Summary of Datacenter Market Insights - ODM Direct Industry Overview - The report focuses on the **Datacenter Market** within the **Hardware Technology** sector, specifically analyzing **ODM (Original Design Manufacturer) direct server shipments** in the Asia Pacific region. Key Insights 1. **ODM Shipments and Value Growth** - ODM shipments declined by **4% quarter-over-quarter (q/q)** but the shipment value increased by **2% q/q** due to growth in both general and AI servers [1][2] - The expected shipments for **GB200/300 racks** are projected to reach approximately **27.3k** in **CY25** and **70k+** in **CY26** [1][5] 2. **Global ODM Direct Server Shipments** - Total global ODM direct server shipments were **1.83 million** units in **3Q25**, reflecting a **4% decline q/q** but a **37% increase year-over-year (y/y)** [2] - This accounted for **43.5%** of global server shipments, which remained flat at **4.2 million** units q/q but increased by **14% y/y** [2] 3. **Market Share Dynamics** - **Inventec** became the top ODM with a **24.6%** market share, gaining **480 basis points (bps)** q/q, while **Wiwynn** dropped to **20.4%** [2][12] - **Intel** and **AMD** both lost unit share, with Intel at **35.1%** (-300 bps q/q) and AMD at **40.3%** (-390 bps q/q) [3][12] 4. **Regional Performance** - **Central & Eastern Europe** exhibited the highest growth in shipment units at **449% y/y**, followed by the **US** at **50% y/y** [4][12] - The US accounted for **75%** of aggregate ODM direct shipments, with other regions like **APxJC** at **13%** and **Western Europe** at **6%** [4] 5. **AI Server Contribution** - AI servers were the main contributors to the increase in shipment value, with the average selling price (ASP) of ODM servers increasing by **7% q/q** and **54% y/y** [5] Additional Insights - **ODM Shipment Value** reached **US$66.8 billion** in **3Q25**, marking a **2% increase q/q** and a **111% increase y/y** [2] - The report highlights potential investment opportunities in ODMs such as **Wistron**, **Wiwynn**, **Hon Hai**, **FII**, and **Quanta** [5] Conclusion - The ODM direct server market is experiencing a complex landscape with declining unit shipments but increasing value, driven primarily by the growth of AI servers. The competitive dynamics are shifting, with new leaders emerging in market share and significant regional disparities in growth rates.

Summary of ZTE Conference Call Company Overview - **Company**: ZTE Corporation (0763.HK) - **Industry**: Telecommunications and AI Infrastructure Key Points and Arguments Financial Performance - ZTE's server and storage revenues increased by **200% YoY** in 1H25, with AI servers contributing **55%** of total revenues [1][2] - Projected **3Q25 revenues** are expected to grow **26% YoY**, compared to **21% YoY** in 2Q25, with a gross margin stabilizing at **31%** [1] - Estimated **net income** for 3Q25 is projected to be **Rmb2.4 billion**, reflecting a **12% YoY** growth [1] Market Position and Growth Drivers - ZTE is positioned as a major beneficiary in the telecom and enterprise AI data center market, supplying GPU servers, general servers, storage, and networking cards [2] - Recent procurement wins include: - **Rmb3 billion** general server procurement from ICBC [2] - **Rmb1.9 billion** PC server procurement from China Mobile [2] - **Rmb5 billion** AI inferencing server procurement from China Mobile [2] - The demand for AI and general computing infrastructure in China is increasing, with ZTE benefiting from comprehensive product lines and long-term customer relationships [2] Capital Expenditure Trends - Chinese Cloud Service Providers (CSPs) are expected to increase capital expenditures by **65%** in 2025, **20%** in 2026, and **9%** in 2027 [2][8] Earnings Revisions - 2026-27E net income estimates have been revised up by **1%** and **2%** respectively due to higher revenue expectations [11] - Revenue estimates for 2026E and 2027E have been increased by **1%** and **2%** respectively [11] Valuation and Price Target - The 12-month target price for ZTE's H-shares has been raised by **14%** to **HK$43.6**, reflecting a market re-rating of AI infrastructure players [1][12] - The target P/E multiple for H-shares is now **19.2x**, up from **17.0x** [11] - The 12-month target price for A-shares is raised by **13.6%** to **Rmb67.6** [12] Risks and Considerations - Key risks include faster or slower-than-expected demand in telecom infrastructure and potential non-operating gains or losses that could impact earnings estimates [22] Revenue Mix - ZTE is seeing an increasing contribution from non-telecom business segments, indicating diversification in revenue sources [13] Additional Important Information - The company maintains a **Neutral rating** due to fair valuation despite positive growth outlook [1] - The report emphasizes the importance of considering ZTE's normal earnings power without factoring in non-operating items, which have historically varied significantly [22]

Core View - Recent advancements in artificial intelligence (AI) have led to increased interest from businesses, with 287 out of 500 S&P 500 companies mentioning AI in their earnings calls, a significant rise from less than 100 at the end of 2022 [1][2] Group 1: CoreWeave - CoreWeave specializes in renting GPU servers to AI developers and has a significant investment from Nvidia, which owns approximately 7% of the company [4][5] - Nvidia's recent contract to purchase unused capacity from CoreWeave as part of a $6.3 billion GPU deal ensures CoreWeave's growth potential through at least 2032 [5] - CoreWeave has rapidly expanded by taking on debt to build new data centers outfitted with Nvidia chips, benefiting from high demand for AI compute [6] - The company faces significant risks, including a high customer concentration, with Microsoft accounting for 71% of its revenue last quarter, and Microsoft's own capacity expansion could negatively impact CoreWeave's growth [7][8] - HSBC analyst Abhishek Shukla set a price target of $32 for CoreWeave, indicating a potential 75% decline from its current stock price due to high debt and reliance on Microsoft [9] Group 2: Palantir Technologies - Palantir Technologies provides software that helps businesses and government agencies analyze large data sets, with its AI Platform enhancing its product offerings [10] - The company reported a 48% year-over-year sales increase last quarter, with U.S. commercial customer sales up 93% year-over-year, and an adjusted operating margin of 46% [11] - Palantir's remaining deal value among U.S. commercial customers reached $2.79 billion, a 145% increase year-over-year, and it secured a $10 billion contract with the U.S. Army [12] - Despite strong growth, RBC Capital analysts set a price target of $45 for Palantir, suggesting a 75% drop from its current stock price due to unfavorable valuation metrics, trading over 100 times forward sales estimates [13]

Investment Rating - The report maintains a "Buy" rating for Wiwynn Corporation with a target price of TWD3,400, implying approximately 32.8% upside from the current price of TWD2,560 [4][21][22]. Core Insights - The report highlights stronger growth in ASIC servers compared to GPU servers, with expectations for continued momentum into the second half of 2025 [2][7]. - Major PC ODMs experienced a significant pull-in in notebook shipments in June 2025, with a 22% month-over-month increase and an 11% quarter-over-quarter rise, exceeding previous guidance [1][3]. - The overall outlook for notebook shipments in the second half of 2025 remains cautious due to unclear consumer demand, with a forecasted year-over-year growth of only 3% [3][4]. Summary by Sections ASIC Server Outlook - The demand for ASIC servers is expected to strengthen in the second half of 2025, particularly driven by AWS's Trainium 2 servers, with a forecast of sequential double-digit growth in rack shipments [2][4]. - The yield rate for GB200 server rack assembly is anticipated to improve from below 50% in the second quarter of 2025 to 60-70% in the second half of 2025 [2]. Notebook Market Analysis - The early pull-in of notebook shipments is largely completed, with a muted growth outlook for the second half of 2025 due to ongoing consumer demand uncertainty [3][4]. - The report estimates a 1% quarter-over-quarter increase in notebook shipments for the third quarter of 2025, which is below seasonal norms [3]. Stock Recommendations - Wiwynn is favored due to its strong revenue outlook supported by accelerating ASIC server shipments, with Oracle expected to contribute 7% to Wiwynn's revenue in 2025 [4][7]. - The report emphasizes the potential for additional upside from Oracle beyond 2025, driven by market share shifts and an expanding addressable market [4].