September 25, 2025 10:58 AM GMT Source: Morgan Stanley Research, Factset MS Capex Tracker aggregates forecasts across hundreds of companies, separating the data into 14 key verticals. The MS Capex Tracker has further accelerated through Q3 w/ NTM capex now tracking +20%, a step function higher from the already healthy +10% base growth entering 2025 (Exhibit 1). However, as we peel back the onion it becomes clear that positive rate of change is almost entirely driven by US Hyperscalers (Exhibit 2) – in line ...

Group 1 - Cryptocurrency exchanges experienced a rally as Bitcoin prices increased following the Federal Reserve's interest rate cut [1] - The SEC approved rule changes that facilitate easier listings of cryptocurrency ETFs, positively impacting market sentiment [1] - Newly IPO'd Bullish led the gains after its quarterly report, while Coinbase and Gemini also saw significant price increases [1] Group 2 - The Dow Jones Industrial Average struggled to gain traction, with Apple shares declining after its iPhone event [2] - Gemini's IPO saw a strong debut on Nasdaq, although it closed below its highs [4] - Coinbase rebounded from a significant 19% drop, raising questions about its current investment potential [4]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Asia Pacific Thematic Investing - **Focus**: Competitive Reinvention in Asia, capital market reforms, and thematic investment opportunities across various sectors Core Themes and Arguments 1. **Competitive Reinvention**: Asia is undergoing significant changes in corporate strategies and capital markets to adapt to global themes, which are still in progress but transformative [3][19] 2. **Thematic Opportunities**: Key themes include AI and Tech Diffusion, Multipolar World dynamics, Future of Energy, and Longevity, each driving unique investment opportunities [4][23] 3. **AI and Tech Diffusion**: National strategies like China's 'AI-plus' and India's digital initiatives are pivotal for tech adoption and supply chain competition [4][22] 4. **Multipolar World**: Increased defense spending is projected to reach US$1 trillion by 2030, reflecting economic security initiatives across Asia [4][40] 5. **Future of Energy**: A shift towards renewable energy, nuclear power, and natural gas is essential for energy security and meeting rising electricity demand, with a forecasted 5% CAGR in power consumption through 2030 [46][47] 6. **Longevity**: The demographic shift towards "super-aged" societies in China, Korea, and Japan is driving demand for innovative healthcare solutions and nutrition [51][53] Investment Framework 1. **Thematic Investment Growth**: Thematic funds in Asia total US$113 billion, indicating a growing trend in institutional investment processes [5] 2. **Focus List**: A 25-stock Asia Thematic Focus List has been launched, with a median stock offering a 3-year EPS CAGR of 17.6% for 2025-27, outperforming the MSCI AC Asia Pacific [6] 3. **Sector Opportunities**: Capital Goods, particularly in heavy industrials and robotics, are highlighted as standout sectors for investment [6] Important Insights 1. **Capital Market Reforms**: Reforms are crucial for enhancing market liquidity and competitiveness, particularly in the context of AI and tech diffusion [55] 2. **Regional Dynamics**: Countries like India and Singapore are implementing innovative strategies to enhance their capital markets and economic positioning [28][29] 3. **Demographic Challenges**: The aging population in Asia necessitates reforms in healthcare and pension systems to address the needs of "super-aged" societies [52][54] 4. **Valuation Metrics**: The median stock in the thematic focus list trades at 21.6x 12-month forward P/E, indicating a premium compared to benchmarks [6] Conclusion - The Asia Pacific region is at a pivotal moment of transformation, driven by competitive reinvention and thematic investment opportunities across various sectors. The focus on AI, energy, and demographic changes presents significant potential for investors, while ongoing capital market reforms will further enhance the investment landscape.

Core Insights - The event features Amphenol management, including CEO Adam and CFO Craig, indicating a focus on investor engagement and transparency [1] Group 1 - The presentation is led by Asiya Merchant, a VP & Analyst covering tech hardware and supply chain at Citi Research, highlighting the importance of industry expertise in discussions [1] - The format of the event is a fireside chat, suggesting a casual and open dialogue for investors to engage with management [1] - There is an invitation for investor questions, emphasizing the company's commitment to addressing investor concerns and fostering communication [1]

Core Insights - The discussion features Seagate's CFO, Gianluca Romano, who highlights the company's recent achievements and future expectations regarding their HAMR product qualification process [2]. Group 1: Company Developments - Seagate has achieved a new qualification for its HAMR (Heat-Assisted Magnetic Recording) product, with four major cloud customers now qualified, three of which are based in the U.S. and one outside the U.S. [2] - The company is progressing rapidly through the qualification process and anticipates completing the qualification for all top seven cloud customers by next June [2].

Seagate (STX) 2025 Conference Summary Company Overview - **Company**: Seagate Technology Holdings PLC (STX) - **Industry**: Data Storage Solutions Key Points and Arguments Financial Performance - Seagate reported a strong quarter with sequential revenue and profitability growth expected for Q3, following increases in Q1 and Q2 [8][12][30] - The company anticipates demand growth in the nearline segment to be around mid-20s percentage, with a notable 90% growth in the last four quarters [12][30] Product Development and Demand - Seagate has achieved qualification for its MR product with four major cloud customers, aiming to complete qualifications for all top seven customers by June [3][4] - The focus is on increasing exabyte volume through higher capacity drives, moving customers from 24 terabyte EMR to 32 terabyte HAMR drives [9][10] - The company has started qualification for a 40 terabyte HAMR drive, indicating progress in meeting demand [10][63] Customer Relationships and Order Visibility - Seagate emphasizes the importance of build-to-order partnerships, requiring three to four quarters of visibility for orders to ensure production aligns with customer needs [14][16][21] - The company is cautious about longer-term visibility due to the complexity of customer plans and the number of clients involved [20][21] Market Dynamics and Competitive Landscape - Seagate is currently under shipping demand, with a focus on maintaining a balance between supply and demand to support pricing and mitigate the impact of potential market cycles [51][52] - The company does not prioritize market share but rather focuses on producing and selling exabytes efficiently [64] Technological Advancements - The transition from PMR to HAMR technology is expected to significantly reduce costs per terabyte, enhancing profitability as capacity increases without a proportional increase in materials [70][74] - Seagate believes that the gap in cost between HDDs and NAND will widen in the coming years, favoring HDDs for large-scale storage needs [76][79] AI and Future Demand - AI is driving increased data retention and generation, leading to higher storage demands. Seagate sees this as a significant growth opportunity [32][35] - The company acknowledges that innovation will continue to create new applications for data storage, further increasing demand [38][39] Capital Expenditure and Financial Strategy - Seagate's CapEx is projected to be 4% to 6% of revenue, indicating a low capital intensity compared to other sectors [80][82] - The company is initiating share buybacks and maintaining dividends, reflecting confidence in cash flow generation and financial health [97][99] Operational Efficiency - Transitioning to HEMR technology has allowed Seagate to streamline operations and reduce operational expenses, contributing to improved margins [86][88] Investor Considerations - Seagate encourages investors to recognize the strong demand dynamics in the cloud space and the potential for future growth driven by AI and other innovations [102][103] Additional Important Insights - The company is prepared to manage cyclical fluctuations in demand while focusing on long-term growth strategies [36][104] - Seagate's operational model is designed to generate strong free cash flow, which supports shareholder returns and strategic investments [82][100]

PresentationAsiya MerchantVP & Analyst Good morning, everyone. Asiya Merchant. I work here at Citi Research. I look after the tech hardware, tech supply chain stocks. Very pleased to have CDW here inaugurating our Global TMT Conference. I believe it's the 33rd Annual Conference. Don't quote me on that, but it feels like that, like Jayz said. So really happy to have Chris Leahy here as well as Al Miralles from CDW. This is a fireside chat. So we're going to have a few questions. If they want to kick off with ...

Summary of Key Points from the Conference Call Industry Overview - The report covers the Chinese market, specifically focusing on the performance of various sectors and macroeconomic indicators. [1][12] Core Insights and Arguments - **Market Performance**: MXCN and CSI300 indices gained 2.5% and 2.4% respectively, with notable outperformance in Brokers (+10.3%), Semiconductors (+9.1%), and Insurance (+8.1%) sectors. [1] - **Interest Subsidy Programs**: The Ministry of Finance launched two temporary interest subsidy programs aimed at household consumer loans and targeted service businesses. [1] - **Credit and Economic Activity**: July credit and activity data showed a significant decline, with net new loan growth turning negative for the first time in 20 years. [1] - **Inflation Trends**: CPI inflation decreased to 0.0% year-on-year, while PPI deflation remained deep at -3.6% year-on-year in July. [1] - **Foreign Investment**: Southbound capital saw inflows of US$4.9 billion this week, with a record-high daily inflow of US$4.6 billion on Friday. [1] - **Property Market Divergence**: Data from 70 cities indicated a continuing divergence in property prices between top-tier and lower-tier cities. [1] Earnings and Valuations - **Earnings Growth Forecast**: The I/B/E/S consensus for 2025/26 EPS growth is projected at 4%/14% for MXCN and 15%/12% for CSI300. [9] - **Sector Performance**: Real Estate and Growth sectors outperformed with growth rates of 4.3% and 3.9% respectively, while Utilities and Beta sectors lagged with declines of -2.4% and -3.9%. [2][3] Policy and Regulatory Environment - **Government Support for Private Sector**: President Xi emphasized the importance of healthy, high-quality development for the private sector in a recent article published in the Qiushi Journal. [5] - **Tech Sector Caution**: Chinese authorities have warned tech firms regarding the purchase of Nvidia H20 chips, indicating regulatory scrutiny in the tech sector. [1] Additional Insights - **Current Account Surplus**: The 25Q2 Balance of Payments data indicated a solid current account surplus, leading to an upward revision of the BBOP forecast. [1] - **Visa Initiatives**: China plans to introduce a new visa type for eligible foreign young science and technology professionals, aiming to attract talent. [1] - **Production Suspension**: CATL has suspended production at a major lithium mine pending license renewal, highlighting regulatory impacts on resource sectors. [1] Conclusion - The Chinese market is experiencing a mixed performance with significant sectoral divergences and macroeconomic challenges. The government's proactive measures in interest subsidies and talent attraction are aimed at stabilizing the economy amidst declining credit growth and inflationary pressures.

Group 1 - The focus has shifted from primarily tech stocks to include offshore drilling, supply industry, and shipping sectors such as tankers, containers, and dry bulk [1] - There is an emerging interest in the fuel cell industry, which is still in its nascent stage [1] Group 2 - The individual has a background in auditing with PricewaterhouseCoopers and transitioned to day trading nearly 20 years ago [2] - The experience includes navigating significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Greater China Technology Hardware, specifically in the Asia Pacific region [1][3] - **Current Industry View**: In-Line [3] Core Insights - **Positive Outlook on AI Infrastructure Spending**: Strong results and optimistic comments from Microsoft and Meta regarding capital expenditures (capex) are expected to boost confidence in AI infrastructure investments for 2026 [1][2] - **Investor Confidence**: The positive remarks from Microsoft, Meta, and Google are anticipated to enhance investor confidence in AI demand as the market approaches 2026 [2] - **Investment Recommendations**: Investors are advised to focus on infrastructure-related stocks, which are expected to be more resilient compared to consumer technology stocks [2] Preferred Companies - **Top Picks Among AP ODMs**: - Wiwynn: Noted for its ASIC AI server exposure and potential to capture market share in GPU AI servers in the medium to long term [2] - Other preferences include Wistron, Quanta, and Hon Hai [2] - **Additional Companies of Interest**: Delta, AVC, King Slide, Bizlink, Accton, and Chroma are also highlighted as favorable investments [2] Financial Data and Projections - **Microsoft and Meta's Performance**: Specific financial results and projections from Microsoft and Meta are referenced, indicating a positive trend in AI investments [1] - **Market Positioning**: The report suggests a strategic positioning in infrastructure names to mitigate risks associated with consumer tech volatility [2] Supply Chain Insights - **Microsoft's Supply Chain Beneficiaries**: A detailed list of companies benefiting from Microsoft's AI and general server hardware supply chain is provided, including Unimicron, Ibiden, and Delta among others [6][8] - **Meta's Supply Chain Beneficiaries**: Similar insights are shared regarding Meta's supply chain, highlighting key players such as Unimicron, Delta, and Quanta [10][11] Additional Considerations - **Investment Banking Relationships**: Morgan Stanley has disclosed potential conflicts of interest due to its investment banking relationships with several companies mentioned in the report [4][18] - **Analyst Certifications**: Analysts involved in the report have certified their views on the companies discussed, ensuring the integrity of the research [16] This summary encapsulates the essential insights and recommendations from the conference call, focusing on the technology hardware sector in Greater China and the implications of AI infrastructure spending.