Samsung Electronics is showing signs of passing the low point in the sub-3nm foundry competition. Considering that its competitor's CAPA has virtually reached its limit, Samsung is rising again to a position where it can expect reflective benefits as a second choice

Summary: Shares Shinhan Securities bullish view: Samsung foundry passing its low point, set to benefit as TSMC Plan B with re-evaluation of its foundry ecosystem.

Report: Samsung Electronics' 'Changed Strategy,' a 'Volume Offensive' Despite Low-Margin Tesla Order

An analysis suggests that although Samsung Electronics has signed a 22 trillion KRW foundry (semiconductor contract manufacturing) supply deal with Tesla, it is a structure where profits are difficult to expect in the short term, considering the yield and cost of the 2-nanometer (nm) process. Nevertheless, the reason Samsung pushed for this order appears to be a strategic shift. Unlike in the past, when it secured orders based on technological prowess from introducing advanced processes, the new strategy seems to be securing orders first and then increasing stability by pouring in massive funds and volume, even if it incurs some cost losses due to low yields.

Recently, Samsung Electronics has been experiencing multi-trillion won foundry deficits as its 3nm process failed to achieve expected yields, causing it to lose major clients to Taiwan's TSMC. Consequently, it seems to have decided that it is more beneficial to produce some finished products and deliver them to clients, even while accepting losses, rather than waiting for yields to be secured.

A semiconductor industry official stated, "I understand that the 2nm process, AI6, accounts for the majority of this order volume, with some 4nm process, AI4, mixed in." Samsung plans to mass-produce the AI6 using its 2nm Gate-All-Around (GAA) process at its Taylor fab in Texas. The mass production timing is anticipated to be after 2027.

In the case of the Dojo series, it appears a separate order was not received this time, as Tesla recently revealed plans to integrate the A16 and Dojo series. However, as Tesla CEO Elon Musk has hinted that Samsung's actual production scale could become several times larger in the future, the possibility of additional negotiations expanding to the Dojo series is considered open.

Of course, from Samsung Electronics' perspective, this order is not a "profitable business." It is highly likely that Samsung offered Tesla a lower price than TSMC to win this contract, and with existing yield issues, it is at a disadvantage compared to TSMC in terms of profit margins. While there are talks that the 2nm yield has recently improved significantly to over 40%, yield improvement is still in progress as the target is set for over 60% by the end of this year.

Another industry official commented, "Samsung's 2nm process yield seems to have risen from the 20% range at the beginning of this year to the current 30% range." TSMC's 2nm yield is estimated to be between 60% and 70%.

Amidst this, Samsung must also bear massive costs to enhance the completeness of its 2nm process. It is actually accelerating the commercialization of 'High-NA,' a next-generation Extreme Ultraviolet (EUV) technology. A High-NA machine is an EUV equipment that costs 500 billion KRW per unit, a greater investment burden than existing equipment (200-300 billion KRW).

The first official mentioned, "Until now, High-NA technology was considered a big risk for full-scale adoption due to its low efficiency relative to its price. However, with recent successive news of performance improvements, the interest from major companies has rapidly increased." He added, "Currently, Samsung Foundry is conducting trial runs of High-NA and checking its performance."

The possibility of the Dojo2 volume, currently produced by TSMC, being allocated to Samsung is analyzed to be low. The reasoning is that there is no need to dual-source Dojo2 before the mass production of AI6. A semiconductor industry official said, "As of now, the possibility of Dojo2 volume coming over to Samsung is almost non-existent. This is because there have been no cases of dual-sourcing when Tesla clearly defines the roles of each supplier." Tesla CEO Elon Musk recently drew a line on social media, stating, 'AI4/AI6 will be produced by Samsung, AI5 by TSMC.'

Within Samsung's foundry business division, the atmosphere is more focused on securing clients rather than immediate profitability. An official familiar with the company's situation said, "The strategy for responding to orders has recently changed. In the past, the basic approach was to deliver after raising the yield. Now, the approach is to somehow meet the volume (number of good chips) presented by the client through mass production, even if the yield is low."

He further explained, "Currently, we are in a situation where we cannot afford to wait for the yield to increase, and this Tesla order was also a decision made considering that it's difficult for it to contribute to profitability right away. Above all, we are viewing it positively because foundry yield is an aspect that naturally improves as the utilization rate increases."

It was reported that not only in foundry but also in the memory business, the company has emphasized a stance of "injecting massive volume this year." This is a similar trend to the moves of its competitor, Micron. Micron is also in a situation where it is absorbing the cost burden to maximize production and meet the High-Bandwidth Memory (HBM) volume demanded by clients like NVIDIA, even if it means many chips are discarded due to low yields.

Meanwhile, there is also an interpretation that this order could allow Samsung's foundry business to rapidly emerge as a 'Plan B' for TSMC's customers. This analysis suggests a green light has been lit for securing future clients.

Shinhan Securities analyzed, "Samsung Electronics is showing signs of passing the low point in the sub-3nm foundry competition. Considering that its competitor's CAPA (production capacity) has virtually reached its limit, Samsung is rising again to a position where it can expect reflective benefits as a second choice." They explained, "This change is expected to act as an opportunity for a re-evaluation of Samsung's entire foundry ecosystem."

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https://t.co/DGAyZtadak


Summary: Bullish GOOGL: GCP reaccelerating to +32%, $106B backlog, token usage doubling, subscription momentum, and improving Cloud margins all point to durable strength.

structural marker; pre-classified as canonical yfinance ticker

industry='Internet Content & Information'

Alphabet (GOOGL US EQUITY) FY2Q25 Conference Call

▶ Key Comments

At I/O on May 20th, disclosed 480 trillion tokens used in April (50x increase YoY).

This number has since doubled, now processing 980 trillion tokens monthly.

Search

Recorded double-digit revenue growth (+7% QoQ, +12% YoY).

New features like AI Overviews, Circle to Search, and Lens are preventing user churn.

Subscription

YouTube and subscription services also showed strong momentum, reflecting robust performance.

Gemini MAU (Monthly Active Users) reached 450 million, with daily requests increasing by over 50% compared to Q1.

GCP

Recovered to +32% after a slight slowdown to +28% last quarter.

Annual revenue run rate exceeds $50B.
Google Cloud's backlog increased by 18% QoQ and 38% YoY, reaching $106B at quarter-end.
Supply is still expected to remain tight relative to demand until 2026.

Capex

Capex forecast raised from the previous $75B to approximately $85B.

▶Q&A

Q: Do you anticipate changes in the traditional long-standing methods related to clicks and click monetization over the next 3-5 years?

A: All indicators we are seeing suggest that people are very positive about AI. AI is being well-received across all products. For example, people are already actively using the image-based Circle to Search feature in multimodality.

Q: What are your thoughts on the mix between advertising and subscriptions?
A: We have a very deep understanding of our monetization strategies for both advertising and subscriptions. We plan to continue aggressively pursuing this dual strategy.

Q: How should we understand the contribution of cost per click and click volume growth to the 12% growth?
A: Paid clicks increased by 4% YoY. Some policy changes are leading to a decrease in click volume but are favorable for monetization.

Q: You mentioned a $10B increase in Capex and supply shortages simultaneously. How should this be understood?
A: While additional investments are being executed, it takes time for them to translate into actual capacity expansion.

Q: In conversations with engineering teams developing agentic capabilities, what are the biggest technical hurdles?
A: Currently, during the experimental process, reducing latency, optimizing costs, and maintaining user trust are challenging. We expect agentic-based experiences to be more widely used by 2026.

Q: What are the efficiency gains from using internal Gen AI tools? Are they better than before?
A: Many agents are being utilized in actual workflows, and previously friction-filled experiences are gradually improving.

Q: What is the difference in user behavior between AI mode and the standalone Gemini app?
A: AI mode and the standalone Gemini app are optimized for different use cases. AI mode is very powerful when focusing on information retrieval and seeking accurate, information-based responses, whereas Gemini's queries vary from psychological counseling to conversational.

Q: How is Google currently responding to attracting and retaining AI talent?
A: We have invested deeply in AI talent over a long period and currently boast a very competitive position in the AI talent pool, possessing both breadth and depth. The factors top talent values most are: 1) conducting meaningful research on the front lines, 2) access to abundant computing resources, and 3) an environment for collaboration with industry-leading colleagues.

Q: Given that Click-Through Rate (CTR) has been a key driver of monetization in Search, can CTR be maintained in an environment where ad impressions per SERP (Search Engine Results Page) decrease due to the introduction of AI Overviews and new AI formats?
A: User satisfaction continues to increase, and the number of search users is also growing. From a monetization perspective, we see AI Overviews yielding nearly the same level of monetization performance as the traditional search experience.

Q: There have been reports about collaboration between OpenAI and Google Cloud. In what direction can this partnership expand in the future?
A: The collaboration with OpenAI is a very encouraging partnership from Google Cloud's perspective. We hope to further strengthen and grow it.

Q: Is the advertising environment in the second half of the year more uncertain or more stable compared to last year?
A: It's early in Q3, so it's premature to give specific comments for the entire second half, but currently, there are no particular concerns.

Q: Why are you pursuing both AI Mode and Gemini instead of moving to a unified, integrated search experience?
A: Because the two platforms can broadly and deeply cover the entire spectrum of human information consumption behavior. Search is information-centric, while Gemini is focused on being a personal assistant. It's closer to an everyday helper. Over time, we will allow users to integrate functionalities from both interfaces without complex choices. In the past, text, image, and video search were separate. We have experience integrating them through Universal Search.

Q: What is the outlook for the Cloud segment in the second half? Last quarter you mentioned resolving supply constraints by end of 2025, but today you are talking about supply constraints until 2026. Can you explain the change in outlook?
A: Current growth rates are a result of past Capex execution, and cloud growth is not linear. Growth can continue to vary quarter by quarter.

Q: How are subscription services related to Gemini growing, and what is the growth strategy?
A: The past quarter was a period of very healthy growth for AI-based subscription services, and the future outlook is very encouraging.

Q: How do you assess the ROI on CapEx investment in the Cloud segment?
A: As the Cloud customer base expands, operational efficiency gradually increases. Churn rates also decrease. This structure allows for greater revenue generation with the same cost. The Cloud segment has shown a strong trend of improving operating margins over the past few years.


Samsung is competing with a more advanced process node… Samsung holds the edge… Samsung's advantage, as its implementation (11 Gbps) is faster than SK hynix's

Summary: Samsung leads HBM4 race with 1c DRAM + 4nm logic die + 11Gbps speed advantage over rivals ahead of Rubin ramp.

“A Matter of Pride, Not Money”… How Samsung Broke Through NVIDIA’s Wall

Samsung Electronics has passed NVIDIA’s quality test for its fifth-generation high-bandwidth memory (HBM3E) 12-high product. It took a year and six months since the company completed development of the HBM3E 12-high in February last year. Analysts say this was the result of Samsung revamping its existing HBM3E to improve performance, combined with NVIDIA’s strategy of diversifying its suppliers. With Samsung having regained a significant portion of its HBM competitiveness, many expect the company to perform well in the race to develop and supply sixth-generation HBM (HBM4).

◇ Tackling Heat Issues Through DRAM Redesign

According to industry sources on the 19th, Samsung recently passed NVIDIA’s quality test for HBM3E 12-high. Stacking 12 DRAM layers to maximize data throughput, the HBM3E 12-high is used in the latest AI accelerators such as NVIDIA’s B300 and AMD’s MI350. Samsung had broken into AMD’s supply chain but had repeatedly failed to clear NVIDIA’s hurdles.

Samsung went through multiple setbacks in its efforts to supply HBM3E 8-high and 12-high to NVIDIA. Around October last year, the HBM3E 8-high test was close to passing when orders were suddenly postponed. The issue was that Samsung had used fourth-generation 10-nanometer (1a DRAM) chips as the core die, which failed to meet NVIDIA’s strict heat dissipation requirements.

The reason Samsung managed to break through with the more advanced 12-high was its redesign of the 1a DRAM, solving the overheating problem. The decisive move came from Jun Young-hyun, who took over as head of the Device Solutions (DS) division last May. After meeting NVIDIA’s executives early this year, he ordered a full redesign of the 1a DRAM for HBM3E. The HBM development team, effectively betting everything, fixed the thermal issues.

It was only natural that NVIDIA, after verification, placed an order with Samsung. Adding Samsung to the supplier list helps lower costs. However, shipment volumes are expected to be small, as Samsung is the third supplier after SK hynix and Micron.

An industry insider commented, “For Samsung, HBM3E 12-high was a matter of pride. Even if it doesn’t bring big sales, it carries great significance in proving their technical capability.” Samsung officially stated regarding its HBM3E 12-high supply to NVIDIA, “The process is proceeding in line with customer schedules.”

◇ Advantage in HBM4 Speed

The next battleground for the memory “big three”—Samsung Electronics, SK hynix, and Micron—is HBM4. HBM4 will be used in NVIDIA’s next-generation AI accelerator, Rubin, set for release next year. Unlike the HBM3E round, the HBM4 race is expected to be different—Samsung is competing with a more advanced process node.

Samsung plans to use sixth-generation 10-nanometer (1c DRAM) chips in HBM4, while SK hynix and Micron will continue with the 1b DRAM they used for HBM3E. For the logic die, Samsung will use a 4-nanometer foundry process, compared to SK hynix and Micron’s reliance on TSMC’s 12-nanometer process. On paper, Samsung holds the edge.

NVIDIA recently asked HBM suppliers to raise data processing speeds to at least 10 gigabits per second (Gbps) to boost Rubin’s performance. This plays to Samsung’s advantage, as its implementation (11 Gbps) is faster than SK hynix’s (around 10 Gbps). Micron is reportedly struggling to meet NVIDIA’s requirements. Samsung plans to deliver HBM4 samples this month that meet NVIDIA’s requested specifications.

$NVDA

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https://t.co/zgLE52GZXb


Summary: NAND/DRAM contract prices rising 15-20% per quarter through 1Q26 on AI-driven CSP demand; Samsung V9 sold out, Micron signaling hikes, Phison posting record profits — entire memory supply chain bullish.

Memory prices surged in 4Q25, defying seasonal trends as AI drives demand-Digitimes

Driven by strong AI demand, memory contract prices for NAND and DRAM rose sharply by an estimated 15-20% in the fourth quarter of 2025, breaking traditional year-end price decline patterns. Supply shortages led to aggressive procurement from cloud service providers, with high-stack 3D NAND products nearly sold out.

Industry insiders reveal that large cloud service providers (CSPs) have expanded their big data storage needs from HDD shortages to high-capacity SSDs.

Samsung's V9 NAND nearly sold out
Recent reports indicate that Samsung Electronics' most advanced V9 NAND (estimated around 290-layer stacking) for 2026 is nearly sold out. Due to three key advantages—better cost structure from higher stacking layers, faster read speeds, and larger die capacity per chip—this 3D NAND product has attracted strong priority purchasing interest from CSP customers.

The scramble for supplies has now spread to the main V8 NAND products, reflecting the booming development of AI servers in recent years. As computing power infrastructure becomes more complete, "data storage capability" is becoming a critical requirement for the next phase of AI advancement.

SanDisk and Micron signal price hikes
Recently, SanDisk and Micron announced NAND price increases, signaling that manufacturers anticipate tight capacity supply in 2026. Micron's fiscal year-end report concluded at the end of August, likely clearing internal inventory levels just as major CSPs ramp up orders for 2026. This has prompted several manufacturers to preemptively signal upcoming price hikes, reminding downstream customers of another impending price cycle.

Although fourth-quarter contract prices are not yet finalized, supply chains estimate that this round of price increases will definitely exceed single-digit percentages. Contract prices could rise by 15-20% per quarter starting from the fourth quarter of 2025 through the first quarter of 2026, clearly reflecting industry-wide supply constraints.

DRAM and NAND both facing steep gains
Another source revealed that manufacturers recently proposed a 10% price increase for October contracts. Based on this, quarterly price growth may surpass 20%, with contract price rises for NAND and DRAM being comparable. In terms of spot market performance, DRAM price increases might even be more pronounced than those of NAND.

The NAND market slowed down in the third quarter of 2024 but began showing signs of recovery starting in the second quarter of 2025, boosting confidence across related supply chains.

The market initially expected prices to decline during the traditional slow season from the fourth quarter through the following first quarter, but the 2025 price trend is proving to be an exception.

Despite consumer purchasing power not significantly improving, the clear trend of increased orders from major cloud players indicates that the 2025 price rally will extend from the third quarter into the fourth quarter and potentially all the way through the first quarter of 2026. Price forecasts for the entire year of 2026 remain optimistic, with expectations for quarterly price increases smoothly connecting to the traditional peak season in the third quarter.

As the NAND market warms up, manufacturers have successively initiated price hikes, benefiting the entire supply chain. Many memory module makers currently hold low-cost inventories.

Phison reports record-breaking profits
NAND controller giant Phison(https://t.co/dzoVOYHImM) reported a significant profit leap in August 2025, with monthly revenue reaching approximately NT$5.934 billion (approx. US$197.6 million), a 23.48% year-over-year increase, and net income after tax hitting NT$650 million, soaring 49x compared to the previous year. This reflects positive contributions from its strategic focus on non-consumer markets and R&D investments.

Phison stated it will continue strengthening cooperation with NAND manufacturers to ensure supply meets diverse global customer applications and seize growth opportunities brought by market recovery.

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https://t.co/q4YaPbacmK


Samsung Electronics' most advanced V9 NAND (estimated around 290-layer stacking) for 2026 is nearly sold out


contract prices could rise by 15-20% per quarter starting from the fourth quarter of 2025 through the first quarter of 2026, clearly reflecting industry-wide supply constraints


We maintain our Buy rating. The new $200 target price is derived by applying the same 30x P/E multiple to our revised 2026 EPS estimate.

Summary: Shares Citi note: Buy NVDA (PT cut to $200) + Buy AVGO (PT raised to $350, 4th AI customer est. OpenAI with $10B order).

Citi) NVIDIA – GPU vs. XPU: Target Price Lowered to $200 Amid Intensifying TPU Competition

Following Broadcom’s comments last week that year-over-year growth in XPUs is accelerating due to both new and existing customers, we are lowering our 2026 GPU revenue forecast by about 4% and cutting our target price (TP) to $200. We had previously expected AI XPU chip sales to surpass GPU sales in 2026. Broadcom’s remarks on the rapid pace of XPU adoption appear to stem from Google’s strategy shift toward providing compute power to competitors such as Meta, OpenAI, and Oracle, thereby indirectly competing with NVIDIA. This has also been a risk we recently flagged.

We estimate that these transactions will impact NVIDIA’s 2026 revenue by reducing GPU sales by roughly $12 billion. Supported by growth in spending from new cloud players (“neo cloud”) and sovereign AI initiatives worldwide, our revised 2025/2026 forecasts remain 2% and 5% above consensus, respectively. Importantly, our estimates exclude China-related revenue. Should NVIDIA resume GPU exports to China, that would represent an additional upside to earnings.

The new $200 target price is derived by applying the same 30x P/E multiple to our revised 2026 EPS estimate. We maintain our Buy rating.

Broadcom (AVGO.O) – Fourth AI Customer Announced, Estimated to be OpenAI with $10B Order for 2H 2026. Estimates Raised, Buy Rating Maintained.

Broadcom reported solid results and guidance. Strength in the AI segment (33% of Q3 FY25 revenue) continued, though partially offset by higher stock-based compensation expenses. The company announced a fourth AI customer, which we believe to be OpenAI. We estimate this will add $10 billion of incremental revenue in Q3 2026, although we remain cautious on the extreme volatility of the AI business.

We are raising our estimates for Broadcom (AVGO), maintaining our Buy rating, and lifting our target price from $315 to $350.

$NVDA $AVGO

CITI: NVIDIA Price Target Cut, Broadcom XPU and GPU Pose a Real Threat

• CITI lowered its NVIDIA price target to $200 due to intensifying TPU competition. As a result, it forecasts NVIDIA’s GPU revenue in 2026 will decline by about $12 billion. Specifically, the 2026 XPU market


We are raising our estimates for Broadcom (AVGO), maintaining our Buy rating, and lifting our target price from $315 to $350.


Summary: Bullish Samsung: earnings bottomed in Q2, inventory losses shrink in Q3, HBM ramp underway — projects recovery from here.

What We Can Glean from Samsung Electronics' Earnings Release

The increase in DRAM's ASP (Average Selling Price) was lower than expected. The company announced a 30% increase in bit growth. Since Q1's bit growth was 600 million Gb, Q2's was nearly 800 million Gb. This suggests that the ASP movement was not significant compared to the volume increase. Another interpretation is that the company lowered HBM prices significantly, resulting in no mix improvement.

Regarding the Q3 outlook, it's estimated that there will be considerable noise in the semiconductor sector.
First, DRAM bit growth is projected to be around 7%. The key issue is pricing, and it seems that an overall price increase is a plausible scenario. Considering that Samsung tried to maximize shipments in Q2 to clear out DDR4 inventory before prices rose in Q3, a potential price increase for DDR4 in Q3 might be suppressed.

As for HBM, the company aims for a 100% quarter-on-quarter increase in Q3, which amounts to roughly 1.5 billion Gb. Not all suppliers have to meet all demand, but this year, SK Hynix and Micron combined are at around 16 billion Gb, while market demand is 20-22 billion Gb. This indicates a significant supply shortage compared to demand.
In the conference call, Samsung mentioned something that could be interpreted as a potential HBM oversupply. This statement seems to be somewhat disconnected from the current market sentiment. If we are to interpret it, it might be related to the recent price cuts for 12-stack HBM in the second half of the year. It could also be interpreted that with Micron's entry, prices are falling, and the supply situation is not as tight as before, and will fall further when Samsung enters. Conversely, it could also mean that we will enter the market at a lower price than before.

In order for Samsung to ship 1.5 billion Gb, they will need to supply NVIDIA. There are rumors that the 12-stack HBM qualification will proceed in August. There are also rumors that HBM3E still has thermal issues. From NVIDIA's perspective, which continues to push for lower prices, they need to bring in as many suppliers as possible, so there is a possibility that NVIDIA might lower their standards.

Finally, Samsung stated that Q2 was not the last quarter for inventory valuation losses. While they did not disclose the exact scale of the Q2 losses, they did mention that the losses would be significantly reduced in Q3. Based on this, I conclude that Samsung's earnings bottomed out in Q2 and project a bullish outlook for Samsung.


Summary: Bullish BESI on increasing adoption of hybrid bonding in AI accelerator packaging.

industry='Semiconductor Equipment & Materials'

The increasing adoption of hybrid bonding is also worth noting.

That’s the reason I’m bullish on BESI. https://t.co/MGfR4z0XaZ

AI Accelerator Roadmap Summary

Feynman’s specs stand out.

It uses the A16 node,

and notably, its HBM4E capacity is smaller than Rubin Ultra’s.

The speculation that Jaguar Shore might be built on Intel 18A is also interesting. https://t.co/XBDC4mbeAf


Summary: Bullish GIS as Apple foldable iPhone/iPad supply chain beneficiary on raised shipment forecasts for 2026–2027.

GIS = General Interface Solution 6456.TW; Apple foldable context

Bullish on Apple foldable value chain

"Apple recently revised its shipment forecasts for the foldable iPhone upward to 8–10 million units in 2026 and 20–25 million in 2027 (vs. previous estimate of 6–8 million and 10–15 million, respectively), which will significantly boost demand for relatively low-yield UTG."

GIS: Worst Over, Exclusive Apple Foldable iPhone/iPad and Vision Air Supply, Enhanced Long-Term Profitability Visibility from Next-Gen Orders

Full story
https://t.co/xg3iixB75m https://t.co/hlPXfHuaZc


Summary: NVDA dominates AI networking via Spectrum-X (647% YoY growth); Arista benefits from data-center focus; Cisco loses ground with weak DC growth and legacy exposure.

▶ Nvidia’s Spectrum-X dominates Ethernet switch market, surpassing Cisco

    • Building on the success of its Spectrum-X platform, Nvidia is replicating its computing dominance in the networking domain.
    • Spectrum-X is a dedicated Ethernet solution designed for hyperscale GenAI clusters.
    • It delivers InfiniBand-level performance on Ethernet while breaking the barriers of closed ecosystems and high costs.
    • According to IDC, the data center Ethernet market revenue in Q2 2025 surged 71.6% year-on-year.
    • Over the same period, Nvidia’s switch business revenue skyrocketed 647% YoY to $2.3 billion, capturing 25.9% market share and overtaking Cisco and Arista.
    • In an era where GPUs are scaling into the millions, networking is no longer a background element but a core factor determining AI training efficiency.
    • Nvidia is positioning itself as the new king of AI networking by completing the last piece of the AI infrastructure puzzle with Spectrum-X.
    • IDC data shows the global Ethernet switch market reached $14.5 billion in Q2 2025, up 42.1% YoY, driven by data center demand.
    • With model parameters and training datasets growing exponentially, requirements for compute density, memory bandwidth, and network communication are intensifying.
    • Hyperscalers and cloud service providers are accelerating the buildout of AI-dedicated data centers with bandwidth of 800GbE and above, driving growth in the high-speed switch market.
    • Nvidia grew 647% YoY centered on data centers, while Arista rose 33.5%, with 90.7% of its revenue from data centers.
    • Cisco still held the top spot with $4 billion in revenue, but its data center growth was just 9.1%, with more than two-thirds of its sales coming from the slower-growing non–data center segment.
    • As legacy leaders lose ground at the gateway to the AI era, Nvidia’s new weapon, Spectrum-X, underscores its competitive edge.
    • Nvidia CFO Colette Kress announced plans to release new Spectrum-X chips and switches annually to support GPU clusters ranging from tens of thousands to millions.
    • InfiniBand still retains a performance edge thanks to ultra-low latency, native RDMA architecture, and in-network computing.
    • Ethernet, however, is preferred by many vendors for its lower cost and flexibility. Nvidia’s Ethernet platform continues to improve with technologies such as lossless networking, RDMA, and congestion control.
    • IDC forecasts that Ethernet and InfiniBand will continue to maintain distinct roles in the future.

$NVDA

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https://t.co/wxCUaCmOYJ


Arista rose 33.5%, with 90.7% of its revenue from data centers


Cisco still held the top spot with $4 billion in revenue, but its data center growth was just 9.1%, with more than two-thirds of its sales coming from the slower-growing non–data center segment


Summary: Bullish AMEC on durable ~44% gross margins; vouches for quality of the Chinese semicap name.

AMEC = Advanced Micro-Fabrication Equipment, Shanghai STAR Market

Even though it’s a Chinese company, AMEC is an extraordinarily high-margin business — with gross margins projected to stay in the 44% range. https://t.co/8nD2E5y66T

Goldman modeling on Chinese Semicap name AMEC - heavy growth in Etch https://t.co/MpWqwEPb2g


Summary: Bullish NVDA on strong B30 demand from Chinese internet majors; hundreds of thousands of units ordered.

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.

• Internet company B plans to increase its Q3 capital expenditure and intends to order 300,000 units of B30, with delivery scheduled for September.

• Internet company C's detailed information remains confidential.

The demand for B30 is significant.

$NVDA


Summary: Bullish Micron outlook; Samsung expected to underperform expectations.

@efekarhanli I think the outlook is good for Micron.

Samsung doesn’t seem like it will do as well as expected.


Samsung doesn't seem like it will do as well as expected


Apple's profit margins will decline due to tariffs... it appears they will raise prices by about $50 to defend profit margins

Summary: Bullish AAPL: tariff pressure forces ~$50 iPhone 17 price hike, defending margins despite rising BoM costs.

A Brief Note on iPhone 17 Series Price Increase

A few days ago, Jefferies analysts revealed in their note that the iPhone 17 series could see a $50 price increase.

Additionally, WSJ reported last May that Apple was considering raising prices for the iPhone 17 series.

Apple's iPhone price increase speculation has been one of the consistently raised issues. Since the iPhone 14 series.

However, it's now becoming a realistic necessity rather than mere speculation. As confirmed with the iPhone 16 series, Apple's profit margins decreased compared to the previous generation due to rising BoM costs.

Therefore, many industry analysts/stakeholders expected a price increase for the iPhone 16 series. Because Apple is not a company that tolerates profit margin decline. However, contrary to everyone's expectations, Apple did not raise prices.

But now, I think Apple really has no choice but to raise prices.

Because of tariffs.

As seen in the headlines that dominated the media a few days ago, the US now imports the largest share of iPhones from India.

And DJT imposed a 25% tariff on India.

Based on media reports and industry supply chain news, the iPhone 17's BoM is expected to actually decrease compared to the previous generation. This is the result of Apple's tremendous pressure on component suppliers for cost reduction.

This news isn't exactly a secret. That's why the stock performance of companies in Apple's value chain was quite poor in the first half of this year.

However, despite the decrease in iPhone 17 series BoM, Apple's profit margins will decline due to tariffs.

According to my modeling, the weak dollar effect can reduce tariff burden by 5%, and component cost reduction can alleviate tariff burden by about 7-10%.

Still, a 10% tariff remains burdensome for Apple. Therefore, it appears they will raise prices by about $50 to defend profit margins.

$AAPL


Summary: Endorses Morgan Stanley's finding that GB200 margins are huge; implied bullish on Nvidia.

The profit margin of the GB200 is tremendous. https://t.co/9nCOtTcDM6

Morgan Stanley: AI inference is an incredibly profitable business. In its newly released report, the firm used a detailed financial model to calculate, for the first time from an economic perspective, the profitability of global AI compute competition. The conclusion is that https://t.co/j8GpKzYYRD


Summary: JPM bullish on GDS: H20 resumption drives China AI data center rebound, DayOne IPO and C-REIT support valuation re-rating.

GDS Holdings: H20 Resumption Drives China AI Data Center Rebound, DayOne Shows Strong Growth

JPM (G. Hariharan, 25/07/16)

JPM states that Nvidia's resumption of H20 shipments to China significantly alleviates the AI server supply bottleneck in China, helping to drive an upward revision of GDS Holdings' China business outlook. Simultaneously, its international subsidiary DayOne continues its strong growth momentum, opening up room for valuation re-rating.

H20 Resumption Alleviates Chip Bottleneck, Drives China AI Inference Demand & Valuation Uplift

Nvidia's resumption of H20 shipments to China is expected to drive a rebound in domestic AI inference server demand. GDS Holdings stands to benefit from the initial build-out phase of inference compute power in tier-one cities and its collaborations with clients like Alibaba. JPM expects an upward revision of the FY26/27 China AI data center pipeline, noting GDS's lower exposure to training compute power.

DayOne International Business Expands Steadily, Large Social Media Clients Drive Mid-to-Long-Term Revenue Potential

DayOne, a subsidiary of GDS, has already signed up for over 500MW of client capacity and secured 1.2GW of underlying resources. It is expected to launch its IPO in the second half of 2026, at which point GDS will hold approximately a 30% stake. If valued at 20x FY27E EV/EBITDA, GDS could achieve significant value realization.

C-REIT Mechanism Aids Capital Recycling and Supports a New AI Capex Cycle

GDS raised capital through its C-REIT listing (oversubscribed by 166 times) and plans to continuously inject mature assets. This is expected to stabilize dividend payout ratios, expand the Free Cash Flow (FCF) pool, and support a new AI-driven capital expenditure cycle domestically, alleviating liquidity pressure before 2026.

Core Pricing Stabilizes with Upside Potential, Alibaba Capex Expected to Drive Revenue Growth from 2H25

After two years of消化, pricing in the China IDC market has largely stabilized. High-power density/low-PUE demand related to AI inference will enhance pricing power. Alibaba's Capex plans for the next three years are clear, and with chip availability, orders are expected to materialize, potentially marking a growth inflection point for GDS's core business.


Summary: TSMC in-house EUV pellicle development reduces ASML supply chain dependence and may delay High-NA EUV adoption — bearish for ASML.

TSMC Begins In-House EUV Pellicle Development, May Delay High-NA EUV Adoption…Negative for ASML

- TSMC’s 6-inch wafer fab (Fab 2) in Hsinchu Science Park will cease production on related lines.

- According to semiconductor equipment industry sources, the 6-inch fab will be converted into a panel-level packaging (CoPoS) facility, while the 8-inch fab will officially begin in-house EUV pellicle production, reducing reliance on ASML and other suppliers.

- This means TSMC can leverage its own R&D and manufacturing capabilities to significantly improve yields in EUV-based advanced processes, achieving minimum cost and maximum efficiency.

Currently, EUV equipment procurement costs are extremely high, prompting TSMC to delay High-NA EUV adoption while exploring alternatives to improve EUV process yields and cut costs.

- One such alternative is the EUV pellicle, which TSMC has been developing for years. Industry sources say Fab 3 in Hsinchu will soon begin full-scale in-house EUV pellicle production, reducing dependence on ASML’s supply chain and enabling TSMC to enhance EUV yields while building processes and products with lower costs and higher efficiency.

- With the advent of the EUV era, conventional organic pellicles have become unsuitable as they fail to meet both transmittance and stability requirements.

- Currently, most EUV processes use pellicle-free photomasks, which necessitates frequent pattern inspections.

- When defects are detected, masks must be repaired or remade, leading to higher production costs and slower throughput. For this reason, ASML and other semiconductor companies have been striving to develop EUV pellicles, but the high technical difficulty has so far prevented mass production.

- TSMC has determined that EUV pellicles are critically important for improving production efficiency and reducing costs in sub-7nm processes, and has recently decided to accelerate its in-house development plans.

$ASML

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https://t.co/LJa38NBtQT


Summary: Shares TrendForce bullish thesis: H20 export approval revives NVIDIA demand in China and drives HBM consumption higher.

▶ H20 Export Approval Reignites Demand Momentum, China’s Procurement Ratio for Foreign AI Chips Expected to Rise to 49%, Says TrendForce

- TrendForce expects that the US government's lifting of export restrictions on NVIDIA's H20 GPU to China will stimulate a recovery in demand from local Chinese AI companies and CSPs (Cloud Service Providers).

- The H20 is anticipated to once again establish itself as a primary high-performance AI chip in the market and is expected to contribute to an increase in HBM demand.

- Following the strengthening of US AI chip export regulations in April, the annual shipment forecast for the H20, which was developed specifically for the Chinese market, was drastically lowered.

- However, considering recent trends and the likelihood that NVIDIA will strive to meet its initial shipment targets, TrendForce has revised China's procurement ratio for foreign AI chips (primarily NVIDIA and AMD) upwards from the previously estimated 42% to 49%.

- While Chinese companies like Huawei are developing their own AI chips, their ecosystems are not yet mature enough to fully replace the advantages of NVIDIA's system integration, computational efficiency, and supply chain scale.

- The resumption of H20 shipments is expected to significantly restore potential demand for AI infrastructure construction, especially among major CSPs in China who have been prioritizing H20 for their domestic data center builds.

- Furthermore, NVIDIA plans to launch a custom version of the RTX PRO 6000 targeting the Chinese market to support a wider range of edge AI inference applications.

- H20 chips to be shipped in 2024 will primarily use HBM3 8hi, with an upgrade to HBM3e 8hi and an increase in total capacity expected in early 2025.

- As Chinese domestic ASIC manufacturers face HBM export restrictions, many of their products still rely on previously supplied HBM2e.

- Therefore, the H20 is expected to be preferred, increasing its proportion of overall HBM consumption.

- Additionally, with China's AI market still vulnerable to geopolitical uncertainties and persistent risks for NVIDIA, an aggressive inventory build is anticipated if H20 export restrictions are indeed lifted.

---

https://t.co/8ZPQYl48dY


H20 is anticipated to once again establish itself as a primary high-performance AI chip in the market and is expected to contribute to an increase in HBM demand

Global HBM sector basket: SK Hynix, Samsung, Micron


Summary: SK Hynix to capture ~70–100% of HBM4 volume in H1 2025; Micron lagging in HBM and likely retreating to commodity memory.

Summary:

- Rubin’s tape-out has been completed.

- The industry expects about 70% of Nvidia’s HBM4 volume to be allocated to SK hynix.

- In fact, SK hynix is likely to handle the entire HBM4 volume in the first half of next year.

- Samsung’s 1c DRAM yield remains at only around 60%.

- Considering that yields decline in the latter stages of processing, a stable mass production ramp requires reaching 80%.

- In Micron’s case, CS samples may be shipped at the same time as Samsung’s or may not be released at all within this year.

- Micron is somewhat lagging in HBM competitiveness, and there is a possibility it will expand into the commodity memory space within its limited capacity.

$NVDA $MU

Samsung Electronics, HBM4 ‘CS Sample’ Shipment in November… Yield Issues Remain a Drag

Samsung Electronics’ HBM4 12-high, developed based on 10nm-class 6th-generation (1c) DRAM, is expected to face difficulties securing Nvidia’s initial orders. The CS sample shipment schedule


Micron is somewhat lagging in HBM competitiveness, and there is a possibility it will expand into the commodity memory space within its limited capacity


Summary: Morgan Stanley: H20 export resumption boosts NVDA, AMD, AVGO revenue; TSMC 45% AI semi CAGR; Samsung reverses impairment loss; China AI capex RMB 380B on track.

China AI: H20 Export Resumption Sends Positive Signal to China-US AI Industrial Chain
Morgan Stanley (C. Chan, 2025/07/20)

Morgan Stanley stated that the US's proposed resumption of exports of medium-level AI chips (such as H20) to China is beneficial for China's AI infrastructure investment, US semiconductor companies, and the Asian supply chain, while also creating temporary pressure on domestic Chinese GPUs.

H20 Export Approval to Facilitate China's AI Capital Expenditure Realization
Morgan Stanley pointed out that if H20 chip shipments resume, China's CSPs' AI capital expenditure, which could reach RMB 380 billion in 2025, is expected to proceed as planned, and may even see upside. This further validates China's strategic path of promoting AI popularization and enhancing daily user experience through application and large model deployment.

US AI Semiconductor Companies to Benefit Significantly, NVDA Outlook Boosted
According to Nvidia's estimation of the AI accelerator market, China's AI accelerator expenditure is approximately $50 billion. Resuming shipments to China will provide revenue support for Nvidia, AMD, and Broadcom. Although the official export license is still pending and supply chain availability remains uncertain, this event has positive implications for the AI industry starting from 2026.

Asian Supply Chain to Benefit Simultaneously, TSMC and Samsung Show Strong Performance
TSMC stated that the resumption of H20 shipments is beneficial for the company. Morgan Stanley expects its AI semiconductor revenue to achieve a compound annual growth rate of 45% over the next five years. Samsung is also expected to reverse its previous KRW 1.5 trillion impairment loss due to this event. In addition, server ODM manufacturers such as Wistron, Foxconn Industrial Internet, and Lenovo are expected to benefit from China's CSPs' H20 server projects.

Domestic GPU Manufacturers Under Pressure, Self-Sufficiency Process to Continue
Morgan Stanley noted that this event may slow down the penetration rate of domestic GPUs, cautiously estimating the self-sufficiency rate of domestic GPUs to 39% by 2027, while emphasizing that China's will to promote AI chip self-sufficiency will not weaken amidst geopolitical risks.

China to Achieve Leadership and Accelerated Development in ToC AI Applications
China is expected to take the lead in ToC AI applications, benefiting from breakthroughs in AI-native applications, the integration capabilities of super apps, the open-source large model ecosystem, declining inference costs, and accelerated capital expenditures. Starting from H2 2024, AI-native applications have significantly improved user retention, product differentiation, and functional diversity, overcoming the challenges of early AI chatbots. At the same time, AI functionalities are gradually being integrated into super apps, leveraging user activity and proprietary data resources to enhance usage scenarios and penetration.

$NVDA


Resuming shipments to China will provide revenue support for Nvidia, AMD, and Broadcom.


TSMC stated that the resumption of H20 shipments is beneficial for the company. Morgan Stanley expects its AI semiconductor revenue to achieve a compound annual growth rate of 45% over the next five years.


Samsung is also expected to reverse its previous KRW 1.5 trillion impairment loss due to this event.


could not only offset cost pressures but also serve as a positive catalyst to break the 'post-event share price drop' jinx and drive Apple's stock higher into year-end

Summary: Shares Morgan Stanley view: iPhone 17 price hike could drive AAPL ASP +5% and push stock higher into year-end.

Morgan Stanley: First Moderate Price Hike in 7 Years? All Eyes on iPhone 17 Pricing Ahead of Next Week’s Apple Launch Event

• Morgan Stanley projects that Apple may implement its first “moderate price hike” in seven years by eliminating the 128GB entry-level configuration of the Pro model and launching a new ultra-thin model at a higher starting price. This move could drive iPhone average selling prices (ASP) up by +5%, well above the market consensus of +1%. If this strategy materializes, it could not only offset cost pressures but also serve as a positive catalyst to break the “post-event share price drop” jinx and drive Apple’s stock higher into year-end.

$AAPL

iPhone 17 Series Supply Chain Analysis

Source: Citi https://t.co/hQYhHTFAVT


Summary: Samsung HBM4 passing Nvidia testing is bearish for Micron; author flags MU down 5%.

[Exclusive] Samsung’s HBM4 Sample Sent to Nvidia ‘Passes’… Mass Production Imminent

Samsung Electronics’ 6th generation High Bandwidth Memory (HBM4), sent last month to Nvidia, the unrivaled No.1 in the AI semiconductor sector, has passed reliability testing and entered the https://t.co/15vEQCOVbA


Summary: JPM Asia Tech marketing review: long-term preference for SK Hynix, growing interest in Samsung on 1cnm yield; TSMC confirms AI demand; HBM supply tight; NAND price stabilization expected; high interest in Hanmi and Leeno.

Asia Tech Marketing Review (JPM)

• Recently held meetings with over 45 institutional investors during Hong Kong marketing.

• Overall interest was concentrated in the order of Memory > Holding Companies > EV Batteries & Materials = Hardware.

• Investor confidence in the trend of AI hardware spending has increased compared to three months ago.

• Confirmation of increased server build-up due to easing supply chain bottlenecks.

• Rising demand confidence as AI use cases and adoption increase, particularly in the U.S. market.

• TSMC's performance and outlook reconfirmed strong AI semiconductor demand.

• MSFT's CAPEX announcement on July 31st mentioned as a future market catalyst.

• In HBM4 price discussions, investors did not sympathize with the bearish view of making excessive price concessions to GPU customers.

• Emphasized that the HBM market supply-demand is tight, and logic die costs have significantly increased.

• Pointed out that HBM4 supplier certification is still ongoing, leading to high uncertainty.

• HBM4 premium expectations have fluctuated, but the market still anticipates a reasonable price premium.

1. Regarding SK Hynix

• Some investors are concerned that HBM4 margins are lower than HBM3E.

• They consider the risk of further margin decline depending on negotiation outcomes.

• Mentioned that technological leadership can maintain long-term competitiveness.

2. Regarding Samsung Electronics

• Interest in HBM4 certification and customer sample plans due to 1cnm DRAM technology improvements.

• Noted the possibility of certification results coming out by 1Q26.

• Maintained a cautious view due to past failures even after reaching the final certification stage.

3. Comparison of Samsung Electronics and SK Hynix Positions

• While SK Hynix has been preferred for the long term, recent improvements in Samsung Electronics' 1cnm yield have led to considerations for portfolio adjustment.

• Opinions were also raised regarding the possibility of SK Hynix's premium narrowing in the short term.

4. General Memory Prices

• Feedback that the rising trend in DDR4 prices is likely to be reflected in contract prices starting from 3Q25.

• Shared that PC DRAM prices have high volatility.

• NAND is expected to stabilize in price due to supply discipline and increased seasonal demand.

5. HBM Post-processing

• Concerns regarding Hanmi Semiconductor have eased; the opinion is to closely monitor the extension of TCB lifespan and the potential introduction of HCB.

6. Hardware and Components

• Interest in traditional hardware and consumer cycles was low.

• Relatively high interest in AI-centric supply chains (Hanmi Semiconductor, Leeno Industrial).


recent improvements in Samsung Electronics' 1cnm yield have led to considerations for portfolio adjustment


TSMC's performance and outlook reconfirmed strong AI semiconductor demand


HBM market supply-demand is tight, and logic die costs have significantly increased

HBM sector basket: SK Hynix, Samsung, Micron


Relatively high interest in AI-centric supply chains (Hanmi Semiconductor, Leeno Industrial)

Leeno Industrial 058610.KQ Korea KOSDAQ test sockets


NAND is expected to stabilize in price due to supply discipline and increased seasonal demand


Summary: TSMC's decision to exclude Chinese equipment from Taiwan fabs (to qualify for US subsidies) is a major blow to AMEC.

Interesting.

Nikkei reported that in order to receive U.S. subsidies, TSMC decided not to use Chinese equipment at its Taiwan fabs, rather than removing Chinese equipment from its U.S. fabs.

This will be a major blow to AMEC. https://t.co/OO9hpqRD4E

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https://t.co/Dh9jheYkpk


Summary: Relays Citi checks: Hynix dominant HBM4 share in 2026 (long); buyside turning cautious on MU into print given high EPS bar and HBM supply concerns.

Citi’s note on Samsung, SK Hynix, and Micron:

Samsung denied the press report and our checks (Peter & me) indicate there's no firm orders yet from NVDA. However Samsung up 5% on expectation for NVDA HBM entry. Looking back over the last 3 years, this is probably 10-11th of qualification false alarm but buyside continues to view HBM oversupply as a base case on the back of Samsung's entry simply because of huge new supply addition. Our checks confirms 1) NVDA pulling in Rubin schedule so asking for early shipment of HBM4 from Hynix and 2) Hynix preparing HBM4 mass production in 2 weeks and I reckon there could be potential announcement or event for successful HBM4 production given numerous noise from the market (mgmt is well aware of this) and confidence for dominant m/s in 2026 amid higher HBM4 spec. Also don't forget below local feedback on 28b GB Socamm orders for 2026E vs. CITI 25b / and iPhone probably total 16-18b.

MU buyside bar is high since a lot of you said MU Nov Q eps is close to 3.6-3.7 and they won't be able to talk about HBM sold out in 2026. I can sense that buyside turning more cautious (long Samsung vs. short MU, or long Semicap vs. short MU) into the print.


NVDA pulling in Rubin schedule so asking for early shipment of HBM4 from Hynix and 2) Hynix preparing HBM4 mass production in 2 weeks… confidence for dominant m/s in 2026 amid higher HBM4 spec


buyside turning more cautious (long Samsung vs. short MU, or long Semicap vs. short MU) into the print


Summary: Compilation of 2Q25 broker views on SK Hynix: JPM/Nomura/Citi/CLSA all Overweight (TPs ₩360-380K); Goldman downgrades to Neutral, cuts TP to ₩300K on 2026 HBM ASP/competition concerns.

SK Hynix 2Q25 Foreign Broker Comments (July 25, 2025)

(1) JPMorgan: Overweight / TP: ₩360,000 [Maintained]

■ We expect HBM negotiations in 2H25 to proceed smoothly, based on an estimated HBM4 price formation with a +35% premium over existing HBM.
■ While past capital expenditure expansions by memory companies were interpreted as a sign of oversupply, we believe the current market perceives 1) the increase in HBM-related CAPEX as a positive sign of expanding HBM revenue, and 2) furthermore, a positive indication that the HBM business model is transitioning to a ‘customized’ model.
■ We are relieved that the trend is expected to be better than pessimists' concerns of a double-digit (DD%) decline in HBM prices in 2026.
■ However, reflecting stronger price trends for supply-driven general DRAM and some assumption adjustments in the HBM market, we slightly lower our 2026 and 2027 EPS forecasts by -2% and -3% respectively, but maintain our target price at ₩360,000.
■ Management's comment that eSSD could be utilized as cache storage if AI inference demand increases in the next 2-3 years is still at a cautious expectation level.

(2) Goldman Sachs: Neutral / TP: ₩300,000 [Downgraded]

■ DRAM strength offsets NAND sluggishness. Higher-than-expected legacy shipments improved top-line.

■ HBM revenue is estimated at around $5.3bn. The HBM mix within DRAM appears to have slightly decreased from 46% last quarter to 43% this quarter.
■ HBM demand and performance are both solid, but they met market expectations. We maintain our outlook for a lack of guidance for 2026 ['26 full booking confirm X] and ASP decline due to intensifying competition.
■ We foresee HBM3E prices themselves declining significantly in 2026, even with an expected +40-50% premium price for HBM3E 12-hi. We expect OPM to fall from the 60-70% range to the 50-60% range in 2026.
■ We upgrade our 2025 EPS estimate by +2% but downgrade 2026 and 2027 EPS estimates by -2%. We lower our target price from ₩310,000 to ₩300,000.

(3) Nomura: Overweight / TP: ₩360,000 [Maintained]
■ The implications of this earnings report are: 1) HBM cost reduction is progressing faster than expected, 2) HBM profitability significantly exceeds market expectations, and 3) NAND inventory reduction is rapid, reducing future burden.

■ DRAM shipments exceeded expectations, attributed to tariff Pull-in Demand.

■ We forecast operating profit of ₩11 trillion for 3Q25(F) and maintain ₩40 trillion for the full year 2025 operating profit.
■ For 2026, we forecast revenue of ₩110 trillion and operating profit of ₩50 trillion vs. market consensus of ₩96 trillion and ₩41 trillion respectively.
■ HBM profitability in 2026 is expected to only slightly decrease compared to initial expectations, despite a 7% ASP decline, due to faster-than-expected cost reductions. HBM4 costs are +25% higher than HBM3E, but price increases are limited [+0-10%], suggesting some decline in profitability.
■ Samsung Electronics' HBM4 costs are expected to be +30% higher than SK Hynix, allowing SK Hynix to maintain an HBM operating profit margin of around 59% in 2026.

(4) Citi: Overweight / TP: ₩380,000 [Downgraded]
■ This earnings report is positive due to increased HBM3e 12-Hi sales and higher server/PC DRAM sales.
■ As 2026 HBM supply contracts are not yet finalized and due to intensifying competition in the HBM market, the 2026 HBM ASP growth rate is projected to be revised down from the previous expectation of +7% YoY to -6%.

■ Currently, HBM supply shortages persist, but fierce competition among suppliers is expected from 2026. The HBM market is projected to enter an oversupply state (HBM S/D ratio +3%) in 2026.

■ Accordingly, we lower our target price from ₩430,000 to ₩380,000.

(5) CLSA: Overweight / TP: ₩375,000 [Upgraded]
■ Despite significant demand pull-ins in the first half of the year, SK Hynix's customer inventories are low, and AI demand remains very strong, making a sharp decline in second-half demand unlikely.
■ Negotiations with HBM customers for 2026 supply are ongoing, but a certain level of demand visibility has already been secured, and CAPEX is accelerating to proactively address anticipated demand.
■ For HBM4, production costs have increased due to the integration of advanced features, so Hynix is negotiating ASPs with customers to maintain HBM profitability at current levels.

■ Accordingly, we raise our 2026 and 2027 operating profit estimates by +10% and +18% respectively, and upgrade our target price from ₩350,000 to ₩375,000.


Goldman Sachs: Neutral / TP: ₩300,000 [Downgraded]


Nomura: Overweight / TP: ₩360,000 [Maintained]


Citi: Overweight / TP: ₩380,000 [Downgraded]


CLSA: Overweight / TP: ₩375,000 [Upgraded]


Summary: Piper Sandler reaffirms bullish stance on TEAM and GTLB; AI will not hurt developer hiring, supports DevOps names.

Piper Sandler) AI: Foe or Friend to Developer Hiring?

As the adoption of AI coding tools proliferates across organizations, the debate around its long-term impact on developer headcount has become a paramount topic of conversation for investors. While the bearish view that AI will lead to developer job cuts in the future has gained traction in several feedback loops, we believe a more optimistic view is warranted for several reasons at this juncture. In this report, we review survey feedback, hiring data, and recent tax law changes to maintain our positive view on how AI will positively impact developer hiring, ultimately re-affirming our bullish stance on top picks TEAM and GTLB.

Background on the Bear Case. Code writing has become one of the most widely adopted use cases for Generative AI (GenAI). Large Language Models’ (LLMs) ability to rapidly generate code based on natural language input, or through autocomplete, has led to significant improvements in developer productivity within enterprises. This has naturally led to a debate around the ultimate impact on a developer’s job function, or if the job will even exist in the long-term. Conversations across our DevOps coverage have been focused on this risk for some time, with many investors hesitant to invest in potentially impacted names due to this long-term risk to the business model. While we believe in the power of AI, we do not believe it is a structural risk to these stocks and outline our four key reasons why below.

Four Reasons Why AI Will Not Be Detrimental to Developer Hiring

1. Coding Only Accounts for ~17% of a Typical Developer’s Day. While often thought of as a core part of a developer’s day, a MSFT survey of 6,000 developers indicated a typical day includes ~90 minutes of coding time. In our view, efficiency gains in the code writing process alone are not enough to fully displace a developer’s overall responsibilities.

2. CIOs Believe AI Can Accelerate Developer Hiring. Contrary to current conventional wisdom, our 2025 CIO survey data indicates that engineering/DevOps hiring could accelerate as a result of AI adoption, with this cohort representing the largest net beneficiary of any job function we surveyed.

3. Hiring Data Not Indicating AI Induced Pressure. Software developer employment growth slowed in 2024 after two years of strong growth, primarily due to slowing growth within software companies focused on profitability. With recent data indicating hiring in the sector is starting to pick up again, we do not see widespread evidence of AI induced developer cuts at this time.

4. Recent Tax Law Changes Make Developer Hiring More Tax Efficient. Passed earlier this month, the “One Big Beautiful Bill” (OBBB) reversed tax law changes related to domestic R&D expenditures. We believe the prior changes, originally changed for the 2022 tax year, contributed to the slowdown in developer hiring, which could be reversed as a result of the recently passed changes.


Summary: Long NVDA, AMD, AWS/Amazon, Microsoft, Google Cloud on sustained demand from rising token consumption despite falling unit inference costs.

AI Inference Costs (Token Pricing) and Their Investment/Industry Implications

AI Inference Costs (Token Pricing)

- Between 2022 and 2025, costs have been dropping by roughly 10x annually.

- The most advanced models (e.g., GPT-4o level) have seen nearly a 900x annual reduction.

- Less sophisticated models only saw about a 9x annual reduction.

Dual Cost Structure

- Training: Still extremely expensive → heavy burden on companies.

- Inference: Rapidly becoming cheaper → enabling broader enterprise adoption.

New Challenge: Token Usage Growth

- More advanced models (with stronger “reasoning/thinking” capabilities) consume more tokens.

- As a result, even if unit costs fall, total usage may drive overall costs higher.

Corporate Dilemma

- Absorb higher costs to maintain high-performance models.

- Cut costs by choosing cheaper, simpler models.

- Ultimately, companies face the hard decision of passing costs to customers vs absorbing them internally.

Investment & Industry Implications

1. Opportunities for AI Infrastructure Companies

- Falling token prices may drive wider adoption.

- Yet, increased token consumption → continued demand for data centers and GPUs.

- Long-term growth momentum for semiconductors (NVIDIA, AMD) and cloud infrastructure providers (AWS, Microsoft Azure, Google Cloud) remains strong.

2. Risks for SaaS Companies

SaaS firms embedding AI features face margin pressure.

Passing costs to customers risks price resistance, while absorbing them erodes profitability.

3. Shifts in Consumer Choice

- Some consumers may opt for low-cost, lightweight models over premium ones.

- This encourages market diversification and segmentation of AI models.


AWS is a division of Amazon AMZN; no separate listing


Summary: Shares Morgan Stanley DC deep-dive: bullish global DC/AI infrastructure, nuclear energy, and NVDA on 23% CAGR capacity growth and surging hyperscaler capex.

Global data center sector proxied by DTCR ETF

Global Data Center Deep Dive: AI Drives Soaring DC Investment, Energy & Approvals Become Key Expansion Barriers

Morgan Stanley (E. Kelly, 25/07/15)

Morgan Stanley states that the AI investment wave is driving a 23% compound annual growth rate in global data centers. However, factors such as energy supply, approval delays, and building material shortages pose bottlenecks to expansion. Nuclear power and the conversion of Bitcoin mining farms are emerging as important energy solutions, and related sectors and regional assets are expected to benefit significantly.

Energy Remains the Primary Constraint, But Approvals and Building Material Supply Are Also Increasingly Important

AlphaWise surveys indicate that energy will remain the top obstacle for DC expansion over the next two years, followed by planning permit acquisition, low-carbon building material supply, and cooling technologies. Operators are increasingly focused on data sovereignty and the ability to match green energy sources. DC construction costs are projected to increase by 11% annually over the next two years.

AI Drives High Growth in Global DC Construction, U.S. Remains Core, China and Middle East Accelerate Catch-Up

Global DC capacity is expected to grow by 23% annually until 2030, with the U.S. contributing over 60%, and projects like Stargate potentially adding 15GW. China's growth rate has increased to 16%, while Middle Eastern regions like the UAE and KSA are projected to grow 5 to 6 times. Europe, due to difficulties in obtaining approvals and green energy, is expected to lag but still holds potential.

Nuclear Power, Natural Gas, and Bitcoin Mining Farm Conversions Key to Future Energy Supply

As AI drives a multiple increase in energy consumption, nuclear power is becoming a focal point for energy supply. The U.S. has eased nuclear energy approval processes, with Three Mile Island restarting to power Microsoft, and Meta signing a 1.1GW nuclear power purchase agreement. New supercomputing centers in France also rely on the country's nuclear energy advantage.

AI Wave Drives Hyperscale Capital Expenditures, Some Companies Adjust Guidance Upward

Morgan Stanley expects capital expenditures by the four major cloud providers to grow by 43% year-over-year in 2025. Meta has raised its full-year Capex guidance to $64-72 billion, and Nvidia also noted continuous upward revisions in GB200 orders, with AI training and inference demand exceeding expectations. Billions of dollars in AI investments are continually being added in the Middle East.

Cross-Industry Beneficiaries Emerge, Multiple Regions and Sectors Poised for Structural Tailwinds

Morgan Stanley, through its global DC stock screening model, has identified relevant beneficiaries in 8 regions and 8 sectors, including real estate, infrastructure, industrial goods, utilities, energy, technology, and telecommunications. These will benefit from the long-term prosperity of DC investment and AI computing infrastructure construction.


Nuclear power and the conversion of Bitcoin mining farms are emerging as important energy solutions, and related sectors and regional assets are expected to benefit significantly

US nuclear power sector proxied by NLR ETF


Nvidia also noted continuous upward revisions in GB200 orders, with AI training and inference demand exceeding expectations


Summary: Morgan Stanley (adopted): NVDA top pick, ALAB and MRVL upside potential on AI supply chain strength; hyperscaler Blackwell demand drives 2026 capex growth.

North American Quarterly Earnings Outlook: AI Momentum Remains Strong, But Inventory and Durability Spark Debate

Morgan Stanley (J. Moore, 25/07/14)

Morgan Stanley believes that AI supply and demand remain strong, but other sectors are affected by inventory replenishment and trade uncertainty. Some company managements are adopting a more conservative stance, and while market sentiment is strengthening, it still shows skepticism.

AI Remains Core Growth Driver, NVDA, ALAB, MRVL Expected to Show Strong Performance

Morgan Stanley emphasizes that AI investment remains the primary driving factor, optimistic about the performance across the entire chain from processors to networking, storage, and memory. NVDA is the top pick, while ALAB and MRVL have upside potential, especially ALAB, which maintains strong fundamentals amidst weak market sentiment. Hyperscale cloud service providers are expected to continue revising up their Blackwell procurement plans, driving sustained expenditure growth in 2026.

Partial Inventory Replenishment Driven by Tariffs, Durability Remains Major Market Debate Point

Recent inventory growth is partly in response to tariff uncertainties. After inventory destocking in 1Q, 2Q/3Q entered a replenishment phase. Although demand is not strong, customers need to maintain higher buffer inventories. In contrast, conservative statements from management have led to stock price pressure; Morgan Stanley tends to favor more conservative players as more noteworthy.

2026 May Face Mismatch Between Chip Shipments and Server Sales

Some Asian companies anticipate that 2026 might experience a phase where "chip shipments lead server installations," fueling skepticism about the market's short-term strength but long-term sustainability. Despite this, Morgan Stanley believes that strong demand for non-server forms and accelerated rack shipments will alleviate this pressure, maintaining an optimistic stance.

Analog Chips and Consumer Electronics Show Signs of Recovery, But Sustainability of Inventory Replenishment Unclear

Analog chip companies like ADI and NXPI are expected to show recovery, but there is debate in the market about the durability of their recovery. The PC and smartphone supply chains are also in an inventory replenishment period, but PCs are already showing signs of slowing down. Smartphones have not yet seen clear destocking signals, but investors are generally cautious about this sector.

Overall Outlook Positive But Uncertainties Remain

Morgan Stanley believes that this quarter's earnings reports will generally be positive, with AI remaining the strongest theme. It also favors representative companies in the analog and storage sectors. However, confidence in the outlook still diverges across different sectors, emphasizing that investors should adopt a more cautious attitude toward the recent strong market rally.


ALAB and MRVL have upside potential, especially ALAB, which maintains strong fundamentals amidst weak market sentiment


SK Hynix's HBM competitiveness is expected to continue into 2026 due to its technological leadership and competitors' delays. We expect SK Hynix to maintain over 60% HBM4 market share in FY26.

Summary: JPM bullish SK Hynix: >60% HBM4 share in FY26, HBM4 price premium +35% at median, DRAM ASP +2% QoQ — author adopts the stance by sharing the note.

JPM Tech Sales: SK Hynix 2Q25 Earnings Preview

2Q25 Earnings Estimates

Operating Profit (OP): JP Morgan estimates KRW 9 trillion.

Current sell-side consensus is around KRW 9.2-9.3 trillion, and the results are expected to converge within this range.
2Q JPMe Gross Margin (GM): 57%

3Q25 Guidance Estimates

3Q DRAM Bit Growth, Average Selling Price (ASP), HBM Proportion:

JP Morgan anticipates DRAM bit growth of +8% QoQ and +25% YoY.

DRAM ASP is projected to increase by +2% QoQ and +12% YoY.
HBM revenue proportion is forecasted to be 44%.

2025 Annual Capital Expenditure (CAPEX) Estimates

CAPEX: JP Morgan estimates 2025 CAPEX at KRW 21.284 trillion.

SK Hynix is expected to begin operation of the M15X fab in 4Q, with a possibility of an earlier schedule. Consequently, sell-side and street (market consensus) expect CAPEX to exceed KRW 23 trillion, and the company's guidance is likely to be around this level.

Yongin Cluster will commence full-scale operation in 2H 2027. Even if the schedule is accelerated, CAPEX reflection will begin from 2H 2026.

HBM3E / HBM4 Contract Price Outlook
Price Forecast:

The most bearish market scenario suggests a -30% price decline for HBM3E 12Hi and a +20% premium for HBM4 relative to HBM3E.

However, we believe there is upside risk. Our analyst's model projects an HBM4 premium of +35% at the median, with HBM3E price decline of <10%.

Current consensus estimates an HBM4 premium of 20-30% and an HBM3E 12Hi price decline of 10-20%.

Note: SK Hynix is currently in price negotiations, and as this is a sensitive matter, it is highly probable that specific prices will not be disclosed. Therefore, the 2Q earnings themselves are unlikely to be a catalyst; rather, the results of the price negotiations with Nvidia (NVDA) expected at the end of 3Q will be the key event.

2026 HBM Market Share and Product Mix Outlook

HBM Product Mix and Market Share:
SK Hynix's HBM competitiveness is expected to continue into 2026 due to its technological leadership and competitors' delays. In particular, the proportion of HBM4 is expected to increase.

NVDA needs to make FY26 volume procurement decisions by the end of 3Q to match Rubin product yields. We expect SK Hynix to maintain over 60% HBM4 market share in FY26.


Citigroup recently projected Micron's fiscal 2026 revenue at $56 billion... This represents a 48% increase from the company's estimated fiscal 2025 revenue

Summary: Shares Citi's bullish Micron thesis: 48% revenue growth to $56B in FY2026 driven by HBM/AI demand and data center tailwinds.

Citigroup: “Micron to See 48% Revenue Growth Next Year”… Chasing SK

Micron is expected to see a sharp jump in revenue for fiscal 2026 (September 2025–August 2026). With demand for AI memory—particularly high-bandwidth memory (HBM)—surging, the company is forecast to be one of the major beneficiaries.

Citigroup recently projected Micron’s fiscal 2026 revenue at $56 billion (approx. ₩78 trillion). This represents a 48% increase from the company’s estimated fiscal 2025 revenue of $37.7–37.9 billion (approx. ₩53 trillion).

Christopher Danely, an analyst at Citigroup, said: “Micron’s Q4 earnings will be in line with market expectations, but its revenue guidance will far exceed forecasts thanks to rising DRAM/NAND sales and prices. Data center demand and expanding AI investments will translate into significant revenue growth for Micron.”

Citigroup also highlighted that data center demand accounts for 55% of Micron’s revenue, noting that growing investment by cloud service providers (CSPs) will act as a tailwind.

Next year, Micron’s advanced packaging plant in Singapore is set to begin operations, expanding its HBM production capacity. The following year, advanced DRAM production will also begin at its Idaho fab in the U.S.

Importantly, Micron is expected to post around 50% revenue growth for two consecutive years, far outpacing the HBM market growth rate of 33%. This has raised concerns that Micron could emerge as a serious threat to current market leader SK Hynix.

According to market research firm Yole, the HBM market is projected to grow from $17 billion in 2024 to $98 billion in 2030, representing a CAGR of 33%. This year, the market size is estimated at around $34 billion.

Meanwhile, Micron is scheduled to announce its Q4 FY2025 earnings on September 23 (local time).

$MU

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https://t.co/qFm5DFi17Q


That's also why I'm extremely bullish on BESI.

Summary: Extremely bullish BESI as dominant hybrid bonder paired with AMAT's CMP monopoly; both set to lead if hybrid bonding enters HBM.

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 be?

First, let’s look at CMP equipment.

CMP is a technology used to planarize surfaces in both front-end and back-end semiconductor processes, and in hybrid bonding it’s performed right before two chips are mated.

Originally, CMP wasn’t needed for TC bonding.

That’s because TC bonding uses bumps as an intermediary to join semiconductor chips, and the spaces between bumps are filled with a compliant molding material, so flatness requirements aren’t stringent.

Hybrid bonding is different. Because chips are directly joined without separate bumps, surface planarity basically dictates bonding yield.

The problem is that AMAT literally has a 100% monopoly on CMP equipment for hybrid bonding.

AMAT also holds a 60% share of the overall CMP market, and in hybrid-bonding CMP, AMAT is, quite literally, the god.

In April this year, Applied acquired a 9% stake in the Netherlands’ Besi, becoming its largest shareholder. The two companies had already been collaborating in hybrid bonding, and the equity investment made their relationship even tighter.

Even now, in the advanced packaging market for logic, the “Applied (CMP) + Besi (hybrid bonder)” alliance has tremendous influence.

Industry insiders unanimously say that if hybrid bonding technology is introduced into the HBM (high-bandwidth memory) industry, the pair is likewise highly likely to dominate the market.

Just as Japan’s Lasertec mask inspection tools are bundled alongside ASML’s EUV lithography systems, the two companies’ equipment could be supplied in tandem.

(That’s also why I’m extremely bullish on BESI.)

It’s reasonable to interpret LG’s decision to pursue CMP development in parallel from the outset—while kicking off hybrid bonder development—as a response to this market structure.

There are alternatives in the CMP equipment market—Japan’s Ebara and Korea’s KC Tech—but neither has any track record of supplying CMP for hybrid bonding.

Since AMAT has no reason at all to cooperate with LG, LG has no choice but to develop it in-house.

I think any company developing a hybrid bonder will ultimately have to find a solution for CMP equipment one way or another—either by developing it internally or by forming a partnership.


the 'Applied (CMP) + Besi (hybrid bonder)' alliance has tremendous influence... highly likely to dominate the market


UBS expects results to meet guidance with a small upside... 3Q25 guidance may exceed market expectations

Summary: Shares UBS Neutral on INTC with short-term upside bias into Q2 earnings; 3Q25 guidance may beat on server/PC pull-ins despite structural foundry headwinds.

Intel Outlook: Fundamentals Under Pressure, Strategic Adjustment Focuses on Product Business

UBS (T. Arcuri, 25/07/13)

UBS points out that while INTC may slightly exceed expectations in the short term, its fundamental and strategic uncertainties remain significant, maintaining a "Neutral" stance.

Short-Term Upside Bias, But Fundamentals Still Face Structural Challenges

INTC is set to release its earnings after market close on July 24. UBS expects results to meet guidance with a small upside. While 2Q25 originally assumed tariff-induced demand destruction, actual pull-ins were evident, especially in server and PC segments, suggesting 3Q25 guidance may exceed market expectations. More importantly, a significant strategic shift at the company level may be underway.

Potential Foundry Strategy Adjustment, Shifting to Product-Focused Model and Capex Cuts

Media reports indicate that INTC may abandon external foundry services for its 18A/18AP processes, instead focusing on the 14A process, signaling a potential pivot from the foundry business to an in-house product-centric route. UBS believes this move might be strategically more reasonable but challenging to execute. The company is expected to announce significant capex reductions (possibly up to $5 billion) either this quarter or when communicating its 2026 capital expenditure guidance later this year, aiming to alleviate its current net debt pressure of up to $30 billion.

Valuation Adjustment But Maintain Neutral Rating

Despite short-term earnings and order support, the delay in foundry profitability timeline beyond 2027, coupled with increased difficulties in managing capital expenditure and deleveraging, keeps UBS cautious on INTC's fundamentals. Nevertheless, based on a valuation cycle update, UBS maintains a neutral stance.

$INTC


Nvidia is expected to be the biggest beneficiary of this investment boom… Nvidia will capture the majority of those orders, further solidifying its dominant position in the AI chip market

Summary: Long NVDA: OBBBA tax changes boost Big Tech free cash flow, accelerating AI capex with Nvidia as the dominant chip beneficiary capturing ~80% share through 2030.

Nvidia: The Biggest Beneficiary of OBBBA?

Nvidia, which became the world's first company to surpass a $4 trillion market capitalization earlier this month, could see an unexpected boost from the One Big Beautiful Bill Act (OBBBA), recently signed by President Trump.

According to reports, the 'Great America Bill,' signed earlier this month, allows companies to immediately expense capital investments instead of depreciating them over several years. This tax policy change could induce tech giants to significantly increase their spending on Nvidia chips and other AI infrastructure.

Morgan Stanley predicts that the bill and related depreciation policy changes will increase the combined free cash flow of Amazon, Alphabet, and Meta by nearly $49.5 billion in 2025 and about $29.2 billion in 2026. Analysts expect these tech giants to invest the saved funds into infrastructure to meet the surging demand for artificial intelligence and cloud computing.

Less than a month after the bill's passage, signs of accelerating AI investment are already emerging. Alphabet last week raised its full-year capital expenditure forecast by $10 billion (about 13%), citing the need for increased AI investment to meet rapidly growing demand. As the undisputed leader in the AI chip market, Nvidia is expected to be the biggest beneficiary of this investment boom.

Tax Reform Benefits Unleash Big Tech's Cash Flow

The tax changes from the 'Great America Bill,' signed by President Trump on July 4, could become a significant catalyst for tech giants to increase spending on Nvidia chips and other AI infrastructure. Brian Nowak, an analyst at Morgan Stanley, stated in a recent report:

"We believe these tax incentives may be intended to encourage/enable leading U.S. tech companies to invest more aggressively in the field of generative AI to ensure the U.S. maintains its leading position in the global generative AI competition."

Analysts point out that the impact of this change will be significant. The ability to immediately write off AI investments not only incentivizes tech giants to increase investment to enhance computing power but also helps them save on tax costs.

Morgan Stanley analyst Joseph Moore viewed this as a sign that "GPU demand has not yet peaked in 2025."

Meanwhile, according to previous reports, Microsoft's total capital expenditure for the fourth quarter of its 2025 fiscal year reached a record high of $24.2 billion for a single quarter.

Meta also raised the lower end of its 2025 capital expenditure forecast from $64 billion to $66 billion.

Analysts expect this pattern of AI spending growth to be replicated among other tech giants. Being able to fully deduct AI investment costs in the year of investment provides a stronger incentive for companies, allowing them to achieve the dual benefits of increasing computing power and saving on taxes.

Driven by the new tax policy, tech giants will use their increased free cash flow to continue expanding the scale of data center construction, thereby alleviating the current supply shortage for AI services.

Nvidia's Market Dominance Expected to Solidify

As the biggest beneficiary of the AI investment boom, Nvidia has seen its quarterly revenue grow more than fourfold over the past two years, reaching a record $44 billion in the first quarter of the current fiscal year.

Nvidia chips are one of the largest expenditure items for tech giants building data centers, and the company's share in the fast-growing market is expected to expand further.

Bank of America (BoA) predicts that AI accelerators will account for over 65% of all data center spending by 2030, up from about 38% in 2024. During this period, Nvidia is expected to maintain a market share of about 80%.

This means that as the cash flow unleashed by 'OBBBA' drives tech giants to increase AI investment, Nvidia will capture the majority of those orders, further solidifying its dominant position in the AI chip market.


Summary: Shares/endorses Morgan Stanley Overweight on AMZN, PT $300, on macro improvement, AWS acceleration, and Anthropic contribution.

Amazon: Macro Improvement and Accelerated AWS Growth Drive Upward Revision in Earnings Forecast
Morgan Stanley (B. Nowak, 25/07/10)

Morgan Stanley raised Amazon's 2026/2027 EPS forecasts to $8/$9 and increased its price target to $300, maintaining an "Overweight" rating, based on an improving macro environment and a more positive outlook for AWS growth. Macro Improvement Drives 2026/2027 EPS Revisions to $8/$9.

Benefiting from easing US-China trade tensions, Morgan Stanley has revised upwards its EPS expectations, which were previously lowered due to a 145% tariff scenario. It now expects 2026 EPS to be $8, consistent with early 2025 forecasts, and 2027 EPS to be $9, representing increases of 9% and 6% respectively. Macroeconomic recovery, improved advertising prospects, and a rebound in e-commerce business margins are the main drivers.

Anthropic's Contribution Fuels AWS Acceleration.
Based on the latest reports and modeling, Morgan Stanley predicts that Anthropic's annualized contribution to AWS revenue will rise from the current approximately 60 basis points to over 150 basis points in 2026/2027. Anthropic's revenue is projected to reach $10 billion and $19 billion in 2026 and 2027, respectively, becoming a significant engine for AWS's mid-term accelerated growth. Non-Anthropic Business Performance Remains Robust, AWS Fundamentals Resilient.
Even excluding Anthropic's contribution, AWS has maintained 16% to 19% year-over-year growth over the past five quarters, demonstrating the high resilience of its business fundamentals. With improved GPU supply, GenAI and non-GenAI workloads are expected to accelerate deployment from 2H25, adding further momentum to overall growth. Azure Comparison and CIO Survey Indicate AWS's Potential for Tactical Market Share Expansion.

Microsoft Azure's experience suggests that initial investments in non-GenAI workloads can drive subsequent GenAI acceleration, a path AWS may replicate. Furthermore, the latest quarterly CIO survey indicates that AWS is tactically projected to surpass MSFT, GOOGL, and ORCL in IT budgets, achieving further market share gains.


despite the noise around Micron's HBM4, I believe one should actually take a long position on the company

Summary: Long MU: even if HBM4 misses NVIDIA qualification, strong ASIC/CSP HBM demand, soaring commodity memory prices, and diversifying customer base make shorting extremely risky.

Recently, after I covered some negative aspects about Micron, I received inquiries from several hedge funds and research firms.

They asked me whether they should short Micron.

Meanwhile, some passionate Micron fanboys began labeling me as a Micron short-seller.

But in fact, despite the noise around Micron’s HBM4, I believe one should actually take a long position on the company.

Let me explain why by quoting the perspective of Mr. Peter Lee, Managing Director at Citigroup, whom I personally respect.

Last year, NVIDIA accounted for 80% of total HBM demand, this year it will be 70%, by 2026 it will fall to 60%, and by 2027 to 50%. In other words, ASICs will take up an increasingly larger share.

That’s why, even if Micron fails to qualify its HBM4 at NVIDIA, I don’t think the financial impact will be nearly as severe as what Samsung faced in the past.

When Samsung failed its HBM3E qualification last year and this year, commodity memory prices were also weak, and HBM demand from ASIC players (whose qualification standards are far looser than NVIDIA’s) was not very strong either. Today, however, the situation is the complete opposite. Demand for HBM from CSP-targeted ASICs is extremely strong, and commodity memory prices are soaring.

This is why Micron’s stock has remained resilient despite rumors about its HBM4 performance.

Furthermore, the HBM market going forward will become increasingly segmented—on one end, ultra-high-performance, high-priced products for NVIDIA-like customers, and on the other, lower-priced, lower-performance products. The rise of custom HBM will accelerate this segmentation trend even further.

Finally, the fact that NVIDIA’s share of HBM demand is steadily declining means that suppliers will gain more bargaining power in HBM pricing.

In other words, even if you can’t sell to NVIDIA, there are plenty of other customers to sell HBM to.

That’s why I think shorting Micron is extremely risky.

$MU


Summary: Shares UBS note: raises INTC PT $25→$35 on NVIDIA partnership/SOTP; KLAC benefits from improved CapEx outlook; AMD faces medium-to-long-term competitive pressure.

Intel: NVIDIA and Intel Reach $5 Billion Investment Partnership, Potentially Driving Intel Foundry Spin-Off and Long-Term Valuation Re-Rating

UBS (T. Arcuri, 250918)

UBS stated that NVIDIA announced a $5 billion joint investment with Intel to develop AI infrastructure and PC products. This follows the U.S. government’s conversion of CHIPS Act commitments into an equity stake in Intel.

Investment Background and Comparisons

UBS pointed out that this partnership extends the logic of government injections being followed by customer investments. Intel’s manufacturing roadmap focus has already shifted from 18A to the 14A process node, which is expected to go into mass production in 2029. Similar to how Intel, Samsung, and TSMC once invested in ASML to accelerate EUV adoption, this investment increases the likelihood that the market will evaluate Intel using a sum-of-the-parts (SOTP) approach, with a reasonable valuation range of $35–$40 per share.

Dual Significance: Products and Foundry

UBS believes this investment is more significant for Intel’s foundry business, though it also carries potential implications for Intel’s product side. While NVIDIA remains committed to the Grace CPU roadmap, it may in the future launch Rubin or Rubin Ultra systems with x86 CPUs, which would be a mild positive for Intel’s product business. More importantly, the funding will allow Intel to continue investing in the 14A node and may pave the way for a split between its foundry and product businesses.

Industry Chain Impacts and Competitive Landscape

UBS emphasized that this move first benefits semiconductor equipment makers, especially KLA (KLAC), given the improved long-term CapEx outlook for Intel. However, it will not significantly alter the short-term expectation of lower CapEx in 2026. The market may interpret this as a negative for AMD, but UBS views the impact as more medium-to-long term. If Intel does spin off businesses and opens up to TSMC capacity, it could put competitive pressure on AMD, though this would take 3–4 years to materialize.

Valuation and Target Price

Based on SOTP analysis of Intel’s five business segments (Intel Products, Intel Foundry, Altera, Mobileye, and Others), UBS applied differentiated valuation methods and ultimately raised its price target from $25 to $35.

$INTC


this move first benefits semiconductor equipment makers, especially KLA (KLAC), given the improved long-term CapEx outlook for Intel


The market may interpret this as a negative for AMD


Summary: UBS: H20 shipment resumption drives NVDA estimates up; SK Hynix and Micron preferred in HBM; Samsung's near-term benefit limited.

Nvidia: Resumption of Shipments to China Drives Model Revisions Upward, H20 Inventory Release to Boost Gross Margins

UBS (N. Gaudois, T. Arcuri, 25/07/15)

UBS stated that the U.S. government is expected to approve Nvidia's resumption of H20 and RTX PRO GPU shipments to China. This development is anticipated to provide upside for Nvidia's revenue and gross margins, especially given the H20 inventory has already been impaired.

Resumption of Shipments to China Leads to Upward Revision of Revenue and Profit Models; H20 Impaired Inventory Becomes Source of Short-Term Gross Margin Flexibility

UBS's model previously assumed that products like H20 would resume shipments in Q3, contributing approximately $2 billion to $3 billion in quarterly revenue, significantly lower than the pre-ban peak of $7 billion to $8 billion, though that peak was influenced by pull-ins. If H20, due to its prior impairment, is resold, it will bring upside to recent gross margins.

H20 Accounts for 13% of GPU Shipments but Has Limited Impact on HBM, Approximately 5% of HBM Bit Demand

Prior to the ban, H20 GPUs accounted for about 13% of Nvidia's GPU shipments. However, because they are configured with only 96GB of HBM, their overall share of HBM bit demand is only about 5%. UBS believes that if shipments resume, the Chinese market might see an initial H20 inventory replenishment rush due to a shortage of alternatives, despite ongoing efforts for domestic substitution.

Differentiated Impact on HBM Manufacturers; Samsung's Short-Term Benefit Limited, SK Hynix and Micron Remain Preferred

Samsung had previously recorded an impairment of approximately 1.3 trillion Korean Won related to HBM in 2Q25, partly due to H20 and AMD MI308 products. While the resumption of H20 shipments might partially reverse this impairment, Samsung's packaging business among Chinese AI customers and the adoption of HBM3E 8-Hi are still restricted. UBS considers SK Hynix to have a leadership advantage in the HBM sector, while Micron is expected to continue increasing its market share.


UBS considers SK Hynix to have a leadership advantage in the HBM sector


Micron is expected to continue increasing its market share


Summary: DRAM supercycle underway with record-low inventories; Samsung named biggest beneficiary, Hynix and Micron also positioned to gain from supply constraints and surging prices.

DRAM Supercycle Returns After 7 Years

DRAM semiconductor inventories have fallen to record lows and prices are soaring, signaling the full onset of a “semiconductor supercycle” after seven years.

According to market research firm TrendForce on the 29th, as of the end of the third quarter the average inventory of global DRAM manufacturers stood at 3.3 weeks, the lowest level ever recorded. Even compared with the 2018 semiconductor supercycle, when inventories averaged 3 to 4 weeks, this is a lower level. SK Hynix (000660) and Micron reportedly hold only two weeks of inventory each, while Samsung Electronics (005930) has six weeks. Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association, pointed out, “The average inventory level of DRAM memory is about eight weeks. Two weeks is an emergency situation, and competition among buyers to secure supply will intensify.”

In reality, the rapid growth of the artificial intelligence (AI) market has driven up demand for high-bandwidth memory (HBM), which is essential for AI accelerators. As semiconductor companies converted existing DRAM production lines to HBM, output of general-purpose DRAM fell sharply. On top of this, the server replacement cycle in data centers coincided, further boosting demand for standard DRAM.

The shortage of supply has led to surging prices. On this day, TrendForce reported that the price of the standard PC DRAM product “DDR4 8Gb” hit $6.3, setting a new annual high. The latest standard “DDR5 16Gb” was priced at $7.5, which, depending on the institution, represents an increase of nearly twofold. NAND memory prices have also been rising daily, and Samsung Electronics and SK Hynix are reportedly planning additional price hikes for both DRAM and NAND.

The semiconductor boom is expected to continue for the time being. Since Samsung Electronics, SK Hynix, and Micron are all focusing on HBM4, which will be mounted on NVIDIA’s next-generation AI accelerator Rubin, general-purpose memory production will inevitably remain constrained. An industry insider said, “At present, there are no plans to expand general-purpose memory production lines.”

Samsung Electronics is cited as the biggest beneficiary of this supercycle. Based on its industry-leading memory semiconductor production capacity, it is predicted to benefit the most from rising legacy memory prices. Samsung Electronics’ operating profit forecast for the third quarter is on average in the 9 trillion won range, but some securities firms suggest it could exceed 10 trillion won.

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https://t.co/FZXiMrReNi


SK Hynix (000660) and Micron reportedly hold only two weeks of inventory each