September 15, 2025 04:05 AM GMT Semiconductors | North America Weekly: strength in servers We see significant strength in supply chains for general purpose servers. That's good for INTC, AMD, MU, albeit not central to the thesis on any of those stocks. We have seen tightening supply demand balance for CPUs, DDR5 RDIMMs, and eSSDs, all reportedly due to strength in the supply chains for the general purpose server market, across both enterprise and cloud. The reason for this is less clear; tightness in some a ...

V i e w p o i n t | 04 Sep 2025 03:00:00 ET │ 11 pages US Semiconductors Day 1 of Citi TMT Conf – It Ain't That Bad in Analog, AI Orders Ticked Up Recently, Expect ADI to Trade Well, DRAM Datapoints CITI'S TAKE We attended several presentations at the Citi TMT Conference. By far the most debate was generated on the Analog space with Infineon sounding cautious but ON preaching stability in bookings. Our checks indicate AI order rates have recently increased which should be positive for AMD and AVGO. HPQ (cov ...

Core Viewpoint - Intel's shares rose by 7.4% following reports that the Trump administration is considering a government investment in the company to support its factory hub in Ohio and improve its financial situation amid job cuts [1][3]. Group 1: Investment Considerations - The potential investment would be funded by the US government and aims to bolster Intel's operations during a challenging financial period [1]. - Discussions regarding the investment originated from a meeting between President Trump and Intel CEO Lip-Bu Tan, despite Trump's previous calls for Tan's resignation due to alleged ties to the Chinese Communist Party [2][5]. Group 2: Market Reaction - Investor excitement was evident as Intel's shares surged by as much as 8.9% before closing at $23.86, resulting in a market capitalization of $104.4 billion [3]. - The White House spokesperson indicated that discussions about the investment should be viewed as speculation until officially announced [3]. Group 3: Political Context - A stake in Intel would represent the Trump administration's ongoing efforts to intervene in critical private industries, particularly in the semiconductor sector [4]. - The administration has previously threatened to impose tariffs on imported semiconductors, which could benefit Intel as a domestic manufacturer [4]. Group 4: Recent Developments - The US government recently announced a deal requiring Nvidia and AMD to pay 15% of their revenues from Chinese AI chip sales to the government, indicating a broader strategy to regulate the semiconductor industry [5]. - Trump's recent aggressive rhetoric against Intel's leadership contrasts with the potential investment, highlighting a significant shift in approach [5][6].

Summary of Advanced Micro Devices (AMD) Earnings Call Company Overview - **Company**: Advanced Micro Devices (AMD) - **Industry**: Semiconductors - **Market Cap**: $285.351 billion - **Current Stock Price**: $174.31 - **Price Target**: $168.00 - **Fiscal Year Ending**: December 2024 Key Financial Highlights - **Q2 Revenue**: $7.685 billion, up 3.3% quarter-over-quarter (q/q) and 31.7% year-over-year (y/y) [15] - **Data Center Revenue**: $3.240 billion, down 11.8% q/q but up 14.3% y/y [15] - **Client Revenue**: $2.499 billion, up 8.9% q/q and 67.5% y/y [15] - **Gaming Revenue**: $1.122 billion, up 73.4% q/q and 73.1% y/y [15] - **Embedded Revenue**: $0.824 billion, up 0.1% q/q but down 4.3% y/y [15] - **Gross Margin**: 43.2%, in line with expectations [15] - **EPS**: $0.48, matching consensus estimates [15] Guidance and Outlook - **Q3 Revenue Guidance**: $8.7 billion at the midpoint, implying a 13.2% sequential increase, above consensus estimates [16] - **Gross Margin Guidance for Q3**: 54.0%, up 1080 basis points q/q [16] - **Full Year 2025 Revenue Forecast**: $33.419 billion, up from $32.413 billion [18] - **2026 Revenue Forecast**: $40.044 billion, reflecting 20% top-line growth [18] Core Insights and Concerns - **Strength in Segments**: The quarter was strong across all segments, but the reliance on console gaming for revenue growth is seen as a lower quality portion of AMD's business [3] - **AI and MI400 Series**: The MI400 series is viewed as a key driver for future growth, with expectations of generating "tens of billions" in AI revenue [11][12] - **China Market Uncertainty**: AMD did not include potential MI308 sales to China in their guidance due to uncertainties in the licensing process, reflecting a more conservative outlook on the Chinese market [4][10] - **Operating Expenses**: Higher operating expenses limited the impact on EPS, which is a concern for future profitability [3][9] Competitive Landscape - **Market Position**: AMD is gaining market share in the PC and server markets, particularly benefiting from Intel's struggles [14][37] - **AI Competition**: Despite AMD's strong position, there are concerns about competition from Nvidia and the need for tangible enthusiasm from customers regarding AMD's long-term roadmap [20][19] Risks and Considerations - **High Expectations for AI**: The current high expectations for AMD's AI capabilities leave limited room for upside, making it difficult to maintain a premium valuation [19][22] - **Potential for Downside**: If AMD fails to capitalize on AI opportunities or if Intel regains footing, there could be significant downside risks [30][19] Conclusion - **Investment Thesis**: The stock is rated as Equal-weight due to a combination of strong segment performance and concerns about future growth, particularly in AI and the Chinese market. The price target has been adjusted to $168, reflecting a more cautious outlook [9][21]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Semiconductors, specifically focusing on AI semiconductor companies in North America - **Overall Industry View**: Attractive for semiconductors, in-line for semiconductor capital equipment [4][5] Company-Specific Insights NVIDIA Corp. (NVDA.O) - **Price Target Change**: Increased from $170.00 to $200.00 [1][6] - **Growth Drivers**: Anticipated strong growth in the data center business driven by generative AI enthusiasm [17] - **Market Position**: Expected to benefit significantly from increased cloud capex, particularly from large language models [14] - **Revenue Projections**: GAAP revenue expected to reach $130.5 billion in 2025, with a gross margin of 75.4% [24] - **Risks**: Supply bottlenecks may continue to impact growth, particularly in the second half of the year [12][9] Broadcom Inc. (AVGO.O) - **Price Target Change**: Increased from $270.00 to $338.00 [1][6] - **Growth Outlook**: Strong prospects in AI and recovery in core semiconductor business; expected to maintain premium multiples [38] - **Revenue Projections**: GAAP revenue expected to reach $51.6 billion in 2024, with a gross margin of 75.2% [44] - **Risks**: Potential loss of networking share to NVIDIA and execution risks related to the VMware acquisition [49] Astera Labs Inc. (ALAB.O) - **Price Target Change**: Increased from $99.00 to $125.00 [1][6] - **Market Position**: Positioned as an AI connectivity leader with significant growth potential [50] - **Revenue Projections**: Expected revenue of $939 million in 2026, with a gross margin of 71.2% [60] - **Risks**: Concerns over GB200 content and competition in the networking space [10] Marvell Technology Group Ltd (MRVL.O) - **Price Target Change**: Increased from $73.00 to $80.00 [1][6] - **Growth Outlook**: Attractive growth potential, particularly in optical technologies [73] - **Revenue Projections**: Expected revenue of $9.3 billion in 2026, with a gross margin of 57.9% [77] - **Risks**: High stock compensation expenses and potential underperformance in networking [73] Advanced Micro Devices (AMD.O) - **Price Target Change**: Increased from $121.00 to $185.00 [1][6] - **Market Position**: Expected to gain market share at the expense of Intel, particularly in the data center segment [87] - **Revenue Projections**: Expected revenue of $38.6 billion in 2026, with a gross margin of 55.8% [92] - **Risks**: High expectations in AI may limit upside potential; competition from Intel remains a concern [87] Core Insights and Trends - **AI Demand**: Exceptional strength in both supply and demand for AI semiconductors, with significant upside expected in the second half of the year [3] - **Customer Insights**: Major cloud customers are increasing their capex, indicating strong demand for AI-related products [3] - **Product Cycles**: Anticipation of new product cycles, particularly with NVIDIA's Blackwell, is expected to drive growth [3][12] - **Market Dynamics**: The semiconductor industry is experiencing a shift towards AI, with companies like NVIDIA and Broadcom positioned to benefit significantly [10][19] Additional Considerations - **Geopolitical Risks**: Uncertainty regarding China’s licensing for semiconductor products may temper near-term expectations [9] - **Investment Sentiment**: Overall positive sentiment towards AI semiconductors, with a consensus rating distribution showing a majority overweight outlook [18][41]

Group 1: AI Stocks and Investment Perspective - Contrary to common assumptions, owning AI stocks does not require taking excessive risks or tolerating high volatility [1] - Warren Buffett prefers predictable, profitable companies with simple business models, which often excludes many AI stocks from his investment strategy [1][2] - A few AI stocks may be justifiable additions to a portfolio based on their predictability, profitability, and potential upside [2] Group 2: Arm Holdings - Arm Holdings is categorized as a semiconductor stock, focusing on designing microchip architecture and licensing it to chipmakers [6] - The company generated $4 billion in sales last fiscal year, resulting in nearly $800 million in net income, indicating high-margin revenue due to no production costs [7] - Arm's patented technology and superior power efficiency make it a preferred choice for major companies, potentially controlling up to 50% of the data center processor market by the end of this year [9][10] Group 3: Taiwan Semiconductor Manufacturing Company (TSMC) - TSMC manufactures high-performance chips for major semiconductor companies, holding a market share of 80% to 90% in global production of high-performance processors [12] - The complexity and expense of manufacturing computer processors make outsourcing to TSMC a practical choice for many companies [13] - TSMC's established position and technological advancements align with Buffett's investment principles of proven, high-quality companies with a competitive moat [13][16] Group 4: DigitalOcean - DigitalOcean, with a market cap of less than $3 billion, provides cloud-based services, including AI solutions, and is considered a profitable AI stock [17][19] - The company has an annualized recurring revenue run rate of $843 million, reflecting a 14% increase from the previous year, with $84 million in net income [20] - As demand for cloud and AI solutions grows, DigitalOcean's revenue and earnings are expected to increase accordingly [21]

Core Viewpoint - The U.S. government's trade tensions with China, particularly regarding AI technology, have led to new export restrictions impacting companies like Nvidia, yet Nvidia shows resilience and potential for continued success despite these challenges [1][2][3]. Impact of Trade Restrictions - Nvidia faced a $4.5 billion write-off due to unsold AI chips that could not be sold to China as a result of new export restrictions [5]. - China accounted for $5.5 billion of Nvidia's $44.1 billion revenue in Q1, with an additional $2.5 billion in AI products barred from shipping [6]. Nvidia's Business Resilience - Despite the challenges, Nvidia reported a 69% year-over-year growth in Q1 revenue, totaling $44.1 billion [8]. - Nvidia's stock has increased nearly 30% in 2025, reaching a 52-week high of $172.40, contributing to the company becoming the first to achieve a $4 trillion market cap [9]. Future Prospects - Nvidia plans to resume selling AI chips to China, with the U.S. government assuring that licenses will be granted [10]. - The company projects $45 billion in revenue for fiscal Q2, a significant increase from the previous year's $30 billion [10]. Market Position and Innovations - The U.S. remains Nvidia's largest revenue source, contributing $20.7 billion of Q1's total revenue [11]. - Upcoming technology, such as the Vera Rubin superchip, is expected to enhance Nvidia's position in the AI market [11]. - The AI market is forecasted to grow from $244 billion in 2025 to $1 trillion by 2031, indicating strong demand for Nvidia's products [13]. Investment Potential - Nvidia's price-to-earnings (P/E) ratio stands at 55, lower than competitor Advanced Micro Devices's 114, suggesting favorable long-term investment potential [14].

A c t i o n | 07 Jul 2025 03:00:00 ET │ 60 pages US Semiconductors 2Q25 Earnings Preview: Raising Estimates As Tariff Slowdown Ain't Happenin'. MCHP To Top Pick as We Expect Most Upside CITI'S TAKE We are raising estimates as our previous belief that tariffs would lead to a slowdown in the semiconductor sector doesn't appear to be happening. We are going back to our stance at the beginning of 2025 - a semiconductor upturn driven by solid demand and inventory replenishment with the most upside from analog co ...

Collaboration & Technology - AMD and Oracle Cloud Infrastructure are collaborating to deliver powerful compute capabilities [1] - The collaboration focuses on deep integration across networking and storage to facilitate AI data movement at scale and speed [1] Legal & Trademark - The content includes a trademark notice for Advanced Micro Devices, Inc (AMD) [1] - Mentions the AMD Arrow Logo as a trademark [1] - Notes that other names mentioned are for informational purposes and may be trademarks of their respective owners [1] Community & Social Media - Encourages viewers to subscribe to AMD's YouTube channel [1] - Invites viewers to join the AMD Red Team Discord server [1] - Provides links to AMD's Facebook, Twitter, Twitch, LinkedIn, and Instagram accounts [1]

June 30, 2025 03:58 AM GMT Semiconductors Takeaways from Taiwan/Beijing We spent last week meeting industry contacts in Taiwan and Beijing. Generally, the supply chain lacks longer-term visibility, even in AI where we remain optimistic on next year. Key Takeaways NVDA supply chain strong near term, mixed longer term – though our long-term Industry View Attractive view remains more bullish. Near-term data points from several supply chain participants suggest strength in AI, but significant skepticism about 2 ...