Summary of J.P. Morgan Global Capex Survey Industry Overview - The report focuses on the global capital expenditure (capex) trends across various industries, particularly highlighting the data center (DC) and AI-related end markets. [1][4] Key Findings Capex Growth Projections - Global capex is projected to increase by **10% year-over-year (yoy)** in **2025**, which is **2 percentage points higher** than previous estimates. [1][4] - The **Internet, Media, and Services** sector is expected to lead this growth with a **55% yoy** increase, up **16 percentage points** from earlier estimates. [1][4] - For **2026**, global capex is expected to grow by **1% yoy**, a recovery from the previous estimate of **-1% yoy**. [1][4] Sector-Specific Revisions - **2025 Revisions**: - Positive: - Internet Media & Services: **+16pp to +55% yoy** - Iron & Steel: **+9pp to +2% yoy** - Industrials: **+7pp to +12% yoy** - Negative: - Automotive: **-4pp to -1% yoy** - Chemicals: **-3pp to -4% yoy** - Consumer Products: **-1pp to +1% yoy** [4] - **2026 Revisions**: - Positive: - Internet Media & Services: **+12pp to +17% yoy** - Semiconductors: **+6pp to +6% yoy** - Utilities Power Generation: **+3pp to +1% yoy** - Negative: - Discretionary Retail: **-3pp to flat yoy** - Automotive: **-2pp to -1% yoy** - Cement and Aggregates: **-2pp to -3% yoy** [4] 2027 Capex Outlook - The first look into **2027** indicates continued strength in AI-related markets, with expected growth in: - Internet Media & Services: **+7% yoy** - Utilities Network: **+4% yoy** - Discretionary Retail: **+4% yoy** - Sectors expected to cut capex the most include: - Iron & Steel: **-6% yoy** - Mining: **-5% yoy** - Pulp & Paper: **-3% yoy** [4] Implications for WEG - The survey results are viewed positively for **WEG**, indicating higher expected spending in AI-related markets until **2027**. [1][4] - WEG has announced investments of approximately **R$5.3 billion (~US$980 million)** over the past two years to expand production, including doubling transformer capacity and entering the high-voltage motor segment. [1][4] - The capex survey's correlation with WEG's foreign revenue growth has decreased to **~80%** from **~90%** in 2023, indicating a potential shift in market dynamics. [5] Additional Insights - The survey covers around **3,900 listed companies** across **19 end markets**, representing approximately **US$3.4 trillion** of capex. [1][4] - The report highlights the importance of monitoring commodities-related sectors, which could negatively impact revenues in Industrial Electro-Electronic Equipment. [1][4] Conclusion - The J.P. Morgan Global Capex Survey presents a bullish outlook for capital expenditures, particularly in sectors related to AI and data centers, with significant implications for companies like WEG. The findings suggest a recovery in capex growth, particularly in the Internet and Utilities sectors, while caution is advised for sectors like Automotive and Chemicals. [1][4][5]

Core Insights - SLB has reorganized its Digital Solutions divisions into a distinct reporting entity, generating annual revenue at a run rate of $2.4 billion with a margin of 32.7%, expected to reach 35% [1][10] - The growth in SLB's Digital Solutions segment is driven by demand from hyperscalers responding to the AI boom and data center growth, with revenue from Data Center Solutions reaching $331 million for the quarter [3][10] - Major oilfield service companies are shifting focus from traditional oilfield services to digital and subscription-based revenue models, leveraging their expertise in remote operations [8][10] Digital Transformation - SLB's Digital Solutions includes Platform & Applications, Digital Operations, Digital Exploration, and Professional Services, aiming to integrate digital services across all offerings [1] - The company anticipates that revenue from Digital will eventually surpass that from core oilfield services [1] - The total addressable market (TAM) for digital solutions in this space shows significant growth potential through 2032 [2] Market Dynamics - The demand for data centers is increasing due to the rapid shift toward digital transformation and the adoption of cloud services for flexibility and cost efficiency [3] - Oilfield service companies are facing challenges in their core business due to declining markets, prompting a pivot towards AI-led digital subscription revenue sources [3][8] Strategic Partnerships - Halliburton has formed a joint venture with VoltaGrid to provide distributed power generation solutions for data centers, leveraging both companies' strengths [4][7] - The partnership aims to address the growing demand for microgrids as traditional power infrastructure struggles to keep pace with data center growth [4] Financial Performance - SLB's Digital Solutions segment is expected to enhance overall profitability, with an EBITDA margin of 32% projected to grow to 35% [10] - Both SLB and Halliburton are currently trading at single-digit EV/EBITDA multiples, indicating that the market has not fully recognized their revenue potential from new ventures [10]

Group 1 - Cipher Mining Inc (NASDAQ:CIFR) is experiencing increased interest due to the AI boom and operates industrial-scale data centers in the U.S. [1] - The infrastructure boom is driving investments into energy companies like Cipher Mining Inc, with expectations that built capacity will be sold [2] - There is a need for enterprise software companies to grow faster due to AI, as current revenue growth is not meeting expectations [2] Group 2 - While Cipher Mining Inc is seen as a potential investment, there are AI stocks considered to have greater promise for higher returns and limited downside risk [3]

Core Insights - OpenAI and Oracle are collaborating to develop a data center park in Saline, Michigan, with a capacity exceeding 1 gigawatt, as part of their initiative to enhance AI infrastructure [1][4] - The project aims to add 4.5 gigawatts of computing capacity, expected to commence construction in early 2026 [1][5] - The investment is backed by a consortium of private investors and financial institutions, amounting to several billion dollars [2] Investment and Job Creation - The project is projected to create over 2,500 union construction jobs during the construction phase [3] - In the operational phase, it is expected to generate over 450 jobs on-site and 1,500 supportive jobs at the county level, along with thousands of indirect job opportunities across Michigan and the U.S. [3] Strategic Goals - The core objective of this collaboration is to meet the increasing demand for AI computing power and to ensure the U.S. maintains its competitive edge in the global AI race [4][5] - The project is specifically designed for Oracle, contributing to the nation's technological leadership in future generations [4] Sustainable Design and Energy Solutions - The data center will be built on a 250-acre site with a focus on environmental sustainability [6] - It will utilize LEED-certified design and a closed-loop cooling system, limiting daily water usage to levels comparable to a single office building [7] - DTE Energy will supply 100% of the project's power, ensuring that existing customers' energy supply or rates remain unaffected [8]

Financial Data and Key Metrics Changes - Riot reported total revenue of $180.2 million for Q3 2025, an 18% increase from $153 million in the previous quarter [24] - Net income for Q3 was $104.5 million, or $0.26 per fully diluted share, compared to $219.5 million, or $0.58 per fully diluted share in the prior quarter [24] - Non-GAAP adjusted EBITDA for Q3 was $197.2 million, down from $495.3 million in the previous quarter [24] - Bitcoin production slightly declined to 1,406 Bitcoin from 1,426 Bitcoin in the prior quarter, attributed to an 8% increase in the global hash rate [24][25] - Riot ended Q3 holding 19,287 Bitcoin, valued at approximately $2.2 billion [25] Business Line Data and Key Metrics Changes - Bitcoin mining revenue for Q3 was $160.8 million, with a total direct cost per Bitcoin of $46,324, resulting in a gross profit of $95.7 million, or a 59% gross profit margin [26] - The company generated $31 million in power credits, lowering the net cost of power to $0.32 per kilowatt-hour [25] Market Data and Key Metrics Changes - Approximately 1.7 gigawatts of Riot's total capacity is located in the Dallas and Austin regions, which are highly attractive data center markets [22] - Riot's power portfolio totals more than 1.8 gigawatts, fully approved and available today, positioning it as one of the largest in North America [21] Company Strategy and Development Direction - Riot is transforming into a significant data center developer and operator, with a focus on maximizing the value of its power portfolio by transitioning megawatts towards data center development [20][35] - The company is initiating the core and shell development of two buildings at the Corsicana Data Center campus, representing 112 megawatts of critical IT capacity [4][17] - The overall development plan includes nearly 2 gigawatts of secured utility-load power, with a focus on high-quality tenants to ensure strong foundations for the data center business [6][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for data center capacity, driven by the growing needs of hyperscalers and enterprise customers [4][37] - The company is focused on building a strong foundation for its data center business, emphasizing the importance of delivery timelines and minimizing risks for potential tenants [38][46] - Management highlighted the strategic advantage of having a strong balance sheet, significant cash reserves, and a large Bitcoin holding to support ongoing transformations [34] Other Important Information - Riot has made substantial progress in its design program, completing a standardized data center basis of design that meets tier-three resiliency and efficiency expectations [11] - The company has acquired 67 acres of land adjacent to its Corsicana site for $40 million, enhancing its development capabilities [15][16] Q&A Session Summary Question: Update on discussions with potential tenants for the first builds - Management is encouraged by the current market position and the growing demand for power among hyperscalers and enterprise customers, indicating a strong interest in the Corsicana site [36][40] Question: Additional power procurement opportunities - Management remains active in exploring opportunities to expand the power portfolio, but the focus is primarily on maximizing the current development potential [41][42] Question: Impact of core and shell construction on negotiations - The construction of core and shell buildings is part of the strategy to de-risk projects and provide certainty to potential tenants regarding delivery timelines [44][46] Question: Thoughts on Rockdale site development - Rockdale shares many attractive characteristics with Corsicana, and while Corsicana is the near-term focus, Rockdale remains a viable option for future development [55][56] Question: Hiring strategy and team development - The company is actively building its team in alignment with business development phases, focusing on key roles in development, engineering, and sales [61][63]

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Group 1 - Oracle, OpenAI, and Related Digital will begin construction of a data center in Michigan under the Stargate banner early next year [1]

Data Center Development - Riot initiated core & shell development of the first two buildings at the Corsicana Data Center campus, representing 112 MW of critical IT load capacity[9] - Riot acquired an additional 67 acres of land adjacent to the Corsicana site for $40 million, simplifying the development of the full 1 GW of power capacity[17, 29] - The Corsicana site is planned to be developed over two phases, with Phase 1 providing 504 MW of total critical IT load capacity[32, 34] - Forecasted capital expenditures of $214 million over the next 18 months for the core & shell development of two buildings at Corsicana, representing $19 million per critical IT MW[37] Financial Performance - Riot Platforms reported total revenue of $180 million in Q3 2025, an 18% increase quarter-over-quarter[49] - Net income was $104 million, representing a 58% margin, with earnings per share of $026[49] - Adjusted EBITDA was $197 million, adjusted for non-cash and unusual items[49] - The net cost of power was 32 c/kWh, 16% lower than real-time prices in Load-Zone South[49] - Riot produced 1,406 BTC in Q3 2025, with a daily production of 153 BTC per day[51] - Riot held 19,287 BTC with a quarter-end value of $22 billion[51]

Core Perspective - Two Seas Capital LP, a significant shareholder of Core Scientific, expressed gratitude to shareholders for their engagement and support in rejecting the proposed sale to CoreWeave, emphasizing the value of Core Scientific and optimism for its future [2][3]. Company Strategy - The management team of Core Scientific is encouraged to focus on expanding the power pipeline, securing additional contracts, and developing next-generation data centers, highlighting the company's role as a pioneer in AI infrastructure [3][4]. - Core Scientific's CEO, Adam Sullivan, outlined value creation initiatives that bolstered confidence in the executive management team's capability to leverage the company's assets and competitive advantages [4]. Investment Management - Two Seas Capital, founded in 2020, specializes in event-driven investing with a focus on special situations, managing over $2 billion in assets, and is recognized for its thorough due diligence and ability to identify actionable investment opportunities [4].

Core Scientific Investor Update Call Summary Company Overview - **Company**: Core Scientific (NasdaqGS:CORZ) - **Date**: October 30, 2025 - **Industry**: AI infrastructure and high-performance computing data centers Key Points Merger with CoreWeave - Shareholders voted against the proposed merger with CoreWeave, leading to the termination of the deal [5][8] - The decision reflects broader market dynamics and valuation changes over the past four months [8] - Core Scientific's management emphasized the industrial logic behind the merger, highlighting potential financial synergies [7] Company Performance and Strategy - Core Scientific is positioned as a foundational player in the AI revolution, focusing on building critical infrastructure for future technologies [6] - The company has a strong development team and strategically located sites, enabling significant build-outs [9] - Core Scientific is on track to deliver 250 billable megawatts by year-end 2025 and a total of 590 megawatts by early 2027 [11][22] Power Pipeline and Capacity - The company has a total organic pipeline of approximately 2.3 gigawatts of gross capacity, with 1.5 gigawatts on a billable capacity basis [13] - A conservative approach is taken in presenting the pipeline, focusing on realistic execution rather than inflated metrics [14] - Core Scientific aims to deliver an additional 350 megawatts by the end of 2026, with 280 megawatts dedicated to the CoreWeave contract [22] Financial Outlook - Core Scientific has the potential to raise up to $4 billion in capital against the CoreWeave contract, which is expected to fund multiple non-dilutive equity investments [28] - The company is targeting a long-term leverage ratio of approximately five times stabilized adjusted EBITDA [29] - Recent market conditions have led to strong demand for data center capacity, with over $10 billion raised in debt and equity linked capital across the industry [25][26] Customer Engagement and Future Contracts - Core Scientific plans to diversify its customer base beyond CoreWeave, with expectations to sign at least one new customer and power contract before the next earnings call [29] - The company is actively engaging with potential customers and has been able to continue discussions during the merger process [36][75] Market Dynamics and Competitive Position - The demand for AI infrastructure is described as insatiable, with hyperscalers seeking gigawatts of capacity [84] - Core Scientific's competitive advantage lies in its strong operational team and the ability to deliver high-density data center capacity [10][87] - The company is adapting to market changes, including exploring non-NVIDIA GPU options for data centers [49] Challenges and Risks - Short-term challenges include permitting delays, weather impacts, and design modifications [11] - The company acknowledges the complexities of building high-density data centers and the operational maturity required [10] - Supply chain constraints and labor availability are identified as potential bottlenecks in the construction process [109] Conclusion - Core Scientific is optimistic about its future, focusing on executing its growth strategy and capitalizing on market opportunities [29][30] - The management team expresses confidence in the company's ability to deliver significant long-term value for shareholders [29]