Investment Rating - The industry investment rating is Attractive [7]. Core Insights - Stablecoins are a cryptocurrency category designed to maintain a value pegged to another asset, primarily the USD, and can also be linked to commodities [3][4]. - The GENIUS Act is progressing through the US Congress, which aims to establish clear requirements for stablecoin issuers, potentially reducing ambiguity in the market [13]. - Rising interest rates may increase the transaction costs associated with stablecoins, as they do not pay interest, leading to a higher opportunity cost for users [14]. - Major payment networks like Visa and Mastercard are actively developing stablecoin capabilities, viewing them as incremental opportunities rather than threats [15][16]. Summary by Sections Stablecoin Definition and Functionality - Stablecoins are generally pegged to the USD and can also be linked to other assets, with most maintaining an asset base equivalent to the value of outstanding stablecoins [3]. - They function similarly to deposit accounts without interest, allowing for immediate clearing of transactions [4]. Unique Transaction Capabilities - Stablecoins can facilitate transactions that are difficult to manage with traditional financial instruments, particularly for unpredictable timing or value [9]. Regulatory Developments - The GENIUS Act outlines requirements for stablecoin issuers, including asset holding and reporting obligations, which could clarify the landscape for stablecoin issuance [13]. Market Dynamics - The cost of using stablecoins is expected to rise during periods of increasing interest rates, potentially affecting demand [14]. - Visa and Mastercard have been preparing for stablecoin integration, indicating a strategic move to enhance their service offerings [15][16]. Company Ratings - The report includes various companies in the payments and processing sector, with ratings such as Overweight for Block, Inc and Mastercard, and Equal-weight for others like PayPal and Fiserv [72][74].

Investment Rating - The industry investment rating is Attractive [4] Core Insights - China exports have started to decline, with volumes down significantly year-over-year, indicating muted demand and well-stocked domestic US inventories [3][10] - The report suggests that the expected surge in imports during the 90-day tariff pause did not materialize, leading to lower US import volumes [7] - There is a potential shift in production to the US to avoid tariffs, which may support US manufacturing productivity and increase maintenance, repair, and operations (MRO) demand [7] - The report highlights risks to short-cycle production rates in the second half of 2025, particularly for companies that guided for stability or acceleration without acknowledging pre-buying [8] Summary by Sections China Exports - China maritime exports have shown a mild recovery from April lows but remain down year-over-year, reflecting a lack of urgency in US imports during the tariff pause [3][10] US Import Trends - US import volumes, particularly from LA and Long Beach, have decreased in May and June, suggesting a potential shift in supply chain strategies [12] Manufacturing and Production - The report indicates that US manufacturing capacity utilization has increased post-election, with a notable disconnect between ISM New Orders and Imports, suggesting a strategic relocation of production [7][17] - The report anticipates an extended capital expenditure upcycle in the US, benefiting from protectionist policies and resulting in strong backlogs for certain companies [8] Company-Specific Insights - Companies such as 3M, Lennox International, and Stanley Black & Decker are identified as most at risk for channel digestion in the second half of 2025 [8] - The report emphasizes a preference for US capital expenditure exposure, particularly in light of the current economic policies [8]

Investment Rating - The report assigns an "In-Line" rating for the robotics industry in China, indicating expected performance in line with the broader market benchmark [6]. Core Insights - The humanoid robot category is projected to become the largest segment in the long term, especially with advancements in Artificial General Intelligence (AGI) [3][9]. - The Chinese robotics market is expected to grow significantly, with a projected market size of approximately $47 billion in 2024, accounting for about 40% of the global market. The compound annual growth rate (CAGR) is anticipated to be 23% from 2025 to 2028, reaching $108 billion by 2028 [3][17]. - Drones are expected to dominate the market, comprising nearly 40% of the total market size by 2028, with collaborative robots, mobile robots, and service robots showing the fastest growth rates of 46%, 35%, and 25% respectively [3][4]. Market Size and Growth - The global robotics market is projected to grow at a CAGR of 17% from 2019 to 2024, with significant contributions from various segments including industrial, commercial, and service robots [13][15]. - By 2028, the potential market size for robotics components in China is estimated to reach $40 billion, with a CAGR of 23% [4][19]. Supply Chain Opportunities - The report highlights that 55% of global robots are expected to be produced in China, with key components such as motors and batteries representing the largest market segments, accounting for 13% and 17% of the total bill of materials (BoM) respectively [4][20]. - The report identifies attractive areas for investment within the supply chain, particularly in sensors, vision systems, motors, and reducers [9]. Recommended Companies - The report recommends investing in companies such as Midea and Xiaomi due to their diverse robotics product offerings and strong track records in product development and ecosystem building [4]. - Other notable supply chain participants include 汇川技术 (Inovance Technology), 地平线机器人 (Horizon Robotics), and 禾赛科技 (Hesai Technology) [4].

Investment Rating - The report maintains an Overweight (OW) rating on US stocks, Treasuries, and US Investment Grade Corporate Credit, while recommending a focus on quality assets [4][5][6]. Core Insights - The report highlights a structural shock to the global trading order due to the broad imposition of tariffs by the US, which is expected to weigh on growth but not lead to a global recession [2]. - US real GDP growth is projected to decline from 2.5% in 2024 to 1.0% in both 2025 and 2026, with global growth expected to decrease from 3.5% to 2.5% in the same period [2][9]. - The report suggests that while global growth is slowing, risk assets may perform well as markets adjust to lower growth expectations [3]. Economic Outlook - The US economy is expected to experience a step-down in growth, with inflation projected to peak in Q3 2025 [2][8]. - The report anticipates a decline in global demand due to tariffs, impacting exports and investment in the euro area and China [8]. - Japan's nominal GDP reflation remains intact, but the global slowdown is expected to affect its exports and investment [8]. Sector Recommendations - In the US, the report favors quality cyclicals, large caps, and defensives with less leverage and cheaper valuations [6]. - Key sectors recommended for Europe include defense, banks, software, telecoms, and diversified financials, while in emerging markets, the focus is on financials and domestic businesses [6]. - The report advises against cyclical exporters in Japan due to anticipated JPY appreciation [6]. Earnings Forecasts - The report provides earnings forecasts for major indices, with the S&P 500 expected to reach a price target of 6,500 by June 2026, reflecting a 9% year-over-year increase [7]. - The MSCI Europe index is projected to have a modest growth of 2.2% year-over-year, while the MSCI Emerging Markets index is expected to grow by 10% [7]. Monetary Policy Expectations - The report expects the Federal Reserve to cut rates by 175 basis points in 2026, with Treasury yields projected to reach 4.00% by the end of 2025 [14][19]. - The European Central Bank and Bank of England are also expected to implement rate cuts, with the ECB delivering 75 basis points and the BoE 100 basis points by year-end [14][19]. Commodity Insights - Oil prices are subject to geopolitical uncertainties, with potential scenarios ranging from minimal disruption to significant price increases depending on developments in the Middle East [16]. - European gas prices are expected to rise due to a strong demand for LNG imports to meet storage targets [17]. - Gold is highlighted as a top pick due to strong central bank demand and safe-haven interest amid growth concerns [17].

M Idea The Viewpoint: When Will Higher Oil Prices Start to Affect Asia? Oil prices have spiked due to supply concerns but the effects on Asia should be manageable given a lower oil burden than before and moderate inflation. However, if oil prices move even higher to above US$85/bbl and a stronger USD is sustained, it may lead to delays in rate cuts. Key Takeaways In the event that oil prices rise above US$85/bbl in a sustained manner, on a relative basis within the region, Thailand, Korea, Taiwan, and India ...

Investment Rating - The industry view is rated as Attractive [5] Core Insights - The report highlights advancements in computer vision technologies from Waymo, GOOGL, and META, emphasizing the increasing value of data and the potential long-term advantages for GOOGL and META [3][4] - Waymo's improvements in simulation for autonomous driving are noted as a significant development, enhancing the scalability and efficiency of validation processes [4][7] - GOOGL's robotics research shows promise in generalization and cross-embodiment capabilities, indicating potential for deployment across various robotic applications [10][11] - META outlines a three-stage approach to model development for agent interactions, focusing on efficiency and productivity improvements [12][40] Summary by Sections Autonomous Driving - Waymo has made notable advancements in simulation, allowing for high-fidelity simulations that improve validation processes [4] - The importance of generalization in building scalable systems is emphasized, with evidence that scaling compute, data, and parameters leads to better model performance [8] - Challenges remain in extreme weather conditions, particularly snow and flooding, which require further improvements [9] GOOGL Robotics - GOOGL's early research indicates a strong potential for its robotics models to generalize across different types of robots, enhancing adaptability [10][11] META's Agentic Technologies - META's three-stage model development approach aims to enhance human-agent interactions, focusing on instinctive, deliberate, and collaborative systems [12] - The company is positioned to leverage AI investments for improved engagement and monetization across its platforms [40] Price Targets - GOOGL's price target is set at $185.00, implying a ~12X 2025e adjusted EBITDA [15] - META's price target is set at $650.00, implying a ~12.1X 2026e adjusted EBITDA [35]

Investment Rating - The report maintains a constructive view on India's economic prospects due to positive policy momentum [2][8]. Core Viewpoints - Recent policy efforts by the Indian government to reduce revenue expenditure, accelerate capital expenditure, and improve the business environment are encouraging and support investment growth while mitigating macroeconomic stability risks [2][7]. - The report emphasizes that India is well-positioned cyclically, with low trade exposure and strong domestic demand, which provides a buffer against trade tensions [7][9]. - The government's focus on attracting manufacturing investment and managing macroeconomic stability risks is expected to lead to a structural decline in interest rates, thereby enhancing investment rates [7][10]. Summary by Sections Policy Developments - The report highlights key recent policy advancements that reinforce confidence in India's medium-term growth outlook, including efforts to manage macroeconomic stability risks and promote manufacturing investment [4][8]. - The central government has reduced revenue expenditure to a six-year low of 22% of GDP, while the revenue deficit has decreased to a 17-year low of 1.7% of GDP [19][22]. Manufacturing Incentives - The Production-Linked Incentive (PLI) scheme has shown positive results, particularly in sectors like electronics and automotive, with significant increases in exports and domestic production [29][31]. - The government plans to increase the budget allocation for the PLI scheme by 108% to INR 195 billion (approximately USD 2.3 billion) for the fiscal year 2026, focusing on key manufacturing sectors [34][37]. State Government Initiatives - State governments are taking proactive measures to lower business costs and enhance manufacturing capabilities, with initiatives like Maharashtra's "Viksit Maharashtra" aimed at significant economic growth by 2030 [38][39]. - The central government is incentivizing state-level reforms by linking financial support to progress in areas such as land and urban planning [39][40]. Economic Growth and Employment - India's economy is projected to grow at an average rate of 6.5% annually over the next decade, with a significant increase in the working-age population necessitating job creation [41][42]. - The report stresses the importance of achieving higher GDP growth rates to address employment challenges and maintain social stability [41][42].

Investment Rating - The report indicates a rising bullish sentiment in merchant power, nuclear, and natural gas sectors, while interest in clean energy remains low, presenting an investment opportunity [6][9]. Core Insights - There is a significant increase in investor interest in data center power contracts, particularly in midstream/upstream energy, merchant power, and nuclear stocks, while carbon capture and renewables are currently less favored [5][9]. - The demand for power from data centers is projected to increase significantly, with estimates showing a steady upward progression in power demand over the next few years [11][12]. - The report highlights strategic drivers behind hyperscaler contracts with nuclear power plants, emphasizing political and environmental considerations [21][22]. Summary by Sections Data Center Power Demand - The report outlines a detailed methodology for projecting data center power demand, showing a consistent increase in estimates since early 2024 [11][12]. - The demand for AI compute is expected to grow rapidly, driven by advancements in AI capabilities and the need for more powerful models [13][16]. Investment Opportunities - The report identifies potential investment opportunities in gas turbine stocks due to ongoing gas-fired data center power deals, despite concerns about future demand [5][9]. - There is a noted lack of interest in clean energy stocks, which could signal a buying opportunity for investors [6][9]. Government Support and Infrastructure - Potential government actions to support power grid improvements may benefit large data center projects and natural gas-fired data centers [23]. - The report discusses how US trade negotiations could impact the growth of data center capacity, with minimal risks related to chip access but moderate risks concerning critical minerals supply [36]. AI Supercomputers and Infrastructure - The report references a study indicating that leading AI supercomputers' power requirements and costs are expected to double every 13 months, with significant implications for data center development [24][30]. - The US is projected to lead in AI supercomputer performance, which will drive further demand for data center capacity [34].

Investment Rating - The industry view for Real Estate Investment Trusts (REITs) and Commercial Real Estate (CRE) is rated as "In-Line" [5]. Core Insights - The analysis indicates that approximately 37% of tasks across 525,000 occupations in the public REIT and CRE services space have the potential to be automated, aligning with the Global Technology team's estimate that the total US addressable market for Generative AI (GenAI) applications will increase from about 25% to 44% of occupations in three years [3][34]. - The financial impact of GenAI adoption across 162 public REIT and CRE services companies, with total labor costs of $92 billion, could reach $34 billion, representing around 16% of operating cash flow before labor and interest costs [3][70]. - Key occupations with high automation potential include management (17%), sales and related (14%), office and administrative support (13%), and installation maintenance repairs (12%) [3][64]. Summary by Sections Opportunities - Significant labor automation opportunities exist, particularly for lodging/resorts, brokers & services, specialty, diversified, and healthcare REITs, with potential benefits exceeding 15% to operating cash [4]. - The analysis suggests that the greatest upside potential lies in sectors with high cash flow and high GenAI adoption, specifically in Brokers & Services, Healthcare, Lodging/Resorts, and Data Centers [4][11]. Revenue Impact - Data centers, specialty, and CRE services are expected to benefit most from GenAI infrastructure, potentially enhancing revenue management systems, customer acquisition tools, and predictive analytics [9]. Job Automation Insights - The report highlights that the average job automation rate across the REIT and CRE sectors is approximately 37%, with variations by subsector, such as 34% for Healthcare and 41% for Gaming [34][64]. - The analysis of job postings indicates that Brokers & Services companies have the highest proportion of core AI/machine learning job postings, suggesting they are leading in AI adoption [80][86]. Stock Implications - The report raises estimates and price targets for CBRE Group Inc and Cushman & Wakefield PLC based on potential labor efficiency gains, indicating that healthcare, brokers & services, and lodging/resorts may be underappreciated by investors [13].

Investment Rating - Industry view is rated as In-Line [1] Core Insights - The report expresses a bullish outlook on downstream rack output, anticipating approximately 30,000 rack builds for 2025 [3] - Monthly rack output is increasing for major ODMs, indicating a positive trend in production [3] - The PC market is expected to experience sub-seasonal demand in the second half of 2025, influenced by pull-forward demand in the first half [3] - PC OEMs are projecting a year-over-year shipment growth of 3-5% for 2025 [3] - General server momentum in the first half of 2025 is likely to decelerate as the year progresses [3] Company Summaries Key Stock Ideas - Preferred ODMs: Giga-Byte > Hon Hai > Quanta > Wistron > Wiwynn [3] - AI component plays: Gold Circuit [3] - Preference for enterprise PC exposure over consumer: Lenovo > Asustek > Acer [3] - Less bearish outlook on Unimicron [3] Valuation Comparisons - Lite-On Tech: Closing price of 108.50, rated E with a target of 96.50 [5] - Delta: Closing price of 398.00, rated O with a target of 485.00 [5] - Hon Hai: Closing price of 156.50, rated O with a target of 200.00 [5] - Foxconn Tech: Closing price of 64.30, rated U with a target of 47.50 [5] - Lenovo: Closing price of 9.15 HKD, rated O with a target of 11.40 [5]