDs, making it harder for module makers to secure wafer supply.

Currently, the price increase is around 10%, but cumulative 4Q gains could expand to as much as 20%.

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https://t.co/EnBPf4dQNn


DRAM sector basket: Micron, Samsung, SK Hynix


NAND price hikes have also begun. Currently, the price increase is around 10%, but cumulative 4Q gains could expand to as much as 20%


Summary: Author signals bullish thesis on BESI in context of HBM hybrid bonding equipment dynamics.

BE Semiconductor Industries Amsterdam BESI.AS

industry='Semiconductor Equipment & Materials'

Actually, I was thinking of turning this into a paid report… but I’ll just keep it light in note format and release it for free.

I hope this will be helpful to everyone.

Why is LG developing CMP equipment? feat. Why I’m Bullish on BESI

Everyone’s probably heard that LG Electronics is independently developing an HBM hybrid bonder. What’s interesting is that they’re also said to be developing CMP equipment for HBM hybrid bonding.

Why might that


Summary: Shares JPM NVDA preview: July rev $46-47B beats, Oct guide $53-54B+; names SK Hynix, TSMC, Hon Hai as AI supply-chain winners.

JP Morgan) NVIDIA (NVDA) Earnings Preview

Industry Commentary – We (Harlan and team) believe near-term AI fundamentals remain solid, supported by strong hyperscaler CAPEX spending. This trend was clearly demonstrated during the 2Q25 earnings season, where cloud/hyperscaler companies raised CAPEX guidance, and other AI beneficiaries (e.g., MTSI, ALAB, AMD) reported strong results and outlooks. In cyclical sectors such as telecom/service providers and enterprises, conditions are also showing gradual improvement.

NVIDIA (NVDA) – Thanks to the ramp-up of GB200 production and the start of the GB300 program, July quarter results are expected to beat Wall Street expectations (revenue around $46–47bn), with October quarter guidance likely coming in at $53–54bn or higher, modestly above consensus. NVIDIA is scheduled to report July quarter results on Wednesday (Aug 27, local time), and revenue is likely to exceed guidance ($45bn) and land in the $46–47bn range. This upside is almost entirely driven by the strong ramp of GB200 rack shipments.

For perspective: April quarter revenue ($44bn) included ~$4.5bn from H20. Excluding that, the comparable base was $39.5bn. Thus, July quarter revenue adds $6.5–7.5bn on a like-for-like basis (versus a reported increase of only $2–3bn), again driven by GB200.

For October quarter, we expect NVIDIA to guide revenue to $53–54bn or above. This would modestly top consensus (consistent with recent guidance trends – see Figure 1) and sit above our own estimate of $51bn, as GB200 shipments continue to accelerate (estimated 8,000–9,000 racks). Total Blackwell rack shipments could reach ~12,000 in fiscal 4Q, implying ~28,000–30,000 racks for the year. Like AMD, NVIDIA is unlikely to include H20 (or B20/30) related revenue in October guidance, due to (1) delays and uncertainty around US government licensing approvals, (2) NVIDIA’s need to reassess Chinese customer orders, and (3) China’s government discouraging local adoption of NVIDIA GPUs due to “backdoor” concerns.

That said, potential H20 upside remains: NVIDIA’s existing $1.9bn inventory could convert into $5–6bn of revenue. Every additional 100k units shipped could yield at least $1bn in extra sales, with ~$3–4bn per quarter possible across 2–3 quarters. Gross margin for October is expected to improve slightly (J.P. Morgan estimate: 73%) on supply chain optimization, moving toward the mid-70% range by year-end.

NVIDIA (NVDA) Buyside Dynamics (Buyside Bars) – Josh Meyers

Investor Sentiment: Positioning in NVIDIA remains relatively high, based on trading flows and client conversations. Even long-only investors who have trimmed positions remain optimistic. Our survey results mirror this elevated expectation. Investors anticipate ~60% YoY revenue growth this quarter, and ~55% YoY growth for next quarter guidance. Respondents expect both July revenue and October guidance to come in ~3.5% above consensus (roughly $2bn higher than current guidance, as usual).
Survey respondents see 2026 EPS >$6.5 (with $7 commonly cited; Harlan Sur views this as easily achievable). Optimism is driven by smooth GB200 shipments and the ramp of GB300 in 2H.

Remaining uncertainties:

1. Order volatility – hints of GB300 system order pull-ins (e.g., Quanta).

2. H20 shipment guidance – balancing Chinese demand vs political risk.

3. Networking supply – parts shortages.

Optimists cite Hon Hai’s server strength as support against order volatility concerns (Gokul expects at least 6,000 servers in 3Q). The second and third issues are already well known, making any surprises easier to justify. Notably, margin expectations showed little dispersion in the survey.

When shared with Asia tech specialist Duncan Wagner, he emphasized that Asian investors seem less optimistic than these survey results suggest. Another point of discussion: NVIDIA’s stock has shown a recent pattern of strong gains in 1H (2023, 2024, 2025) followed by flat trading in 2H (2023, 2024).

Positioning score (1 = max sell/underweight, 10 = max buy/overweight): 8
Expected move: 5.8%

NVIDIA (NVDA) and Related Plays (Laterals) – Ashwin Panjabi
NVIDIA could be the spark that unleashes “animal spirits” this week. Conditions are perfect. Last week’s Altman comments and the M.I.T. report reignited the recurring six-monthly concerns over AI CAPEX sustainability. Gokul Hariharan and his team produced an excellent chart showing the massive capacity for US CSPs to keep spending through 2027.

If EBITDA and OCF grow 10% and are fully reinvested, 2027 CAPEX could grow 76%… This is not our base case, but it illustrates the upside potential.
Spending appetite is also enormous. The Big 4 already monetize AI based on FCF this year, with minimal inclusion of reasoning models (whose token usage is 10–30x higher than chatbots). Video-related GenAI, followed by agentic AI, represents the next wave of growth. Appetite extends to startups, sovereign wealth funds/governments, and enterprises, reinforcing confidence in the 2028 outlook.

Much of this demand remains latent due to severe supply constraints, driving price increases across the stack: advanced packaging, ABF substrates, power ICs, MLCCs, and commodity DRAM.

Winners will keep winning: Hon Hai, ASE, TSMC, Delta, Elite Materials, SK Hynix, GDS (BUY-rated), Unimicron.

$NVDA


Winners will keep winning: Hon Hai, ASE, TSMC, Delta, Elite Materials, SK Hynix, GDS (BUY-rated), Unimicron


TSMC listed on NYSE as TSM (ADR); also 2330.TW


Summary: MediaTek likely to win Meta's Arke 2nm ASIC design contract; also expected to benefit from broader ASIC demand expansion.

250722_Taiwan design service - CLSA

(1) CSP (Cloud Service Provider) firms are adopting more flexible chip development models, and automotive OEMs are increasingly moving towards in-house development of ASICs for ADAS.

(2) This is opening up greater opportunities for Taiwanese ASIC companies.

(3) Recent developments like Meta's new 2nm project and the design changes to its Olympus chip demonstrate the continued expansion of ASIC demand. Companies like MediaTek are expected to benefit.

(4) Furthermore, CSP firms are increasingly separating design from the supply chain and tending to handle Front-End design in-house for cost efficiency. This presents a structural opportunity for design service providers.

*Why is in-house Front-End design by CSPs beneficial for them? Specifically, complex areas within Front-End design such as RTL implementation, verification, DFT, and physical design require high levels of expertise, making them difficult to perform entirely in-house. Therefore, CSPs often design only the architecture or key blocks directly, while outsourcing the rest of the Front-End and Back-End (e.g., place & route, tape-out) to specialized design service firms.
**Initially, ASIC development companies primarily outsourced turnkey projects to experienced fabless firms like Broadcom. However, as generations progress, optimizing cost structures becomes increasingly important.

(5) Meanwhile, BEV (Battery Electric Vehicle) companies are directly developing ADAS ASICs to strengthen software and hardware integration, further broadening market opportunities for Taiwanese ASIC companies.

(6) Below is an update on Meta's ASIC roadmap.

(7) Meta recently announced 'Arke', a new ASIC project, in addition to its existing ASIC lineup.

(8) It will use TSMC's 2nm process with a target for mass production in Q1 2027. Its purpose is to act as a bridge between Iris and Olympus.

(9) The selection of the design house is expected to be completed within a few weeks, and our assessment is that MediaTek has a high probability of securing the contract.

(10) On the other hand, the schedule for Olympus is being delayed. This is due to some design changes aimed at enhancing its competitiveness against NVIDIA's Vera Rubin.

(11) Consequently, the mass production schedule has been pushed back from 4Q27 to 1H28.


Goldman expects that as the pressure from enterprise software renewal cycles eases in 2026, AI's incremental contribution will provide stability for key indicators such as net revenue retention (NRR), paving a durable, multi-year growth path for the industry

Summary: Shares Goldman Sachs bullish view: AI is a force multiplier for SaaS/enterprise software, not a disruptor; multi-year growth path ahead as renewal headwinds ease in 2026.

Global software sector proxied by IGV ETF

Will software companies be doomed to die in the age of AI? Goldman Sachs says no.

The AI wave is reshaping the technology industry with unprecedented momentum, sparking an intense debate over the outlook for traditional software businesses.

Over the past two weeks, sentiment in the software sector has clearly turned bearish. Last Tuesday, after OpenAI released its latest large model, GPT-5, worries that AI would replace traditional software triggered panic selling in the market. Shares of German software giant SAP plunged as much as 7.1%, wiping out nearly €22 billion in market value—the biggest one-day drop since late 2020—and dragged European software stocks sharply lower across the board.

According to Goldman Sachs analyst Gabriela Borges and her team, their report on the 17th pointed out that investors’ concerns are focused on an existential risk: “Will AI erode existing pricing models, lower barriers to entry for new players, and ultimately pressure the profit margins of SaaS (Software-as-a-Service) giants?”

In Goldman’s view, the answer is no.

The report argues that the “software is dead” rhetoric is overly pessimistic. In some cases, AI has the potential to become a “force multiplier” for industry-leading suppliers. The current stage is similar to the historical period when the software industry shifted from on-premises deployment to cloud computing—a time that gave rise to a new cohort of leaders, but also prompted established companies such as Adobe, Intuit, and Autodesk to transform into larger, faster-growing, and more profitable enterprises, creating meaningful excess returns for investors.

Goldman expects that as the pressure from enterprise software renewal cycles eases in 2026, AI’s incremental contribution will provide stability for key indicators such as net revenue retention (NRR), paving a durable, multi-year growth path for the industry. The future leaders of the software market will consist of two types of companies: today’s giants that continue to innovate, and emerging firms that successfully build differentiated, AI-native software.

Is AI a Disruptor or a Force Multiplier?
In the debate over whether AI-native companies can replace traditional SaaS firms, the crux is whether their products can be “significantly better and cheaper.”

Goldman points out that today’s SaaS giants are not comparable to the on-premises software companies they once disrupted. Back then, SaaS had a huge advantage in cost and experience thanks to cloud architecture, whereas SaaS enterprises today have set rather high competitive barriers.

In terms of pricing strategy, the biggest risk for AI-native companies is offering value-based pricing, which could cannibalize seat-based models. However, SaaS leaders have begun evolving their pricing toward outcome-based approaches, as Salesforce has done, or encouraging adoption by incorporating AI features into existing subscription plans like HubSpot.

On the innovation front, SaaS leaders are maintaining a rapid pace through organic growth and acquisitions. Examples abound: ServiceNow acquired Moveworks, Braze acquired Offerfit, and Salesforce acquired Bluebirds. In organic innovation, Salesforce launched Agentforce in September 2024, which to a large extent defined the next phase of AI adoption.

Therefore, the report believes it is very difficult for AI-native companies to disrupt existing SaaS leaders on pricing and product functionality.

A Goldman case study shows that in call-center scenarios, AI applications can reduce operating costs by 30%, yet total software budgets increase by 130%. This suggests that AI not only fails to compress the market, but may actually expand the total addressable market (TAM) for application software.

The Software Giants’ Hybrid AI Strategies and Moats
To meet challenges and seize opportunities, giants in enterprise software are broadly deploying a hybrid AI model strategy, which has become key to strengthening their moats.

This strategy combines domain-specific models trained on a company’s own proprietary data with cutting-edge external large language models (LLMs), preserving their data advantages while offering flexibility and high performance.

From Snowflake’s Arctic model and Salesforce’s Agentforce to ServiceNow’s Now LLM, these industry leaders embed their own models within their platforms to handle core enterprise workflows, while also allowing customers to call external models such as OpenAI and Google via interfaces.

The report explains that this strategy greatly reduces the risk of being “undercut at the source” by AI-native upstarts, because it locks customers into ecosystems that are familiar, secure, and deeply integrated. Meanwhile, vertical software vendors possess stronger barriers thanks to their deep industry expertise.

Goldman believes that in these specialized domains, AI is more likely to play an “augmenting” rather than a “replacing” role. Due to complex workflows and high data-migration costs, even technically superb AI-native products will struggle to earn customer trust and adoption in the short term.

Higher Barriers for Enterprise Software Than for Consumer Software
The report also notes that the market often underestimates the fundamental differences between enterprise and consumer software—differences that constitute another important moat for existing giants. Goldman emphasizes that entry barriers for enterprise software are much higher than for consumer applications, with the core being “mission criticality.”

The report points out that “hallucinations” in AI models may be harmless in consumer settings, but in enterprise environments they can lead to reputational damage, customer churn, and other serious consequences. Therefore, enterprise software is about more than product features; it involves an entire complex system “beneath the iceberg.”

In addition, a current view holds that customers can now build their own SaaS-equivalent tech stacks at lower cost than before. Agentic AI significantly lowers development thresholds through code-generation and debugging tools, and lowers the barrier to full UIs through natural-language-driven agents. For example, Palantir’s value proposition combines forward-deployed engineers, an ontology-based operating system, and an AI toolkit.

However, Goldman sees this as a classic insourcing vs. outsourcing issue. Even if the cost of maintaining software applications in-house falls, the costs of specialized suppliers fall as well; thus, the efficiency frontier of professional vendors typically remains ahead of internal efforts.

Goldman argues that simply using AI to replicate a software stack is not only fraught with difficulty but also “somewhat meaningless.” The essence of technological change is to create new, differentiated applications, rather than to rebuild the past.

The report suggests that the industry may currently be at a local peak in the share of opportunities for customized versus packaged solutions: existing SaaS firms lack comprehensive AI features; AI-native firms often address only a small part of broader enterprise problems; and many developers and IT professionals are still early in the learning curve of successfully implementing AI projects.

Future Indicators to Watch
While remaining optimistic about the long-term outlook for the software industry, Goldman also highlights several key factors that investors should monitor closely to determine whether the bullish or bearish arguments are being validated.

First is the stability of net revenue retention (NRR). The report shows that over the past two years, SaaS leaders have faced particular renewal pressure. Pandemic-related demand peaked in 2021 and the first half of 2022, and those three-year contracts faced the greatest pressure upon renewal in 2024 and the first half of 2025.

Second is the degree of AI revenue contribution to growth. SaaS leaders need to demonstrate that their AI products generate incremental revenue. For example, Adobe expects its AI products to contribute $250 million in annualized recurring revenue (ARR) by the end of 2025. The report notes that such clear financial figures will be key validation signals.

Third is customer feedback on SaaS leaders’ innovation. The market will watch the progress SaaS leaders make in addressing obstacles to AI adoption, such as model selection and tool integration.

Finally, the momentum of AI-native companies will be tracked to gauge their staying power and the risk they pose to incumbents. Many AI-native firms founded over the past two years have the potential to grow into larger enterprises over time, expanding from single-product companies into suites. Tracking such companies over the long run will help assess their actual impact on existing profit pools.


Summary: Morgan Stanley reiterates Overweight on Google; raises revenue/cloud estimates, lifts PT on accelerating Search/YouTube/Cloud growth and AI monetization progress.

industry='Internet Content & Information'

Google Quarterly Report: Search, YouTube, and Cloud Businesses Accelerate Across the Board, GenAI Drives Product Suite Innovation, Increased Capital Expenditures Bolster Long-Term Growth Momentum
Morgan Stanley (B. Nowak, 25/07/24)

Morgan Stanley notes that Google's core businesses are accelerating across the board, with GenAI-driven product innovation permeating core product lines, cloud business growth momentum significantly strengthening, and capital expenditures substantially raised to support future development. Although increased short-term investment creates some pressure on EPS and free cash flow, the sustained growth momentum and valuation re-rating logic remain valid.

Core Businesses Accelerate Across the Board, Revenue Growth Exhibits Durability

In Q2 2025, Google's Search, YouTube, and Cloud businesses grew year-over-year by 12%, 13%, and 32% respectively, all showing acceleration compared to the previous quarter. Morgan Stanley believes that Google's leading position in traffic entry points and the continuous commercialization progress of its AI products are key drivers for its long-term sustainable revenue.

AI Product Penetration Accelerates, User Engagement and Data Disclosure Simultaneously Increase

Google continues to advance its AI applications, not only integrating GenAI products into more product lines but also significantly increasing the frequency and breadth of related data disclosure. For example, enterprise users of Gemini have reached 85,000, with usage growing 35 times year-over-year. Morgan Stanley points out that these data strengthen investor confidence in the long-term value of its AI ecosystem.

Capital Expenditures Substantially Raised, OBBBA Tax Benefits Provide Funding Assurance

Google has raised its 2025 capital expenditure guidance from $75 billion to $85 billion, primarily for server and data center expansion to meet cloud demand. Morgan Stanley believes this increase could be partially offset by up to $25 billion in OBBBA tax benefits, which are expected to be a significant valuation driver in the coming quarters.

Google Cloud Business Shows Strong Growth, Order Scale and Customer Quality Both Improve

Cloud business growth is primarily led by GCP, which is expected to account for approximately 80%. In Q2, cloud business backlog orders grew 18% quarter-over-quarter and 38% year-over-year; the number of large orders over $2.5 million doubled year-over-year, and orders over $1 million in 1H 2025 have already reached 2024 full-year levels. New GCP customers increased by 28% quarter-over-quarter, reflecting the rapidly increasing enterprise demand for AI tools.

Revenue Expectations Raised but EPS Maintained, Target Price Increased

Morgan Stanley has raised its 2026/2027 revenue expectations by 1% and 2% respectively, primarily due to a 4% and 5% upward revision of Google Cloud revenue expectations. However, due to an 8% simultaneous increase in capital expenditures, which offsets the impact on EPS and free cash flow, EPS remains unchanged, and FCF forecasts are lowered, maintaining an Overweight rating.


Summary: JPM bullish on Delta Electronics: AI server power/liquid cooling share gains, 40% CAGR in cooling biz FY25-27, margins rising 11.3%→14% by 2027.

Delta Electronics: Increasing Market Share in AI Server Power and Liquid Cooling, Clear Upside for Performance and Valuation
JPM (G. Hariharan, 2025/07/20)

JPM states that Delta Electronics continues to strengthen its leading position in AI server power supplies and liquid cooling systems. Benefiting from the multi-fold expansion of the AI server market, the company has clear growth and valuation catalysts for the next two years.

AI Servers Drive Revenue Mix Optimization, Multiple Catalysts in the Next Two Years
Although 2Q revenue was lower than expected due to exchange rates and production line transfers, Delta Electronics' product portfolio optimization and improved AI server pricing led to gross margin improvement. The company anticipates increased GB300 cabinet shipments in the second half of the year, with power cabinet and HVDC architecture design changes driving a new round of performance in the next two years.

High Market Share in Liquid Cooling Systems, Amazon IRHX a Key Catalyst
Delta Electronics holds a higher-than-expected market share in Meta and Microsoft's L2A liquid cooling systems. Recently, Amazon announced its self-developed liquid cooling solution, reinforcing the trend of cloud service providers transitioning to an ODM model. JPM projects the liquid cooling business CAGR to reach 40% for FY25-27, with its revenue contribution potentially reaching 9% by 2027.

High-Power Cabinets Drive Increased Power Value
The power value contributed by Delta Electronics in GB200 cabinets is $37,000, projected to rise to $53,000 for GB300. Future higher-power platforms like VR200 and Kyber are expected to push the value of a single power cabinet up to $150,000, and drive the full adoption of HVDC architecture.

Server Business Structure Transformation Boosts Overall Profit Margins
Delta Electronics' server-related revenue share is expected to increase from 25-30% in 2024 to 45-50% in 2027, boosting overall operating profit margins from 11.3% to 14%. High-value products such as liquid cooling and power cabinets are simultaneously driving up ASP and market share, strengthening the company's profitability


Summary: Goldman/TrendForce: DRAM and NAND ASPs rising strongly into 4Q25; server demand upcycle with 2026 CSP bit-demand growth >25%; bullish memory pricing outlook.

Korea DRAM sector: SK Hynix, Samsung Electronics

251001_South Korea Technology: September 2025 Memory Pricing – Goldman Sachs

[Key Takeaways]
    1. Solid server demand is driving the memory price upcycle.
    2. TrendForce forecasts that in 2026, bit demand growth from U.S. CSPs will exceed +25%, while Chinese CSPs will exceed +20%.

⸻

[Contents]
    1. TrendForce reports that general DRAM ASP rose by +10–15% QoQ in 3Q25, and expects an additional +8–13% QoQ increase in 4Q25.
    2. For NAND ASP, prices rose +3–8% in 3Q25 and are projected to rise another +5–10% in 4Q25, supported by strong eSSD demand.
    3. PC DRAM rose +8–13% QoQ in 3Q25. There were no new deals in September, while increased server DRAM supply kept PC DRAM supply tight.
    4. PC OEMs, already holding sufficient inventories, may build up additional stock in anticipation of future price hikes. In 4Q25, PC DRAM prices are expected to rise +3–8% QoQ.
    5. Server DRAM rose +3–8% QoQ in 3Q25. With Chinese CSPs requesting additional orders, server DRAM contract prices continued to rise.
■ September: DDR5 contract prices MoM +1%, DDR4 contract prices MoM +2%.
    6. In 2026, U.S. CSP bit demand growth is expected to exceed +25%, and Chinese CSPs over +20%.
    7. TrendForce noted that with supply already tight, long-term contract discussions for server DRAM in 2026 have already begun.
    8. In 4Q25, server DRAM prices are projected to rise +5–10% QoQ. However, there is a possibility that CSPs may have placed excessive orders to secure DRAM on time.
■ DDR5: +5–10% / DDR4: +15–20%.
    9. For LPDDR, demand is recovering due to rising smartphone content per device and the expanding applications of LPDDR.
    10. In 3Q25, LPDDR4/5 prices rose +10–15% and +38–43% QoQ, respectively, and are forecast to rise another +8–13% and +15–20% in 4Q25.
    11. In NAND, AI inference demand and HDD supply shortages are giving NAND manufacturers room to raise ASPs.


NAND ASP, prices rose +3–8% in 3Q25 and are projected to rise another +5–10% in 4Q25, supported by strong eSSD demand

Korea NAND sector: SK Hynix, Samsung Electronics


Jeff Pu of Hong Kong's GF Securities downgraded AMD, citing that the company has implemented order cuts.

Summary: Shares GF Securities downgrade on AMD citing order cuts; adopted bearish stance.

Jeff Pu of Hong Kong’s GF Securities downgraded AMD, citing that the company has implemented order cuts.

$AMD


Summary: Amazon undervalued as AWS backlog accelerates and margin mix improves; MSFT premium ignores cloud margin dilution risk; GOOG margin risk already priced in.

Why has Microsoft reached a $4 trillion valuation while Amazon seems to be lagging? Is it possible that the market is undervaluing Amazon?

Microsoft's market capitalization surging past $4 trillion seems to have dimmed Amazon's spotlight in the AI race. However, in the artificial intelligence-driven cloud competition, investors may need to shift their focus from growth speed to the deeper structure of profitability.

The AI cloud race is not just a battle of technology and growth; it is a reshaping of the profit models of tech giants. A recent analysis by The Information points out that in this competition, Microsoft and Google are facing margin pressures from their cloud business expansion. This very situation presents an opportunity for Amazon to enhance its overall profitability, a dynamic the market appears to misperceive.

In the latest earnings season, both Microsoft and Google announced accelerating growth in their cloud businesses. In comparison, Amazon Web Services' (AWS) 17% growth rate for the quarter seemed lackluster, but its business structure reveals a different story. AWS's profitability far surpasses that of its core e-commerce business, which means that every point of growth in its cloud division structurally optimizes Amazon's overall profit.

The Price of High Growth: Microsoft and Google's "Sweet Sorrow"

For Microsoft and Google, the robust growth of their cloud businesses is a double-edged sword.

According to the latest quarterly data, Microsoft's "Intelligent Cloud" segment had a profit margin of 40.6%, whereas its "Productivity and Business Processes" segment, which includes commercial software, boasted a much higher margin of 57.4%. A similar pattern is evident at Google, where its cloud business reported a profit margin of 20.7%, significantly lower than the 40% margin of its "Google Services" segment, which is predominantly driven by advertising.

The issue is that for both companies, their lower-margin cloud businesses are growing at a much faster pace than their high-margin core operations. Data shows that Microsoft's cloud business grew by 26% in the quarter, far outpacing the 16% growth of its software business. Similarly, Google's cloud business expanded by 32%, well ahead of the 12% growth in its services segment.

The analysis suggests that as AI continues to drive enterprises toward the cloud, this "growth imbalance" will become more pronounced. In the long term, this implies that the overall profit margins of both companies could be "diluted" by their expanding cloud businesses, gradually converging toward the margin levels of their cloud operations. Furthermore, there is a potential risk that new AI products could cannibalize Microsoft's lucrative enterprise software and Google's search advertising businesses.

Is Amazon's Potential Underestimated? The Cloud Business as a Profit Engine

Amazon's situation is the complete opposite. Its cloud business, AWS, is the core engine of the company's profits. In the most recent quarter, AWS's operating margin stood at an impressive 33%, while its vast e-commerce business had a margin of just 6.6%.

Historical data corroborates this trend. From 2017 to 2024, as AWS's share of Amazon's total revenue increased from 9.8% to 17%, the company's overall operating margin leaped from 2.3% to 10.7%. The expansion of the cloud business has been the key driver of Amazon's leap in profitability.

Although the market has expressed concern over AWS's 17% growth rate for the quarter, there are signs that its growth may be on the verge of accelerating. In a report, New Street Research analyst Dan Salmon noted that AWS's backlog (i.e., customer commitments for future orders) saw a substantial 25% increase during the quarter, a powerful indicator of future revenue.

Of course, all cloud service providers face a common challenge: massive capital expenditures to support AI will increase depreciation expenses, thereby putting pressure on the margins of the cloud businesses themselves. However, the core issue lies in the long-term evolution of the business mix. For Google, the market seems to have already priced in the margin risk, with its stock performance lagging behind advertising peers like Meta. Yet, judging by the premium valuation of Microsoft's stock, investors appear to be selectively ignoring the same risk.

As for Amazon, the market may be placing too much emphasis on its current growth figures, thereby underestimating the future potential signaled by its business backlog and its unique profit growth model.

$MSFT $AMZN $GOOG

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https://t.co/wN7zuAoQz6


judging by the premium valuation of Microsoft's stock, investors appear to be selectively ignoring the same risk


For Google, the market seems to have already priced in the margin risk, with its stock performance lagging behind advertising peers like Meta


Summary: Shares UBS view: OpenAI–NVDA deal = ~$400B revenue; OAI–AVGO deal volume exceeds Google–AVGO, bullish both.

Very interesting. UBS says that the OAI–AVGO deal has a volume target even larger than the one between Google and AVGO.

(Must read) UBS Commentary on the OpenAI–NVDA Deal:

While timing will, to a large degree, depend on OpenAI's ramp plan, we estimate this deal ultimately translates into ~$400B of NVDA revenue over a multi-year period. Given the sheer size of the numbers, it does seem likely


we estimate this deal ultimately translates into ~$400B of NVDA revenue over a multi-year period


We believe HBM-related strength should also be accretive to MU's margins as HBM commands a much higher premium compared to traditional DRAM... The net result is a significantly stronger GM profile.

Summary: Shares/endorses Deutsche Buy initiation on MU at $150 PT; HBM margins ~60% vs non-HBM ~35% drive strong gross margin expansion.

We believe HBM-related strength should also be accretive to MU's margins as HBM  commands a much higher premium compared to traditional DRAM (DBe HBM  ASPs are ≥5x greater than conventional DRAM).  HBM offers significant  performance improvements vs. standard DRAM, which drives pricing substantially  higher, more-than-offsetting the higher manufacturing costs associated with a  more complex and silicon-intensive technology.  The net result is a significantly  stronger GM profile.  As per our estimates, MU's HBM GMs currently stand in the  ~60% range, while non-HBM GMs stand at ~35%.

Deutsche initiation on Micron $MU

We are launching coverage of Micron (Ticker: MU) with Buy rating and $150 price  target.  We are constructive on both the cyclical and secular setup facing Micron.  On  the secular side, we believe High Bandwidth Memory (HBM) is an underrated


Nvidia is bound to succeed in China. China's competing chips are still inferior to Nvidia's, and now Nvidia is about to launch a chip in China that is six times more powerful than the H20.

Summary: Bullish NVDA on China dominance: local chips inferior and a new chip 6x more powerful than H20 incoming.

Nvidia is bound to succeed in China.

China’s competing chips are still inferior to Nvidia’s, and now Nvidia is about to launch a chip in China that is six times more powerful than the H20.

$NVDA https://t.co/DiWOmLlsNw

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https://t.co/Rimiqmox8J


NVIDIA has clearly emerged as the true 'big winner'

Summary: NVDA wins AI value chain with 70%+ margins; server OEMs (SMCI, DELL) structurally squeezed with razor-thin margins and no pricing power.

AI Server Business Booming, but All the Money Goes to NVIDIA

Amid surging demand for artificial intelligence, global major AI server manufacturers are facing a common challenge. Revenues are growing significantly, but profit margins continue to shrink.

With companies such as HPE, Dell, and Supermicro releasing earnings one after another, the harsh reality has emerged: while revenue growth is evident, soaring NVIDIA chip costs and fierce market competition are making hardware makers’ margins extremely thin.

HPE, in its third-quarter results released Wednesday, reported revenue of $9.14 billion, up 18% year-on-year, and earnings per share of $0.44, both exceeding market expectations. However, its server division’s operating margin fell to 6.4% from 10.8% a year earlier.

Conscious of investor concerns, HPE CEO Antonio Neri pledged on an analyst conference call that margins would recover to around 10% by the end of the current fiscal quarter. This statement temporarily reassured the market, and HPE’s stock rose 1.5% in after-hours trading.

This trend is spreading across the entire industry, and the root cause lies in the fact that NVIDIA virtually monopolizes the core of AI servers—high-performance GPU chips. These very expensive chips account for most of the server’s cost, leaving the overwhelming majority of value at the top of the supply chain with NVIDIA.

⸻

The Dilemma of “Higher Revenue, Lower Profits”

For server OEMs, the current AI market presents an awkward situation of “增收不增利 (increased revenue without increased profit).”

Supermicro, in addition to HPE, is facing the same issue. While its Q4 2025 revenue soared 46.59% year-on-year, its gross margin declined to 9.7%.

Dell shows a similar picture. Its Q2 2026 gross margin fell to 18.7% from 22% in the same period last year, which the company attributed to pricing pressure brought on by AI servers.

In other words, the phenomenon of “high revenue but low profit” has become a common dilemma for AI hardware manufacturers. In stark contrast to the razor-thin margins of server makers is NVIDIA’s overwhelming profitability.

With a 98% share of the data center GPU market, NVIDIA holds absolute pricing power. Its Q2 2026 results showed a non-GAAP gross margin of as high as 72.7%, several times that of server makers. Data also shows that its latest Blackwell GPU platform delivers margins of up to 77.6% in AI inference workloads.

⸻

The Current State of the AI Value Chain

- NVIDIA: Gross margin over 70%

- Dell: Gross margin about 18.7%

- HPE: Server division operating margin between 6.4%–10%

- Supermicro: Gross margin 9.7%

⸻

Background to Margin Pressure for Server Makers

There are three structural reasons why server manufacturers’ profits continue to be under pressure.

1. High component costs
The core of AI servers, NVIDIA GPUs, are expensive and in short supply, leaving OEMs with virtually no bargaining power. One report even pointed out that in AI hardware for cloud service providers, OEMs may lose $1 for every $7.9 of revenue, highlighting the asymmetry in cost structure.

2. Fierce market competition
To secure market share, server makers are engaged in aggressive price wars. In order to win large customer orders, they are offering steep discounts, further eroding already thin margins. Dell’s Infrastructure Solutions Group operating margin has already dropped to 8.8%.

3. Complex supply chain management
To meet urgent delivery demands for AI components, manufacturers are incurring additional logistics costs, while challenges in inventory management are further adding to operating costs and profitability pressures.
⸻

Investor Perspective

From an investor’s standpoint, the growth story of AI server manufacturers is becoming increasingly complicated. Revenue forecasts are dazzling, but sustainability faces severe tests. Analysts warn that maintaining margins at the 10–11% level, as in the case of Supermicro, will be insufficient to support long-term technological innovation or deliver substantial returns to shareholders.

In the grand game of AI, server assemblers are little more than “freight carriers,” while NVIDIA has clearly emerged as the true “big winner.”

$NVDA $SMCI $DELL


server assemblers are little more than 'freight carriers'


high revenue but low profit has become a common dilemma for AI hardware manufacturers


Summary: Amazon ASIC work with Alchip seen as bad news for Marvell; implied bearish.

Amazon’s chip division is working with Taiwan’s Alchip on Trainium3 and Trainium4 to bring the chips to mass production on TSMC 3nm and 2nm processes, respectively, media report, citing unnamed industry sources. Trainium3 will be in mass production in the 1st quarter of 2026.


Summary: Bullish AVGO: revised up 2026 CoWoS guidance at TSMC to 180k on stronger TPU demand, with external sales to XAI/Meta.

Hong Kong GF Securities, Jeff Pu: We believe that AVGO has revised up 2026 CoWoS guidance in TSMC to 180k for now, mainly driven by better demand f TPU. We believe that, beyond internal use, we expect TPU to be sold extern for customers such as XAI, Meta, etc

$AVGO


Summary: Bullish NVDA: B30 positions as preferred inference solution for SMB/cloud, leveraging CUDA ecosystem stickiness and cost advantages over domestic alternatives.

NVIDIA B30 Industry Notes 2

This design precisely addresses two major pain points: first, becoming the preferred solution for inference in small and medium-sized models, fully aligning with the arrival of the inference era; and second, serving as a low-cost computing power pool for cloud services.

Firstly, regarding inference for small and medium-sized models, the B30's disadvantage in single-card energy efficiency is mitigated in scenarios with low memory bandwidth requirements, such as intelligent customer service, text generation, and image recognition. For instance, when processing a 4096-long text, the H20's throughput reaches 961 tokens/s, while the B30 is only 60% of that; however, if expanded to an 8-card cluster, the B30 can increase its effective bandwidth to 1.2TB/s through dynamic compression technology, meeting medium concurrency demands. More importantly, its deep compatibility with the CUDA-X ecosystem allows enterprises to seamlessly migrate frameworks like PyTorch, saving technical reconstruction costs.

Secondly, regarding its role as a low-cost computing power pool for cloud services, the B30's cluster solution is highly cost-effective for small and medium-sized enterprises and academic institutions. Tests by a major company show that a computing power pool constructed with 100 B30 cards can support lightweight training of billion-parameter models, reducing procurement costs by 40% and unit power consumption by nearly 30% compared to the H20. Although a certain domestic card significantly surpasses the B30 in single-card FP16 computing power (approximately 200 TFLOPS), the latter maintains an advantage in mainstream model deployment efficiency due to the stickiness of the CUDA ecosystem.

$NVDA

NVIDIA B30 Industry Notes:

• China's major internet company A estimates that the performance of NVIDIA's B30 is approximately 75% that of the H20. They placed an order for hundreds of thousands of units (USD 1 billion) in late June, with delivery expected in August.

•


Summary: Merrill endorses maintaining equity allocation at all-time highs; S&P 500 historically outperforms after new highs, supported by earnings, consumption, and tech innovation.

Merrill: Why Stock Allocation Should Be Maintained Even at All-Time Highs

The S&P 500 index recently surpassed the 6,400 mark for the first time, setting new all-time highs on a closing basis 15 times since the beginning of the year. The fact that 12 of these instances have occurred within the last 30 trading days suggests that the market's upward momentum remains strong. This environment may foster a perception among investors, particularly those who reduced risk during the high volatility period in the spring, that they have not fully participated in the rally.

It is natural to feel a psychological burden about deploying new capital when the index is near its all-time high. However, this can lead to investment decisions based on market timing. We have consistently cautioned against strategies centered on market timing, emphasizing that reducing stock allocation based solely on valuation concerns can result in missing out on medium- to long-term return opportunities.

Based on data since 1990, investing in the S&P 500 on a day it reached an all-time high has, on average, yielded superior returns over 1, 2, 3, and 5-year periods compared to investing on any given day (Chart 3A). This indicates that all-time highs frequently occur during momentum phases within a bull market, suggesting a high probability of subsequent return improvements even after these peaks (Chart 3B).

Furthermore, historical cases show that a correction of -10% or more within one year of an all-time high has occurred in less than 5% of instances. Out of the 24 years since 1990 that saw a market peak, only four coincided with a recession. This implies that market peaks have generally occurred during economic expansion phases.

The current market rally is supported by structural factors such as solid corporate earnings, a recovery in consumption, technological innovation, and the proliferation of asset-light business models. While there may be some noise in future economic indicators or the possibility of short-term corrections, we view these as temporary fluctuations within a medium- to long-term upward trend. In this environment, excessively increasing cash holdings could lead to opportunity costs. From a strategic standpoint, maintaining stock allocation is a necessary consideration.


Summary: Bearish AVGO as VMware customer churn accelerates, including major Samsung affiliates.

It seems that VMware's customers are increasingly leaving. This is obviously bad news for Broadcom.

I also know that many companies I'm familiar with are reviewing VMware alternatives.

$AVGO https://t.co/TIvh4PsKZP

Report: Samsung Affiliates Actively Seeking VMware Alternatives; Reviewing Costs and Efficiency from Multiple Angles

Major Samsung Group affiliates are embarking on a quest for alternatives to the virtualization software 'VMware.'

This move comes as VMware's prices have surged https://t.co/I40dOH777F