October 8, 2025 01:45 AM GMT Global Valuation, Accounting & Tax | North America AI: Mapping Circularity The AI ecosystem is increasingly circular — suppliers are funding customers & sharing revenue; there is cross-ownership & rising concentration. More sufficient disclosure is warranted to understand these relationships. We map a section of this circularity and highlight areas of risks & rewards. Key Takeaways Investor attention is increasing to the intertwined relationships of AI players. We focus on the e ...

Two companies capture the boom-or-bubble split better than any chart. Nvidia proves there’s real money in AI now, with record data-center revenue ($46.7 billion in Q2 2025 revenue ) and guidance that’s turned once-surreal numbers into baseline expectations — even if growth showed its first signs of cooling after an unprecedented run. Oracle, meanwhile, shows how frothy the future bets can get — a backlog inflated by a reported five-year, $300 billion deal with OpenAI that doesn’t even start until 2027 and a ...

I had a buy rating for HubSpot (NYSE: HUBS ) previously, as I believed it was in a great position to grow robustly, with support from the shift to seat-based pricing and AI monetization. The latest updates, particularly from INBOUND 2025, reinforce myI’m a fundamental, valuation-driven investor with a strong focus on identifying businesses that have the potential to scale over time and unlock massive terminal value. My investment approach centers around understanding the core economics of a business—its com ...

I had a buy rating for HubSpot (NYSE: HUBS ) previously, as I believed it was in a great position to grow robustly, with support from the shift to seat-based pricing and AI monetization. The latest updates, particularly from INBOUND 2025, reinforce myI’m a fundamental, valuation-driven investor with a strong focus on identifying businesses that have the potential to scale over time and unlock massive terminal value. My investment approach centers around understanding the core economics of a business—its com ...

Apple Inc. - Wedbush has become more bullish on Apple, raising the price target from 270 to 310 while maintaining an outperform rating, driven by the iPhone 17 launch [2][5] - Demand for the iPhone 17 is tracking 10% to 15% ahead of the iPhone 16, with production ramping up by about 20% for both base and pro models [3] - Analysts believe that AI monetization could add $75 to $100 per share to Apple's valuation over the next few years, indicating that there is currently no AI premium factored into the stock price [4][3] Pfizer Inc. - Pfizer is acquiring weight loss drug maker Metsa for up to $7.3 billion, with the deal contingent on reaching certain milestones [8][9] - Metsa has a pipeline of oral and injectable weight loss treatments, including a GLP-1 drug that shows an 8.4% weight loss in 36 days, which is significant in the weight loss drug market [10][11] - Pfizer has struggled to find success in the weight loss drug space, leading to this acquisition strategy [12] Semiconductor Industry - Morgan Stanley has upgraded ASML to overweight from equal weight, with a new price target of 950 euros, citing underestimated contributions from Intel and Samsung and increased memory chip demand [13][14] - Applied Materials has also been upgraded to overweight with a price target of 209, seen as the biggest beneficiary of a memory rebound [15] - KLA Corp has been downgraded to equal weight from overweight due to valuation concerns, despite strong fundamentals [16]

Summary of Key Takeaways from the Conference Call on China's Software and Data Center Industry Industry Overview - The conference focused on the software and data center industry in China, highlighting the significant role of AI as a growth driver for the sector [1][2]. Core Insights 1. **AI as a Growth Driver**: AI is identified as the key growth driver for software companies, with notable progress in AI monetization and increasing AI-related contract values [1][2]. 2. **Operational Efficiency**: Deployment of AI agents and coding is enhancing operational efficiency for software companies [1]. 3. **Subscription Revenue**: Companies with a higher share of subscription revenue, such as Kingdee and Meitu, are showing better growth visibility [1][2]. 4. **Data Center Demand**: There is strong demand for data centers driven by AI, with positive developments in domestic AI chip production to support order visibility [1]. 5. **Public Cloud Growth**: The AI-driven public cloud business is experiencing strong growth momentum [1]. Financial Performance 1. **2Q25 Results**: Software companies reported mostly in-line results for 2Q25, with 1 beat, 12 in-line, and 3 misses. Companies with solid downstream demand and higher recurring revenue performed better [3]. 2. **Data Center Performance**: Companies like VNET, GDS, and Kingsoft Cloud exceeded expectations due to strong AI demand [3]. Market Data 1. **Revenue Growth**: The revenue of China's software and IT services industry grew by 12.3% YoY to Rmb8.32 trillion in the first seven months of 2025, with net profit increasing by 12.4% YoY to Rmb1.09 trillion [4]. 2. **Sector Performance**: In July 2025, the sector's revenue growth accelerated to 14.6% YoY, and net profit growth reached 13.9% YoY [4]. Investment Recommendations 1. **Top Picks**: The preferred companies in the software sector include Kingdee and Meitu for their solid growth and improving profitability. In the data center/public cloud space, VNET, GDS, and Kingsoft Cloud are favored for their strong growth driven by AI [2][9]. 2. **Price Objective Changes**: Price objectives for several companies were revised, reflecting changes in market conditions and company performance [7][11]. Employee Trends - The total number of employees in software companies under coverage declined by an average of 5% in 1H25 compared to FY24, indicating potential cost-cutting measures [13]. Margin Trends - There is an observed improvement in profitability across software and data center companies, with gross profit margins (GPM) and net profit margins (NPM) showing positive trends [14]. Conclusion The conference highlighted the robust growth potential of the software and data center industry in China, driven primarily by AI advancements. Companies with strong subscription models and operational efficiencies are positioned favorably for future growth. The overall financial performance indicates a healthy demand environment, although some segments, particularly cybersecurity, are facing challenges.

Group 1 - Adobe's stock has lagged behind its peers this year, with fragile sentiment heading into its earnings report [1][2] - The company warned investors in June about a longer timeline for AI monetization, similar to Salesforce's situation [2] - A key initiative for Adobe is its Firefly Gen AI platform, which has contributed to nearly doubling paid subscriptions in the last quarter [3] Group 2 - Adobe's digital media annualized recurring revenue is crucial for assessing customer retention and spending power, especially after a price hike of up to 17% on some plans [4] - Despite beating earnings expectations for the past 20 quarters, Adobe's shares have declined following results in the last four reports, indicating potential user cancellations due to increased prices [5]

Summary of Baidu and IQIYI Conference Call Company and Industry Overview - **Companies Involved**: Baidu Inc. (BIDU.O) and iQIYI Inc. (IQ.O) - **Industry**: Internet and Other Services in Asia Pacific Key Points and Arguments Baidu's Advertising Performance - Core advertising revenue is expected to decline by **23% YoY** in Q3, worsening from a **15% decline in Q2** [1][2] - AI-related search results have increased from **50% in June to 64% in July**, but monetization remains limited [2] - Estimated **16% of advertising revenue** in Q2 came from AI, with **13% from AI agents** and **3% from digital humans** [2] - Cautious outlook for advertising recovery, with expectations of a **15% decline in Q4** [2] Baidu's Cloud Business - Cloud revenue reached **Rmb 6.5 billion**, growing **27% YoY** in Q2 [3] - Enterprise cloud growth is outpacing personal cloud, with subscription revenue growing over **50% YoY** [3] - Expected cloud growth of **30% YoY** in Q3, with margins maintained in the teens [3] Robotaxi Developments - Apollo Go operates in **16 cities globally** and has formed partnerships with Uber and Lyft [4] - Focus on expanding global operations with over **1,000 fleets** and **2.2 million rides in Q2** [4] - Limited financial contribution expected in the near term [4] Margin Pressures - Margins are under pressure due to declining ad revenue and increased investments in AI and robotaxis [5] - Operating profit for Q2 is expected to be **Rmb 2.2 billion**, down **66% YoY**, with an operating margin of **9.0%**, a decrease of **16.1 percentage points** [5] iQIYI's Financial Outlook - Price target raised from **US$1.7 to US$2.1**, maintaining an equal weight rating [6] - Despite recent financial struggles, potential for revenue growth exists due to regulatory relief [6] - Risks include competition in the long video and short drama segments [6] Baidu's Price Target and Earnings Estimates - Price target maintained at **US$100**, with a cautious outlook on core ads and margin pressures [7] - Core earnings estimates for 2025 lowered by **12%** [7] - Current price target implies an **11x P/E** for 2026, compared to **19-20x** for Tencent and NTES [7] Financial Performance Highlights - Baidu's total revenue fell **4% YoY**, with core revenue declining **2% YoY** [17] - Core marketing revenue dropped **15%**, while non-marketing revenue rose **34% YoY** [17] - iQIYI's revenue fell **11%** to **Rmb 6.6 billion**, missing estimates [17] Valuation Insights - Baidu's valuation derived from a sum-of-the-parts approach, with a **12% discount rate** and **3% terminal growth rate** [25] - iQIYI's valuation reflects weaker earnings growth visibility compared to peers [27] Additional Important Information - Baidu returned **US$232 million** in Q2 under its **US$5 billion share repurchase program** [17] - iQIYI's operating profit declined **88% YoY**, missing consensus estimates [17] - Baidu's gross margin decreased to **43.9%**, down **7.8 percentage points** YoY [17] This summary encapsulates the critical insights from the conference call, highlighting the challenges and opportunities faced by Baidu and iQIYI in the current market landscape.

Market Performance - US stocks closed mixed, with the S&P 500 securing a fresh new record high [1] - Nvidia stock topped "Magnificent 7" stock rankings [1] Investment Focus - AI monetization is a key factor in stock rankings [1] Resources - Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, and advanced tools [1]

Core Viewpoint - The Invesco QQQ ETF has recently experienced a Golden Cross, indicating a potential long-term uptrend supported by strong price momentum and a robust technology sector backbone [1]. Technical Indicators - The QQQ ETF closed at $539.78, trading above all key simple moving averages (SMA), including the eight-day SMA at $531.40, the 20-day at $528.09, and the 50-day at $501.48, confirming strong upward momentum [2]. - The MACD is at 7.87, and the RSI is at 66.09, suggesting that while QQQ is heating up, it is not yet overbought [3]. Performance of Holdings - Key holdings such as Netflix, Meta, and Microsoft have shown significant year-to-date gains of 44.25%, 18.85%, and 17.09% respectively, contributing to the overall strength of the QQQ ETF [3]. - Despite some underperformance from major players like Apple, Tesla, and Alphabet, the overall market-cap heavyweights are still driving growth, with Meta benefiting from AI monetization, Netflix leveraging its content strategy and ad tiers, and Microsoft excelling in cloud and enterprise services [4]. Market Sentiment - The QQQ ETF serves as a sentiment proxy for the Nasdaq 100, and with a confirmed technical breakout and strong performance from tech bellwethers, the focus is on whether investors are already positioned in this growth opportunity [5].