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]

Investment Rating - The long-term industry view for semiconductors is rated as Attractive, with a bullish outlook despite mixed signals for 2026 [3][9]. Core Insights - The supply chain for semiconductors lacks long-term visibility, particularly in AI, although there is optimism for the upcoming year [1][3]. - NVIDIA is identified as a top pick in the semiconductor sector, driven by strong demand for its Blackwell form factors and easing supply bottlenecks [3][10]. - There is skepticism regarding the performance of the semiconductor market in 2026, primarily due to concerns about excess inventory resulting from chip production ahead of supply bottlenecks [3][4]. Summary by Sections AI Market - NVIDIA shows strong near-term performance in AI, but there is uncertainty about the longer-term outlook, particularly in China where demand for certain products is minimal [4][5]. - Chinese hyperscalers are facing challenges post-export controls, with technology at the H20 performance level being competitive but lower performance levels lacking appeal [5][10]. Memory Market - The PC market is described as sluggish, impacting the memory sector, with expectations of weaker follow-through in Q4 after a strong Q3 [9][11]. - DRAM and NAND markets are expected to perform well in the near term, but there is skepticism about sustainability due to weaker volumes in PCs and smartphones [13][14]. Equipment and Foundry - China is anticipated to see stronger equipment spending in the second half of the year, driven by logic customers and state subsidies [16][17]. - KLA is highlighted as a key winner in the equipment sector, benefiting from GAA technology and expanding its market share [17][18]. General Market Conditions - There is limited visibility in broader markets beyond modest near-term pull-forwards, with inventory build being a concern amid tariff uncertainties [19][20]. - The transition to 800V data center architecture faces significant challenges, with skepticism about its near-term implementation [20].

Core Insights - The article discusses the significant potential of artificial intelligence (AI) as a transformative technology for corporate growth, likening it to the impact of the internet three decades ago [2][4] - Nvidia is highlighted as the leading beneficiary of the AI revolution, with its market capitalization soaring from $360 billion to $3.76 trillion since the end of 2022, and a projected valuation exceeding $6 trillion [5][7] Company Overview - Nvidia's dominance in the AI sector is underscored by its leadership in graphics processing units (GPUs) for AI-accelerated data centers, with a gross margin exceeding 70% due to high demand and pricing premiums [8][9] - Loop Capital analyst John Donovan has raised Nvidia's price target from $175 to $250 per share, suggesting a potential market cap of $6.1 trillion if achieved [7] Market Dynamics - Nvidia is expected to ship approximately 6.5 million GPUs in the current year and 7.5 million next year, with average selling prices exceeding $40,000, indicating strong demand [9][10] - The anticipated increase in data center spending from various sectors, including government and startups, is seen as a catalyst for Nvidia's growth [10] Valuation Metrics - Nvidia's forward-year earnings multiple is currently at 27 for fiscal 2027, suggesting that the company is growing into its valuation amidst rapid sales and profit growth [11] - Historical trends indicate that leading companies in transformative technologies typically reach price-to-sales (P/S) ratios of 30 to 43, with Nvidia currently at a P/S ratio of almost 26, which is significantly higher than other leading stocks [20] Competitive Landscape - Despite Nvidia's strong position, there are emerging competitive pressures as other companies, including Taiwan Semiconductor Manufacturing and Advanced Micro Devices, ramp up production of AI-accelerating chips [16][18] - Some of Nvidia's major customers are developing their own GPUs, which, while less powerful, are cheaper and more accessible, potentially impacting Nvidia's market share and gross margins [18]

Core Viewpoint - Advanced Micro Devices (AMD) stock has increased by 19% in the year 2025 [1] Group 1 - AMD stock performance shows a significant upward trend, indicating positive market sentiment [1]

Group 1 - The article discusses the author's extensive experience in the field of investing, particularly in technology stocks, with a focus on companies involved in Artificial Intelligence (AI) [1] - The author has previously written about major AI companies such as NVIDIA and Advanced Micro Devices, indicating a strong interest in the AI sector [1] - The author's background as a Merchant Seaman and engineer contributes to a unique perspective on investment opportunities in tech stocks [1] Group 2 - There is no specific financial data or performance metrics provided in the articles [2]

Investment Rating - The investment rating for Advanced Micro Devices (AMD) is Equal-weight [7] Core Insights - AMD launched the MI350 series, but the focus is on the upcoming MI400 series, which is expected to have a more significant impact in the long term [2][4] - Commentary from major cloud customers like Oracle, Microsoft, and Meta was positive regarding AMD's performance, but it did not significantly alter the investment thesis [4][9] - AMD's ability to expand its market share among existing customers is crucial, especially as competition from Nvidia intensifies [5][10] Summary by Sections Product Launch and Performance - The MI350 series was officially launched, featuring 288GB HBM3E memory and significant performance improvements over the MI300 series, with a ~4x increase in compute and 35x in inference capabilities [12] - The MI400 series is anticipated to launch next year, featuring 432GB HBM4 and a performance uplift of up to 10x compared to MI355X, particularly for inference workloads [13][16] Market Dynamics - AMD is expected to see a 25% year-over-year growth in its Instinct product line in 2025, but there are concerns that it may underperform among its top customers [5][20] - The competitive landscape remains challenging, with Nvidia's strong position in the market potentially limiting AMD's growth opportunities [10][20] Financial Projections - The price target for AMD is set at $121.00, reflecting a P/E ratio of approximately 22x based on FY2026 estimates [25][30] - Revenue projections indicate growth from $25.8 billion in 2024 to $45.1 billion by 2027, with non-GAAP EPS expected to rise from $3.33 in 2024 to $6.69 in 2027 [35][39] Strategic Outlook - AMD's strategy includes significant investments in software and cloud infrastructure, with the introduction of ROCm 7 and a new developer cloud aimed at enhancing performance for AI workloads [13][14] - The company is optimistic about its server business and expects to gain market share in the x86 segment, despite current challenges in the gaming and embedded markets [18][20]

Core Insights - Compal Electronics has launched its new high-performance server platform SG720-2A/OG720-2A, designed for generative AI and large language model training, featuring AMD Instinct™ MI355X GPU architecture and advanced liquid cooling options [1][3][6] Technical Highlights - The SG720-2A/OG720-2A supports up to eight AMD Instinct MI350 Series GPUs, enabling scalable training for LLMs and generative AI applications [7] - It incorporates a dual cooling architecture, including air and two-phase liquid cooling, optimized for high thermal density workloads, enhancing thermal efficiency [7] - The server is built on the CDNA 4 architecture with 288GB HBM3E memory and 8TB/s bandwidth, supporting FP6 and FP4 data formats, tailored for AI and HPC applications [7] - High-speed interconnect performance is achieved through PCIe Gen5 and AMD Infinity Fabric™, facilitating multi-GPU orchestration and reducing latency [7] - The platform is compatible with mainstream open-source AI stacks like ROCm™, PyTorch, and TensorFlow, streamlining AI model integration [7] - It supports EIA 19" and ORv3 21" rack standards with a modular design for easy upgrades and maintenance [7] Strategic Collaboration - Compal has a long-standing collaboration with AMD, co-developing solutions that enhance efficiency and sustainability in data center operations [5] - The launch of SG720-2A/OG720-2A at both Advancing AI 2025 and ISC 2025 highlights Compal's commitment to expanding its global visibility and partnerships in the AI and HPC sectors [7]

One of the biggest perceived competitive advantages for Nvidia may backfire. Since 2022 came to a close, shares of Nvidia have advanced by more than 870%, with the company tacking on over $3 trillion in market cap and completing a historic 10-for-1 forward split. Though Nvidia's aggregate percentage return has lagged Palantir Technologies, Nvidia's valuation soared quicker than any megacap stock in history. The advent and proliferation of the internet in the mid-1990s was a can't-miss trend that captivated ...

Core Insights - Intel is undergoing a leadership change with Lip-Bu Tan as the new CEO, who has extensive experience in the semiconductor industry and venture capital [1][3][10] - The company is facing significant challenges, including a 70% decline in value since early 2020 and increased competition from AI chip manufacturers like Nvidia and AMD [3][8] - Tan's strategy focuses on transforming Intel into a foundry service provider, emphasizing customer needs and industrial standards [4][12][20] Group 1: Leadership and Strategy - Lip-Bu Tan's extensive network and experience are seen as critical assets for Intel's turnaround [2][3] - Tan is prioritizing customer engagement, having met with 22 potential partners in one day, to understand their specific requirements [2][4] - The company aims to pivot towards chip manufacturing, aligning with U.S. initiatives to onshore critical technologies [4][12] Group 2: Financials and Investments - Under the previous CEO, Intel invested $90 billion from 2021 to 2024 to build its foundry operations, with an expected $18 billion in capital expenditures for 2025 [5][6] - Tan has personally invested $25 million in Intel shares, indicating his commitment to the company's future [11] - Analysts express skepticism about the company's ability to generate meaningful returns from its investments, highlighting the need for a successful turnaround in the foundry business [24] Group 3: Operational Challenges - Intel's foundry operations are under pressure to adapt to a different investment timeline, which is challenging for publicly traded companies [8] - The company is facing competition from established players like TSMC, and Tan is focused on making Intel's processes more accessible to external customers [18][20] - There is an ongoing effort to streamline corporate culture and reduce bureaucracy, with job cuts anticipated as part of this initiative [22][23][25] Group 4: Market Position and Competition - Intel's traditional CPU market share is being eroded by AI chips and competitors like Nvidia and AMD [8][9] - The company is working on new chip technologies, such as the 18A process, which aims to compete with TSMC's offerings [16][18] - Tan's leadership is marked by a shift towards a service-oriented business model, focusing on customer satisfaction and ecosystem development [20][22]