Qualcomm (QCOM) stock is slipping on Feb. 5, after the semiconductor giant issued disappointing Q2 guidance, citing a global memory shortage it believes will remain an overhang on smartphone production in 2026. At the time of writing, QCOM shares sit decisively below their key moving averages (MAs), signaling the downward pressure is unlikely to subside anytime soon. More News from Barchart Still, the relative strength index (RSI) and options data warrants buying Qualcomm stock, now down 25% versus its ...

Core Viewpoint - Memory shortages are expected to constrain cell phone sales for an extended period, negatively impacting demand for companies in the chip industry, including Qualcomm and Arm Holdings, as indicated by disappointing results reported by both companies [1] Group 1: Industry Impact - The ongoing memory shortages are anticipated to limit the sales of cell phones, which will subsequently affect the overall demand for the chip industry [1] - Executives and analysts have highlighted that these shortages will have a prolonged effect on the market dynamics within the chip sector [1] Group 2: Company Performance - Qualcomm and Arm Holdings reported results that fell short of investor expectations, reflecting the challenges posed by the current market conditions [1] - The disappointing financial results from these companies underscore the adverse effects of supply chain constraints on their performance [1]

Core Viewpoint - Nintendo is experiencing significant challenges due to a memory chip shortage, which has led to a decline in its stock price despite a strong performance in profit and revenue growth. Group 1: Financial Performance - Nintendo's profit increased by 24% year on year, driven by strong sales of the Nintendo Switch, which is now the company's best-selling console since its release in 2017 [2] - Revenue rose by 86%, indicating robust demand for its products despite the ongoing supply chain issues [2] Group 2: Market Challenges - The company is facing headwinds from an unprecedented shortage of memory chips, a critical component for its consoles, resulting in rising prices [2] - Investors are concerned about the potential impact of high memory costs on Nintendo's profit margins, although the company maintains that these costs have not yet significantly affected its financial results for the current year [3] Group 3: Product Launches and Future Outlook - Nintendo plans to release major titles for the Switch 2, including "Mario Tennis Fever" in February and "Pokémon Pokopia" in March, which are expected to drive sales [4] - The company is also set to release "The Super Mario Galaxy Movie" in April, following the success of the first Super Mario movie in 2023, which boosted console sales [4] - Analysts suggest that 2026 will be a critical year for the Switch 2 as Nintendo aims to expand its appeal to a broader market [5]

Core Insights - Micron Technology is actively expanding its semiconductor manufacturing capabilities with significant investments, including a $100 billion foundry in New York, a new fab in Boise, Idaho, and another in Singapore, with production expected to ramp up between 2027 and 2030 [1][2] Group 1: Company Developments - Micron is developing memory and storage solutions, including DRAM, NAND, and SSD products, under the Micron and Crucial brands [2] - The company has seen a stock price increase of 39% since the beginning of January 2023, indicating strong market performance [2] - Micron's expansion plans include a new fab in Boise, Idaho, expected to add output in the second half of 2027, and a fab in Singapore, projected to start production in the second half of 2028 [1] Group 2: Market Context - There is a notable shift in investment focus towards storage companies, with Micron being highlighted as a strong player in this sector [2] - The current memory shortage is anticipated to persist, which may provide continued support for Micron's stock price [2] - The emergence of new tech stocks is drawing investment away from traditional sectors, benefiting companies like Micron that are involved in storage solutions [2]

Group 1 - Micron Technology, Inc. (MU) stock has experienced a significant surge recently due to an increasing memory shortage, attracting investor interest as they anticipate further growth in the sector [1] - The memory shortage is expected to continue gaining momentum, which could lead to additional investment opportunities in Micron Technology [1] Group 2 - The article emphasizes the importance of conducting personal due diligence before making investment decisions, highlighting that past performance does not guarantee future results [2]

Summary of Conference Call on China Autos & Shared Mobility Industry Overview - The focus is on the Chinese automotive industry, particularly the impact of the anti-involution campaign on auto dealers and manufacturers [1][2][6]. Key Companies Discussed - **Zhongsheng Group Holdings (0881.HK)** - Price Target: Reduced from HK$21.00 to HK$18.00 [1][17]. - **China Yongda Automobiles Services (3669.HK)** - Price Target: Reduced from HK$2.30 to HK$1.90 [1][17]. - **China MeiDong Auto Holdings Ltd (1268.HK)** - Price Target: Reduced from HK$2.10 to HK$1.70 [1][17]. Core Insights and Arguments - **Anti-Involution Campaign Effectiveness** - The campaign aims to curb excessive price discounts and improve dealer margins by enforcing pricing guidelines [2][9]. - Initial market expectations for the effectiveness of these guidelines are low due to industry fragmentation [2][9]. - BMW's recent MSRP cuts (10-20%) are seen as a positive sign for improving dealer margins [10][11]. - **Dealer New Car Losses** - There is a debate on whether overall new car losses will widen in 2026, despite expected declines in luxury ICE sales [3]. - Factors such as the ramp-up of EV stores and dealer closures may help narrow losses [3]. - **Earnings Recovery** - Earnings estimates for Zhongsheng, Yongda, and Meidong have been cut by 9-13% due to lower new car margins [4][17]. - Despite lower commission income, a recovery in dealer earnings is anticipated in 2026, supported by a growing after-sales business [4]. - **Impact of Memory Shortage** - A potential memory shortage could lead to vehicle production cuts, benefiting dealers by improving new car margins [14][15]. Financial Highlights - **Zhongsheng Group Holdings Financials** - Revenue projections for 2025E: Rmb 155,108 million, 2026E: Rmb 150,103 million, 2027E: Rmb 148,876 million [16]. - Net profit projections for 2025E: Rmb 2,160 million, 2026E: Rmb 3,419 million, 2027E: Rmb 4,874 million [19]. - EPS projections for 2025E: Rmb 0.88, 2026E: Rmb 1.40, 2027E: Rmb 1.99 [19]. Other Important Insights - **Market Sentiment** - The consensus rating distribution shows 79% overweight, indicating a generally positive outlook despite challenges [29]. - **Investment Drivers** - Growth in car collision repair services and expansion into EV brands are expected to drive future growth [26]. - The new car business is projected to bottom out in 2026, supported by capacity cuts and model upcycles [26]. - **Risks** - Risks include intensified competition from NEVs and potential declines in new car margins due to widening discounts [31][35]. This summary encapsulates the key points discussed in the conference call regarding the Chinese automotive industry and the specific companies involved, highlighting the challenges and potential recovery paths for auto dealers.

Group 1 - Micron Technology, Inc. has seen a significant stock increase of 39% since the beginning of January 2023, indicating strong market interest in storage solutions [1] - The company is part of a new group of tech stocks that are attracting investment away from other sectors, particularly the "Magnificent Seven" stocks [1] - Micron develops memory and storage solutions, including DRAM, NAND, and SSD products, under the Micron and Crucial brands [2] Group 2 - Despite the recent stock gains, Micron is still considered not expensive on a price-to-earnings basis, suggesting potential for further investment [1] - There is uncertainty regarding the duration of the memory shortage, which could influence Micron's market performance in the near future [1]

Group 1: Earnings Reports and Expectations - The first Big Tech earnings of the year will begin with Intel reporting results, with a focus on AI monetization and spending from major companies like Amazon, Google, Microsoft, and Meta [1] - Investors are particularly interested in PC chip sales from AMD and Intel, which may benefit from Microsoft's end of support for Windows 10, although a global memory shortage could negatively impact sales outlooks [2] - Apple's earnings are anticipated to show solid growth driven by strong iPhone sales in Q4, while Nvidia's future in China remains uncertain as it seeks to reestablish its business in a key AI market [3] Group 2: AI Spending and Capital Expenditures - Major AI spenders include Amazon, Google, Meta, and Microsoft, with their earnings results expected to influence AI companies across the market [6] - Amazon plans to invest $125 billion in data centers by 2025, with even higher spending anticipated in 2026 [6] - Google has raised its 2025 capital expenditures forecast to between $91 billion and $93 billion, up from $85 billion, with significant increases expected in 2026 [7] - Meta has also increased its 2025 capital expenditures projection to between $70 billion and $72 billion, with total expenses expected to grow at a faster rate in 2026, driven by infrastructure costs and employee compensation [7][8]

Group 1: Earnings Reports and Market Trends - The first Big Tech earnings of the year will begin with Intel reporting results, with a focus on AI monetization and spending from major companies like Amazon, Google, Microsoft, and Meta [1] - Investors are particularly interested in PC chip sales from AMD and Intel, which may benefit from Microsoft's end of support for Windows 10, although a global memory shortage could negatively impact sales outlooks [2] - Apple's earnings are expected to show solid growth driven by strong iPhone sales in the fourth quarter [2] Group 2: AI Spending and Infrastructure - Major AI spenders such as Amazon, Google, Meta, and Microsoft are expected to continue significant investments in data centers, with Amazon planning to spend $125 billion in 2025 and even more in 2026 [5] - Google has raised its 2025 capital expenditures forecast to between $91 billion and $93 billion, up from $85 billion, with further increases anticipated in 2026 [6] - Meta has also increased its 2025 capital expenditures projection, now estimating between $70 billion and $72 billion [6] - Nvidia's CEO highlighted the ongoing AI infrastructure buildout, stating that trillions of dollars in infrastructure still need to be developed despite existing investments [7]

Investment Rating - The report maintains a cautious outlook on the smartphone industry, with a preference for component suppliers over OEMs due to rising memory prices and supply challenges [5][8]. Core Insights - The smartphone industry is expected to face challenges in 2026, with limited unit growth forecasted at +1.0% YoY in 2026 and +2.0% YoY in 2027, following a +3.5% YoY growth in 2025 [2][8]. - The UBS Evidence Lab 4Q25 Smartphone Survey indicates a moderate increase in purchase intent, with 40% of respondents planning to buy a smartphone in the next 12 months, up from 36% in 2Q25 [3][19]. - Rising memory prices are projected to significantly impact Bill of Material (BOM) costs, potentially accounting for approximately 14% of flagship smartphone BOM costs and 34% of mid-range/lower-end smartphone BOM costs by 4Q26 [4][101]. Summary by Sections Industry Outlook - The smartphone market is anticipated to grow moderately, with unit sell-in forecasts slightly raised to 1.27 billion units in 2025 and 1.28 billion units in 2026, reflecting a +3.5% and +1.0% YoY growth respectively [50][55]. - The average age of the smartphone installed base has decreased to 22.0 months, indicating a normalization in the replacement cycle [30][44]. Purchase Intent Trends - Purchase intent for the iPhone 17 series is strong, with 66% of respondents interested in this model, up from 61% for the iPhone 16 series [3][89]. - Retention rates for Apple and Samsung remain stable at 87% and 75% respectively, while Chinese OEMs have seen declines in retention rates [59][61]. Component Supplier Preference - The report favors component suppliers such as ASE, SK Hynix, and TSMC, while maintaining neutral ratings on major OEMs like Apple, Lenovo, and Xiaomi, and a buy rating on Samsung Electronics [5][8]. - The memory supply shortage is expected to create significant challenges for OEMs, particularly smaller ones, as they may struggle to secure adequate memory supply [4][110].