February 16, 2026 09:20 AM GMT Micron Technology Inc | North America NDR with CFO focuses on strong execution and favorable market backdrop This week, we hosted CFO Mark Murphy and head of investor relations Satya Kumar for a number of investor meetings in Boston. Management remains enthusiastic about the opportunities ahead for the company across products and end markets but especially in AI. Stock remains our Top Pick in semis. Micron reiterated recent commentary that it sees supply demand tightness persi ...

February 3, 2026 04:47 AM GMT Broadcom Inc. | North America AVGO FAQ: What will it take for the stock to outperform? Following our recent, similar NVDA note, we focus on what needs to happen for AVGO stock to resume its outperformance - clarity on competitive dynamics with TPU & margins on racks; we see a strong multiyear growth path. Key Takeaways We have been somewhat surprised at AVGO's underperformance YTD after a weak close to 2025, and similar to NVIDIA, one of our biggest FAQs so far this year has be ...

January 29, 2026 04:48 AM GMT NVIDIA Corp. | North America NVDA: FAQs on what it will take for the stock to outperform Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework NVIDIA's recent underperformance has happened while near- term expectations remain high, which is different; while there is a wall of worry to climb, we think a strong Vera Rubin ramp will mitigate any share concerns, and expect to see outperformance from here. Key Takeaways We have been somewhat surprised a ...

Core Viewpoint - Memory and storage stocks are currently the hottest trade in the market, driven by the transformative impact of artificial intelligence, leading to elevated valuations that investors are willing to accept despite historical comparisons being deemed irrelevant [1][2]. Group 1: Company Performance - Sandisk Corp., Western Digital Corp., Micron Technology Inc., and Seagate Technology Holdings Plc have been the best-performing shares in the S&P 500 Index since the end of 2024, with Sandisk shares gaining 111% in 2026 [2][3]. - Seagate's earnings multiple is around 24, while Micron is trading at less than 11 times estimated earnings, despite a 36% gain in January [3]. - Analysts have revised Sandisk's net 2026 earnings per share estimates up by 172% in the past three months, with revenue expectations increasing by over 21% [8]. Group 2: Market Dynamics - The memory chip market has historically been cyclical, heavily influenced by the computer and mobile phone industries, leading to periodic gluts and lower valuations [5][6]. - The emergence of AI is fundamentally changing the demand landscape, with significant investments from major companies in memory chips and storage components, suggesting a more sustainable valuation environment [6][7]. - The index of spot prices for DRAM chips has soared recently, indicating accelerated growth and rising memory prices, which analysts believe could persist for two to three years [7]. Group 3: Analyst Sentiment - BNP Paribas upgraded Seagate to outperform, citing robust data center storage demand that could drive a longer upcycle than previously expected [8]. - Despite the positive outlook, Wall Street does not expect significant further climbs for these stocks, with Sandisk trading 32% above its average analyst price target, indicating weaker return potential [9]. - Caution is advised in the near term, as the consensus view suggests that while memory prices will remain strong, the rapid gains may lead to potential market risks [10][11].

Core Insights - The demand from AI data centers is driving a significant increase in memory chip prices, negatively impacting sales and margins for major consumer electronics manufacturers [1][2]. Memory Chip Market - Global AI capital expenditure is projected to reach between $5 trillion and $8 trillion by 2030, putting pressure on memory chip supply [2]. - Major memory chip manufacturers, including Samsung, SK Hynix, and Micron, are struggling to meet demand despite rising prices and new capital expenditure plans [2]. - The memory market is in a "hyper-bull" phase, with prices expected to increase by 40% to 50% in Q1 2026, following a similar rise in Q4 2025 [3]. Consumer Electronics Impact - Consumer electronics companies like Dell, Lenovo, HP, Xiaomi, and Apple are facing challenges in maintaining margins due to high memory chip prices, which may lead to decreased consumer demand [4]. - IDC forecasts a 3% to 5% increase in the average selling price of smartphones, while the market may contract by 5.2% in 2026 [5]. - The PC segment is also under pressure, with only the Microsoft Windows 10 end-of-life refresh cycle providing some support for demand [5]. Stock Performance - Leading consumer electronics stocks have experienced significant declines, with Dell down 8.90%, Lenovo down 14.02%, HP down 23.14%, and Xiaomi down 38.69% [6]. - In contrast, memory chip manufacturers have seen substantial stock price increases, with Samsung up 60.62%, SK Hynix up 181.19%, and Micron up 256.26% over the past six months [8]. - The VanEck Semiconductor ETF, which tracks semiconductor and memory stocks, has also performed well, increasing by 40.85% [8][9].

Core Viewpoint - Western Digital Corp. (NASDAQ:WDC) has reached an all-time high, driven by positive sentiment in the memory sector, particularly due to Nvidia's CEO's optimistic outlook on AI-related storage needs [1][3]. Group 1: Stock Performance - Western Digital's stock price peaked at $221.23 during intra-day trading, ultimately closing at $219.38, reflecting a 16.77% increase [1]. - The rally in Western Digital's stock was in line with other companies in the memory sector, including Seagate Technology, Sandisk, and Micron Technology [3]. Group 2: Market Outlook - Nvidia's CEO, Jensen Huang, described the memory market as "completely unserved," predicting it will become one of the largest storage markets globally due to increasing demand from the AI industry [2]. - Huang emphasized that the current infrastructure is insufficient to meet the growing AI-related storage needs, which are significantly outpacing existing capabilities [3]. Group 3: Earnings Guidance - Western Digital is expected to announce its second-quarter fiscal year 2026 earnings results in the last week of January [4]. - The company has provided updated guidance, projecting revenues of $2.9 billion, with a variance of $100 million, and diluted earnings per share of $1.88, with a variance of $0.15 [4].

Micron Technology Inc. Conference Call Summary Company Overview - **Company**: Micron Technology Inc. (MU.O) - **Industry**: Semiconductors - **Market Cap**: $259.607 billion - **Price Target**: Increased from $338.00 to $350.00 Key Financial Highlights - **Earnings Per Share (EPS)**: Guidance of $8.19, which is over 75% above consensus estimates of $4.78 [1][9] - **Revenue Guidance**: Projected at $18.7 billion, significantly above the consensus of $14.326 billion [17] - **Gross Margin Guidance**: Expected to be 68.5%, exceeding the Street's estimate of 52.0% [17] - **Operating Income**: Non-GAAP operating income guidance of $6.419 billion, with an operating margin of 47.0% [39] - **Free Cash Flow (FCF)**: Anticipated to generate $30-35 billion in FCF over the next 12 months [13] Industry Dynamics - **Demand Drivers**: Strong demand from hyperscalers and PC/server companies, with many only receiving 70% of their requirements [5] - **Capex Guidance**: FY26 capex guidance revised to $20 billion, lower than previous estimates, indicating a disciplined approach to capital expenditures [4][14] - **Market Conditions**: The semiconductor market is experiencing unprecedented demand, particularly for DDR5 memory, with supply constraints leading to higher pricing [12][16] Management Insights - **Long-term Contracts**: Management noted that hyperscalers are locking in pricing for multiple years, indicating strong future demand [5] - **Market Share Strategy**: Management's lack of clarity on market share objectives is viewed positively, allowing for flexibility in meeting demand without being constrained by market expectations [4] - **AI Impact**: The ongoing growth in AI is expected to continue driving demand for semiconductors, with Micron positioned to benefit significantly [9][12] Risks and Considerations - **Valuation Concerns**: The stock may appear expensive based on trailing earnings, but the potential for earnings power exceeding $40 is anticipated if AI growth continues [19] - **Funding Risks**: Concerns about funding for AI projects could pose risks, although the immediate outlook for AI semiconductors remains strong [11] - **Market Volatility**: Potential for stock price fluctuations based on broader market reactions to earnings reports from competitors like NVIDIA and Broadcom [16] Conclusion - Micron Technology Inc. is positioned strongly within the semiconductor industry, with robust earnings guidance and a favorable market outlook driven by AI and data center demand. The disciplined approach to capital expenditures and management's strategic insights suggest a positive trajectory for the company, despite potential valuation and funding risks.

Market Overview - U.S. stock futures are slightly higher after a decline in the previous session, amid concerns about a "hiring recession" following the November jobs report [1] - The November Consumer Price Index is anticipated as a key inflation indicator that could influence market sentiment in the final trading days of the year [1] Treasury Bonds and Market Projections - The 10-year Treasury bond yielded 4.13%, while the two-year bond was at 3.46% [2] - The CME Group's FedWatch tool indicates a 73.4% probability that the Federal Reserve will maintain current interest rates [2] Stock Performance - The SPDR S&P 500 ETF Trust (SPY) increased by 0.23% to $672.95, and the Invesco QQQ Trust ETF (QQQ) rose by 0.55% to $603.70 in premarket trading [2] - Accenture PLC shares decreased by 0.27% ahead of its fiscal first-quarter results, with expected earnings of $3.75 per share on revenue of $18.52 billion [6] - Micron Technology Inc. shares rose by 9.61% following a better-than-expected first-quarter performance and a strong outlook for the second quarter [6] - FedEx Corp. shares fell by 0.07% pre-market, with analysts expecting earnings of $4.10 per share on revenue of $22.79 billion [6] - Nike Inc. shares increased by 0.44% ahead of its fiscal second-quarter results, with expected earnings of $0.38 per share on revenue of $12.22 billion [13] Sector Performance - On the previous trading day, Information Technology, Consumer Discretionary, and Communication Services sectors performed well, while Energy, Health Care, Real Estate, and Financials sectors saw declines [8] Economic Data and Market Sentiment - Initial jobless claims and the November consumer price index report are set to be released, which will provide insights into price pressures and regional factory activity [14]

Market Overview - U.S. stock futures are slightly higher after a decline on Wednesday, driven by concerns over a "hiring recession" following the November jobs report [1] - The November Consumer Price Index is anticipated as a crucial inflation indicator that could influence market trends for the remaining trading days of the year [1] Treasury Bonds and Market Projections - The 10-year Treasury bond yielded 4.13%, while the two-year bond was at 3.46% [2] - The CME Group's FedWatch tool indicates a 73.4% probability that the Federal Reserve will maintain current interest rates [2] Stock Performance - The SPDR S&P 500 ETF Trust (SPY) increased by 0.23% to $672.95, and the Invesco QQQ Trust ETF (QQQ) rose by 0.55% to $603.70 in premarket trading [2] - Accenture PLC shares decreased by 0.27% ahead of its fiscal first-quarter results, with expected earnings of $3.75 per share on revenue of $18.52 billion [6] - Micron Technology Inc. shares rose by 9.61% following a better-than-expected first-quarter performance and a strong outlook for the second quarter [6] - FedEx Corp. shares fell by 0.07% pre-market, with analysts expecting earnings of $4.10 per share on revenue of $22.79 billion [6] - Nike Inc. shares increased by 0.44% ahead of its fiscal second-quarter results, with expected earnings of $0.38 per share on revenue of $12.22 billion [13] Sector Performance - On Wednesday, Information Technology, Consumer Discretionary, and Communication Services sectors performed well, while Energy, Health Care, Real Estate, and Financials sectors saw declines [8] Economic Data and Market Sentiment - Initial jobless claims and the November consumer price index report are set to be released, which will provide insights into price pressures and regional factory activity [14] - Asian markets closed mixed, with some indices in the green, while most European markets opened higher [15]

Summary of Key Points from Conference Call Industry Overview - **Industry Focus**: Semiconductors, particularly in North America, with emphasis on AI and memory strength [1][7] - **Market Dynamics**: The semiconductor ecosystem is being tested by AI strength, with significant growth expected in AI-related revenues [1][2] Company-Specific Insights NVIDIA Corp. (NVDA) - **Market Position**: NVIDIA is expected to maintain a dominant market share despite overstated threats from competitors [2] - **Revenue Growth**: Projected revenue for FY27 is $329.829 billion, reflecting a 55% year-over-year change, with a gross margin of 74.6% [10] - **Product Demand**: There is significant customer anxiety regarding the ability to procure NVIDIA products, particularly the Vera Rubin model [2] - **Estimates Revision**: Estimates for NVIDIA's revenues have been raised, with a target price increase from $235 to $250, based on a new EPS estimate of $9.57 [9][66] Broadcom Inc. (AVGO) - **Revenue Projections**: Broadcom's ASIC revenue is forecasted to be $27.210 billion in FY2026 and $59.475 billion in FY2027, with a price target increase from $409 to $443 [13][15] - **Market Dynamics**: The company is experiencing strong demand for its products, particularly in AI and memory sectors, with a notable increase in TPU supply chain checks [13][17] - **Risks**: Potential risks include competition from Google's Tensor processor and architectural challenges faced by Meta in utilizing Broadcom's products [12][11] Memory Market Insights - **Supply Constraints**: There is an ongoing memory shortage, particularly in DDR5 and NAND markets, with high demand from cloud buyers and OEMs [16][18] - **Market Dynamics**: The memory supply has shifted to high-value users, leading to a stark supply tightness that is not artificial [16] - **Future Outlook**: The memory shortage is expected to persist, with potential risks of demand destruction as prices rise [17] General Market Trends - **AI Influence**: The strength of AI is impacting not only specialty back-end capacity but also front-end wafer supply and memory availability [20] - **Server Market**: The general-purpose server market is strong, with AMD gaining market share while Intel struggles to keep up [21] - **China Localization**: The Chinese semiconductor industry is striving for self-sufficiency, with significant investments in legacy technologies, although advanced technology remains constrained [24][25] Investment Recommendations - **NVIDIA**: Overweight rating with a price target of $250, reflecting strong growth potential in AI and data center revenues [59][66] - **Broadcom**: Overweight rating with a price target of $443, supported by strong AI growth and recovery in core semiconductor businesses [75][81] - **Micron Technology**: Top pick with a price target of $338, driven by improving DRAM fundamentals and AI demand [94][98] Conclusion - The semiconductor industry is poised for significant growth driven by AI, with both NVIDIA and Broadcom positioned to capitalize on this trend. However, supply constraints in memory and competition from emerging technologies present risks that investors should monitor closely.