The buildout of AI infrastructure in the Asia-Pacific is in high gear. Masayoshi Son and Mukesh Ambani are among the region's wealthiest taking the lead.Read more: https://t.co/tszLuJ6xJl https://t.co/jZiBSrl5gi ...

Core Insights - The current market environment shows signs of asset bubbles, with stocks significantly outpacing earnings and high valuations in various asset classes, including gold and junk bonds [1][2] - The S&P 500 index has reached 6,700, nearly double its value from five years ago, largely driven by major tech companies that represent about 40% of the index [1] - Gold prices are nearing record highs, which is unusual in a rising stock market, indicating a potential market hedging against risks [5] Stock Market Dynamics - The S&P 500's growth is heavily influenced by the "Magnificent 7" tech companies, which are making substantial investments in AI, suggesting a transformative impact on the market [1] - Despite an inverted yield curve from June 2022 to August 2024, which typically signals an impending recession, the market has experienced a strong rally, attributed to AI investments [4] Asset Class Performance - Gold and coffee prices are at or near record highs, while Bitcoin has surged over 130% since being included in exchange-traded funds in January 2024, reflecting a risk-on sentiment among investors [2] - Junk bonds are trading at high valuations, indicating a lack of perceived risk in the market, which may not align with underlying economic indicators [2] Economic Indicators - Historical patterns suggest that bubbles form through a cycle of optimism and credit expansion, leading to eventual market corrections [3] - The current market sentiment may be influenced by a mix of optimism in tech and underlying fears, as indicated by the simultaneous rise in gold prices [5]

[Music] Hey, Morgan. Open AAI is asking the Trump administration to help lower the cost of AI infrastructure according to a letter obtained by Bloomberg. The startup wants the White House to expand a Key Chips Act tax credit to cover AI data centers and related components like transformers.Now, this comes just one day after OpenAI faced blowback over a comment made by its CFO implying that it would look for a government backs stop for its $1.4% trillion in comput deals. They have since been walking that bac ...

Government Policy & Industry Support - OpenAI requests Trump administration to revamp Chips Act tax credit to lower AI infrastructure costs [1] - OpenAI explores ways the US can support an industrywide data center build-out for AI [1]

Economic Growth & Resilience - US economy defies tariff doomsday predictions, showing continued growth [1] - AI infrastructure is contributing to economic growth [1] - Corporate balance sheets are healthy, providing resilience and investment power [1] - American companies' investments are powering economic growth [1] Potential Risks & Softening - Potential risks include labor market drops, tariffs passed to consumers, and asset valuation adjustments [2] - Expectation of a period of economic softening [2] Overall Outlook - Reasonably positive outlook for the economy, expecting around 26 (likely referring to a specific economic indicator, but without context, the unit is unclear) [2] - US economy demonstrates resilience and strength compared to other regions [2]

Core Insights - Brookfield Infrastructure Partners reported strong financial results for Q3 2025, with a 9% increase in funds from operations (FFO) per unit to $0.83, driven by organic growth and inflationary benefits [2][6][47] - The company achieved over $3 billion in asset sales year-to-date, with a realized internal rate of return (IRR) exceeding 20% and a 4x multiple on capital [3][12] - The company is well-positioned for growth entering 2026, with significant investments in AI infrastructure and new acquisitions [2][7] Financial Performance - Net income for Q3 2025 was $440 million, a substantial increase from a net loss of $52 million in the same period last year [5][40] - FFO for the nine months ended September 30, 2025, reached $1.938 billion, up from $1.822 billion in 2024 [5][6] - Revenues for Q3 2025 were $5.975 billion, compared to $5.270 billion in Q3 2024, reflecting strong operational performance [40] Strategic Initiatives - The company secured six new investments totaling over $1.5 billion, including a $140 million project with Bloom Energy for AI data centers [7][8] - Two utility acquisitions in Asia-Pacific were announced, including a $270 million natural gas infrastructure business in New Zealand and a $500 million industrial gas business in South Korea [9][10] - The acquisition of Colonial Enterprises, the largest refined products pipeline in the U.S., was completed in July 2025 [11] Capital Recycling - Brookfield Infrastructure generated over $3 billion in proceeds from asset sales and is on track to achieve an additional $3 billion over the next 12 to 18 months [12][13] - Significant recent sales include a 26% interest in an Australian export terminal, generating $350 million in proceeds, and a 28% interest in a North American gas storage platform, raising approximately $230 million [13][14] Segment Performance - The utilities segment generated FFO of $190 million, slightly up from $188 million in the prior year, benefiting from inflation indexation [17] - The transport segment reported FFO of $286 million, down from $308 million, primarily due to asset sales [18] - The data segment saw a 62% increase in FFO to $138 million, driven by strong organic growth and contributions from acquisitions [20] Balance Sheet and Liquidity - Total liquidity at the end of Q3 2025 was $5.5 billion, including $2.5 billion at the corporate level [22] - The company executed financings to enhance liquidity and support growth initiatives, including a corporate issuance of medium-term notes totaling C$700 million [21] Distribution and Dividend Declaration - The Board declared a quarterly distribution of $0.43 per unit, representing a 6% increase compared to the prior year [23] - The distribution is payable on December 31, 2025, to unitholders of record as of November 28, 2025 [23] Unit Repurchases and ATM Program - Brookfield Infrastructure Partners plans to increase repurchases of its outstanding limited partnership units under its normal course issuer bid program [24] - The company is exploring the establishment of an at-the-market (ATM) equity program to issue additional shares when market conditions are favorable [25]

Financial Data and Key Metrics Changes - Net sales for the September quarter were $1.14 billion, reflecting a 6% sequential increase and exceeding guidance by $10.4 million [15][24] - Non-GAAP gross margin was reported at 56.7%, impacted by inventory reserve charges of $71.8 million and underutilization charges of $51 million [15][24] - Non-GAAP operating margin increased to 24.3% of sales, with operating expenses at 32.4% of sales [15] - Non-GAAP net income was $199.1 million, translating to earnings per diluted share of $0.35, which was $0.02 above guidance [15] Business Line Data and Key Metrics Changes - The microcontroller (MCU) business grew 9.7% sequentially, while the analog business saw a 1.7% increase [4] - Sales from data center products, particularly Gen 4 and Gen 5, showed strong growth, although from previously low levels [4][21] Market Data and Key Metrics Changes - Sales growth was observed in the Americas and Asia, while Europe remained flat, which is considered acceptable for a summer quarter [4] - The data center market exhibited the strongest sales performance, with significant increases in bookings and shipments of PCIe switches and related products [21] Company Strategy and Development Direction - The company is focusing on advanced technology, highlighted by the introduction of the industry's first 3-nanometer-based PCIe Gen 6 switch, aimed at enhancing AI infrastructure [10][12] - A strategic shift towards high-performance data center products is underway, with plans to expand offerings in the AI and FPGA markets [76] Management's Comments on Operating Environment and Future Outlook - Management noted a softer overall business environment compared to previous quarters, impacting December quarter guidance, which is expected to be down 1% sequentially [28][29] - Despite the current challenges, there is optimism for strong performance in the March, June, and September quarters of 2026, driven by improved backlog and bookings [50][52] Other Important Information - Inventory levels decreased by $73.8 million sequentially, with inventory days down to 199 days [16][17] - The company is undergoing a restructuring plan, including the sale of its Fab 2 facility, which is expected to be completed by December 2025 [7][8] Q&A Session Summary Question: How does the current environment compare to 90 days ago? - Management indicated a slightly softer tone in the business environment, affecting December quarter guidance, which is better than seasonal expectations [28] Question: What is the outlook for inventory reserve and underutilization charges? - Management stated that while it is difficult to predict, they expect these charges to decrease in stronger quarters ahead [30][31] Question: What is the status of long-term supply agreements (LTSAs)? - Management clarified that they have been flexible with customers regarding LTSAs, allowing them to adjust their requirements without forcing purchases [39][40] Question: What drives confidence in above-seasonal growth for the next three quarters? - Confidence is based on improved backlog visibility and strong bookings, with expectations for inventory replenishment in the March quarter [50][52] Question: What is the expected impact of inventory charges on gross margins? - Management indicated that as inventory charges decrease, gross margins are expected to improve, potentially reaching a target of 65% in the future [66][68]

Financial Data and Key Metrics Changes - Net sales for the September quarter were $1.14 billion, reflecting a 6% sequential increase and exceeding guidance by $10.4 million [15][24] - Non-GAAP gross margin was reported at 56.7%, impacted by $51 million in underutilization charges and $71.8 million in inventory reserve charges [15][24] - Non-GAAP operating margin increased to 24.3% of sales, with operating expenses at 32.4% of sales [15] - Non-GAAP net income was $199.1 million, translating to earnings per diluted share of $0.35, which was $0.02 above guidance [15][24] Business Line Data and Key Metrics Changes - The microcontroller (MCU) business grew 9.7% sequentially, while the analog business saw a 1.7% increase [4] - Sales from Gen 4 and Gen 5 data center products experienced strong growth, although from previously low levels [4][21] Market Data and Key Metrics Changes - Sales growth was observed in the Americas and Asia, while Europe remained flat, which is considered acceptable for a summer quarter [4] - The data center market showed the strongest sales performance, with significant increases in bookings and shipments of PCIe switches and related products [21] Company Strategy and Development Direction - The company is focusing on advanced technology products, including the introduction of the industry's first 3 nm-based PCIe Gen 6 switch, aimed at enhancing AI infrastructure [9][10] - A strategic shift towards high-performance data center products is underway, with plans to expand offerings in the FPGA business unit and AI-focused initiatives [76] Management's Comments on Operating Environment and Future Outlook - The management noted a softer overall business environment compared to previous expectations, impacting guidance for the December quarter [28] - Despite a challenging December quarter, the company anticipates strong momentum in the following quarters, particularly in March, June, and September 2026 [25][50] Other Important Information - Inventory levels decreased by $73.8 million sequentially, with inventory days down to 199 days [16][17] - The company has entered into a purchase and sales agreement to sell its Fab 2 wafer fabrication facility as part of a restructuring plan [7][8] Q&A Session Summary Question: Characterization of current business environment versus 90 days ago - The company noted a slightly softer tone in the business environment, impacting December quarter guidance, which is better than seasonal expectations [28] Question: Update on inventory reserve and underutilization charges - Management indicated uncertainty in predicting future charges but expects improvements in the coming quarters as sales grow [30][31] Question: Insights on long-term supply agreements (LTSAs) - The company clarified that it has dismantled many obligations under LTSAs, allowing customers flexibility in their purchasing [36][39] Question: Confidence in above-seasonal growth for the next three quarters - The company cited strong visibility in backlog and bookings as key drivers for confidence in upcoming quarters [47][50] Question: Expectations for gross margin improvements - Management indicated that inventory write-offs are expected to normalize quicker than underutilization charges, with a path to improved gross margins [80][82]

Financial Data and Key Metrics Changes - Net sales for Q2 2026 were $1.14 billion, reflecting a 6% sequential growth and exceeding the midpoint of guidance by $10.4 million [12][13] - Non-GAAP gross margin increased to 56.7%, impacted by inventory reserve charges of $71.8 million and underutilization charges of $51 million [12][13][22] - Non-GAAP operating margin rose to 24.3% of sales, with operating expenses at 32.4% of sales [13][22] - Non-GAAP net income was $199.1 million, translating to earnings per diluted share of $0.35, which was $0.02 above guidance [13][22] Business Line Data and Key Metrics Changes - Microcontroller (MCU) business grew 9.7% sequentially, driven by strong demand for 32-bit MCUs [3][4] - Analog business saw a 1.7% sequential increase [4] - Data center products, particularly Gen 4 and Gen 5, experienced strong sales growth, although from previously depressed levels [3][4] Market Data and Key Metrics Changes - Sales growth was observed in the Americas and Asia, while Europe remained flat, which is considered acceptable for a summer quarter [3] - The data center market showed the strongest performance, with increased bookings and shipments as inventory corrections occurred [18][19] Company Strategy and Development Direction - The company is focusing on advanced technology with the introduction of the industry's first 3-nanometer-based PCIe Gen 6 switch, aimed at enhancing AI infrastructure [4][8] - A strategic shift towards high-performance data center products is underway, with plans to expand offerings in the AI and FPGA markets [70] - The company aims to improve operational efficiency and reduce inventory write-offs and underutilization charges in the upcoming quarters [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted a softer overall business environment compared to previous expectations, but still anticipates better-than-seasonal growth in the upcoming quarters [25][26] - The company expects net sales for the December quarter to be approximately $1.129 billion, down 1% sequentially, with a non-GAAP gross margin guidance of 57.2% to 59.2% [22][23] - Management expressed optimism about strong bookings and a robust backlog for the March quarter, indicating potential for sequential growth [45][46] Other Important Information - Inventory levels decreased by $73.8 million sequentially, with inventory days down to 199 days [14][15] - The company is undergoing a restructuring plan, including the sale of its Fab 2 facility, which is expected to close in December 2025 [5][6] Q&A Session Summary Question: How does the current environment compare to 90 days ago? - Management noted a slightly softer tone in the business environment, impacting guidance for the December quarter, but bookings were strong [25][26] Question: What is the outlook for inventory reserve and underutilization charges? - Management indicated uncertainty in predicting future charges but expects improvements in the upcoming quarters as sales grow [28][29] Question: What is the status of long-term supply agreements (LTSAs)? - Management clarified that they have been flexible with customers regarding LTSAs, allowing them to adjust their requirements without forcing purchases [34][36] Question: What drives confidence in above-seasonal growth for the next three quarters? - Management cited a strong backlog and increased bookings as indicators of potential growth, despite current low lead times [44][46] Question: What is the expected impact of underutilization and inventory write-offs on gross margins? - Management expects these charges to decrease over time, positively impacting gross margins as sales improve [60][62]

Core Viewpoint - The current earnings season has shown a trend where tech companies, despite beating estimates and raising forecasts, are experiencing stock declines, indicating a potential overvaluation concern among investors [1][2][4]. Qualcomm Analysis - Qualcomm reported a strong quarter but did not provide additional details on its new data center chip, leading to a muted stock reaction despite the earnings beat [3][5]. - The overall sentiment suggests that investor positioning prior to earnings plays a significant role in stock performance, rather than the earnings results themselves [2][6]. Market Sentiment and Valuation - The earnings season has seen an 80% beat rate on both top and bottom lines, yet stocks are still falling, reflecting high investor expectations and concerns over valuations [5][6]. - Investors are exhibiting fear of missing out (FOMO) on AI-related stocks, which may lead to buying opportunities during dips [7][8]. Importance of Earnings Details - While quarterly earnings reactions may not be critical for long-term investment in AI, consistent performance is necessary to justify stock valuations [9][10]. - The long-term growth potential of companies like Super Micro is contingent on their ability to address design issues and maintain competitive positioning in AI infrastructure [11][15]. Semiconductor Industry Insights - The semiconductor industry is experiencing a quarter-over-quarter growth of 15.8%, but specific companies like Super Micro are facing challenges, impacting their stock performance [14]. - The focus on AI infrastructure, including energy and networking opportunities, is seen as a significant area for future investment [22][24]. M&A Activity - There are reports of SoftBank considering acquiring Marll Technology, which is viewed as undervalued compared to its peers, indicating potential consolidation in the semiconductor space [16][17]. Future Catalysts - Upcoming earnings reports, particularly from Nvidia, are anticipated to be key indicators for market direction and investor sentiment in the semiconductor sector [19][20].