You want me to. Welcome back everyone. I'm John Fer with The Cube.We are live here at supercomputing 2025. I'm here with Dave Volante, my co-host Jackie Magcguire, Savannah P. The whole team is here unpacking the wave of AI infrastructure that continues to accelerate the value uh to the enterprise and to large cloud hyperscalers and neoclouds.A lot of action happening. Alex Bazari here, CEO of DDN is back on the cube. Alex, great to see you as always. as always. Always a real pleasure.You guys uh continuing ...

Core Insights - Applied Materials (AMAT) reported a gross margin of 48.8% in Q4 of fiscal 2025, reflecting a year-over-year increase of 120 basis points, driven by a favorable product mix and high-margin solutions [1][9] Financial Performance - The growth in AMAT's margins is attributed to advanced technologies such as leading-edge logic foundry solutions, Sym3 Magnum etch system, Cold Field Emission eBeam technology, and 3D DRAM technology nodes, which are essential for AI and high-performance computing chips [2][9] - AMAT's R&D expenses rose by 10% year over year in Q4 of fiscal 2025, impacting overall margins despite the growth in the memory segment, particularly in advanced DRAM technologies [4] - To counterbalance rising R&D costs, AMAT is reducing general and administrative expenses, including headcount, which has helped maintain its operating margin [5] Competitive Landscape - AMAT faces strong competition from Lam Research (LRCX) and ASML Holding (ASML) in areas such as 3D DRAM architectures and EUV Lithography, both of which have also reported growth in their gross and operating margins [6][7] Market Performance - Year-to-date, AMAT's shares have increased by 49.5%, outperforming the Electronics - Semiconductors industry, which grew by 44.7% [8] - AMAT's forward price-to-sales ratio stands at 6.63X, which is lower than the industry average of 7.73X, indicating potential valuation attractiveness [10] Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year earnings growth of 0.96% for fiscal 2025 and 15.77% for fiscal 2026, with upward revisions in estimates over the past 30 days [11]

Core Insights - Hewlett Packard Enterprise (HPE) and Cisco Systems (CSCO) are key competitors in the networking sector, with HPE emerging as a direct rival to Cisco following its acquisition of Juniper Networks [1][2] HPE Overview - HPE's networking business encompasses a wide range of services including wired and wireless local area networks, data center switching, software-defined wide-area networks, cellular network software, network security, and HPE Aruba Networking [3] - The acquisition of Juniper Networks on July 2, 2025, enhanced HPE's networking capabilities, allowing it to expand beyond campus and branch networking to include routers, data-center networking, and firewalls [4] - HPE's Networking operating profit reached $360 million, reflecting a 43% year-over-year increase in Q3 of fiscal 2025, driven by the Juniper acquisition and improvements in Intelligent Edge, which achieved an operating margin of 22.7% [5] - Despite gains in networking, HPE faces challenges from low-margin traditional server and high-capex AI server segments, which constitute a significant portion of its revenue [6] CSCO Overview - Cisco Systems is recognized as a leader in the networking space, offering a comprehensive portfolio that includes switching, routing, wireless, servers, software, and SaaS services [9][10] - In Q1 of fiscal 2026, Cisco's networking revenues reached $7.77 billion, marking a 15% year-over-year increase, driven by strong demand for AI infrastructure and campus networking solutions [10][12] - Cisco has experienced five consecutive quarters of double-digit growth, with product orders growing in the high teens during Q1 of fiscal 2026 [12] - The Zacks Consensus Estimate for Cisco's fiscal 2026 revenues is $60.8 billion, indicating a year-over-year growth of 7.3% [13] Comparative Analysis - Year-to-date, HPE shares have decreased by 1.2%, while CSCO shares have increased by 28.8% [15] - HPE trades at a forward 12-month price-to-sales (P/S) multiple of 0.68X, significantly lower than Cisco's 4.93X, indicating a disparity in market valuation [16] Conclusion - Both HPE and CSCO are capitalizing on the growing demand for advanced networking systems driven by AI and high-performance computing. However, HPE is experiencing margin compression in its server business, raising concerns for investors [19]

Summary of Semiconductor Industry Research Industry Overview - **AI Demand**: AI compute is projected to account for 37% of global semiconductor revenue by 2025, up from 10% in 2020. Data center investments by hyperscalers are expected to grow at a 24% CAGR, reaching US$1.2 trillion by 2030, which will drive high-performance computing (HPC) demand and sustain order backlogs for advanced nodes and packaging [1][2][3] - **Traditional Tech Devices**: Stabilization in units for traditional tech devices (smartphones, PCs, TVs) is noted, while automotive and industrial applications are beginning to recover. Healthy inventory levels suggest a potential reacceleration as edge AI technology proliferates [1] Supply Growth and Investment - **Foundry and OSAT Investment**: Foundry and OSAT (Outsourced Semiconductor Assembly and Test) investments are expected to accelerate through 2026-2027, with global foundry capex projected to grow 22% YoY to US$71 billion in 2026, driven by TSMC's expansion [2] - **Capital Intensity**: Front-end manufacturing capital intensity is expected to remain around 35%, while back-end capex is projected to grow 45% YoY to US$19 billion in 2026, with capital intensity rising to 24% [2] TSMC's Role - **Market Position**: TSMC is positioned as a core enabler of structural expansion in the semiconductor industry, with sales projected to grow at a 21% CAGR from 2025 to 2027. HPC/AI is expected to reach 70% of TSMC's sales by 2027 [3] - **Gross Margin and Operating Margin**: TSMC's gross margin and operating margin are expected to sustain at approximately 60% and 52%, respectively, due to a favorable business mix that offsets rising costs from capital expenditures [3] Valuation and Selectivity - **Valuation Bifurcation**: The semiconductor sector's valuation is expected to remain bifurcated, with AI-driven leaders at the upper end of their valuation range. TSMC is highlighted as a dominant technology player with potential for re-rating [4] - **Stock Picks**: Preferred stocks include TSMC, Chroma, GPTC, and MediaTek, while caution is advised for UMC, Globalwafers, and Novatek due to their exposure to mature tech products [4] Additional Insights - **HPC Market Growth**: The HPC semiconductor market is projected to grow at a CAGR of 31% through 2027, indicating strong demand for advanced computing solutions [22] - **Industry Capacity Trends**: The industry is seeing meaningful expansion in CoWoS (Chip on Wafer on Substrate) capacity from 2024, which is expected to unlock additional demand potential [27] - **Customer Revenue Contribution**: TSMC's top customers have consistently outperformed smaller ones, indicating a concentration of revenue among leading firms [18] This summary encapsulates the key points from the research on the semiconductor industry, focusing on AI demand, supply growth, TSMC's pivotal role, valuation dynamics, and market trends.

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is a pivotal player in the global semiconductor industry, demonstrating strong financial performance and technological leadership, particularly in AI and high-performance computing sectors [1][5][13]. Company Overview - TSMC specializes in manufacturing, packaging, testing, and selling integrated circuits, with a diverse range of wafer fabrication processes [2]. - The company holds a dominant position in the global foundry market, particularly in advanced nodes like 3nm and 5nm technologies, serving major clients such as Apple, Nvidia, and Qualcomm [2][4]. Financial Performance - In Q3, TSMC reported a 41% year-over-year revenue growth, with net income increasing over 39% to $33.10 billion, surpassing estimates [5][7]. - The company's forward estimated revenue growth is exceptional at over 29%, significantly higher than its 5-year historical average [7]. Profitability Metrics - TSMC's net income margin stands at over 43%, well above the sector median of approximately 11%, indicating strong profitability [8]. Competitive Landscape - TSMC faces competition from major players like Intel, Global Foundries, and Samsung, but maintains a unique value proposition through its technological leadership and scale [3][4]. Strategic Initiatives - The company is expanding globally with new fabs in the US, Japan, and Germany, reducing reliance on Taiwan and enhancing its role in the global supply chain [4][13]. - TSMC announced a $100 billion investment in US chip manufacturing, building on a previous $65 billion commitment [5]. Market Challenges - TSMC is experiencing valuation challenges with a forward PE ratio at multi-year highs, which may limit upside price performance [9]. - The company faces production constraints and relies heavily on cyclical AI demand, which poses risks to future profitability [10]. Technical Analysis - Current momentum for TSMC is slowing, with bearish indicators in the near term, although it remains above its 200-day moving average, suggesting intermediate-term strength [11][12]. Conclusion - Despite macro risks such as export controls and geopolitical tensions, TSMC's technological leadership and global footprint position it favorably for growth in the semiconductor and AI sectors [13].

Core Insights - The article discusses the transition of former bitcoin miners, including Cipher Mining, Riot Platforms, and IREN, towards high-performance computing (HPC) and AI services, highlighting the potential for significant revenue growth in this sector [2][5][19]. Cipher Mining - Cipher Mining operates five data centers in Texas, with plans to shift focus from bitcoin mining to HPC, aiming to leverage existing infrastructure for AI workloads [1][8]. - The company has a development pipeline of 3.2 gigawatts and announced a new 1-gigawatt site in West Texas, primarily financed by Cipher, to focus on HPC [6][7]. - Cipher's recent lease agreement with AWS is valued at approximately $5.5 billion, providing 300 megawatts of power capacity for AI workloads starting in August next year [8]. - In Q3 2025, Cipher generated $71.7 million in revenue, nearly tripling from Q3 2024, although it fell short of expectations [9]. - Analyst Greg Miller projects Cipher's stock could exceed $90 per share if it successfully executes its HPC strategy, with a current price target of $30 indicating a potential upside of 106% [10][11]. Riot Platforms - Riot Platforms has over 1 gigawatt of operational data center capacity and is expanding its Corsicana facility by an additional 600 megawatts [12][14]. - The company reported a record revenue of $180.2 million in Q3 2025, up 112% year-over-year, with a net income of $104.5 million [15]. - Miller notes Riot's capacity is well-positioned for the HPC market, and he sets a price target of $25, suggesting an 87% potential gain [16]. IREN, Ltd. - IREN operates four data centers, with a significant focus on renewable energy, and has shifted its business model from bitcoin mining to AI cloud services [17][19]. - The company secured a multi-year GPU cloud service contract with Microsoft valued at $9.7 billion, alongside a $5.8 billion deal with Dell for hardware [19][20]. - IREN's fiscal 1Q26 report showed a record revenue of $240.3 million, a 355% increase from the previous year, and a net income turnaround from a loss to a profit of $384.6 million [21]. - Analyst Miller believes IREN's strategy could lead to a valuation of over $280 per share in the long term, with a current price target of $80 indicating an 84% upside [23].

Core Insights - Cipher Mining has entered a 10-year HPC hosting agreement with Fluidstack, adding 56 MW of capacity at its Barber Lake site in Texas, securing approximately $830 million in contracted revenue over the initial term [1] - The agreement could potentially increase in value to about $2.0 billion with two optional five-year extensions and approximately $9.0 billion across the broader partnership [1] Financial Performance - Cipher will deliver 39 MW of additional critical IT load, supported by the 56 MW of gross capacity [2] - Google has increased its backstop of Fluidstack's lease obligations by $333 million, totaling $1.73 billion in support [2] - Cipher plans to fund the buildout through project-related debt and approximately $118 million in additional equity contributions [2] Operational Outlook - The company anticipates strong financial performance from the Barber Lake site, forecasting a net operating income margin of 85% to 90% and project costs of $9 million to $10 million per MW [3] - The expansion is expected to strengthen Cipher's position in high-performance computing and support its growing 3.2 GW development pipeline [3] - Following strong results and outlook from Nvidia, shares of Cipher Mining increased by more than 10%, with the latest news pushing gains to 13% [3]

So, SIET, what you're seeing behind us is the biggest part of it. Uh, SIET is what we say takes us a year to plan, a month to build, a week to operate, and one day to tear down. And so, this provides all the connectivity for the entire show floor.But, uh, probably even more importantly than that, this provides high bandwidth connectivity for a science networking experience. So, while it's in operation, SINET is actually one of the most powerful networks in the entire world right now. Uh as we speak, these r ...

HPC/AI Infrastructure and Strategy - Bitfarms has a 1.9 GW power infrastructure asset portfolio in high-demand HPC/AI regions in North America, located in cool climates for improved efficiency[24] - The company is developing 18 MW of HPC/AI infrastructure at its Washington site for Nvidia Blackwell in 2026, with a secured supply chain for $128 million[26, 28] - Panther Creek in Eastern Pennsylvania is planned as a flagship HPC/AI campus with over 410 MW of power and 316 acres of land, with Phase 1 (50 MW) expected in H1 2027 and Phase 2 (300 MW) in H2 2027[33, 34] - Bitfarms has 170 MW of hydropower operating across multiple sites in Quebec, with potential to convert BTC mining infrastructure to HPC/AI[38] - Scrubgrass is a potential gigacampus site with 1.3 GW capacity and 650 acres, offering proximity to Pittsburgh and Cleveland[39, 40] Financial Performance and Capitalization - Bitfarms reported ~$8 million in monthly free cash flow from BTC mining operations in Q3 2025[49] - Q3 2025 revenue was $69 million, a 11% increase Q/Q and a 900% increase Y/Y[51] - Adjusted EBITDA for Q3 2025 was $20 million, a 122% increase Q/Q[51] - The company has over $1 billion in cash and Bitcoin on hand, with remaining funds available from the Macquarie facility[55] Strategic Initiatives - Bitfarms is undergoing a U S pivot, with the majority of planned MW development based in the U S , a new NYC office, and a transition to U S GAAP accounting, aiming for U S redomicile in 2026[42] - The company is evaluating a cloud monetization strategy for its Washington site to replace BTC mining cash flows[42]

Core Insights - Bitfarms plans to convert its Washington site to support HPC/AI workloads, targeting completion by December 2026 [1][2] - The facility will feature advanced liquid cooling and support Nvidia GB300s, with a capacity of 18 MW and a Power usage Effectiveness (PuE) ratio between 1.2 and 1.3 [2][3] - The company has secured a fully funded agreement worth US$ 128 million for critical IT equipment and building materials [2][3] Company Strategy - The conversion of the Washington site is part of Bitfarms' HPC/AI infrastructure development strategy, aiming to generate more net operating income than Bitcoin mining [3][6] - The company holds nearly a billion dollars in cash and unused credit facilities, allowing for potential GPU financing options [3][6] - Bitfarms is exploring GPU-as-a-Service and cloud monetization strategies specifically for the Washington site [3][6] Infrastructure and Technology - The facility will utilize modular infrastructure for phased deployment and scalability, ensuring compatibility with Nvidia GB300 GPUs [7][6] - Proven thermal and power management systems will be critical for supporting HPC/AI workloads [7][6] - The site is designed to enable high-performance computing with advanced liquid cooling technology [3][6] Financial Position - The conversion of the Washington site is expected to provide a strong cash flow foundation to support operational expenses, general and administrative costs, and debt service [3][6] - The company aims to wind down its Bitcoin mining business in 2026 and 2027, reallocating resources towards HPC/AI opportunities [3][6] Company Overview - Bitfarms is a North American energy and digital infrastructure company focused on building and operating data centers for high-performance computing and Bitcoin mining [4][5] - The company has a 2.1 GW energy portfolio across North America, strategically located in data center hotspots [4][5]