Accessible version US Semiconductors Cloud Capex Preview: mission-critical spend to ensure durable growth Industry Overview AI capex CY26/27 outlook now up +36%/+15% YoY Data center remains a key stronghold into Q4 semis earnings, with four major US hyperscalers (Google, Microsoft, Meta, Amazon) set to report in the coming weeks. Ahead of earnings, our tracker indicates Q4 global hyperscale capex at $141bn, up +9% QoQ or +59% YoY. For CY26/CY27, capex points to $641bn/$739bn or up +36%/+15% YoY now, up from ...

Global Research ab 26 January 2026 First Read China Internet Sector China ad pulse check: 2026 outlook and impacts from new ad tax policy Growth: 2026E stable; bottom-up bright spots to offset soft macro Growth: We expect overall China ad growth to remain stable at 9.5% in 2026E (2025E's 9.6%), based on takeaways from our recent channel checks with leading ad agencies in China and catch-ups with major listcos. We expect ad growth to still outperform underlying consumption growth (UBSe 4.8/4.4% in 2025/26E r ...

Flash | Baidu – On the evening of January 25, Baidu also announced the launch of its Spring Festival red-envelope campaign, valued at a total of Rmb500mn, with the largest- value single red envelope at Rmb10,000. In addition to distributing red envelopes through AI interactions and card-collecting activities within the Baidu App, the company will also integrate its Ernie Assistant into the campaign. Users will be guided to participate and claim rewards within the AI application through various creative Spri ...

Summary of the Conference Call on China's Internet and AI Industry Outlook for 2026 Industry Overview - The focus is on the **China Internet** industry, particularly the **AI sector** and its growth prospects in 2026, influenced by both supply and demand factors [1][2]. Key Insights AI Growth Prospects - **Supply Improvements**: Anticipated import of Nvidia H200 chips for training and expansion of domestic chip production capacity for inferencing are expected to enhance AI capabilities [2][4]. - **Demand Surge**: A breakthrough in agentic capabilities is projected to drive a significant increase in consumer (2C) adoption. Positive signals from the latest China CIO Surveys indicate a first-time uptick in enterprise (2B) spending since the second half of 2021 [2][4]. Overseas Expansion - As the domestic market faces deflationary pressures and rising competition, overseas expansion is becoming crucial. Various segments such as gaming (Tencent, NetEase), cross-border e-commerce (PDD, Alibaba), and cloud services (Alibaba, Tencent) are highlighted as key areas for growth [3][4]. - It is estimated that overseas markets contributed over **10%** of revenue for Chinese internet companies in 2025, with expectations for further growth in the next 2-3 years [3][4]. Risks and Challenges - The macroeconomic climate, competition, regulatory changes, and geopolitical tensions are identified as significant risks. A decline in consumption since Q4 2025 is impacting industry revenue growth across e-commerce, local services, and advertising [4]. - Competition in food delivery and quick commerce remains intense, particularly following the State Council's anti-involution investigation. ByteDance's continued disruption across various sectors is also noted [4]. Investment Recommendations Overweight (OW) Recommendations - **Tencent**: Identified as a top pick due to resilient core businesses and strong 2C AI applications [5]. - **Alibaba (BABA)**: Considered the best AI enabler with cloud services as a key growth catalyst [5]. - **PDD**: Valued for its attractive pricing and potential breakeven of Temu in 2026 [5]. - **TME**: Noted for its resilient business model and potential upside from the proposed Ximalaya acquisition [5]. Underweight (UW) / Equal Weight (EW) Recommendations - **JD (UW)**: Facing operational de-leverage and high investments in new businesses [5]. - **BILI (EW)**: Low visibility in gaming and high valuations are concerns [5]. - **Kuaishou (EW)**: Core business performance is lukewarm, with current valuations reflecting this [5]. - **BIDU (EW)**: While Kunlunxin is a near-term catalyst, core business challenges persist [5]. Additional Insights - The report emphasizes the importance of prudent capital expenditure in AI applications to mitigate bubble risks, suggesting a focus on applications that yield better returns on invested capital (ROIC) [2][4]. - The overall industry view remains attractive, with a strong emphasis on the potential for growth in AI and overseas markets despite existing challenges [7]. This summary encapsulates the key points from the conference call, providing a comprehensive overview of the current state and future outlook of the China Internet and AI industry.

Core Insights - The article emphasizes the importance of early access to investment ideas and trends, particularly in the electric vehicle (EV) and EV metals sector, which is a focus area for the Trend Investing group [1][2] Group 1: Company and Industry Focus - The Trend Investing group consists of qualified financial personnel with over 20 years of experience in financial markets, focusing on trending themes such as electric vehicles, EV metals supply chain, stationary energy storage, and AI [2] - The service offers features including access to a portfolio, monthly news updates, macro trends updates, stock watchlists, CEO interviews, and community engagement [2] Group 2: Investment Positions - The article discloses that the analyst holds long positions in several companies, including TESLA, BYD CO, GEELY AUTOMOBILE HOLDINGS, XIAOMI CORPORATION, ZHEJIANG LEAPMOTOR TECHNOLOGY, BAIDU, GOOGL, APTERA MOTORS, and CONTEMPORARY AMPEREX TECHNOLOGY [3]

Core Insights - The article emphasizes that stablecoins and tokenization are two significant growth drivers in the cryptocurrency space, providing long-term support beyond the typical volatility associated with crypto [1][8]. Stablecoins - Stablecoins are cryptocurrencies designed to maintain a stable value, typically pegged to $1 or another currency, supported by reserves or supply-demand mechanisms [3]. - There are nearly 300 stablecoins currently available, with Tether (USDT) and USD Coin (USDC) being popular examples [3]. - The GENIUS Act, passed in July 2025, provides a regulatory framework for stablecoins, which may lead to increased growth in this segment [3]. Tokenization - Tokenization refers to creating digital representations of traditional assets, allowing for more automated and accessible ownership and transfer [4]. - This concept extends to ETFs and funds, with several issuers already offering tokenized funds, including Franklin Templeton and BlackRock [4]. - BlackRock has shown interest in exploring tokenization through its iShares retail brand, reaffirmed during its October 14 earnings call [4]. ETFs Focused on Stablecoins and Tokenization - Amplify launched two ETFs on December 23, 2025, focusing on stablecoins and tokenization, which invest in companies and infrastructure benefiting from these themes rather than directly in stablecoins or tokenized assets [5]. - The Amplify Stablecoin Technology ETF (STBQ) allocates around 25% to crypto assets like XRP, Solana, Ethereum, and Chainlink, with the remaining 75% in equities of companies involved in stablecoin transactions [5]. - The Amplify Tokenization Technology ETF (TKNQ) follows a similar structure but focuses more on banks and companies involved in tokenization, holding names like Baidu and Citigroup [5]. Comparison with Broader Blockchain ETFs - Stablecoin and tokenization ETFs are more theme-specific compared to broader blockchain ETFs, which capture a wider range of crypto-related trends [7]. - Funds like the Amplify Blockchain Technology ETF (BLOK) include a broader array of holdings, such as crypto mining and infrastructure providers, while STBQ and TKNQ focus specifically on financial companies [7]. Conclusion - Stablecoins and tokenization are becoming foundational elements in the cryptocurrency ecosystem, with STBQ and TKNQ representing emerging investment opportunities in this space [8].

Group 1 - Montage Technology plans a second listing in Hong Kong with a share offering between $800 million to $1 billion, potentially becoming the largest deal in the city since Zijin Gold International's $3.53 billion listing in September [1][2] - The listing is expected to take place on January 26, following the company's successful hearing at the Hong Kong stock exchange [2] - The surge in AI and chip IPOs in Hong Kong and mainland China is driven by Beijing's efforts to enhance domestic capabilities and reduce reliance on U.S. technology [2][3] Group 2 - Montage Technology, founded in 2004, specializes in designing fabless integrated circuits for data flow in servers and data centers, with a current market cap of approximately $22 billion [4] - The company reported a 59% revenue increase from 2023 to 2024, reaching 3.64 billion yuan ($521.27 million), with a net profit of 1.34 billion yuan and a gross margin exceeding 58% [5] - Montage Technology holds a 36.8% share of the global memory interconnect chip market in 2024, according to a draft prospectus [5] Group 3 - Proceeds from the upcoming listing will be allocated to enhance research and development in interconnect chips, invest in marketing, and pursue strategic investments [6]

Core Viewpoint - Hesai, a Chinese lidar manufacturer, plans to double its production capacity from 2 million units to 4 million units in 2026, aiming to capture a larger share of the global lidar market [1] Group 1: Company Developments - Hesai has raised hundreds of millions of dollars and is listed on both the Nasdaq and Hong Kong stock exchanges, despite facing accusations from the U.S. government regarding its ties to China's military [3] - The company reported that its production target was doubled due to "accelerating demand" in the automotive and robotics sectors [4] - Hesai has secured 4 million orders for its latest ATX lidar sensor and has 24 automotive customers, including a major European automaker [5] Group 2: Market Context - The automotive market in China has seen a significant adoption of lidar sensors, with 25% of new electric cars sold in the country now equipped with them [5] - The lidar market outside of China has proven to be volatile, as evidenced by Luminar's bankruptcy, which was partly due to failed deals with major automakers like Volvo [6] - The robotics sector is viewed as a promising market for lidar, with Ouster estimating it represents a $14 billion opportunity [6] Group 3: Competitive Landscape - Hesai has contributed to a dramatic reduction in lidar sensor costs, achieving a 99.5% decrease over eight years, which has impacted competitors like Luminar [10] - The company is also involved in providing lidar sensors for autonomous vehicle companies such as Pony AI, Motional, WeRide, and Baidu [9]

Market Overview - U.S. equities are showing a mixed but generally positive tone as Wall Street begins 2026, with a focus on technology and artificial intelligence [1] - Major indexes like the S&P 500 and Nasdaq Composite initially showed strong gains but experienced some fluctuations throughout the session [1][2] Current Market Indexes and Trends - The S&P 500 Index opened up 0.48% and rose 0.7% in morning trading, but by midday, it had wavered, showing a slight decline at one point [2] - The Nasdaq Composite Index opened with a 1.03% gain and surged 1.3% in the morning, but also saw a slight retreat around midday [3] - The Dow Jones Industrial Average started positively, opening up 0.09% and rising 42 points, but later reports indicated a decline of 0.26% [4] Economic Indicators - The U.S. December S&P manufacturing PMI remained unchanged at 51.8, slightly down from 52.20 in November, with new orders falling for the first time in twelve months [6] - Exports have declined for the seventh consecutive month, indicating ongoing impacts from tariffs and trade tensions [6] Federal Reserve Monitoring - Market participants are closely watching the Federal Reserve's monetary policy stance, with a 15% probability of a 25 basis point rate cut anticipated at the next FOMC meeting [7] Major Stock News and Developments - Nvidia (NVDA) shares rose approximately $2.65, up 1.3% due to strong interest in AI-related stocks and a new licensing agreement with Groq [9] - Micron Technology (MU) is performing well, driven by supply-demand issues that could create a $100 billion high-bandwidth market by 2028 [10] - Tesla (TSLA) shares fell 0.6% after reporting declining sales for the second consecutive year [10][11] - Alphabet (GOOGL) initially rose 2% but later dropped 0.2%, while Microsoft (MSFT) fell 2.1%, impacting overall market momentum [12] - Broadcom (AVGO) shares increased by 1.9%, reflecting strong investor confidence [13] - Vertiv Holdings (VRT) climbed 8% after an upgrade from Barclays, citing substantial upside potential [13] - Baidu (BIDU) shares jumped 9.4% after announcing plans to spin off its AI chip unit, while Alibaba (BABA) rose 4.3% [14] - Nike, Inc. (NKE) was a top gainer, up 4.12%, following insider investments [15] - Fair Isaac Corporation (FICO) and Moderna, Inc. (MRNA) were among the biggest losers, down 3.16% and 3.03% respectively [15] Leadership Changes - Warren Buffett stepped down from his position at Berkshire Hathaway, a significant development that will be closely monitored by investors [16]

Economic Overview - The economy in 2025 demonstrated resilience, overcoming challenges such as higher inflation, a slowing labor market, and fewer rate cuts than expected, maintaining steady growth without entering a recession [1] - The S&P 500 and Nasdaq 100 indexes recorded gains of approximately +16.4% and +20.2% respectively, marking their longest winning streak since 2021 with double-digit gains for three consecutive years [2] Labor Market - The number of initial jobless claims in the U.S. fell by -16,000 to a one-month low of 199,000, which was better than the expected 219,000 [2] Stock Market Performance - In a recent trading session, major equity benchmarks ended lower, with notable declines in chip stocks like Micron Technology and KLA Corp, both dropping over -2% [3] - The "Magnificent Seven" stocks also faced losses, with Tesla down more than -1% and Meta Platforms down about -0.9% [3] - Conversely, Nike saw a rise of over +4% after its CEO purchased nearly $1 million worth of shares [3] Trade Developments - Positive sentiment in the market was bolstered by the U.S. postponing tariff hikes on certain goods, including upholstered furniture and kitchen cabinets, while also reducing proposed duties on Italian pasta [4][7] AI Sector Developments - Renewed optimism around AI was noted, particularly with the performance of Shanghai Biren Technology Co. in its Hong Kong trading debut and Baidu's AI chip unit filing for an IPO [5] Futures Market - March S&P 500 E-Mini futures rose by +0.63%, and March Nasdaq 100 E-Mini futures increased by +1.08%, indicating a strong start for Wall Street in the first trading session of 2026 [6] Eurozone Economic Indicators - The Euro Stoxx 50 Index reached a new record high, with defense stocks leading the gains despite weak PMI data indicating a contraction in Eurozone factory activity [9] - The Eurozone's December Manufacturing PMI was reported at 48.8, below expectations of 49.2, signaling a decline in manufacturing activity [10]