Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Internet** sector, particularly the **Cloud & Data Centers**, **Games**, and **Mobility** sub-sectors, highlighting their performance and future outlook post-3Q results and a recent China Internet trip [1][9][10]. Core Insights and Arguments 1. **Sub-sector Preferences**: - The **Cloud & Data Centers** sub-sector has been elevated to the top preference (1) due to expected sustained AI growth momentum driven by AI training/inference demand and positive order volume outlook for data centers [1][9]. - **Games** sub-sector is now ranked 2, while **Mobility** has dropped to 3, reflecting their defensive nature and favorable pricing power amidst a soft macro backdrop [1][9]. 2. **AI and Valuation Performance**: - The China Internet sector has shown outperformance driven by AI and valuation multiples, with notable EPS growth expected from companies like **Alibaba** and **Tencent** [9][10]. - The sector's median 2026E P/E is noted at **18X**, indicating that valuation multiple expansion has been a significant driver of performance rather than profit growth [9][10]. 3. **Competitive Landscape**: - **Bytedance** is highlighted as a key competitor, particularly with its recent launch of the **Doubao Phone Assistant**, which could disrupt existing app traffic and advertising models [1][9][10]. - The potential for a new era of AI assistants in China is discussed, with implications for user engagement and privacy concerns [9][10]. 4. **Food Delivery and Quick Commerce**: - The competition in food delivery is intensifying, with **Meituan**, **Alibaba**, and **JD** expected to see adjusted EBIT declines in the upcoming quarter [9][10]. - Market share dynamics are projected to stabilize at a ratio of **5:4:1** between Meituan, Alibaba, and JD, with Meituan maintaining a leadership position [9][10]. 5. **Global Expansion**: - The report notes the increasing competition among Chinese players in the **LatAm food delivery market**, with companies like **DiDi** and **Meituan** expanding their international footprints [1][9][10]. - **JD** is also highlighted for its international expansion efforts, particularly in Europe, which could provide a re-rating opportunity for the company [9][10]. Additional Important Insights - The report emphasizes the importance of strategic pivots for eCommerce and local services players in response to Bytedance's advancements in AI and eCommerce [1][9][10]. - The potential disruption of the advertising market due to AI assistants filtering out ads is noted, indicating a shift in how users interact with apps [10]. - The report includes a detailed earnings summary and market reactions for various companies within the sector, providing insights into their performance and future outlook [12][46]. This summary encapsulates the key points discussed in the conference call, focusing on the China Internet sector's dynamics, competitive landscape, and future growth opportunities.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Disruptive Technology** sector, particularly the **AI Revolution** expected to gain momentum in **2026** with significant monetization opportunities arising from AI infrastructure built in **2025** [1][2] - The **global semiconductor market** is projected to reach between **$1.7 trillion - $2.4 trillion** by **2040**, driven by advancements in AI, 5G, and IoT technologies [15] - The **autonomous vehicle market** is expected to reach **$3.22 trillion** by **2033**, with a **36% CAGR** as AI developments drive adoption [57] Core Insights - **AI Monetization**: Approximately **20%** of AI-driven deal flow has accelerated recently, indicating strong demand from enterprise customers [1] - **Big Tech Capex**: Expected to be in the range of **$550 billion to $600 billion** for **2026**, with significant spending anticipated from governments and Global 2000 organizations [1] - **Tech Stock Growth**: A forecasted **20%** increase in tech stocks for **2026** as the AI Revolution progresses [1] AI Bubble Concerns - Concerns regarding an **AI Bubble** are deemed overblown, with the belief that the AI Revolution is still in its early stages [2] - Less than **5%** of US enterprises have fully adopted AI strategies, indicating substantial room for growth [2] Company-Specific Updates Additions to IVES AI 30 List - **CoreWeave (CRWV)**: Recognized for providing essential AI infrastructure, addressing global data center buildout needs [6] - **Iren Limited (IREN)**: Positioned to meet rising demand for AI High Performance Computing (HPC) [7] - **Shopify (SHOP)**: Accelerating AI integration through personalized shopping and operational efficiencies [8] Removals from IVES AI 30 List - **SoundHound (SOUN)**: Facing competitive challenges and shifting focus to M&A [9] - **ServiceNow (NOW)**: Struggling with monetization and backlog issues [10] - **Salesforce (CRM)**: Slower than expected monetization of its Agentforce strategy [11] Infrastructure and Investment - **AI Infrastructure**: Remains a top priority, with significant investments needed to meet rising compute demand [12] - The **data center power market** is expected to reach **$50 billion** by **2030**, with a **CAGR of 8%** [12] Geopolitical Context - Easing **US-China tensions** are seen as a positive development for tech stocks, with ongoing discussions between leaders [14] - The relationship between the US and China is crucial for the AI Revolution, particularly concerning the use of Nvidia GPUs [14] Sector-Specific Insights Semiconductors - **Nvidia (NVDA)**: Dominating the GPU market, expected to benefit significantly from AI-related capex [16] - **AMD**: Anticipated to gain market share in CPUs and benefit from rising AI infrastructure spending [19] - **TSMC**: Positioned to capitalize on AI investments due to its leadership in semiconductor foundry [20] Software and AI Applications - The global AI market is projected to reach **$407 billion** by **2027**, with a **36% CAGR** [30] - **IBM**: Backlog for AI agents has reached **$9.5 billion**, indicating strong demand [35] Cybersecurity - The cost of cybercrime is expected to reach **$23 trillion** by **2027**, emphasizing the need for robust cybersecurity solutions [50] - AI is increasing the sophistication of cyberattacks, with **87%** of security professionals reporting AI-driven attacks [51] Conclusion - The AI Revolution is in its early stages, with significant growth potential across various sectors, particularly in tech and infrastructure. Companies that can effectively leverage AI will likely see substantial benefits in the coming years.

Core Viewpoint - Nvidia holds equity stakes in several public companies, including CoreWeave, which has seen significant stock price growth since going public [2][3] Company Overview - CoreWeave operates as a neocloud, building data centers equipped with GPU clusters and renting access through a cloud-based platform [4][5] - The company has a market capitalization of $44 billion and a gross margin of 49.23% [4] Business Performance - CoreWeave's backlog reached $55.6 billion, reflecting a 271% year-over-year increase [9] - Major customers include OpenAI, which has committed $22.4 billion, and Meta Platforms, with a multiyear deal worth $14.2 billion [10] Market Position - CoreWeave's revenue is projected to rise nearly fourfold over the next two years, with an implied price-to-sales ratio of 2.2 based on expected 2027 revenue [12] - The company's valuation is lower than competitors like Iren and Nebius Group, which trade at 3.3x projected 2027 sales [13] Financial Considerations - CoreWeave has taken on over $13 billion in debt to finance infrastructure buildouts [15] - Nvidia's $6.3 billion deal with CoreWeave provides a safeguard by agreeing to purchase unused capacity, mitigating risks associated with overbuilding [16][17] Investment Thesis - CoreWeave is positioned for long-term success in the AI infrastructure era, supported by a strong backlog, customer acquisition, and strategic alliances [18]

Core Viewpoint - The "Magnificent Seven" stocks, including Alphabet and Amazon, have shown strong performance in 2025, with Alphabet leading the group. Amazon is expected to emerge as a strong performer in 2026 despite its recent underperformance [2][3][4]. Group 1: Performance Overview - The "Magnificent Seven" stocks have achieved a cumulative increase of 25% as of December 3, 2025 [2]. - Alphabet has outperformed its peers with a year-to-date performance of 67.4%, followed by Nvidia at 35.2%, and Microsoft at 17.1% [3]. Group 2: Amazon's Position and Future Potential - Amazon has lagged among the "Magnificent Seven," with less than a 50% increase over the past five years, but is expected to break out in 2026 [4]. - The company has been enhancing its e-commerce and cloud computing operations, which may lead to improved performance [4][7]. Group 3: Innovations and Operational Efficiencies - Amazon has built the largest fulfillment and logistics network globally, utilizing robots and AI to enhance operational efficiency [5][6]. - The company deploys over 1 million robots in its fulfillment centers, including advanced robots like Vulcan, which can handle a variety of items and detect damaged products [6]. - AI is being used to optimize delivery routes and improve warehouse operations, contributing to faster delivery times and reduced costs [7][8].

Core Insights - Snowflake's share prices have recently declined despite strong fiscal 2026 third-quarter results and a positive outlook, although the stock is still up nearly 47% year-to-date [1] Financial Performance - Snowflake reported a 29% year-over-year increase in quarterly revenue, reaching $1.21 billion, surpassing the analyst consensus of $1.18 billion [5] - Product revenue also increased by 29% to $1.16 billion, while adjusted earnings per share (EPS) rose to $0.35 from $0.20 a year ago, exceeding the consensus estimate of $0.31 [5] - The net revenue retention rate remained strong at 125%, indicating increased usage among existing customers [6] Growth Drivers - The company attributed its growth to AI, with AI revenue hitting $100 million in the quarter, one quarter ahead of projections [7] - Over 1,200 customers are utilizing Snowflake's AI-powered Snowflake Intelligence solution to develop AI agents, driving consumption-based growth [7] - Snowflake added a record 615 new customers in the quarter, with AI offerings accounting for approximately half of its bookings [8] Strategic Partnerships - Notably, Snowflake secured a $200 million partnership with Anthropic to deliver Claude-powered AI agents to enterprise customers [9]

Core Insights - Rubrik's stock price is expected to reach a new all-time high by mid-2026 due to its critical role in the AI ecosystem [2] - The company's fiscal Q3 results showed a significant increase in revenue and subscriptions, indicating strong demand and growth [3][4] Financial Performance - Rubrik reported net revenue of $350.17 million for fiscal Q3, a nearly 50% year-over-year increase, significantly surpassing market expectations by almost 1000 basis points [3] - Subscription revenue increased by 52%, with annual recurring revenue (ARR) from clients generating over $100K up by 27% [3] - The company achieved adjusted earnings of 10 cents, exceeding expectations, with cash flow up 200% and free cash flow up 400% [4] Guidance and Outlook - Rubrik provided a strong Q4 guidance, expecting continued business momentum and raised its full-year revenue forecast to at least $1.28 billion, which is 400 basis points better than expected [4] - Analysts indicate a positive outlook for Rubrik, with a Moderate Buy rating and an upward trend in consensus price targets, suggesting a minimum target upside of 25% [5] Market Trends - There is a notable accumulation of Rubrik's stock by analysts and institutions in 2025, despite some price target reductions [5] - The overall trend remains positive, with several price target revisions indicating potential upside closer to $130, or about 35% [5]

Core Viewpoint - Apple's high valuation metrics are currently supporting its market valuation, but it is expected that other companies will surpass Apple in market cap in the coming years due to its slow growth and high valuation [1]. Group 1: Competitors to Apple - Alphabet is approximately $300 billion behind Apple and generates more net income, indicating it could be valued higher if given the same stock price valuation. Its revenue and operating income growth rates are nearly double those of Apple, positioning it well to surpass Apple in market cap within three years [4][6]. - Microsoft, with a market cap of about $3.6 trillion, is also a strong contender to surpass Apple. Its net income is close to Apple's, and its growth rates, driven by a thriving software business and a strong cloud computing platform, suggest it will likely pass Apple in market cap soon [9]. - Amazon, currently valued at about $2.5 trillion, faces a tougher challenge as it is $1.7 trillion smaller than Apple. However, its cloud computing business, AWS, is experiencing significant growth, and its advertising business is also expanding rapidly, which could help it close the gap with Apple [10][11][13]. Group 2: Growth Prospects - Alphabet's advertising platform is performing well, and its challenge to Nvidia's dominance in the AI computing market could further enhance its growth prospects [7]. - Microsoft benefits from strong demand for AI, which is expected to continue driving growth in its cloud computing services [9]. - Amazon's AWS saw a 20% year-over-year revenue increase, and its advertising business grew by 24% in Q3, indicating strong potential for profitability and growth [11][13].

Group 1: AI Investment Opportunity - The AI revolution is expected to be a significant investment opportunity, comparable to the internet boom in the late 1990s, with potential to transform the global economy [1][2] - Analysts highlight that AI will enhance productivity and economic output by automating tasks, presenting opportunities beyond established players like Nvidia and Palantir [2] Group 2: Amazon - Amazon holds a dominant position in three key industries: online marketplace, retail advertising, and cloud computing [4] - The company has developed over 1,000 generative AI applications to optimize various retail tasks, and has introduced AI tools for advertising and custom AI chips for cloud services [5][6] - Wall Street anticipates Amazon's earnings to grow at an annual rate of 18% over the next three years, making its current valuation of 33 times earnings appear reasonable [7] Group 3: Pure Storage - Pure Storage specializes in all-flash storage systems and software, enabling efficient data management across public and private clouds [9] - The company's DirectFlash technology offers two to three times more storage density while consuming half the power compared to competitors, making it suitable for AI workloads [10][11] - Despite a recent stock drop of 27% following strong financial results, analysts project adjusted earnings growth of 30% annually through May 2027, with a median target price of $100 per share, indicating a potential upside of 45% from its current price [11][12]

Core Viewpoint - Amazon is close to joining the $3 trillion valuation club, currently holding a market cap of $2.5 trillion, with significant growth potential ahead [2][10]. Company Segments - Amazon's e-commerce platform is well-known, but its most promising segments are Amazon Web Services (AWS) and its advertising division, which are the fastest-growing areas of the company [3][4]. - AWS is benefiting from trends in cloud computing, particularly the rise of artificial intelligence and the shift from on-premise computing to cloud solutions, which is driving its growth [6][7]. Financial Performance - In the third quarter, AWS revenue grew by 20% year-over-year, contributing 66% of Amazon's total operating income, with a strong operating margin of 35% [8]. - The advertising segment, while smaller than AWS, is the fastest-growing, with a 24% year-over-year revenue increase in the third quarter, indicating high profit margins similar to those of AWS [9]. Growth Outlook - Amazon needs approximately 20% growth to reach the $3 trillion market cap, and with its recent acceleration in growth, it could achieve this milestone by the end of next year if spending is managed effectively [10][12]. - The company is projected to be a strong investment choice for 2026, with a high likelihood of reaching the $3 trillion club by 2027 if market conditions remain stable [12].

Core Insights - The artificial intelligence (AI) revolution is accelerating, with significant investments in AI chatbots and agents leading to a major refresh of IT infrastructure [1][2] - Hyperscalers are investing hundreds of billions in AI-related technologies, indicating a massive retooling of IT budgets reminiscent of the early internet era [2][3] - Major cloud providers like Amazon AWS, Microsoft Azure, Google Cloud, and Meta Platforms are projected to increase their spending from approximately $100 billion in 2023 to over $300 billion by 2025, potentially exceeding half a trillion dollars in the coming years [3] Company Investments - Fidelity Investments has highlighted that large funds, including its own $5.9 trillion in assets, are heavily investing in AI stocks, reflecting a strong belief in the profitability of AI advancements [4] - The AI boom has attracted significant interest from institutional investors, with Fidelity portfolio managers identifying top AI stocks that are expected to benefit from this trend [4] Market Performance - Despite skepticism regarding the pace of spending by big-cap tech companies, there are signs that these investments are beginning to yield returns [5][6] - Members of the "Magnificent Seven" (Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla) are experiencing earnings growth in the mid-20% range, significantly outpacing the mid-single-digit growth of the broader S&P 500 [7] - Alphabet and Meta, which together account for nearly 50% of Fidelity's Select Communication Services Portfolio, are already profiting from AI improvements, generating a combined $500 billion in digital ad sales [7]