Investment Rating - UBS maintains a bearish outlook on the dollar, forecasting significant further weakness by year-end, with EUR/USD expected to reach 1.23 and JPY/USD at 130 [2][17]. Core Insights - The report identifies both cyclical and structural reasons for the continued weakness of the dollar, including high US net foreign debt, over-ownership of the dollar in global reserves, and potential policy actions that could further devalue the dollar [4][21][33]. - A weaker dollar is generally seen as positive for global equities, easing financial conditions and leading to earnings upgrades [5][74]. Summary by Sections Why Should the Dollar Continue to Weaken? - The dollar is expected to remain in a bear market due to long-term cycles and structural issues, including US net foreign debt nearing 90% of GDP and significant unhedged dollar positions held by foreign investors [4][21][23][33]. Tactical Factors Pointing to a Weaker Dollar - UBS forecasts US GDP growth to slow from 1.7% YoY in Q2 to 0.9% YoY in Q4, with expectations of four rate cuts by year-end, which contrasts with market expectations of only two [3][42][46]. Investment Implications - A weaker dollar is projected to positively impact global equities, with a 10% decline in the dollar potentially adding approximately 2% to MSCI AC EPS growth [5][79]. - Emerging markets are expected to be the clear winners from a weaker dollar, with significant relative performance improvements [6][83][90]. Regional Insights - Emerging markets and the Eurozone are expected to outperform in unhedged terms when the dollar weakens, while the US is likely to underperform [6][84][90]. - In local currency terms, Japan and the UK are projected to be the worst performers, while emerging markets are anticipated to be the best [84][90]. Sector and Stock Recommendations - In Europe and the UK, sectors such as retailing and budget airlines are expected to benefit from a stronger Euro, while pharma is seen as an underperformer [12]. - In the US, sectors like software, telecoms, and household products are expected to perform well if the dollar weakens [14]. Emerging Market Opportunities - Specific companies in emerging markets, such as Cathay and CTBC, are rated as buys and are expected to benefit significantly from a weaker dollar [13][121].

Investment Rating - The report maintains an Overweight rating on ASM International, indicating a positive outlook for FY25 with continuing share gains [15]. Core Insights - The European semiconductor market is showing signs of recovery, although the recovery is not as significant as typically expected due to macroeconomic uncertainties and higher than normal inventory levels [15][17]. - Infineon Technologies reported positive current trading with no signs of tariff impact, and the auto market is showing early signs of an up-cycle [15][17]. - Nokia is expected to see steady improvement, particularly in its Network Infrastructure business, with low potential tariff impact due to flexible manufacturing [15][17]. - Future's management emphasized a focus on audience growth, diversification, and monetization, with a compelling valuation narrative for a turnaround [15][17]. Summary by Sections European TMT Conference Highlights - The conference featured discussions with 11 telco management teams, highlighting key takeaways from companies such as Cellnex, Inwit, and Vodafone [15][17]. - BT Group's FY results showed a revenue of £5,049 million, slightly below consensus, with a mixed KPI performance [15][17]. Semiconductor Insights - Companies at the conference indicated that the inventory correction in the semiconductor market is nearing its end, but visibility for FY25 remains constrained [15][17]. - ASM International is optimistic about mid-term trends and has not seen changes in customer behavior due to the macro environment [15][17]. Company-Specific Feedback - Infineon Technologies expressed confidence in current trading, with no deterioration in orders despite tariffs [15][17]. - Nokia's growth in the hyperscaler market is expected to continue, aided by the integration of the Infinera sales team [15][17]. - Future's management is committed to P&L efficiency and capital allocation, setting the stage for potential value creation [15][17].

Summary of Key Points from the Conference Call Industry and Company Overview - The conference is focused on the APAC market, particularly China, with significant participation from over 2800 attendees at JPM's China Summit [1] - The MSCI China index has shown a +19% increase over the past 12 months and +16% year-to-date, outperforming the S&P and MSCI Emerging Markets [1] Core Themes and Arguments 1. **Consumption as a Policy Priority** - The Chinese government has identified boosting domestic demand as the top policy goal, which is crucial given the unstable global trade backdrop [5] - There is an observed upturn in consumer corporate EPS trends, presenting an opportunity to invest in undervalued consumer leaders in sectors like Internet and Brands [5] 2. **Innovation through AI Implementation** - AI's real-world application is highlighted as a key growth theme, particularly in smart robotics and internet platforms [5] - The demand for AI-driven services is expected to grow, especially in cloud businesses [5] 3. **US-China Relations and Strategic Competition** - Recent improvements in US-China relations have been noted, but underlying tensions remain, particularly in technology and geopolitics [5] - The strategic decoupling between the two nations is ongoing, which may affect investment strategies [7] 4. **Market Positioning and Strategy Adjustments** - The positioning of hedge funds has returned to neutral, indicating a shift in market sentiment [10] - JPM's strategy report has upgraded Communication Services to Overweight (OW) while downgrading Technology to Neutral due to valuation concerns [7] 5. **Earnings Growth and Sector Outlook** - The consensus EPS growth for the MXCN market is projected at 8.3% for 2025, with AI adoption expected to drive further growth [18] - Caution is advised for sectors facing overcapacity and inventory downcycles, such as NEVs and renewable energy [18] 6. **Taiwan Tech Sector Insights** - There is a noted gap between upstream GPU module builds and downstream production, which may pose risks [19] - The forecast for AI GPU shipment growth has been trimmed due to recent US restrictions on China [19] Additional Important Insights - The sentiment at this year's summit is more optimistic compared to the previous year, which was characterized by hope for policy changes and growth stabilization [3] - The tactical desk view indicates that execution will be critical for continued market rallying, with EPS growth expectations needing to be lifted [1][3] - The report emphasizes the importance of monitoring geopolitical developments as they could significantly impact market dynamics [5][7] This summary encapsulates the key points discussed during the conference call, providing insights into the current state of the APAC market, particularly in China, and the strategic considerations for investors.

Core Viewpoint - SoftBank has posted its first annual profit in four years, with a net income of 1.15 trillion yen ($7.8 billion) for the year ended March, overcoming a previous loss of $1.5 billion, signaling a potential turnaround for the company as it invests heavily in AI [1][2][3]. Financial Performance - The fourth quarter saw a 124% year-on-year increase in quarterly profit, driven by a significant rise in Alibaba shares, which have increased over 55% this year, and profits from its telecom unit, including T-Mobile [2]. - The overall profit recovery provides relief for CEO Masayoshi Son, who has faced criticism for past losses, including a disastrous investment in WeWork and significant losses in the Vision Fund [3]. AI Investment Strategy - Masayoshi Son is heavily investing in AI, believing it will surpass human intelligence by 2035, and is making high-risk moves to achieve this vision [4]. - SoftBank has become a key backer of OpenAI, leading a $40 billion funding round and investing a total of $2.2 billion, viewing OpenAI as the closest partner to achieving artificial general intelligence [5]. - The company is also focusing on the necessary computing power for AI development, with Son serving as chairman of Stargate, a $500 billion infrastructure project in the US [6]. Broader AI Initiatives - In addition to OpenAI, SoftBank holds a majority stake in AI chip firm Arm and has established a new holding company, Robo HD, for its robotics investments [7]. - However, these investments come with risks, including legal challenges faced by OpenAI and uncertainties surrounding the Stargate project due to external factors like tariffs [8]. Market Concerns - There are concerns regarding the long-term demand for AI chips, as evidenced by Arm's decision not to provide full-year revenue guidance, leading to an 11% drop in its shares after earnings [9].

Investment Rating - The report maintains a cautious view on the technology sector, particularly on software and IT services, while highlighting structural growth opportunities in AI and semiconductors [26][31][44]. Core Insights - CIOs' IT budget growth expectations for 2025 have decreased to 5.8%, down 140 basis points from 2H24, with significant downward revisions anticipated in software and hardware spending [8][44]. - AI/ML/PA remains the top priority for CIOs, with 71% expecting AI/LLM projects to enhance IT investments in 2025, reflecting a 19 percentage point increase from 2H24 [53][70]. - The share of AI/LLM in total IT spending is projected to rise to 11.2% in 2025, up from 10% in 2H24, indicating a growing focus on AI-related investments [65][70]. Summary by Sections IT Budget Expectations - CIOs' average IT budget growth expectations fell to 5.8% for 2025, with a notable decline post-US tariff announcements, where expectations dropped from 6% to 2% [8][11][44]. - The survey indicates that 43% of CIOs foresee further downward revisions to their budgets following the tariffs, compared to 31% prior to the announcement [15][44]. AI and Technology Trends - AI/ML/PA has overtaken digital transformation as the most defensive area of IT spending, with significant increases in spending expectations [64][69]. - The report highlights that 34% of companies have initiated AI/LLM projects, with 39% expecting to have projects in production by 2025 [54][61]. Sector-Specific Insights - Software and IT services are expected to see the largest budget cuts, while semiconductors are anticipated to experience structural growth driven by AI, despite a delayed cyclical recovery [26][31][44]. - The hardware sector is expected to face reduced spending, particularly in PCs, while AI server hardware is projected to benefit from increased demand [33][37][70]. Preferred Companies - The report identifies several preferred companies within the AI and semiconductor sectors, including TSMC, MediaTek, and Beisen, which are expected to benefit from the ongoing AI trend [31][70][72]. - Caution is advised for companies with significant exposure to traditional tech and enterprise software, as macroeconomic uncertainties may hinder recovery [26][31][44].