Core Viewpoint - Supermicro has lowered its revenue outlook for Q1 fiscal 2026 to approximately $5 billion, down from an earlier forecast of $6 to $7 billion, indicating a shift in expected revenue due to design win upgrades [1] Revenue Outlook - The revised forecast suggests a significant slowdown in growth for Supermicro, which previously reported $5.8 billion in revenue for the last quarter, reflecting a 7.4% year-over-year increase [2] - The company is now anticipating a year-over-year decline in sales for Q1 fiscal 2026, as it generated $5.94 billion in the same quarter last year [3] Profitability Impact - Analysts project that Supermicro's earnings per share (EPS) will decline nearly 46.3% year-over-year to $0.36 in Q1, indicating potential margin pressure due to slower revenue growth [3] Long-Term Prospects - Despite the short-term challenges, Supermicro continues to experience strong demand for its next-generation Blackwell Ultra systems, which utilize Nvidia's latest architecture [4] - The company has announced design wins exceeding $12 billion, with many orders expected for delivery in Q2 fiscal 2026, and customer engagement for new AI solutions is at record levels [5]

Group 1 - HPE will build two systems for Oak Ridge National Laboratory [1] - HPE introduces a next-generation supercomputing portfolio [1]

Group 1 - The company raised its full-year outlook after reporting strong third-quarter results, with revenue growth exceeding 7% and free cash flow projected at approximately $14 billion [1][6] - Key drivers for the improved guidance include a booming AI business, strong software growth, and significant contributions from the mainframe systems [2][9] - The latest mainframe, the z17, emphasizes AI capabilities, featuring a built-in AI accelerator that can perform 450 billion inferencing operations daily [5][4] Group 2 - The launch of the z17 mainframe triggered an upgrade cycle, resulting in a 59% increase in mainframe revenue and a 15% rise in overall infrastructure revenue year over year [6][7] - This quarter marked the best revenue performance for the mainframe business in nearly two decades, with expectations of continued revenue growth following the launch [7][9] - The mainframe business's strength improved the infrastructure segment's profit margin by 4.2 percentage points to 18.1%, contributing to the overall increase in free cash flow outlook [8][9]

Core Viewpoint - The tech sector continues to show strong performance, with the Nasdaq Composite up 20.4% this year, and there are still valuable investment opportunities among leading tech companies [1]. Group 1: Alphabet - Alphabet's Google has a vast user base and generates significant cash flow from advertising, which is being reinvested into AI [3]. - The current price-to-earnings (P/E) ratio for Alphabet is 23, lower than the S&P 500, indicating it is undervalued [3]. - Alphabet's market cap is $3,143 billion, with a gross margin of 58.92% and no dividend yield [5]. - Despite concerns about competition from AI models like ChatGPT, Alphabet has seen increased search activity and strong growth in search advertising revenue [6]. - Google Cloud's operating profit has more than doubled year-over-year in Q2, showcasing growth potential [6]. Group 2: Dell Technologies - Dell Technologies is a leader in the AI-optimized server market, with most of its revenue now coming from servers and related services [8]. - The stock trades at a forward P/E of 13 based on 2026 earnings estimates, indicating it is undervalued [9]. - Dell offers a small dividend yield of 1.3%, reflecting a consistently profitable business [9]. - The company has shipped more servers in the first half of 2025 than in all of last year, with a backlog of $11.7 billion [11]. - Dell's management highlights a substantial deal pipeline, indicating strong future growth as enterprises invest in AI [12]. - The ability to quickly deliver cutting-edge servers with the latest AI chips positions Dell favorably in the competitive landscape [12].

Core Viewpoint - Certain Wall Street analysts recommend selling Super Micro Computer and Intel, citing concerns over their competitive positions and future performance despite recent stock gains driven by excitement around artificial intelligence (AI) [1] Super Micro Computer - Super Micro Computer has seen a year-to-date share increase of 57%, attributed to its involvement in AI server solutions [1] - The company reported a 7% revenue increase to $5.8 billion in Q4 fiscal 2025, but gross margin fell by 70 basis points and non-GAAP net income dropped by 24%, indicating potential loss of pricing power [5] - Analysts expect Supermicro's adjusted earnings to grow at 22% annually over the next two years, making its current valuation of 29 times earnings appear reasonable, although past overestimations raise concerns [6] - Mehdi Hosseini from Susquehanna suggests a target price of $15 per share for Supermicro, indicating a 69% downside from its current price of $48 [7] - The company has missed consensus estimates by an average of 15% over the last five quarters, leading to skepticism about its future performance [8] Intel - Intel's shares have increased by 90% year-to-date, with Q3 revenue rising 3% to $13.7 billion and non-GAAP earnings improving to $0.23 per diluted share from a loss of $0.46 per share last year [1][9] - Despite positive financial results, Intel's market share in server CPUs has dropped by 20 percentage points over the last four years, now accounting for only 63% of shipments [11] - The partnership with Nvidia, which includes a $5 billion investment, is seen as a potential avenue for Intel to regain competitiveness in the AI sector [12] - Analysts project Intel's sales to grow at 2% annually over the next two years, suggesting that its current price-to-sales ratio of 3.1 is expensive [14] - Kevin Cassidy from Rosenblatt Securities recommends a target price of $14 per share for Intel, indicating a 66% downside from its current price of $41 [7]

Market Overview - U.S. markets opened positively with small cap-focused Russell 2000 rising by 1.22%, while large cap indexes such as Nasdaq Composite, S&P 500, and Dow increased by 0.87%, 0.62%, and 0.51% respectively after the Consumer Price Index (CPI) data was released softer than expected [1] - The Consumer Price Index came in at 3% year-over-year, with a month-over-month increase of 0.3%, while Core CPI also rose by 3% YoY and 0.2% MoM, which was below analysts' expectations [2] Economic Indicators - The CPI report is significant as it is the first major government-issued report since the recent government shutdown, with the Bureau of Labor Statistics (BLS) bringing back employees to prepare the report for the annual Cost of Living Adjustment (COLA) for Social Security recipients [3] - Current CPI numbers are not expected to influence the Federal Reserve's anticipated interest rate cut at the upcoming Federal Open Market Committee (FOMC) meeting, following a previous rate cut in September [4] Company Movements - Comfort Systems USA saw a significant increase of 17% in premarket trading, driven by positive earnings reports [5] - Other notable movers include SLM Corp (+8.6%), Intel (+6.8%), SS&C Technologies (+3.86%), and Ford (+3.8%), all benefiting from their earnings reports released the previous evening [6] - HCA Healthcare increased by 4.05% after raising annual forecasts due to strong demand for medical services, while Procter & Gamble rose by 3.47% despite warning of a "bifurcation" in consumer spending [6]

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable, particularly for Dell Technologies [1][5][10]. Group 1: Analyst Recommendations - Dell Technologies has an average brokerage recommendation (ABR) of 1.52, indicating a consensus between Strong Buy and Buy, based on 22 brokerage firms [2]. - Out of the 22 recommendations, 15 are Strong Buy (68.2%) and 2 are Buy (9.1%) [2]. - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often fail to guide investors effectively [5][10]. Group 2: Limitations of Brokerage Recommendations - Brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][10]. - The interests of brokerage firms may not align with those of retail investors, providing limited insight into future stock price movements [7][10]. Group 3: Zacks Rank as an Alternative - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is based on earnings estimate revisions and is considered a reliable indicator of near-term price performance [8][11]. - Unlike the ABR, the Zacks Rank is timely and reflects the latest earnings estimates, making it a more effective tool for predicting stock price movements [12]. - For Dell Technologies, the Zacks Consensus Estimate for the current year has increased by 0.1% to $9.54, indicating growing optimism among analysts [13]. Group 4: Current Investment Outlook for Dell Technologies - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank of 2 (Buy) for Dell Technologies, suggesting a favorable investment outlook [14].

Core Insights - Dell Technologies has seen a 17% increase in stock price over the past month, but Hewlett Packard Enterprise (HPE) may present a more attractive investment opportunity due to its superior revenue growth and profitability metrics [2] - Regular assessment of investment alternatives is essential for a robust strategy, with HPE showing better performance indicators compared to Dell Technologies [2] Company Performance Comparison - HPE's revenue growth over the last 12 months was 14.0%, while Dell's was 10.5%. Over the past three years, HPE's average revenue growth was 5.9%, significantly outperforming Dell's -1.3% [6] - HPE's three-year average margin stands at 7.6%, compared to Dell's 6.1%, indicating stronger profitability for HPE [6] Business Segments - Dell operates in various segments including infrastructure, client devices, and VMware, offering a range of products such as desktops, workstations, software, multi-cloud solutions, networking, security, and digital workspace solutions [4] - HPE focuses on data solutions, general and workload-optimized servers, and networking hardware, including wired and wireless components like Wi-Fi access points, switches, routers, and sensors [4]

Group 1 - Super Micro Computer, Inc. (NASDAQ:SMCI) experienced a significant decline, with shares dropping 8.72% to close at $47.92, marking the third consecutive day of losses due to weak preliminary results that fell short of prior guidance [1][2]. - The company announced an expected revenue of $5 billion for the first quarter of fiscal year 2026, which is lower than the previously anticipated range of $6 billion to $7 billion [2]. - The decline in expected revenues is attributed to "design win upgrades" that have shifted some anticipated revenues from the first quarter to the second quarter of the fiscal period [3]. Group 2 - Despite the recent setbacks, Super Micro is witnessing strong customer engagement for its newly released AI liquid-cooled solutions, with key customers increasing their volume deployments over multiple quarters [4]. - The President and CEO of Super Micro, Charles Liang, expressed optimism about customer demand accelerating and the company gaining market share in AI, reiterating a revenue expectation of at least $33 billion for fiscal year 2026 [4]. - Official results for the company are set to be released after market close on November 4, 2025 [5].

Core Viewpoint - A-shares experienced a strong performance with significant gains across major indices, indicating positive market sentiment and potential investment opportunities driven by macroeconomic policies and structural reforms [1] Market Performance - The Shanghai Composite Index rose by 0.71% to close at 3950.31 points, marking a 10-year high - The Shenzhen Component Index increased by 2.02% to 13289.18 points - The ChiNext Index surged by 3.57% to 3171.57 points - The total trading volume in Shanghai, Shenzhen, and Beijing reached 1.99 trillion yuan, showing a substantial increase compared to the previous trading day [1][1][1] Sector Performance - Key sectors that saw significant gains included electronic components, semiconductors, and computer hardware - Notable concept sectors included CPO (optical modules), memory storage, selected components, and high-frequency PCBs, which performed exceptionally well [1][1][1] Policy Impact - The recent Fourth Plenary Session of the 20th Central Committee of the Communist Party of China is expected to provide clarity on the medium to long-term direction for the A-share market - According to Zhongyin Securities, the session's core significance lies in reinforcing structural certainty and aligning macro policies to support the upward movement of A-share market levels - The upcoming "14th Five-Year Plan" is anticipated to reshape the investment themes and valuation systems in the capital market [1][1][1]