On Nvidia's recent earnings call, Nvidia CEO Jensen Huang specifically cited reasons why there is not an AI bubble.Whether you've been listening to hedge fund manager Dr. Michael Burry, who made a name for himself by betting against the housing market right before its implosion during the Great Recession, or just looking at the market in general over the past several weeks, it's clear that investors are worried about an artificial intelligence (AI) bubble forming.How could they not be when stocks like Tesla ...

On Wednesday, Nvidia Corp (NASDAQ:NVDA) CEO Jensen Huang pushed back on growing concerns that the world is heading toward an AI bubble, arguing that today's massive investments are rooted in a historic shift in how computing itself works. Huang Breaks Down Why AI Demand Isn't Hype Speaking at the U.S.-Saudi Investment Forum in Washington, D.C., alongside Tesla Inc. (NASDAQ:TSLA) and SpaceX CEO Elon Musk, Huang was asked the question everyone has been whispering: Are we in an AI bubble? Huang didn't hesit ...

AI bubble? Jensen Huang doesn’t know her. The Nvidia CEO said on Wednesday that the chipmaker he co-founded excels at every phase of AI, and that the world is currently at a tipping point that Nvidia is uniquely positioned to preside over. “There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point, we see something very different.““The transition to generative AI is transformational and necessary, supercharging existing applications and business models, and the transition to age ...

Summary of Greater China Semiconductors Conference Call Industry Overview - **Industry Focus**: Greater China Semiconductors - **Key Themes**: Global AI Supply-Chain Updates, Opportunities in Asia Semiconductors, Preference for Foundry/OSAT/Memory over Chip Design [1][2] Core Insights - **Investment Recommendations**: - **Overweight (OW)**: TSMC (Top Pick), Aspeed, Alchip, KYEC, ASE, FOCI, Himax, ASMPT, AllRing, SMIC - **Memory Stocks**: Winbond (Top Pick), Phison, Nanya Tech, APMemory, GigaDevice, Macronix - **Non-AI Stocks**: OmniVision, Realtek, USI - **China WFE**: NAURA Tech, AMEC, ACMR - **Underweight (EW/UW)**: MediaTek, UMC, ASMedia, Vanguard, WIN Semi, Hua Hong [8] - **Market Dynamics**: - AI cannibalization is expected, with a gradual recovery in the second half of 2025. Historically, a decline in semiconductor inventory days has been a positive indicator for stock price appreciation [8] - DeepSeek technology is driving inferencing AI demand, but there are concerns about the sufficiency of domestic GPU supply [8] - Rising costs in wafers, OSAT, and memory are anticipated to create margin pressures for chip designers into 2026 [8] - **Long-term Demand Drivers**: - **Tech Diffusion**: AI semiconductor demand is expected to accelerate due to generative AI, impacting various verticals beyond the semiconductor industry [8] - **Tech Deflation**: Anticipated "price elasticity" is expected to stimulate demand for technology products [8] Valuation Insights - **Valuation Metrics**: - TSMC (Ticker: 2330.TW) has a current price of 1,465.0 TWD with a target price of 1,688.0 TWD, indicating a 15% upside [9] - UMC (Ticker: 2303.TW) has a current price of 45.3 TWD with a target price of 48.0 TWD, indicating a 6% upside [9] - SMIC (Ticker: 0981.HK) has a current price of 72.1 HKD with a target price of 80.0 HKD, indicating an 11% upside [9] - Winbond (Ticker: 2344.TW) has a current price of 64.5 TWD with a target price of 72.0 TWD, indicating a 12% upside [9] Additional Insights - **Analyst Conflicts**: Morgan Stanley acknowledges potential conflicts of interest due to business relationships with covered companies, which may affect research objectivity [2] - **Market Sentiment**: The overall industry view is considered attractive, indicating positive sentiment towards the semiconductor sector in Greater China [2] This summary encapsulates the key points from the conference call, highlighting the investment landscape, market dynamics, and valuation metrics within the Greater China semiconductor industry.

Core Insights - Microchip Technology met Wall Street's revenue expectations for Q3 CY2025, reporting sales of $1.14 billion, which represents a 2% year-on-year decline [1][7] - The company's revenue guidance for the next quarter is $1.13 billion, which is 4.3% below analysts' estimates [1][7] - Non-GAAP profit per share was $0.35, exceeding analysts' consensus estimates by 4.9% [1][7] Company Overview - Microchip Technology, established in 1987, is a leading provider of microcontrollers and integrated circuits, primarily serving the automotive sector, especially electric vehicles and their charging devices [4] Revenue Performance - The company has struggled with consistent demand over the past five years, experiencing a 4.2% annual decline in sales, indicating lower business quality [5] - In Q3 CY2025, net sales grew 6% sequentially, reflecting operational improvements despite a gradual market recovery [3] - The adjusted operating income for the quarter was $277.2 million, with a margin of 24.3%, surpassing analyst estimates [7] Financial Metrics - Revenue for Q3 CY2025 was $1.14 billion, aligning with analyst expectations, but down 2% year-on-year [7] - Adjusted EPS was $0.35, beating analyst estimates of $0.33 by 4.9% [7] - Operating margin decreased to 7.8% from 12.6% in the same quarter last year [7] - Free cash flow margin improved to 4.5%, up from 2% in the same quarter last year [7] - Inventory days outstanding decreased to 198 from 213 in the previous quarter [7] - The company's market capitalization stands at $32.81 billion [7]

[Music] [Applause] [Music] Whoever becomes the leader in AI will be the ruler of the world. I didn't say that. Vladimir Putin did all the way back in 2017.If you look throughout history, the greatest civilizations have always been tied to technology and sovereignty has always been tied to technology as has power. So the greatest risk of our time isn't in my view inflation, market instability or even war in the conventional sense. It's that we democracies fail to re-imagine what a technological republic look ...

Methodology - The core of the electronic sector research is to "embrace change and capture the ends of the industrial chain (wafer manufacturing & terminal products)" [3] - The research divides into two main lines: "domestic production" (equipment, materials, IC manufacturing) and "market-oriented" (consumer electronics, automotive, communication) [3] - The focus is on "core focus + dual-line parallel + differentiated strategies" [3] - The ends of the industrial chain are the most valuable segments: wafer manufacturing is the core manufacturing link in the semiconductor industry, with the highest technical barriers and capital investment [3] - The dual-line parallel approach reflects the unique attributes of China's electronic semiconductor industry, where domestic production corresponds to policy-driven and import substitution logic, while market-oriented corresponds to demand-driven and global competition logic [3] - Differentiated strategies are necessary to avoid a "one-size-fits-all" approach, as different sectors have distinct driving logic [3] iPhone Case Study - The article uses iPhone sales and market share data to illustrate its four development stages: innovation and breakthrough, diversification and expansion, transformation and challenge, revival and leap [6] - It emphasizes that "technology changes life and production, and the essence of growth is the growth of demand" [6] - Four supports for demand growth are identified: consumer group expansion, increased payment willingness, desire for new features, and expanded usage scenarios [6] - Investment insights from the product lifecycle are discussed, highlighting different investment logic at each stage [6][8] - The "iPhone moment" is deemed replicable, suggesting that any electronic semiconductor sector's explosion requires a flagship product or technology to activate potential demand [6][7] Valuation Issues - The DDM model serves as a theoretical foundation, while relative valuation is the practical basis, emphasizing the logic of "capital expenditure → revenue → profit" corresponding to "PB → PS → PE" [18] - High valuation premiums stem from "growth certainty," where market expectations for long-term growth drive high valuations [19] - The article outlines the appropriate valuation indicators for different stages: PB during capital expenditure, PS during revenue growth, and PE during profit stability [18]

Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the Greater China Semiconductors industry, particularly the opportunities in the Asia semiconductor market, emphasizing a preference for Foundry, OSAT, and Memory sectors over Chip Design [1][3]. Core Insights and Arguments - **Top Investment Ideas**: - **Overweight (OW)**: TSMC (Top Pick), Aspeed, Alchip, KYEC, ASE, FOCI, Himax, ASMPT, AllRing, SMIC - **Memory (AI Impact)**: Winbond (Top Pick), GWC, Phison, Nanya Tech, APMemory, GigaDevice, Macronix - **Non-AI**: Novatek, OmniVision, Realtek in Smartphone/Glasses; NAURA Tech, AMEC, ACMR in China WFE - **Underweight (UW)**: MediaTek, UMC, ASMedia, Vanguard, WIN Semi, Hua Hong [7]. - **Market Dynamics**: - AI cannibalization is expected, with a gradual recovery in the second half of 2025. Historically, a decline in semiconductor inventory days has been a positive indicator for stock price appreciation [7]. - The demand for AI semiconductors is anticipated to accelerate due to generative AI, impacting various verticals beyond the semiconductor industry [7]. - Rising costs in wafers, OSAT, and memory are projected to create margin pressures for chip designers into 2026 [7]. - **Valuation Comparisons**: - TSMC's current price is 1,505.0 TWD with a target of 1,688.0 TWD, indicating a 12% upside. The P/E ratio is projected to decrease from 33.3 in 2024 to 19.8 in 2026, with an EPS growth of 40% for 2024 and 20% for 2026 [14]. - Other companies like UMC and SMIC show varied performance metrics, with UMC having a current price of 45.9 TWD and a target of 48.0 TWD, indicating a 5% upside [14]. Additional Important Insights - **TSMC's Customer Breakdown**: Apple accounts for 20-25% of TSMC's total revenue, with significant demand expected for the N2 process in the second half of 2026 [21][23]. - **Wafer Demand Trends**: TSMC's wafer demand is expected to increase, particularly from major customers like Apple and Nvidia, with projections for 2nm and 4/5nm processes showing potential upside in 2026 [30][33]. - **Market Sentiment**: The overall sentiment towards the Greater China Technology Semiconductors industry remains attractive, with expectations of a recovery in semiconductor stock prices as inventory levels decrease [61][70]. Conclusion - The conference call highlighted significant opportunities within the Greater China semiconductor market, particularly in the foundry and memory sectors, while also addressing the challenges posed by rising costs and market dynamics influenced by AI technologies. The insights provided a comprehensive overview of the current landscape and future expectations for key players in the industry.

Talked about how AI is now worth paying for. You talked about the end or not of Moore's Law. Depending on your point of view, but the need to scale to meet demand.Was that you saying we are not in an air bubble. I don't believe we're in any bubble. And the reason for that is we're going through a natural transition from a old computing model based on general purpose computing to accelerated computing.We also know that A. I. has now become good enough because of reasoning, capability, research capabilities, ...

Group 1 - The core viewpoint is that AI has reached a level of capability that justifies its cost, indicating a shift in computing models from general-purpose to accelerated computing [1][2] - The transition is not viewed as a bubble, but rather a natural evolution in technology, emphasizing the importance of scaling to meet increasing demand [1] - Companies are investing significantly in AI technologies, reflecting their satisfaction with the performance and outcomes generated by these systems [2][3] Group 2 - AI's reasoning and research capabilities have improved, leading to the generation of valuable intelligence and tokens that companies are willing to pay for [2] - Various AI models are being utilized across different applications, showcasing the diverse use cases and the willingness of companies to invest in these technologies [3]