Morgan Stanley believes these concerns have been overly magnified, and the opportunity in Ethernet-based AI will be strongly validated in the second half... Base-case Valuation Suggests Market Expectations Can Be Surpassed

Summary: Shares Morgan Stanley Buy thesis on ANET: 2H backend AI networking revenue catalyst, conservative $2.25B estimate surpasses consensus, architectural debate overblown.

Arista Networks: Architectural Debate Unresolved, 2H AI Networking Revenue Will Act as a Stock Catalyst
Morgan Stanley (M. Marshall, 25/06/09)

Despite intense discussions in the first half regarding the adaptability of backend AI network architectures, Morgan Stanley believes these concerns have been overly magnified, and the opportunity in Ethernet-based AI will be strongly validated in the second half.

• 2H Backend Networking Revenue Is a Key Catalyst
Morgan Stanley expects the “Demystifying AI” technology briefing on June 12 to mainly focus on architectural details with limited stock impact; the true catalyst is the actual backend network revenue performance in the second half, driven by increased Blackwell deployment. If growth exceeds expectations, sentiment could quickly shift towards a bullish scenario.

• Base-case Valuation Suggests Market Expectations Can Be Surpassed
Under conservative assumptions, Morgan Stanley estimates that in 2025, Arista’s frontend, backend, and campus networking businesses will each generate approximately $750 million, totaling $2.25 billion. This maps to approximately $3 EPS in 2026, surpassing market EPS forecasts for 2025/2026, reflecting the feasibility of outperformance.

• Architectural Debate Has Been Overemphasized
Morgan Stanley argues the market’s skepticism about Arista’s backend networking share ignores the sustained growth and architectural advantages of its frontend business. Even if backend share is only half that of frontend, Arista could still meet or slightly exceed market revenue and earnings expectations. Thus, short-term concerns around technological adaptability are not decisive.

• Risks and Considerations
Morgan Stanley cautions that an unexpected slowdown in cloud capital expenditures could disrupt revenue momentum. Investors should closely monitor market feedback following the AI briefing and the realization of backend revenue in the second half, to assess whether to further increase positions or guard against cyclical risks.

$ANET


Summary: Citi views ANET weakness as a buying opportunity; Ethernet AI backend TAM expanding and ANET doubled market share through FY2024.

structural marker; pre-classified as canonical yfinance ticker

Citi) Arista Networks (ANET.N) – Weakness Presents a Buying Opportunity; Ethernet TAM Expanding

In its Q1 earnings report last night, NVIDIA (NVDA) revealed that its Spectrum-X revenue has reached an annualized run rate of $8 billion and that it has added Google Cloud and Meta as new Spectrum-X cloud customers. These two announcements have raised concerns that Arista and other players may be losing share in the Ethernet-based AI backend switch market.

However, we continue to believe that the total addressable market (TAM) for Ethernet AI backend switching is rapidly expanding, and we have noted that Arista Networks (ANET) has doubled its market share through FY2024. While switching likely accounts for a relatively small portion of the overall Spectrum-X revenue (with Dell’Oro estimating it to be less than 30%), we view NVIDIA’s Ethernet switch revenue as benefiting from the same TAM expansion that is also driving growth for Arista and others.

Lastly, we believe that hyperscalers continue to pursue diversification in networking. Google appears to be moving away from a single-vendor strategy, and Meta seems to be taking a diversified approach to AI networking, including InfiniBand.


Trump allegedly opened a backdoor for NVIDIA to sell a new downgraded AI chip called the 'B30' to China. Major Chinese tech giants like ByteDance, Alibaba, and Tencent have already placed orders.

Summary: Shares bullish report: NVIDIA's B30 chip gains China orders; Gigabyte is the primary beneficiary with guidance raise and May revenue +100% YoY.

Trump allegedly opened a backdoor for NVIDIA to sell a new downgraded AI chip called the ‘B30’ to China. Major Chinese tech giants like ByteDance, Alibaba, and Tencent have already placed orders. The B30 chip is based on the latest Blackwell architecture but deliberately avoids using high-bandwidth memory (HBM) and TSMC’s (2330) advanced packaging technology.

The bulk of the B30 orders reportedly went to Gigabyte (2376), which is expected to raise its financial guidance during its upcoming earnings call. Gigabyte’s May revenue is said to have more than doubled year-on-year.

轉
川普給輝達走後門，開放新款降規版AI晶片「B30」，已經先拿到中國科技巨頭如字節跳動、阿里巴巴與騰訊的買單，B30晶片採用最新一代Blackwell架構，刻意不使用高頻寬記憶體(HBM)與台積電(2330)的先進封裝技術，B30大訂單主要的訂單是由技嘉(2376)吃到，技嘉法說會將調高財測，5月營收YoY 100%起跳


The bulk of the B30 orders reportedly went to Gigabyte (2376), which is expected to raise its financial guidance during its upcoming earnings call. Gigabyte's May revenue is said to have more than doubled year-on-year.


Micron anticipates that prices will continue to rise... Micron plans to push for robust and aggressive pricing capabilities in the coming months... gross margins and pricing still have significant upside potential

Summary: Micron confirms DDR4 EOL, rising DRAM prices from Q2 2025, aggressive pricing push in mobile, and significant margin upside — bullish for MU.

Exclusive Interview with Micron by DigiTimes: Prices to Rise Again! Micron Confirms DDR4 End-of-Life and Significant Shortages

The world's three major DRAM manufacturers are definitively shifting from DDR4 specifications to advanced process products. Following announcements from the two major Korean memory companies regarding their DDR4 discontinuation schedules, Micron has now confirmed it sent letters to customers notifying them of DDR4's End-of-Life (EOL). Shipments are expected to gradually cease over the next 2-3 quarters.

Sumit Sadana, Micron's Executive Vice President and Chief Business Officer, stated in an interview with DIGITIMES that DDR4 will continue to experience a "severe shortage." In the future, Micron's DDR4/LPDDR4 DRAM will only be supplied strategically to long-term customers in three key areas. Meanwhile, DDR5/LPDDR5 products are entering a "sweet spot" in market pricing.

Micron simultaneously released its future market strategy, indicating it will increase pricing power in segments with lower profitability compared to other market areas, ensuring increased margins. Sadana specifically pointed out that product pricing and profitability in the mobile device market have lagged behind other markets, and Micron plans to push for robust and aggressive pricing capabilities in the coming months.

With major memory manufacturers poised to transition DRAM process capacity, Micron, which had not previously announced its DDR4 discontinuation plans, has finally made an official statement.

Sadana said that DDR4/LPDDR4 EOL notices have recently been delivered to customers, primarily targeting the PC and data center segments. Over the next three quarters, production of DDR4 DRAM for consumer, PC, and data center use will be scaled down or reduced.

In the future, supply will primarily be for long-term partners in the "automotive, industrial, and networking" markets, mainly because these three market segments place a higher emphasis on quality and require long-term contract guarantees.

The memory market cycle has been rapidly changing in recent years, especially for DDR4 and LPDDR4. Sadana noted that the recent market is experiencing a supply-demand imbalance, leading to sharp price increases. He even suggested that the prices of LPDDR4 and DDR4 might exceed those of DDR5/LPDDR5.

Although the DDR4 series is an older product and accounts for a very small portion of Micron's revenue, Micron acknowledges that it does pose some challenges for certain customers and is committed to addressing their pain points.

Despite Micron's commitment to maintain stable multi-year supply for specialized customers, the increasing demand for High Bandwidth Memory (HBM) has led to a significant surge in demand for DRAM wafers, thereby limiting the supply of non-HBM products. Market prices have shown a noticeable upward trend starting from Q2 2025.

Micron anticipates that prices will continue to rise.

Sadana also urged customers to consider that DDR5/LPDDR5 is entering a market sweet spot, and for mainstream application customers like mobile devices, PCs, and data centers, upgrading will be more advantageous, as DDR5/LPDDR5 supply will also face tightness.

With data center demand remaining strong and Cloud Service Providers (CSPs) making large-scale capital investments, AI-related capital expenditure will continue to increase in 2025 and remain very substantial in 2026.

Furthermore, different countries are now investing in sovereign AI initiatives, implying capital expenditure plans will extend for many years. Micron believes this timing presents an exciting and tremendous opportunity for the memory industry.

Both AI training and inference require a significant amount of memory, and the current development bottleneck is also in memory. Simultaneously increasing memory capacity and bandwidth is key to enhancing system performance.

Sadana pointed out that PC and mobile device demand is currently stable, and inventory levels have returned to a healthy level as of early 2025.

While PC and mobile device shipments are flat, they are expected to see low single-digit growth in 2025. However, the introduction of AI features requires more DRAM for PC, laptop, and mobile products. For example, smartphones are already moving from 8GB to 12GB or 16GB.

Nevertheless, prices in the mobile device market are generally lower than in other applications. Micron stated that it will further focus on and enhance its more robust and aggressive pricing capabilities in this segment.

Sadana emphasized that compared to other semiconductor industries, memory's gross margins and pricing still have significant upside potential, not yet reaching the general level of the semiconductor industry.

The key focus is on improving overall profitability to "ensure ideal returns on investment" and reinvesting capital into R&D and new fab investments to capitalize on the overall industry growth momentum.

---

https://t.co/nD0g38gyGo


NVDA leads 800 G port growth of over 100 %... NVDA has become the sales champion for 800 G ports and equipment

Summary: Shares Citi note: long NVDA and CLS as 800G leaders, cautious CSCO on minimal AI backend exposure, ANET stable with 800G acceleration in 2H25.

US Communications Equipment: Ethernet Accelerates Replacement of IB, 800G Deployment Shows Strong Growth, NVDA and CLS Lead, ANET and CSCO Diverge

Citi (A. Malik, 25/06/12)

Ethernet’s pace in displacing InfiniBand in the data-center switch market has exceeded expectations, lifting 2025 switch-market growth from 14 % to 23 %. In the 800 G era, market-share reshuffling highlights NVDA and CLS as the most striking performers.

• Ethernet’s replacement of InfiniBand drives accelerated switch growth

Research indicates that Ethernet’s displacement of InfiniBand has surpassed Dell’Oro’s earlier expectations, resulting in significantly better-than-forecast market growth in 1Q25. Dell’Oro has raised its 2025 data-center-switch growth forecast from 14 % to 23 %.

• Arista backend deployment stable; 800 G to accelerate in 2H25

Arista’s backend-switch deployment is estimated at US$1.6 billion, about an 11 % market share, flat versus FY24. Although 800 G shipments are “still slowly ramping up,” they are expected to accelerate markedly in 2H25, with enterprise networks standing out thanks to competitive displacement and share gains.

• NVDA leads 800 G port growth of over 100 %

NVDA has become the sales champion for 800 G ports and equipment, with port shipments surging over 100 % QoQ. Drivers include Blackwell server read acceleration (about 70 % of DC compute sales) and the migration from InfiniBand to Ethernet. Its SpectrumX platform has seen significant revenue uplift from large wins with xAI, Azure, Oracle, Google Cloud, and CoreWeave.

• Cisco frontend networking solid; backend AI deployment still modest

Cisco’s data-center-switch sales are driven mainly by Tier-2/3 cloud providers and enterprise frontend networks. AI backend-switch shipments are “not yet significant,” as related AI-networking products are still booked under the router segment, making large near-term growth unlikely.

• CLS 800 G shipments nearly triple QoQ

CLS (Celestica) saw May 800 G equipment shipments nearly triple QoQ, driven by accelerated deployments at Google and AMZN and Meta’s first large-scale adoption. Its AI-networking gear is also showing eye-catching momentum across the industry.

$NVDA $CLS $ANET $CSCO


CLS 800 G shipments nearly triple QoQ... Its AI-networking gear is also showing eye-catching momentum across the industry


Arista backend deployment stable; 800 G to accelerate in 2H25... expected to accelerate markedly in 2H25, with enterprise networks standing out thanks to competitive displacement and share gains


AI backend-switch shipments are 'not yet significant,' as related AI-networking products are still booked under the router segment, making large near-term growth unlikely


multiple drivers — including further share gains at TSMC and in DRAM, as well as Intel-related upside — are expected to support both KLA's valuation premium and earnings growth

Summary: UBS raises WFE outlook but stays neutral on SPE sector; bullish KLA on TSMC/DRAM share gains + Intel upside into 2026; AMAT/ASML face 45-50% earnings downside risk from full export ban.

industry='Semiconductor Equipment & Materials'

Global Semiconductor Equipment: Forecast Raised on China Spend, but Industry Faces Continued Headwinds
UBS (T. Arcuri, June 2, 2025)

KLA, despite facing concerns about potential growth slowdown in 2H25 due to China’s domestic substitution push, has gained market recognition for its continued share gains in TSMC, DRAM, and advanced packaging.
Moreover, Intel’s transition from post-test inspection to in-line inspection could present additional growth opportunities for KLA.

Looking ahead to 2026, multiple drivers — including further share gains at TSMC and in DRAM, as well as Intel-related upside — are expected to support both KLA’s valuation premium and earnings growth.

⸻

• Global WFE Forecast Raised as China Spending Declines Less Than Expected:
• Based on recent updates from chipmakers and equipment vendors, UBS has revised its 2025/2026 global WFE (wafer fab equipment) outlook upward, mainly due to stronger-than-expected domestic project activity in China.
• China’s WFE capex is now expected to reach $33 billion in 2025 (YoY -8%), with a rebound anticipated in 2026.
• Globally, WFE spending is forecast at $107 billion in 2025 (+10%) and $110 billion in 2026 (+3%).
• While annual data points to moderate growth, quarterly trends remain too soft to justify a major short-term upgrade, so UBS maintains a neutral rating on the semiconductor production equipment (SPE) sector.

⸻

• 2026 Unlikely to Be a Down Year for WFE, but Geopolitical Risk Remains Central:
• Despite some investor concerns about a WFE downturn in 2026, UBS sees such forecasts as overly conservative.
• The market currently expects system revenue for key equipment makers (e.g., AMAT, ASML) to grow by ~7% YoY in 2026.
• However, if U.S.–China trade tensions escalate into a full export ban,
→ U.S. equipment vendors could face earnings downside of up to 45–50%.
• Geopolitics remains the single greatest source of uncertainty for the industry.


UBS maintains a neutral rating on the semiconductor production equipment (SPE) sector

US semiconductor equipment sub-sector basket


if U.S.–China trade tensions escalate into a full export ban, U.S. equipment vendors could face earnings downside of up to 45–50%


Summary: Morgan Stanley: TER gets short-term NVDA RTX testing catalyst but Q2/Q3 revenue below Street; raises PT $68→$74 with cautious stance. Advantest capacity constrained.

Teradyne: Short-Term Catalyst from NVDA RTX Testing Involvement, Overall Market Share Expansion Limited, Q2 Outlook Still Under Pressure
Morgan Stanley (S. Brett, July 09, 2025)

Morgan Stanley notes that Teradyne may gain opportunities in NVDA RTX testing due to Advantest's capacity bottlenecks. While unlikely to lead to broad market share expansion, the news could bring a positive stock price reaction. Concurrently, the Q2 earnings guidance is expected to fall short of market expectations, maintaining a relatively cautious stance.

Advantest Bottleneck Drives Teradyne's Entry into RTX Testing
Feedback from Asian supply chain channels indicates that Advantest's V93000 test platform has become a capacity bottleneck for NVDA Blackwell/Rubin production. In this context, NVDA is considering using Teradyne's Ultra Flex Plus platform for RTX chip testing. Teradyne has previously participated in test solution deployment for NVSwitch, CPO, and Mellanox modules, and the addition of the RTX segment is expected to bring marginal revenue contribution.

Limited Short-Term Market Share Expansion in NVDA, System-Level Testing Still Dominated by Advantest
Despite Teradyne potentially entering more high-value test nodes, Morgan Stanley judges that its position in NVDA's testing ecosystem will not significantly expand. The main reasons are: CPO and other components can be tested independently, system-level test resources remain highly concentrated with Advantest, and transferring core GPU test procedures is difficult. Teradyne's overall revenue contribution from NVDA is expected to be only mid-single-digit percentages in 2025-2026, with limited impact on the company's overall performance.

Revenue and Price Target Upgraded, Valuation Reflects Overall Test Equipment Manufacturer Expansion Trend
Morgan Stanley slightly raised its 2025/26 revenue forecasts to $2.82 billion/$3.19 billion, and EPS forecasts to $3.04/$3.90, to reflect marginal improvements from new NVDA test equipment orders. Concurrently, the target valuation multiple was increased by 1x to 19x, consistent with the valuation expansion trend among peers, raising the price target from $68 to $74.

June Quarter and September Quarter Expectations Remain Conservative, Street Needs to Downgrade Towards MS Estimates
Morgan Stanley believes the current Street expectation of 18% QoQ revenue growth for the June quarter is too high, with its model projecting 11%. Similarly, for the September quarter, Street's growth expectation is 18%, while MS's estimate is only 12%. Morgan Stanley maintains its long-term view that the Street's future earnings expectations for the company are overly optimistic, predicting that the market will gradually lower its expectations and converge towards MS's estimates starting from the June quarter.

NVDA Association Limited, But May Bring Valuation Sentiment Premium
Although NVDA's contribution is relatively small, Morgan Stanley notes that the market typically assigns higher valuation premiums to companies associated with NVDA. Therefore, Teradyne may receive a short-term stock price catalyst from the RTX testing news, especially as the topic of AI testing demand continues to heat up.


Street expectation of 18% QoQ revenue growth for the June quarter is too high, with its model projecting 11%


Advantest's V93000 test platform has become a capacity bottleneck for NVDA Blackwell/Rubin production


TPU Could Be a Hidden Catalyst for Google Cloud Growth... their contribution to Google Cloud revenue might be underestimated

Summary: MS: OpenAI TPU adoption is a hidden catalyst for Google Cloud; NVDA revenue triples at Google; AWS/Trainium face negative interpretive pressure.

industry='Internet Content & Information'

Google's Partnership with OpenAI: TPU Adoption Becomes Key Endorsement for Google's Infrastructure
Morgan Stanley (B. Nowak, 2025/06/30)

If OpenAI officially adopts Google TPUs for inference, it will serve as a significant endorsement of Google's ASIC ecosystem's technical capabilities, reflecting Google's leading position in AI chip infrastructure. It also reveals the practical impact of NVIDIA's capacity limitations on industry decisions.

OpenAI's Adoption of TPU Strengthens Google's Position in AI Chip Infrastructure

OpenAI and Google have reached a cooperation agreement: in addition to utilizing Google Cloud computing resources, OpenAI also plans to use Google TPUs for inference tasks, although they will not receive the most advanced TPU versions. Morgan Stanley believes this reflects OpenAI's recognition of Google's infrastructure capabilities and highlights Google's long-term accumulation in the ASIC ecosystem. This will also mark OpenAI's first use of non-NVIDIA chips for large-scale tasks, potentially leading to higher confidence in Google's AI infrastructure.

Google TPU Could Be a Hidden Catalyst for Google Cloud Growth

Although the current market is still dominated by NVIDIA GPUs, Morgan Stanley points out that as developers become more familiar with TPUs and as TPUs expand to customers beyond Google, their contribution to Google Cloud revenue might be underestimated. Morgan Stanley's model forecasts TPU expenditure of only $21 billion / $24 billion in 2027/28, far lower than NVIDIA GPU expenditure ($243 billion / $258 billion) in the same period. This discrepancy indicates significant room for Google to gain market share.

NVIDIA Supply Bottleneck May Be One of the Inducements for OpenAI's Shift to TPU

Morgan Stanley estimates that NVIDIA's revenue from Google will more than triple year-over-year to $20 billion, accounting for approximately 65% of the processor market share. However, since NVIDIA's capacity, especially for rack-scale products, is sold out, part of Google's motivation for shifting to non-NVIDIA architectures also stems from the shortage of inference computing power, rather than a pure shift in competitive landscape. This passive demand-side push further highlights the differentiated value of Google's product ecosystem.

AWS and Trainium Face Negative Interpretive Pressure

OpenAI currently deploys its AI workloads on multiple cloud platforms, including Google Cloud, Azure, Oracle, and CoreWeave, but AWS is not yet among them. Morgan Stanley believes this may reflect AWS's persistent capacity bottlenecks and also casts a negative light on its custom Trainium chips. Especially given that TPUs are an older generation, OpenAI still choosing them over Trainium further amplifies market attention on AWS's growth and Trainium's market position.


NVIDIA's revenue from Google will more than triple year-over-year to $20 billion


casts a negative light on its custom Trainium chips... further amplifies market attention on AWS's growth and Trainium's market position


Summary: Initiated a large position in Shin Zu Shing (Taiwan), one-third of portfolio, on Apple foldable supply chain thesis.

Today, I bought shares of the Taiwanese stock Shin Zu Shing, making up one-third of my portfolio.

*Not investment advice.

I did some research on Apple’s foldable supply chain and bought a Taiwanese stock today—for the first time in my life.


Summary: JPM bearish on MediaTek: 2H25 mobile/IoT slowdown, ASIC project delays cut 2026 target to $600M vs $1B, TWD headwinds, full-year revenue and earnings at downside risk.

MediaTek: 2H25 Growth Momentum Slows, ASIC Project Delays Add to Downside Pressure
JPM (G. Hariharan, 06/16/2025)

JPM notes that MediaTek's stock price may remain under pressure in the near term due to a slowdown in the mobile/IoT business, continuous delays in AI ASIC projects, and the impact of TWD appreciation on profitability. Full-year revenue and earnings forecasts face downside risks.

 Mobile and Smart Edge businesses to slow significantly in 2H25, with weakening YoY growth momentum

JPM forecasts that after achieving 16% YoY growth in the first half of the year, driven by tariff front-loading and Chinese consumer subsidies, MediaTek will face inventory destocking pressure and unfavorable currency effects in 2H25. Revenue from the Mobile and Smart Edge businesses is expected to decline by 13% and 10% QoQ, respectively. China's smartphone end-demand remains weak, and the full-year YoY growth for the mobile business is now expected to be only 2%, down from the previous forecast of 10%.

 ASIC project delayed again, putting the $1 billion revenue target for 2026 at downside risk

The tape-out of the 3nm data center ASIC project with a U.S. CSP client is now expected to be delayed to 3Q or 4Q25, which could push mass production to late 2026. JPM has lowered its 2026 revenue forecast for this project to $600 million, making the original $1 billion target likely unattainable. Furthermore, while a follow-up 2nm project may be won, Broadcom will continue to dominate the client's high-performance products, and MediaTek's 2027 revenue forecast also faces downward revisions.

Limited breakthrough in the high-end phone market, with no significant progress in Samsung collaboration

Although flagship market share is expected to grow by 20%, JPM believes MediaTek will struggle to make a breakthrough in 2025, expecting only one new Honor flagship model to adopt its SoC. Samsung has not yet opened a window for collaboration, and high-end growth expectations for 2026 are weak.

Xiaomi's self-developed SoC has limited short-term impact, but the long-term competitive threat should not be ignored

Xiaomi's launch of its self-developed SoC, the X-Ring O1, has a limited impact on MediaTek's fundamentals in the short term (shipment estimate of only 1 million units). However, if Xiaomi achieves a breakthrough in its self-developed 5G modem, it could compress MediaTek's market space in commercial SoCs in the long run, posing a potential competitive threat, especially in the flagship market.

Slow progress in ASIC customer expansion, with no major breakthroughs expected in the short term

Although MediaTek has engaged with several potential ASIC clients, including Chinese and U.S. CSPs and automotive manufacturers, JPM expects it will be difficult to secure large-scale orders within the next 6 months. Only some small-scale custom chip projects (such as video processors) have entered the initial stages of collaboration, with limited overall project scale. In the future, the company may secure orders from Japanese automakers for automotive ADAS-related ASICs, but mass production might not occur until 2027-28.


Summary: Korean user endorses CPNG as a heavily-used platform, implicitly backing the quoted bullish thesis.

As a Korean, I really do use Coupang a lot.

I even ordered delivery food through Coupang today, haha.

$CPNG is my first purchase of 2025.

It is entering the profitability inflection phase, margins are expanding and is set for a strong decade ahead.

Here is my $CPNG investment thesis: 🧵 https://t.co/36XahOuiJr


Summary: Shares BofA Buy on NVDA, PT raised to $180 on Blackwell ramp + EPS upside; flags gradual headwind to AVGO from NVDA networking share gains.

BofA) NVIDIA – Best-in-Class Opportunity Capture and Execution; Raising Estimates and Price Objective (PO) to $180

1. Blackwell Back on Track; Validated Long-Term $10 EPS Potential
Key Takeaways from 1Q Earnings:
1. China Risk Mitigated: $15B in 1H revenue from H20 products already factored into models.
2. Blackwell Rack Ramp Reaching Full Production: All major hyperscalers are currently ramping production at ~1,000 racks per week, or ~13,000 racks per quarter (assuming ASP of $2.5M per rack, this translates to over $30B per quarter, or over $100B from top hyperscalers combined; NVIDIA did not disclose incremental figures).
3. Gross Margin (GM) Recovery Confidence: NVIDIA expressed confidence in gross margin returning to mid-70% range within the year — signaling both demand recovery and improved rack-scale execution capabilities.

The networking segment also returned to a low/mid-teens share of 1Q data center revenue. This indicates that NVIDIA’s full rack-scale portfolio — including NVLink (scale-up), Quantum/Spectrum (scale-out), and BlueField (DPU/NIC) — is now expanding meaningfully across several hyperscalers (including new Spectrum-X wins from Google and Meta). This poses a gradual headwind to AVGO (Broadcom). We maintain NVIDIA as our top pick with a Buy rating. We revise our FY26/27/28 pro forma EPS estimates by +6%/+2%/+12% to $4.21/$5.87/$7.23, respectively, and raise our PO from $160 to $180 by applying a 30x P/E (previously 28x), reflecting faster EPS growth.

⸻

2. Positive Factors: Long-Term $10 EPS Potential, AI Capex Diversification
Our FY28 (i.e., CY27) pro forma EPS estimate of $7.23 aligns with $277B in data center revenue and a $325B–$350B TAM (assuming 80–85% NVIDIA share). If the TAM estimate is raised to $450B–$500B while maintaining NVIDIA’s share, conceptually, this opens a path to $10+ EPS in CY27/FY28.
Second, we highlight NVIDIA’s 50% FCF margin (2.6x the Mag-6 avg of 19%) and attractive 0.9x PEG ratio (vs. Mag-6 avg of 3x).
Third, AI Capex is diversifying beyond US cloud names — with multiple sovereign-led builds (e.g., Saudi Arabia; see related report).

⸻

3. Risks: Accelerated Product Cadence Increases Execution Risk
While NVIDIA’s annual (October) next-gen product cadence is admirable, it increases execution risk — similar to the ~2-quarter delay seen with Blackwell rack rollout.
Second, (uneven) deployment of power-stable data centers may pose a bottleneck to AI builds — not just chip/system availability.
Finally, headlines or real risks from use/restriction of AI products as bargaining tools in global trade negotiations cannot be ignored.


This poses a gradual headwind to AVGO (Broadcom)


Summary: CLSA raises SK Hynix TP to ₩350K on HBM leadership; Samsung positive on HBM3E approval and governance restructuring catalysts.

Korea Memory Sector Outlook: Micron Call Read-Across-CLSA

📌 Overall Summary (Korea Memory Sector Outlook)

- Micron's strong earnings and guidance provide positive implications for SK Hynix and Samsung Electronics.
- Strong demand for AI server DRAM and HBM continues.
- SK Hynix target price raised from ₩290,000 to ₩350,000.
- For Samsung Electronics, HBM3E approval/governance restructuring could act as short-term stock catalysts.

💡 Micron Earnings and Guidance Summary

FY3Q25 Earnings (Micron):
- Revenue: $9.3B, +5% vs. consensus
- EPS: $1.91, +18% vs. consensus
- DRAM Revenue: $7.1B, Bit shipments +20%↑
- HBM Revenue: +50% QoQ
- NAND Revenue: $2.1B, Bit shipments +25%↑

FY4Q25 Guidance (Micron):
- Revenue: $10.7B (+8% vs. consensus)
- EPS: $2.5 (+25% vs. consensus)
- GPM: 42%
- FY25 Capex: Maintain $14B
📊 HBM and AI Demand Outlook
- HBM shipment customers: Expanded from 2 companies to 4 companies (GPU and ASIC).
- Micron's HBM market share: Expected to reach 24% in 2H25 (previously forecast for end of 2025).
- 2025 HBM TAM: Expected to be $35B (rapid growth from $18B in 2024).
- Enterprise eSSD demand also expected to recover from 2H25.

🧠 SK Hynix: Strong HBM Leadership & Earnings Estimates
- 70% of HBM supplied to Nvidia.
- 2025 HBM shipments expected to grow +95%, 2026 +40%.
- HBM proportion of DRAM revenue expected to reach 55-60% by 2027-2028.
- 2025 global cloud Capex: Expected to grow +35%.

💵 SK Hynix Earnings Estimates (CLSA Standard)

📈 Annual Outlook
- 2025E Revenue: ₩86.2 trillion (+30% YoY)
- 2025E Operating Profit: ₩38.6 trillion (OPM 45%)
- 2025E Net Income: ₩33.4 trillion
- DRAM ASP: +24%, NAND ASP: -11%
🔮 Multiples & Target Price
- BVPS (as of 4Q 2026): ₩202,531
- Target P/B: 1.7x (average of past +2σ)
- → Target Price: ₩350,000

🏭 Samsung Electronics: HBM3E & Non-Memory Strategy are Key

🧾 Investment Points
- Global No. 1 DRAM/NAND market share.
- Increasing demand for high-value products related to HBM and AI.
- Growth potential in non-memory (Foundry, S.LSI), OLED, CE, and other divisions.

🎯 Catalysts
- ₩10 trillion share buyback.
- HBM3E approval (Nvidia) expected.
- Emergence of governance restructuring scenarios.

💲 Valuation

- SOTP (Sum-of-the-parts) methodMemory: Average of Hynix and Micron EV/EBITDA.
- Foundry: 50% discount to TSMC.
- Mobile: 50% discount to Apple.
- Display: Premium granted.
- CE: 10% premium compared to peers.

⚠ Risk Factors

SK Hynix faces key risks such as U.S.-China trade and geopolitical tensions, weak NAND demand, and the expansion of Chinese competitors.

Samsung Electronics is exposed to risks like delayed HBM qualification and a slow recovery in memory demand.


For Samsung Electronics, HBM3E approval/governance restructuring could act as short-term stock catalysts


Morgan Stanley considers this a 'Show-me Story'— significant uncertainty remains until actual tape-out and successful testing are achieved... optical module business may face some headwinds due to China's export restrictions... a risk that has not been fully priced in by the market

Summary: Shares Morgan Stanley's cautious MRVL view: ASIC a 'show-me story' with unresolved uncertainty; optical segment China export risk not yet priced in.

Regarding Marvell (MRVL) – Morgan Stanley’s View:
• The market has already fully priced in the weak AWS Trainium shipments and lower ASPs.
• Expectations for AWS have been reset, and the stock is now trading based on a new baseline.
• ASIC Segment:
According to Morgan Stanley’s analysis:
Trainium 2 has delivered disappointing results compared to initial expectations.
The current tracked scale is around $2 billion,
while earlier projections called for 1.5 to 2 million units at $2,500 per unit.
However, this was already reflected in market expectations earlier this year, so it’s not a surprise.
Trainium 3 is expected to have more clarity on orders by the end of the year,
with AlChip confirmed to secure part of the orders.
Another ASIC customer is presumed to be Microsoft,
and that project is expected to ramp up in 2026.
Still, Morgan Stanley considers this a “Show-me Story”—
significant uncertainty remains until actual tape-out and successful testing are achieved.
• Optical Module Segment:
MRVL’s optical module business may face some headwinds due to China’s export restrictions,
particularly around products like NVIDIA H20 and AMD Mi308.
This could cap upside potential,
and Morgan Stanley notes this is a risk that has not been fully priced in by the market.

$MRVL


Microsoft's self-developed AI chip performance and schedule, aimed at reducing Nvidia dependence, are significantly delayed more than expected… unlikely to reduce its dependence on Nvidia in the short term

Summary: NVDA long as MSFT chip delays entrench dependence; MRVL short on ASIC delays/missed targets; AMD long as likely beneficiary of big-tech/Marvell schedule slippage.

[Microsoft's AI Chip Development Status and Problems] - BK Tech insight

📌 Executive Summary

- Microsoft's self-developed AI chip performance and schedule, aimed at reducing Nvidia dependence, are significantly delayed more than expected.
- The latest AI chip (Braga) launch is delayed by at least 6 months, shifting from 2025 to 2026, due to design changes and a shortage of personnel.
- Both performance and power efficiency are expected to significantly lag behind Nvidia's latest chip (Blackwell).

🔖 Details

1⃣ Background of Microsoft's AI Chip Development

- Microsoft is highly dependent on Nvidia chips and is considered one of Nvidia's largest customers.
- Self-development of AI chips began in 2019, and the first AI chip (Maia 100) was unveiled in 2023 but has seen little actual service utilization.

2⃣ Problems with the Next-Generation Chip (Braga)

- The next-generation chip (Braga, Maia 200), originally planned for mass production in 2025, has been delayed to 2026.
- Design changes requested by OpenAI in the middle of development caused chip stability issues, and additional work to resolve these issues significantly delayed the schedule.
- Around 20% of the related development personnel left due to schedule pressure and high work intensity.

3⃣ Performance and Efficiency Disadvantages
- Braga is projected to have significantly lower competitiveness in terms of performance and power efficiency compared to Nvidia's latest AI chip, Blackwell (released in 2024).
- Microsoft plans subsequent chips like Braga-R and Clea after Braga, but Braga's delay makes the schedule for subsequent chips uncertain.

4⃣ Comparison with Other Companies
- Amazon and Google are also actively developing their own AI chips; Amazon's Trainium 3 chip development is proceeding smoothly, targeting a release by the end of this year as planned.
- Google has been developing its own AI chips (TPU) for over 10 years, and its next-generation chip (Ironwood) is also on schedule for release. However, Google also faced difficulties with key personnel leaving for Nvidia during its collaboration with MediaTek.

5⃣ Nvidia's Response
- Nvidia CEO Jensen Huang recently stated at a developer event that most competitor AI chip development projects would eventually be abandoned.
- Nvidia has set very high performance targets for its latest AI system (GB200) to make it difficult for customers to switch to their own chips.

📌 Microsoft AI Chip Roadmap
- Maia 100 (Unveiled 2023): AI chip focused on image processing, not yet applied to actual services, only internal testing.
- Braga (Maia 200): Targets mass production in 2026 (delayed by at least 6 months), faces performance issues.
- Braga-R: Successor to Braga, scheduled for 2026.
- Clea (Maia 300): Planned with an entirely new design, considered the first model with potential to truly compete with Nvidia chips (scheduled for 2027).

🧩 Conclusion and Outlook
- Microsoft's self-developed AI chip project faces significant challenges in achieving performance competitiveness against Nvidia, and due to development delays and design issues, it is unlikely to reduce its dependence on Nvidia in the short term.
- The upcoming Clea chip (Maia 300) is expected to be the first model truly capable of competing with Nvidia, but overcoming schedule delays and technical issues will be a key challenge.

// Short comment

- Microsoft's next-generation ASIC, speculated to be primarily involving Marvell and Alchip, is expected to be delayed due to development issues.
- This led to Marvell's stock price weakening on Friday.
- Overall, ASIC projects handled by Marvell seem to be experiencing delays and failing to meet performance targets.
- Due to schedule delays for big tech companies collaborating with Marvell, the possibility of AMD receiving orders for inference purposes is increasingly high for next year.
- It is necessary to follow up on AMD's potential gains from the schedule delays of big tech companies cooperating with Marvell.


Overall, ASIC projects handled by Marvell seem to be experiencing delays and failing to meet performance targets


the possibility of AMD receiving orders for inference purposes is increasingly high for next year


HSBC has lowered its FY26/FY27 EPS forecasts by 18%/17%, maintaining a "Hold" rating and $120 target price

Summary: Shares HSBC Hold on NVDA with $120 PT; EPS cut 18%/17% on H20 ban, margin pressure, and 2H supply-demand imbalance.

Nvidia: Sales Guidance Remains Steady, But Outlook Grows More Uncertain
HSBC (F. Lee, May 15, 2025)

Nvidia has guided for FY1Q26 and FY2Q26 revenues of $43.5B and $45.0B, respectively—slightly below market consensus but in line with management’s projections. However, the China H20 chip export ban and a $550M inventory write-down have already weighed on margins, and H20-related revenue losses will persist starting in Q2.

Moreover, a mismatch between upstream AI GPU shipments and downstream ODM rack installations is expected to intensify supply-demand imbalances in the second half, potentially pressuring EPS performance for FY26 and FY27. Despite improving sentiment around AI investment, HSBC has lowered its FY26/FY27 EPS forecasts by 18%/17%, maintaining a “Hold” rating and $120 target price.

⸻

• Sales Pace in Line With Expectations
• FY1Q26 revenue of $43.5B is broadly in line with management guidance ($43.0B) and market consensus ($43.1B).
• FY2Q26 revenue guidance of $45.0B is below the $46.7B consensus, but better than some pessimistic estimates around $44.0B, thus offering relative stability.

⸻

• Rising Uncertainty in 2H
• Although U.S. cloud service providers are expected to increase CAPEX by 43% in 2025,
• There has been no significant AI GPU supply chain ramp-up since February.
• The disconnect between AI GPU supply and ODM rack installation demand could result in lower-than-expected shipments in 2H FY26.

⸻

• Margin Pressure and Valuation Adjustment
• Due to the H20 export ban and executive-level inventory write-down,
• HSBC has revised FY26/FY27 EPS down to $3.89 and $4.78, respectively—11% and 15% below consensus.
• Maintaining a $120 price target based on a 31x FY26 PE multiple,
• HSBC reiterates its “Hold” rating on the stock.


Summary: BofA top AI picks: NVDA and AVGO as leaders; AMD and MRVL as Tier-2 beneficiaries with PEG below 1x by 2027 on strong EPS CAGRs.

BofA) Q1 Cloud Capex Review: AI Investment Remains Robust

1. AI Capex Outlook for 2025/2026: +44% / +4% YoY Growth

Despite a range of concerns since the beginning of the year—such as Capex intensity (sustainability), DeepSeek (AI efficiency), ongoing China regulations, and the recent rollback of AI diffusion initiatives—demand for data center and AI-related Capex remains strong. In Q1, global hyperscaler Capex totaled $92 billion, slightly below the consensus of $93.8 billion. However, most hyperscalers indicated continued strong AI investment throughout 2025, with expectations for growth to persist into 2026.

Overall, our consensus model shows 2025/2026 Capex reaching $414 billion / $432 billion, representing +44% / +4% YoY growth. This is 300bps/100bps higher than pre-earnings expectations ($402B/$429B), and 5,090bps/4,900bps higher compared to May 2024 projections.

While CSPs (cloud service providers) have not provided extensive guidance on 2026 spending yet, the rollback of AI diffusion regulations has allowed for sovereign AI infrastructure development in most countries, supporting a solid investment environment.

Meanwhile, China’s GPU regulations (which affect ~10% of global AI TAM) are now considered to have fully played out. Residual revenues (e.g., B20 deployments) are expected to be incremental. AMD has stated that its $500 billion AI TAM outlook already factors in the impact of China’s regulations, suggesting limited long-term implications for U.S. accelerator vendors.

The next major catalyst for AI is expected to be Computex (May 19–21 in Taiwan), where NVIDIA (NVDA) CEO is scheduled to deliver a keynote on its roadmap and new products.

⸻

2. 2025 Capex Outlook: Strong Despite Multiple Concerns

Cloud Capex is expected to remain strong in 2025. Google and Microsoft have reaffirmed their 2025 (FY26 for Microsoft) guidance. Meta has raised its 2025 Capex guidance from $60–65B to $64–72B. While most companies avoided commenting on 2026 forecasts, Microsoft indicated YoY Capex growth, noting a shift toward short-lived assets (servers, CPUs, GPUs) over long-term assets (buildings, land).

Amazon has not updated its $105 billion 2025 Capex forecast from the previous call, but its custom silicon Trainium2 (MRVL) is being deployed across more instances.

⸻

3. Questions Around Capex Intensity and AI Sustainability

Cloud Capex intensity (Capex as a percentage of revenue) is rising rapidly, expected to reach 20–22% in 2025–2027 (vs. 17% in 2024 and 10–12% during 2018–2023). We expect continued AI expansion, supported by the following:
1. Leading model sizes double every six months pre- and post-training
2. Derivative models like DeepSeek
3. Inference scaling during testing (token generation 100x vs standard inference)
4. Still early stages of sovereign/enterprise AI adoption

⸻

4. Top AI Investment Picks: NVIDIA $NVDA, Broadcom $AVGO, Plus $AMD / $MRVL

Our top AI picks are NVIDIA (NVDA) and Broadcom (AVGO), leaders in commercial/custom AI silicon, respectively. Additionally, AMD (AI GPUs) and MRVL (AI ASICs, optical/DSP) are expected to benefit from AI growth as Tier-2 players.

AMD is projected to maintain a 3–4% share in the accelerator market by 2027 ($12.6B revenue), while MRVL is expected to maintain a 10–15% share in the custom ASIC market ($4B revenue).

Overall, AMD/MRVL EPS is projected to grow at a +27% / +39% CAGR from 2024 to 2027, and with the AI market growing at +45% (based on TSMC), their PEG ratios are expected to fall below 1.0x.


AMD/MRVL EPS is projected to grow at a +27% / +39% CAGR from 2024 to 2027, and with the AI market growing at +45% (based on TSMC), their PEG ratios are expected to fall below 1.0x


Summary: Memory sector re-rating thesis: DDR4 exit by all major players signals shift to high-margin/high-ASP products, chronic undersupply, prolonged profit cycle — bullish memory stocks.

Global memory semicon basket: Micron, SK Hynix, Samsung, Kioxia

Background of CXMT’s Early DDR4 Production Termination
[Samsung Securities – Semiconductors, IT / Lee Jong-wook]

On Tuesday (May 27), CXMT announced a phased termination of DDR4 production by 2026. On the same night, Micron also announced the end of LPDDR4 production. Following Samsung Electronics’ declaration in April, memory makers are now rushing to abandon DDR4 production.

This raises two key questions:
1. Why is DDR4 being phased out so quickly, when DDR3 continued to be produced for more than five years even after its demand share fell below 10%?
2. If the early retirement of DDR4 was due to the threat from China, why is even CXMT—China’s own DRAM maker—quickly exiting the DDR4 market?

The rules of the game have changed.
1. The era of cost is over. In traditional business, technology was synonymous with cost. Securing MS (market share) and expanding capacity helped reduce costs, but that no longer holds meaning.
2. The era of performance has arrived. Volume growth has halted and the limits of cost reduction have been reached, so the focus must shift to high-margin segments—even if they come at higher prices.
3. There is no longer a reason to expand capacity. The immediate cause of DDR4’s early termination is indeed the threat from China, but the fundamental reason is the declining importance of capacity and market share. Even for CXMT, having the largest capacity in DDR4 now means nothing.

To win in this new game, memory makers must abandon stable cash cow products—even if they are high-yield and customer-secured—and instead prioritize securing high-end, custom products with uncertain yields and demand.
Amid these efforts, downside risks in supply have increased, and the market will suffer from chronic undersupply.
As a result, the profit cycle will be prolonged, and the logic for re-rating memory stocks will gain strength.


Micron also announced the end of LPDDR4 production


Following Samsung Electronics' declaration in April, memory makers are now rushing to abandon DDR4 production


With shipments normalized ahead of Nvidia's quarterly earnings release on Wednesday, investors should take note that despite early technical hiccups, Blackwell shipments are proceeding at a fast pace.

Summary: Bullish NVDA: GB200 rack issues resolved, Blackwell shipments accelerating, GB300 launching Q3 to offset China headwinds and support revenue targets.

▶ Nvidia’s Suppliers Resolve AI ‘Rack’ Issues, Boosting Sales – FT

• Nvidia’s suppliers have resolved technical issues that had delayed shipments, accelerating production of the company’s flagship AI data center product, the GB200 rack.

• At last week’s Computex conference in Taipei, Nvidia’s Taiwanese partners—Foxconn, Inventec, and Wistron—emphasized that GB200 rack shipments began at the end of Q1 and that production capacity is now rapidly scaling up.

• Each GB200 AI rack includes 36 “Grace” central processing units and 72 Blackwell graphics processing units, all connected via Nvidia’s NVLink communication system.

• Nvidia’s supply chain partners spent several months addressing a range of challenges with the GB200 racks, including overheating from the 72 high-performance GPUs, coolant leaks in the liquid-cooling system, and software bugs and chip-to-chip connectivity issues stemming from the complexity of synchronizing such a large number of processors.

• With shipments normalized ahead of Nvidia’s quarterly earnings release on Wednesday, investors should take note that despite early technical hiccups, Blackwell shipments are proceeding at a fast pace.

• Nvidia has also signaled that its next-generation GB300 AI rack—designed to handle more complex inference models like OpenAI’s 01 and DeepSeek’s R1 with enhanced memory capacity—will launch in Q3.

• To accelerate deployment, Nvidia has made compromises in several aspects of the GB300’s design.

• Notably, Nvidia had initially planned to introduce a new chipboard layout called “Cordelia,” which would allow for individual GPU replacement. However, due to installation issues encountered in April, the company has reverted to the current “Bianca” design used in the GB200 racks.

• This decision is expected to help offset declining China sales in the second half of the year and support Nvidia’s revenue targets through an earlier-than-expected product launch.

• However, according to supply chain sources, Cordelia has the potential to offer better margins and make maintenance easier for customers.

• Nvidia has not abandoned Cordelia and has informed suppliers that it intends to implement the redesign in its next-generation AI chips.

---

https://t.co/RNwM9bJskf


Summary: Maintains positive/bullish stance on Quanta on improved GB200 yields, ahead-of-schedule GB300/Meta ASIC, and MSFT ASIC taking shape.

Meta ASIC Project Enters Testing Phase; Quanta and Chenming Electric Collaborate

The Meta ASIC project has now entered its testing phase. Quanta (廣達) and Chenming Electric (晟銘電) are currently working together on the production and assembly of components for this project. Finalization is expected to occur progressively in Q3 2025, with small-scale production commencing in Q4 2025.

Improved Yields and Accelerated Project Timelines:

GB200 production yield has improved.

The progress of GB300 and the Meta ASIC project is better than anticipated.

A Microsoft (MSFT) ASIC project is also taking shape.
These positive developments lead to maintaining a positive outlook on Quanta.

Meta ASIC專案已經入測試階段，目前廣達及晟銘電正攜手生產及組裝該專案之零組件，預計3Q25會陸續定案，並於4Q25開始小量生產

GB200生產良率轉佳，GB300及Meta ASIC進度優於預期，MSFT ASIC專案成形，維持廣達正向看法。


Summary: Cautiously bullish Samsung: HBM3E volumes limited even if qualified, but HBM4 development showing notable progress and is the real bet.

Samsung HBM Update:

1) Internally, there's strong confidence at Samsung that they will pass HBM3E qualification. However, even if they succeed, the expected shipment volume is likely to be limited.

2) Instead, Samsung is going all-in on HBM4. In fact, notable progress has already been confirmed in their HBM4 development.

Samsung's HBM status update

1) They are now guiding for $nvda HBM3e 12-hi qualification from late Q2 to late Q3. Clearly a delay from Q2

2) Non-NVIDIA qualification is smoother than NVIDIA

3) Have to guide down HBM revenue growth, unable to achieve 100% revenue growth in 2025


Summary: Shares Citi's top picks Eoptolink and Innolight on 800G optical module demand surge to 37M units in 2026 and sector P/E re-rating toward 15–20x.

Optical Modules: Strong 800G Demand Expected in 2026 – 37 Million Units Globally
Citi Research (L. Tsang, May 16, 2025)

• Global 800G Optical Module Shipments to Reach 37 Million Units in 2026 (+85% YoY)
This surge is driven by a higher number of optical modules per ASIC and the transition of overseas cloud infrastructure from 100G/200G/400G to 800G. However, the transition to 1.6T Ethernet switches has been delayed due to capacity conversion and extended customer readiness timelines, pushing out 1.6T module demand to 2027. Cloud service providers (CSPs) are increasingly open to second-tier suppliers, and production capacity and delivery capability will determine market share.

⸻

Key Takeaways
• Explosive 800G Demand
• Industry demand for 800G modules has been revised upward from 20M/23M to 20M in 2025 and 37M in 2026
• This is driven by the adoption of mainstream 800G switches such as Tomahawk 5 and a high attach rate
• CSPs are still dominated by large overseas players, but second-tier vendors are getting qualified at a faster pace
• 1.6T Transition Delayed
• Due to capacity yield issues and customer migration preparation, 1.6T demand forecasts have been revised down from 2.3M/12M to 2M/5M for 2025/26
• The actual ramp-up is expected to begin in 2H26 or 4Q26, with more meaningful demand shifting to 2027
• Middle East AI Projects May Catalyze 1.6T Demand
• Aside from the increase in rack yield rates for GB200 deployments in 2025,
rising AI infrastructure investments by Middle Eastern nations could drive incremental 1.6T demand starting in 2026
• Sector Valuation Re-Rating Underway
• As concerns over peak AI capex ease, and with improving sentiment around US-China tariff negotiations and demand outlook,
the optical module sector has rebounded from FY25 P/E multiples of 8–10x and is expected to re-rate toward the 15–20x range

• Top Picks: Eoptolink, Innolight

⸻

Major CSPs and Their Optical Module Suppliers

• Amazon: Innolight, Eoptolink, AAOI, Fabrinet (ramping)

• Google: Innolight, Lumentum, Coherent, TBD (possibly Eoptolink)

• Meta: Innolight, Coherent, Eoptolink, Celestica (ramping)

• Microsoft: Innolight, Coherent, AAOI, Lumentum (ramping)

• NVIDIA: Mellanox (TFC), Coherent, Eoptolink

• Oracle: Innolight, Coherent, AAOI (ramping), Lumentum (ramping)


We believe the upside potential in Neocloud, enterprise, and sovereign AI demand remains underappreciated by the market. From 2H25 onwards, an increase in market share from a new U.S. CSP is expected to further lift Wistron's performance.

Summary: Shares CLSA Buy-equivalent thesis: Wistron's AI server ramp underappreciated; 100K incremental Blackwell GPUs from 4Q25 also bullish NVDA.

250605_Wistron: GB Production Ramping Up for Real – CLSA

1. Wistron’s May revenue rose +56% MoM and +162% YoY.
Quarter-to-date (QTD) sales are significantly outperforming market expectations.
■ As of May, Wistron has achieved approx. 78% of our 2Q25 forecast and 86% of market consensus.
2. Management attributed the revenue surge to strong AI demand, and expects another sequential increase in June.
3. These results reaffirm our prior view from the “Golden Oil on Troubled Waters” report, which highlighted a strong Blackwell Rack production ramp-up.
4. We believe the upside potential in Neocloud, enterprise, and sovereign AI demand remains underappreciated by the market.
5. From 2H25 onwards, an increase in market share from a new U.S. CSP is expected to further lift Wistron’s performance.
6. Meanwhile, Dell recently disclosed a record-high AI backlog of $14.4bn as of 1Q25, and stated that its AI pipeline over the next five quarters is several times larger than its current backlog.
7. Multiple sovereign AI project wins were referenced across the U.S., U.K., France, Germany, and Japan, alongside a large-scale recent project in the Middle East, all of which are positive for Wistron.
8. CoreWeave recently announced lease agreements for two new AI data centers, triggering a sharp rally in its share price.
9. Based on this, we now expect up to 100K additional Blackwell GPU demand to materialize from 4Q25 through mid-2026.
10.xAI is also building a new cluster in Memphis with 1,000K GPUs, separate from its existing 200K-GPU cluster.
11. The project is now expected to be completed by late 2025 to early 2026, much earlier than the previously assumed early 2027 timeline.
12. As a result, Wistron is positioned to structurally benefit from the accelerating infrastructure build-out by players like Dell, CoreWeave, and xAI.

$NVDA


we now expect up to 100K additional Blackwell GPU demand to materialize from 4Q25 through mid-2026


Summary: Bullish MU: beat on revenue/profit/guidance, HBM share accelerating to 23% by CY3Q, generic DRAM supply shortage + healthy inventory signals new profit cycle.

Micron Records All-Time High DRAM Revenue, Three Key Takeaways

[Samsung Securities Semiconductor, IT/Jongwook Lee]

Micron's FY3Q25 revenue and operating profit exceeded market consensus (Bloomberg) by 5% and 17%, respectively. The revenue guidance for the next quarter also surpassed consensus by 9%. We believe the following three points are crucial to note from Micron's record-breaking revenue.

HBM Market Share Growth Rate

Micron mentioned that the period for its HBM market share to approach its DRAM market share of 23% has been pulled forward from year-end (CY4Q) to CY3Q. This indicates the fastest growth rate in the HBM market, attributed to its successful penetration into the NVIDIA and Broadcom markets with HBM3E 12-high products.

Chronic Generic DRAM Supply Shortage

DRAM capacity expansion is primarily for HBM. Micron also noted that the per-unit capacity cannibalization effect of HBM is steadily increasing. In the future, there is a high probability that the company will reduce market share competition in generic DRAM and adopt aggressive pricing policies.

Healthy Customer Inventory

The pre-order effect due to tariffs is negligible, and customer inventory levels are healthy.
This case directly demonstrates that HBM demand growth has begun to be accompanied by profits in generic DRAM. While generic DRAM customers differ from HBM customers, the industry conditions are shared, and profits are being leveraged by HBM. At the peak of HBM growth, another profit cycle for generic DRAM leverage has begun.

Thank you.

(Public Disclosure Date: 2025/06/26)

$MU


Strong DRAM and NAND demand: Recovery is progressing as expected across both data center and consumer markets. Pricing momentum sustained: DRAM prices are on the rise. HBM3E 12-High: Production ramping up. Strong and sustained demand for AI and high-performance computing; no signs of CapEx decline.

Summary: Bullish MU: DRAM/NAND pricing momentum, HBM3E ramp, improving yields, AI demand strength, and margin recovery expected ahead.

Micron at JPMorgan Conference – May 14, 2025

1. Earnings & Demand Outlook

• Strong DRAM and NAND demand: Recovery is progressing as expected across both data center and consumer markets (PCs, smartphones).

• Pricing momentum sustained: DRAM prices are on the rise, while the decline in NAND prices is slowing. Micron sent letters in March indicating intent to raise prices.

• May quarter progress: No update to guidance, but overall quarterly trend is positive; price increases are being well executed.

• Q4 (August quarter) margin: Margin is currently lower due to a higher share of consumer products, but margin improvement is expected moving forward.

2. HBM (High Bandwidth Memory)

• HBM3E 12-High: Production ramping up. From the August quarter, 12-High is expected to surpass 8-High in shipment volume.

• Yield improving rapidly, with stable yield expected by the end of Q3.

• Continued strong demand for HBM, with positive feedback from key cloud customers.

• Already engaged in 2026 HBM supply discussions; early market entry helping secure customer trust.

3. Trade & Tariff Impact

• While some front-loaded demand due to tariff expectations may exist, the overall demand recovery is driven by cyclical recovery.

• DRAM and NAND are exempt from U.S. tariffs; no current price pass-through to U.S. customers.

• Growing customer interest in U.S. production investments in Boise, NY, and Virginia; ESG factors (green energy, etc.) also viewed positively.

4. AI & Data Center Demand

• Strong and sustained demand for AI and high-performance computing; no signs of CapEx decline.

• In addition to HBM, demand is increasing for high-capacity DRAM, low-power DRAM, and SSDs.

• HBM4 scheduled for release in 2026; customized platform roadmaps being discussed with customers.

5. NAND & SSD Strategy

• Data center SSD share expansion: 7% in 2022 → 12% in 2023 → projected 15% in 2024.

• Preparing to launch next-generation Gen9-based SSDs, optimized for high-performance markets.

6. Technology Transition & Manufacturing Strategy

• DRAM: Mass production of One Gamma (1γ) node, the first to adopt EUV, has begun; 30% bit density improvement and stable yield progress.

• NAND: Ramping up Gen9 technology, achieving performance optimized for high-end SSDs.

7. Competition & Market Landscape

• Chinese players (DRAM/NAND): Primarily focused on legacy markets like DDR4. Some are attempting DDR5, but Micron remains focused on the premium segment.

• On Samsung’s HBM entry: Emphasized that delayed entry and shorter platform lifecycles at customers maintain differentiation opportunities.

8. Organizational Restructure

• Transition to four business units:

• High-Performance Computing (HBM, high-capacity DRAM, etc.)

• Data Center (traditional server/enterprise)

• Client (PCs, smartphones)

• Automotive & Embedded

• From Q4 onward, Micron will disclose revenue, gross margin, and operating margin by business unit — aimed at enhancing transparency and responsiveness to market conditions.

---

Source:


Nvidia is less optimistic about its business performance beyond 2026... Nvidia plans to reduce wafer orders for 2026... Nvidia's absolute lead in the cloud AI market may be wavering

Summary: Bearish NVDA on wavering dominance, reduced wafer orders post-2026; bullish AMD on strong AI chips and rising procurement by Microsoft/OpenAI.

Report: UALink camp's first chip aims for tape-out, poised to challenge Nvidia

Following Nvidia's announcement of NVLink Fusion, the competition between NVLink and UALink has resurfaced.

Since Nvidia already has a relatively mature product line and ecosystem, it has attracted many customers to develop related chips. This helps Nvidia avoid losing its voice in the ASIC domain and ensures it remains competitive against UALink in the future.

However, UALink's overall development pace currently lags behind NVLink, which already has actual products on the market. UALink only officially launched its 1.0 specification several months ago. Still, rumors suggest that UALink's first product could tape out as early as the end of this year, with more related products expected to join the lineup in 2026.

Overall, UALink's product launch schedule is not too far behind that of NVLink. According to industry sources discussing ongoing projects, although NVLink has attracted some customers to start investing, the UALink camp reportedly has "dozens of projects" under R&D. Over time, UALink stands a strong chance to leapfrog and challenge Nvidia's dominance.

Insiders note that despite UALink's slower progress, most customers still prefer open standard specifications.

Looking further ahead, it is quite possible that UALink will surpass NVLink in market share. Moreover, market whispers are suggesting that while NVLink Fusion claims to offer an open ecosystem for developing customized products, the actual openness falls short of what industry players initially expected.

Customers willing to adopt NVLink-based development do so partly as a technical experiment. Currently, Nvidia remains the mainstream brand for AI general-purpose computing, so launching products compatible with the market majority is advantageous. But in the long run, if the level of openness remains limited, expanding UALink's ecosystem becomes an inevitable trend.

Additionally, industry experts mention that AMD's latest AI chips and integrated rack solutions have performed impressively. This marks a genuine opportunity to challenge Nvidia's leadership. Major companies like Microsoft and OpenAI are likely to increase their procurement of AMD solutions next year.

This means that starting next year, the UALink specification supported by AMD's compute cores could gradually expand its market influence. With such a foundation, subsequent ASIC product development and market acceptance are expected to grow steadily. The growth potential and ceiling for UALink clearly exceed those of NVLink.

Rumors have emerged indicating that Nvidia is less optimistic about its business performance beyond 2026.

This can be inferred from CEO Jensen Huang's recent global speeches promoting national-level orders, as well as Nvidia's reactions to potential further bans on H20 exports to China.

There are even reports that Nvidia plans to reduce wafer orders for 2026. Meanwhile, ASIC vendors have recently revised upward their forecasts for the market size going forward. These shifts signal that Nvidia's absolute lead in the cloud AI market may be wavering, presenting a prime opportunity for UALink to expand its influence.

Many industry observers welcome these changes optimistically, believing that increased competition will foster better technological products and accelerate AI development.

---

https://t.co/53W9THmNdC


AMD's latest AI chips and integrated rack solutions have performed impressively. This marks a genuine opportunity to challenge Nvidia's leadership. Major companies like Microsoft and OpenAI are likely to increase their procurement of AMD solutions next year


the stock was overcrowded and at elevated levels… a ~5% pullback despite an in-line print appears to be a healthy technical correction

Summary: Near-term bearish on AVGO: overcrowded longs and 90% rally from bottom set up a healthy technical pullback despite in-line results.

Investor Note: What Do Broadcom’s Earnings Tell Us?

Meets Expectations, But Overcrowded Longs Lead to Pullback
• After-hours: -4%. Results were in line with expectations, but the stock was overcrowded and at elevated levels.
• Broadcom’s stock had rallied 30% in the month leading up to earnings, and is up nearly 90% from the bottom, suggesting excessive long positioning.
• At these levels, a ~5% pullback despite an in-line print appears to be a healthy technical correction.

⸻

Broadcom FY2Q / 3Q Revenue and Guidance
• Total Revenue: $15.0B in F2Q / $15.8B guidance for F3Q
• AI Revenue: $4.4B in F2Q / $5.1B guidance for F3Q

This is broadly in line with foreign institutional expectations (F2Q: $15.0B / F3Q: $15.9B; AI: $4.5B / $5.0B).
However, EBITDA guidance was slightly weak.

⸻

🟢 Bull Case
• Continued growth in AI XPU shipments over the next few quarters
• Non-AI businesses appear to have bottomed out
• New demand in AI inference monetization is emerging
• During the call, Hock Tan was asked:
“You previously mentioned a ~60% CAGR in AI-related SAM opportunities. Is that a fair way to think about your AI business growth this year and next?”

He responded concisely: “Yes.”
• This implies AI revenue will grow:
• $12.2B in 2024
• $19.5B in 2025
• $31.2B in 2026

→ This supports bullish AI sentiment across the market.

⸻

🔴 Bear Case
• Broadcom may be experiencing over-earning in networking segments
• AI XPU sales were underwhelming this quarter, as inferred from stronger EBIT margins
• Some investors were already modeling $30B+ in AI ASIC revenue by 2026
• Hock’s response on the call was reasonable but not overly enthusiastic
• The current quarter appears to be a transition phase, with greater scrutiny likely in H2 2025


AVGO remains his top pick, and he is bullish into the print. He expects July-quarter revenues to grow QoQ by +5~7%... guidance could come in close to $16.1B (vs. consensus at $15.75B)

Summary: Shares/adopts JP Morgan Harlan Sur's bullish AVGO preview: AI revenue >$5B, guidance ~$16.1B above $15.75B consensus, FY25 AI revenue $19-20B, top pick into earnings.

JP Morgan AVGO Earnings Preview (by Joshua Myers)

1. Investor Sentiment:
AVGO has been the most crowded long in the semiconductor space over the past five months and remains heavily crowded (though slightly less so heading into earnings, as short interest has ticked up a bit). This stems from high expectations around “Harlan,” the AI ASIC reference platform first mentioned last fall, which has solidified AVGO’s position as the undisputed leader in the space. There’s also a broad perception that this stock remains hard to short. According to our buyside survey, there’s a mildly optimistic—but not irrational—view that AI semis will provide a modest boost to earnings (excluding margins). Investors are bullish on the TPUv6p ramp, and in addition to noise around SKU losses dying down, optimism is also growing around new projects. Minor watchpoints include recovery in networking, wireless, and broadband. The key investor question is: How should I be positioned for this “transition quarter”? Harlan makes clear in today’s note that the ramp has already begun, so if he’s right, this setup could be primed for upside surprise.
2. Positioning Score (1 = max short/underweight, 10 = max long/overweight):
9 (The risk here is that there are very few shorts left.)
3. Implied Volatility:
6.7%
4. Recent Analyst Commentary (Harlan Sur):
Yesterday, Harlan Sur published a well-received note elaborating on the underappreciated (at least based on same-day investor calls) growth drivers from AVGO’s 3nm TPU ASIC and MTIA ramp, as well as the teased launch of Tomahawk 6 (including the Tomahawk 6 F1 stand-up chip), which was hinted at on LinkedIn. Today, he officially previews the April-quarter earnings set to be announced Thursday morning (I’ve previewed them separately here).

Harlan sees continued strength in AI products (custom ASICs and networking) as well as stabilization in non-AI semis (enterprise, server/storage, broadband, and wireless). Combined with improving VMware profitability, these factors are expected to deliver slightly better-than-consensus results across revenue, EPS, and FCF. He expects July-quarter revenues to grow QoQ by +5~7%.

Harlan’s expectations for revenue and guidance are even higher than our own bullish buyside earnings bar. On revenue guidance, he thinks it could come in close to $16.1B (vs. consensus at $15.75B, and our buyside bar at $15.93B). This is driven by his expectation that AI semiconductor revenue (driven by the 3nm TPU6 ramp for GOOGL) could exceed $5B (vs. consensus at $4.8B and our buyside bar at $4.95B). He believes this single TPU6 SKU—described as “the world’s most powerful custom XPU AI accelerator”—could generate over $15B in lifetime revenue.

In addition, driven by strong networking demand and the launch of the next-gen Tomahawk 6, Harlan expects FY25 AI revenue to reach $19–20B, up 60% YoY.

Beyond AI, cyclical trends are improving (with potential upside in wireless), and VMware renewals remain strong (driven by higher ASP VCF full-stack solution upgrades/upsells). AVGO remains his top pick, and he is bullish into the print.


Summary: Citi: HBM supply deficit deepens to -10%/-6% in 2025/2026; maintains favorable view on SK Hynix; NVDA and MU tagged as beneficiaries of tight HBM supply and surging demand.

250520_Tight HBM Supply to Continue in 2025E & 2026E on Continued HBM Quality Issues – CITI

1. CITI projects that the HBM supply shortage will intensify further, extending beyond 2025 into 2026.

2. This is due to persistent quality issues with HBM3E 12hi and lower-than-expected yield rates (especially in TSV and bonding processes), which are likely to limit the growth rate of HBM production.

3. While demand remains solid, supply shortages are expected to worsen.

4. Accordingly, the supply/demand ratio forecast has been revised from -8%/-3% to -10%/-6% for 2025E/2026E, respectively.

5. The 2025 HBM supply growth forecast has been lowered by 11 percentage points, from YoY +97% to YoY +86%.

6. While the market is concerned that Samsung Electronics entering the HBM3E 12hi market after passing qualification tests could lead to oversupply, CITI believes Samsung’s entry would have only a limited impact on overall market balance.

7. CITI expects Samsung’s HBM supply ramp-up to fall significantly short of market expectations and, as a result, has revised down the 2025 HBM bit shipment forecast by 6%.

8. In contrast, HBM demand is projected to grow strongly, with YoY +106% in 2025 and YoY +57% in 2026. This growth is being driven not only by NVIDIA but also by rising ASIC demand.

•2025 Supply: YoY +86%
•2026 Supply: YoY +48%

9. CITI expects the spread of AI supercomputing to accelerate content per system, driving HBM demand growth in both 2025 and 2026.

10. Stacking is expected to increase from 8hi for HBM3 to 12hi for HBM3E, and eventually to 16hi for HBM4. Correspondingly, memory capacity per stack is projected to rise from 16GB → 24GB → 32GB.

11. As a result, given the increasingly tight HBM supply-demand balance through 2025 and 2026, CITI maintains a favorable view on SK Hynix.

$MU $NVDA


HBM demand is projected to grow strongly, with YoY +106% in 2025 and YoY +57% in 2026. This growth is being driven not only by NVIDIA but also by rising ASIC demand


Summary: Shares Loop Capital's Buy reiteration and PT raise to $250, implying ~70% upside from current levels.

Wow! These people think Nvidia could go up another 70% from here.

Loop Capital Reiterates Buy on $NVDA, Raises PT to $250 from $175; says Gen AI compute spending outlook supports long-term valuation

Analyst comments: "Reiterating our Buy rating as our work strongly suggests that 'the math just works', as fantastic as that may sound.


Summary: JPM reiterates Overweight on Foxconn; GB200 ramp + AI server leadership to drive growth and offset H2 seasonality.

Hon Hai Precision (Foxconn) 2317.TW Taiwan

Foxconn: GB200 Shipments Continue to Advance, AI Server Business is the Main Growth Driver
JPM (G. Hariharan, 25/07/07)

JPM notes that despite weaker June sales due to exchange rates and prior pull-ins, Foxconn's overall 2Q25 revenue was in line with expectations. AI server shipments, especially for GB200, are steadily progressing, becoming the core driver of the company's future revenue growth.

June Sales Weakened by NTD Appreciation and Prior Pull-in Effects
Foxconn's June revenue was NT$540 billion, a 12% month-over-month decrease but a 10% year-over-year increase. The decline was primarily due to the 1-2% appreciation of the New Taiwan Dollar (NTD) in June and the fading effect of customers pulling in orders earlier due to tariff expectations, leading to a sales decline in computing, smart consumer electronics, and components. Cloud and networking products remained stable, and AI revenue continued to grow but was partially offset by weakness in general servers and a decline in NVIDIA HGX shipments.

Second Quarter Revenue Performance in Line with Expectations, GB200 Shipment Pace Normal
Preliminary 2Q25 revenue increased by 9% quarter-over-quarter and 16% year-over-year, aligning with market expectations. JPM estimates that Foxconn shipped approximately 2,000 GB200 racks in 2Q25 and maintains its full-year expectation of around 10,000 units, believing that GB200 is the core driver of overall growth. Third-quarter revenue is expected to increase by approximately 7% quarter-over-quarter, slightly lower than the 18-20% growth seen in the same periods of 2023 and 2024. This is mainly due to the fading of pull-in effects, but the continuous ramp-up of GB200 and the launch of new mobile phones will provide some support.

Exchange Rate Factors Limit Gross Margin Improvement, But AI Shipment Outlook Supports Valuation
The NTD exchange rate remains a key factor influencing gross margin. JPM currently expects Foxconn's 2Q/3Q gross margins to improve by +0.3 percentage points and remain flat quarter-over-quarter, respectively. Although there are market doubts about the pace of GB200 rack shipments, and Foxconn's stock price has lagged behind the overall AI industry's rally compared to other ODM manufacturers, JPM maintains its "Overweight" rating on Foxconn given the improving GB200 yield and the company's leading position in the AI server market.

AI Server Business Becomes Key to Mitigating Seasonal Weakness in H2 Demand
JPM believes that as investors' expectations for 2026 AI demand strengthen, AI server-related companies are receiving more attention. Foxconn's AI-related revenue is expected to continue growing in the coming quarters, which will offset seasonal demand weakening and market uncertainties in the second half of the year, supporting overall revenue performance.


Summary: Foreign brokerages broadly cautious on HBM competitiveness but see Q2 as earnings bottom; lowered valuations and shareholder returns viewed positively — net constructive on Samsung.

250709_Q2 2025 Samsung Electronics - Foreign Brokerage Comments

[Key Takeaways]

(1) Q2 2025 earnings are attributed to HBM revaluation losses and a sluggish Foundry business.
(2) There is a common cautious stance regarding HBM business competitiveness.
(3) However, already lowered valuations and shareholder return policies are viewed positively.

[House Comments]
(1) Goldman Sachs

Adjusted HBM shipments and DRAM/NAND ASP estimates downwards, while smartphone margin estimates were revised upwards.

Lowered 2025(F) ~ 2027(F) EPS by -3.6%, -1.4%, and -0.9% respectively.

(2) JPMorgan

Focusing on HBM4 and the possibility of 1-c node entering Rubin GPU in the future. However, sample shipments are delayed, so market share gains will likely be limited for now.

Expects HBM shipment growth of +12% YoY in '25 and +74% YoY in '26 driven by NVDA/AMD & AI ASIC volume growth.

However, during the earnings call on July 31st, management is highly likely to lower the '25 HBM guidance and is expected to share detailed updates on: 1) Qual status, 2) DRAM capacity allocation strategy, and 3) Changes in packaging technology.

(3) Nomura

Judged that the impact of tariff factors was minimal in Q2, but potential impact on US exports and profitability depending on future tariff negotiations.

Q3 2025(F) operating profit is expected to recover to around ₩9 trillion.

ROE is expected to bottom out at around 8% this year and gradually rise to 11% in '26 and 13% in '27 with HBM competitiveness recovery.

(4) CLSA

HBM order delays from AMD and Broadcom were reflected in Q2 2025, leading to stagnation.

Forecasts an earnings rebound with Q2 2025 as the bottom, and expects progress in the HBM business and recovery in the Foundry business in 2H25 and '26.

(5) CITI

Q2 2025 earnings likely marked a bottom, and increasing GDDR7 demand could drive DS division recovery. This is because GDDR adoption is expected to spread as an HBM alternative in AI Inference.

However, reflecting the weaker-than-expected earnings, lowered '25 and '26 earnings by -7% and -8% respectively.


Summary: SK Securities reiterates Overweight on semiconductors + SK Hynix as top pick; HBM4 cost structure drives industry tightness and structural supply constraint.

[SK Securities – Donghee Han, Jemin Park, Semiconductor Sector]

⸻

HBM4 Price Premium Estimation

HBM4 price premium expected at 30–40%

Analysis of Cost Structure Changes:

1. Core Die Penalty: Cost increase of approximately 22%
• TSV vias (power, signal, I/O) are expanded by more than 300%
• → Die penalty estimated at 17–19%
• Additional factors: Increase in metal layers due to RDL, micro bump, power and ground layout

2. Introduction of Logic Die: Cost increase of 250–300%
• Logic die introduced to improve power efficiency
• Base die cost transitions from “memory process cost” to “external foundry pricing,” leading to unavoidable cost surge

3. Cost Offset Factors:
• Allocation of core die capacity from basic die + added value differential
• Potential 8% (1/13) increase in core die production capacity
• Core die provides higher added value than base die, which more than offsets the cost increase

⸻

Maintain Overweight Rating on Semiconductor Sector
• HBM process complexity is rising sharply → continued decline in yield
• High expected premium on HBM4 acts as a structural constraint on both HBM and commodity leading-edge supply
→ Industry tightness expected to persist
• Reaffirm strong fundamentals of the semiconductor sector

⸻

Reaffirmation of Competitive Edge in HBM4
→ Maintain SK Hynix as top pick


Summary: Samsung ramping DRAM supply back up in 2H 2025 is bearish for MU via increased competition and pricing pressure.

Memory Semiconductor Supply: Weak First Half, Strong Second Half – DRAM Production Ramping Up Again (Samsung Policy Shift)

Samsung's DRAM production bit growth, previously at 14% y/y, is likely to be revised upward again.

- In the first half of the year, industry-wide supply growth forecasts were lowered due to Samsung’s restructuring (1bnm redesign, P4 fab delay, etc.),
- However, Samsung's 2025 DRAM bit growth guidance, which had been adjusted from the low teens → to 5% → is now expected to be revised back up to around 8–10%.

Rumor: Samsung, with improved yields from redesigned 1bnm process and lowered HBM production targets, expected to ramp up DDR5/LPDDR5 output in the second half of 2025 to recover market share.

$MU


Summary: Daishin raises SK Hynix TP to KRW 330K; bullish Korean semis on HBM4 supply tightness, DRAM beat, ASIC upside, and lower cycle volatility.

Can we buy more Korean semiconductor stocks? - Korea Daishin Securities

It is too early to say that the rally in memory semiconductor stocks has ended. If Micron's DRAM sales exceeded expectations, I judge that SK Hynix's DRAM sales will be even better. Our firm expects SK Hynix's 2Q25 DRAM sales to reach the mid-20% range, surpassing the guidance (low 10% growth QoQ), and we anticipate that the industry trend will continue to move towards SK Hynix consistently approaching the forefront in terms of overall memory semiconductor revenue. If so, I believe there will be sufficient short-term catalysts to continue the stock rally.

From a valuation perspective, I believe there is still upside potential as the two changes presented in our previous report (250618_Semiconductor: Reasons for further upside) are materializing.

1. Expansion Opportunities in AI

I judge that these remain valid. Given the tight supply-demand environment for HBM4, the bargaining power of suppliers will not easily disappear, and the possibility of increased orders in ASICs is gradually becoming visible. If the growth in volume expands, the absolute profit growth that can be achieved will also be significant, which can lead to changes highlighting the price attractiveness of the stock.

2. Change in Course in the General-Purpose Market

The strategic change in direction among suppliers is materializing. Even if there is a short-term loss in sales, the industry is developing in a direction that maintains the gap with China through strategic changes in product lines, and strategic production control is being maintained to reduce recessionary periods where new entry is easy.

- In terms of CapEx, it is being executed restrictively only for the most advanced products where strong demand is visible. The Capital Intensity (CapEx as a percentage of revenue) across the industry is judged to remain in the mid-to-high 20% range, lower than in past boom periods.

- As the industry's response strategies become more flexible, I believe the volatility of the cycle will continue to decrease. I judge that the market will begin to assign higher value to memory semiconductor stocks as volatility decreases.

- Our Conclusion As SK Hynix is leading AI technology from a customer-centric perspective, I believe it can receive a higher valuation than before. Although the stock price has risen rapidly, there are still changes to anticipate, and considering this, we are raising SK Hynix's target price to KRW 330,000 (Target P/B raised from 1.9x to 2.0x, reflecting changes in profit forecasts).


Can we buy more Korean semiconductor stocks?

Korean semis: EWY ETF + Samsung + SK Hynix


maintaining an 'Overweight' rating for the company... 2028 EPS is expected to reach $8-9

Summary: Shares/endorses JPM Overweight on MRVL; TAM revised up to $94B by 2028, 20% AI ASIC share target, EPS $8-9.

Marvell: AI ASIC Platform Continues to Expand, Targeting 20% Data Center Market Share by 2028
JPM (H. Sur, 2025/06/18)

Marvell, leveraging its end-to-end custom chip development platform, strong customer base, and technological accumulation, is poised to continuously expand its market share in the AI ASIC field and achieve significant EPS growth before 2028.

• Data Center and AI ASIC Market Size Revised Upward, Marvell's Target Share Increased to 20%

The overall data center TAM (Total Addressable Market) has been revised upward to $94 billion by 2028 (previously $75 billion), with the AI Custom Chip (ASIC) TAM revised upward to $54 billion (previously $43 billion). The diversification of AI workloads and the increasing demand for customized XPU (Accelerated Processing Unit) are the main drivers. Opportunities related to customized XPU (including SmartNIC, DPU, security acceleration, co-processors, etc.) collectively amount to a TAM of $15 billion. The institution believes that if Marvell successfully achieves its target of 20% AI data center market share, its 2028 EPS is expected to reach $8-9, maintaining an "Overweight" rating for the company.

• Secured Multiple Generations of ASIC Design Wins with Three Major Cloud Vendors and Added Two New Clients, Covering Five Major Customers in Total

Marvell has achieved multi-generational AI ASIC design wins with three hyperscale clients: Amazon, Google, and Microsoft, covering 18 multi-generational product slots. Additionally, it has added two new AI XPU ASIC clients, bringing the total number of major clients to five. Some design wins have extended to the 2nm node (expected to include Amazon Trainium 4 and Microsoft Maia Gen 3), which is anticipated to help drive its market share to 20% by 2028. The current project pipeline still has 50+ opportunities and 10+ clients, with a total potential revenue of $75 billion.

• Full-Process Custom Chip Platform Offers Significant Advantages, Technology Covers 2nm to 14a Process and Multi-Generational Packaging Capabilities

Marvell has built a strong IP portfolio and delivery capability through its leading technologies in system architecture, high-speed SerDes (up to 448G), SRAM, high-bandwidth memory interfaces, 2.5D/3D/4D packaging, silicon photonics, and co-packaged optics. To date, the company has 20 products deployed at 5nm/3nm nodes, is progressing with 2nm chip testing, and is initiating 16a/14a process development. This platform capability helps clients accelerate time-to-market and deepens collaboration with cloud vendors.

$MRVL


Summary: Shares Morgan Stanley Buy recommendation on CSCO, ANET, FFIV, HPE as AI/network equipment spending remains stable and AI tops CIO priorities.

US Optical Modules: Network Equipment Spending Relatively Stable, AI Remains CIO's Top Investment Priority

Morgan Stanley (M. Marshall, July 08, 2025)

Morgan Stanley's Q2 2025 CIO survey indicates stable network equipment spending and continued strong enthusiasm for AI investment, despite persistent macroeconomic and tariff uncertainties. Compared to other sub-sectors like communications software, network equipment demonstrates greater defensiveness. We recommend prioritizing related targets such as CSCO, ANET, and FFIV.

Network Equipment Spending Expectations Stable, Ranking Slightly Down
The communications sector's 2025 growth forecast is 2.9%, a 7bps decrease from the previous quarter, but still 13bps higher than 2024. Network equipment's priority in CIO spending shifted from 7th to 8th, but spending resilience remains strong, making it one of the few sectors whose expectations have not been downgraded since early 2025.

AI Continues to Be CIO's Top Priority, Budget Source Leaning Towards New Investment
AI remains the top priority for CIOs in 2025, with 60% of CIOs expecting to enter the production phase in 2025 or earlier. 56% of AI spending comes from new budgets, a higher proportion than the 41% in Q1 2025, indicating enterprises' willingness for incremental investment in AI. Related beneficiaries include CSCO, ANET, FFIV, HPE, etc.

Public Cloud Penetration Continues to Increase, Equipment Upgrade Demand Rises
The Q2 2025 survey shows enterprises expect 68% of workloads to migrate to public clouds by the end of 2027, up from the current 44% and 50% by the end of 2025. With clearer distinctions drawn between cloud and on-premise deployments, some enterprises are beginning to refresh on-premise equipment that hasn't been replaced in years, benefiting demand for network-related equipment.

Communications Software Shows Some Improvement But Remains Under Pressure
Communications software spending remains less defensive but has shown marginal improvement compared to the last quarter, especially in collaboration and customer service software. Spending intention for collaboration software slightly rose to the edge of the Top 10, and customer service software's defensiveness climbed from 25th in Q1 to 10th, indicating the emergence of structural highlights.


Related beneficiaries include CSCO, ANET, FFIV, HPE, etc.


Summary: Shares/adopts J.P. Morgan's Overweight on NVDA with $170 Dec-2025 PT on Blackwell ramp, strong AI demand, and CY26 EPS of $5.39.

J.P. Morgan | NVIDIA Analysis: Solid Results/Guidance Despite China Regulations; Smooth Blackwell Production/Ramp; GB300 Mass Production Preparation This Quarter; Maintain Overweight (OW) Rating

Despite approximately $2.5 billion in lost H20 GPU shipments to China due to newly enacted regulations (effective April 9), NVIDIA reported solid revenue of $44 billion for the April quarter, beating both our and consensus estimates of $43 billion. However, gross margin (61% vs. prior guidance of 71%) and EPS ($0.81 vs. consensus of $0.93) were hit due to a $4.5 billion H20 inventory write-down and purchase commitment.

For the July quarter, the company guided revenue of $45 billion. While this falls short of consensus estimates ($46 billion), which we believe do not fully reflect H20 shipment restrictions, it exceeds our estimate that takes the restrictions into account ($41–43 billion). Excluding H20 shipments, July quarter data center revenue is expected to grow approximately 16% QoQ, supported by continued investments in AI/accelerated computing (training and inference) and a strong ramp of the Blackwell data center platform.

Blackwell shipments are expected to increase throughout the year, and the company is on track to begin mass production of the next-generation Blackwell Ultra (B300/GB300) by the end of the quarter. We still expect that ~$5 billion worth of H20 shipments originally planned for 2H will not be fulfilled due to the April restrictions.

In networking, the April quarter saw significant improvement both QoQ and YoY, driven by strong NVLink switch content within the NVL72 rackscale platform. That said, over the past 12 months, networking revenue has only grown 37% compared to 113% for compute, so we will closely monitor the sustainability of the improvement.

Demand for Blackwell remains very strong and is expected to exceed supply for several quarters. However, the company and its supply chain partners are currently shipping 1,000 NVL72 racks per week, demonstrating strong execution. Gross margin guidance (72%) came in 30bps above consensus, reflecting the company’s aggressive ramp of the high-margin Blackwell platform, supported by improved yields and cost structures.

Given the recent easing of export controls and large-scale data center announcements in regions like the UAE, Saudi Arabia, and Taiwan, we believe the company has strong visibility into continued high growth through 2026.

Conclusion: NVIDIA remains 1–2 steps ahead of its peers through its comprehensive silicon/hardware/software platform and robust ecosystem. With an aggressive product rollout cadence and increasing segmentation, it continues to widen the gap. We adjust our estimates and introduce our first CY2026 projections, maintaining our December 2025 price target of $170 and Overweight (OW) rating.

⸻

1. April Quarter Revenue Beats Consensus Despite H20 GPU Shipment Restrictions to China

NVIDIA reported April quarter revenue (FQ1 2026) of $44 billion (+12% QoQ), beating consensus ($43.31 billion), despite a $2.4 billion revenue loss from H20 GPU shipment restrictions to China (effective April 9). However, gross margin (61% vs. prior guidance of 71%) and EPS ($0.81 vs. consensus of $0.93) were impacted by a $4.5 billion inventory write-down and purchase obligations related to H20.
 1. Data center revenue grew ~10% QoQ, supported by increased Blackwell production (~5% QoQ growth in data center compute), though partially offset by lower H20 shipments.
 2. Networking revenue rose ~64% QoQ due to growth in Spectrum-X Ethernet and NVLink switch deployments.
 3. Gaming revenue increased ~48% QoQ driven by supply improvements and expansion of the RTX 50 series.
 4. Pro Visualization revenue remained flat QoQ.
 5. Automotive revenue declined ~1% QoQ.
 6. Gross margin fell to 61% (consensus 71.1%) due to H20-related write-downs.
 7. EPS came in at $0.81, below consensus ($0.93), but excluding H20 charges, EPS would be $0.96.

⸻

2.July Quarter Revenue Guidance at $45B — Above Our Estimate Despite $8B in H20 Losses

We estimate an additional $5 billion of H20 shipments expected for 2H will not occur due to restrictions, but expect this to be offset by a strong Blackwell/Blackwell Ultra ramp in 2H. For the July quarter, the company guided $45 billion in revenue. While this falls short of the $46 billion consensus (due to underestimation of H20 impact by sell-side analysts), it is above our more conservative estimate of $41–43 billion.

Excluding H20, July data center revenue is projected to grow ~16% QoQ, driven by continued investment in AI/accelerated computing and the ramp of the Blackwell platform. Gross margin is expected at 72%, ~30bps above consensus, as NVIDIA increases shipment volumes and improves yield/costs. Operating expenses (OpEx) are forecast at $4 billion. EPS is projected at $0.99, slightly below consensus of $1.01.

⸻

3. Smooth Blackwell Ramp Continues — Strong Execution Against Model Innovation like DeepSeek

We view NVIDIA’s response to innovations like DeepSeek as highly effective. As we’ve noted, such model innovations increase overall computing complexity (e.g., test-time inference, reinforcement learning using AI/synthetic data, agent AI, WFM systems, multimodal variants), sustaining demand for greater and more powerful infrastructure. NVIDIA plans to launch the Blackwell Ultra platform in 2H and expects supply shortages to persist for several quarters.

⸻

4. Revised Estimates and Maintained $170 Dec 2025 Price Target

Despite solid topline results, we revise our estimates to reflect lower margins in 1H due to the H20 write-down. We introduce our CY26 EPS forecast for the first time and maintain our price target of $170, based on ~30–35x multiple on CY26 EPS of $5.39. We reiterate our Overweight rating on NVIDIA.

$NVDA


Morgan Stanley indicates that Alchip may have become the exclusive supplier for AWS Trainium3 and has a high probability of securing the Trainium4 project... the company's CoWoS capacity is expected to significantly ramp up in 2026, driving accelerated revenue growth

Summary: Shares Morgan Stanley Buy-equivalent thesis: Alchip exclusive on Trainium3, high win-rate on T4, 2026 ramp; Marvell exits XPU foundry, loses share.

AIchip: Expected to Exclusively Supply Trainium3 and Likely to Secure Trainium4, Significant Growth Potential in 2026

Morgan Stanley (C. Chan, 25/07/02)

Morgan Stanley indicates that Alchip may have become the exclusive supplier for AWS Trainium3 and has a high probability of securing the Trainium4 project. Considering its smooth progression to 3nm and potential 2nm project roadmap, the company's CoWoS capacity is expected to significantly ramp up in 2026, driving accelerated revenue growth.

Trainium3 Expected to be Exclusively Contracted by Alchip, Mass Production to Begin in 2026

According to industry surveys, Alchip is highly likely to be the sole XPU supplier for AWS Trainium3. Its 3nm chip successfully taped out in May 2025, demonstrating mature backend design and no need to change service providers. Morgan Stanley has raised its 2026 CoWoS wafer start forecast to 40,000 wafers, corresponding to approximately 600,000 to 650,000 units shipped, contributing significantly to revenue.

Marvell Exits XPU Foundry Competition, Shifts to Peripheral Chip Support

In contrast, Marvell recently canceled some 2026 CoWoS-R orders, indicating its failure to enter the 3nm XPU foundry project and its focus solely on XPU auxiliary chips. This further solidifies Alchip's dominant position in Trainium3 foundry.

Trainium4 Project Also Has High Win Rate, Collaboration with Astera Drives 2nm Layout

Alchip hinted at positive progress on its 2nm test chip project during its Q1 2025 earnings call. Coupled with its recent collaboration with Astera Labs on chiplet I/O design capabilities, this increases its likelihood of securing the Trainium4 project. The market expects a decision on this project by the end of July, and Morgan Stanley has upgraded this expectation to its base case.

Although AWS Builds Small-Scale Production Lines, Alchip Still Holds Nearly 100% of Foundry Orders

While the client operates a small CoWoS production line, it is primarily for supplemental capacity, to be utilized if Alchip's capacity is insufficient. Overall, Alchip still handles virtually all Turnkey foundry business. The estimated unit price for its 3nm chip is US$3,000 (excluding HBM), and clients generally use an HBM consignment model to reduce working capital pressure.


Marvell recently canceled some 2026 CoWoS-R orders, indicating its failure to enter the 3nm XPU foundry project


Summary: Bullish NVTS: GaN high-voltage product adopted in NVIDIA GB300, no competitor does it better, 800V orders continuing.

@Semicon_player "미국 주식 NVTS 나노비 반도체: GaN(질화갈륨) 기반 고전압 제품이 엔비디아 GB300에 채택되었으며, 현재 시장에서 이보다 더 잘하는 경쟁사는 없다. 800V급 주문도 지속적으로 들어오고 있다."

https://t.co/4KFDmKeq6r

3월 10일의 코멘터리
CES 4.5$ 이후 2.25불 까지 하락 할 것을 예상

하지만 트럼프가 관세로 더 매수기회를 줌 1.8$ 까지 떨어짐
그래도 계속 이 악물고 매수

결국 모두 수익 전환 https://t.co/DGMdMVOFIT