September 30, 2025 09:00 PM GMT Greater China Semiconductors | Asia Pacific Cloud Semis: Demand Remains Strong "Globally" into 2026 Demand for AI in the semiconductor sector shows ongoing strength, with OpenAI and Alibaba recently releasing new deployments. Substrate shortage in 1H26 suggests a stronger 2H26 for Aspeed. Stay positive on cloud semis overall. Key Takeaways Demand for AI is unstoppable: OpenAI and NVIDIA (covered by Joe Moore; see report) jointly announced a strategic partnership to deploy at ...

Core Insights - The AI frenzy continues to be a major focus, with NVIDIA (NVDA) leading the charge [1] - NVIDIA has announced a strategic partnership with OpenAI to deploy at least 10 gigawatts of systems, planning to invest up to $100 billion in OpenAI [2] - NVIDIA's stock reached an all-time high, with year-to-date gains exceeding 30% [2] NVIDIA's Collaborations - NVIDIA's partnership with Saudi Arabia's HUMAIN aims to build AI factories with a capacity of up to 500 megawatts, utilizing hundreds of thousands of NVIDIA's GPUs over five years [5] - A collaboration with Novo Nordisk focuses on creating customized AI models for early research and clinical development, despite Novo Nordisk's shares being down nearly 30% in 2025 [6] - NVIDIA and Intel announced a joint development of custom data center and PC products, with NVIDIA planning to invest $5 billion in Intel's stock, which has seen a nearly 50% increase in 2025 [7] Data Center Growth - NVIDIA's Data Center growth has been a key driver of its positive performance, fueled by strong demand from the AI sector [11] - The company continues to secure lucrative deals with various partners, including OpenAI, Novo Nordisk, and Intel [14]

Core Insights - IBM is advancing quantum technology through a partnership with AMD to create scalable, open-source quantum-centric supercomputing platforms, aiming to achieve quantum advantage and drive technological innovations in the quantum ecosystem [1][7] Group 1: Quantum Technology Developments - IBM has updated its Qiskit quantum software platform, introducing Qiskit SDK v1.x, which enhances the building, optimizing, and visualizing of quantum circuits [2] - The Qiskit Transpiler Service now utilizes AI for circuit optimization, achieving a performance increase of 39 times and reducing memory usage by threefold compared to earlier versions [2] - New services in the Qiskit stack, including Runtime, Code Assistant, and Serverless, provide advanced tools for users to develop and execute quantum algorithms [3][7] Group 2: Competitive Landscape - Qualcomm is involved in quantum computing by exploring cryogenic CMOS circuits and low-power semiconductors for quantum control systems, leveraging its semiconductor expertise [4] - NVIDIA supplies essential infrastructure for quantum computing, using its GPUs to simulate quantum systems and facilitate a quantum-AI workflow [5] Group 3: Financial Performance and Valuation - IBM's stock has increased by 21.1% over the past year, while the industry has grown by 26.4% [6] - The company trades at a forward price-to-sales ratio of 3.5, which is below the industry average [8] - The Zacks Consensus Estimate for IBM's earnings for 2025 has been rising over the past 30 days, indicating positive sentiment [9]

Core Viewpoint - National Grid and Emerald AI are collaborating to demonstrate an AI system aimed at optimizing energy use in data centers to enhance the efficiency of the UK's transmission network [1][4]. Group 1: Partnership Details - The collaboration will feature a live demonstration in the U.K. scheduled for late 2025, utilizing Emerald AI's Conductor system to manage energy demand flexibly between the electricity grid and data centers [2]. - The trial will employ NVIDIA GPUs to dynamically adjust energy consumption, supporting grid stability [2]. Group 2: Objectives and Benefits - This initiative addresses the increasing energy demands of data centers, particularly those powered by AI, by allowing them to temporarily reduce energy usage during peak demand periods [3]. - The approach aims to optimize existing grid capacity and potentially reduce the need for new infrastructure to connect data centers to the network [3]. Group 3: Strategic Investment - National Grid Partners has made a strategic investment in Emerald AI, emphasizing the importance of flexible energy management as the UK's digital economy expands [4]. - The partnership aims to demonstrate how innovative technologies can optimize the grid and enhance reliability and affordability for all connected users [4]. Group 4: Technical and Industry Trends - The demonstration will showcase real-time adjustments of various AI workloads in response to grid conditions, with plans to advance technical standards for AI data center flexibility [5]. - This effort is part of a broader trend in the energy sector to integrate digital technologies for more effective supply and demand management, supporting economic growth and a transition to a flexible energy system in the U.K. [6].

Core Insights - The automotive industry is rapidly evolving with the integration of artificial intelligence (AI), highlighted by Volkswagen's commitment to invest up to €1 billion ($1.18 billion) by 2030 for AI in vehicle development, factories, IT, and cybersecurity, aiming to save up to €4 billion by 2035 [1][9] AI Across the Entire Value Chain - Volkswagen is responding to increased competition in China and cost-cutting pressures in Europe by investing in AI to enhance innovation cycles and operational efficiency, transforming all aspects of its business from design to cybersecurity [2] - AI is reshaping vehicle interactions, including in-car voice assistants and predictive maintenance, with automakers increasingly adopting these technologies [3] Collaborations and Partnerships - General Motors (GM) is enhancing its AI capabilities through a partnership with NVIDIA, utilizing NVIDIA GPUs for simulating advanced driving systems and creating digital twins of assembly lines to optimize manufacturing processes [4][5] - Stellantis is collaborating with Mistral AI to improve vehicle engineering and manufacturing optimization, leveraging Mistral's expertise in large language models for faster development and quality enhancement [6] - BMW is partnering with Alibaba to develop a smarter Intelligent Personal Assistant for its vehicles, set to debut in 2026 [7] Unique Approaches - Tesla is differentiating itself by focusing on AI, autonomous vehicles, and robotics, with initiatives like Full Self-Driving neural networks and the Optimus robot project, positioning itself ahead of traditional automakers [8] Future Outlook - The integration of AI is becoming essential for automakers to remain competitive, with effective AI strategies providing advantages in speed, efficiency, and customer experience, indicating that keeping pace with AI is crucial for future leadership in mobility [10]

Financial Performance - IREN reported quarterly earnings of 66 cents per share, exceeding the consensus estimate of 14 cents [1] - Quarterly revenue reached $187.3 million, surpassing the analyst consensus estimate of $186.53 million and significantly up from $52.76 million in the same period last year [1] - The company achieved record financial results in FY25, with strong net income and over 10x EBITDA growth [2] Operational Highlights - IREN expanded its contracted, grid-connected power to nearly 3GW and tripled its operating data center capacity to 810MW [3] - The company completed its 50 EH/s expansion and is laying the groundwork for rapid growth in its AI Cloud business, targeting more than 10,000 NVIDIA GPUs [3] Future Growth Potential - IREN is approaching $1.25 billion in total annualized revenue, with over $1 billion expected from Bitcoin mining under current mining economics [4] - The company anticipates $200-$250 million in annualized revenue from its AI Cloud business with 10.9k NVIDIA GPUs by December 2025 [4] - IREN has the capacity to deploy over 60,000 Nvidia Blackwell GPUs across existing British Columbia data centers and over 19,000 GB300s at Horizon 1 [4] - The company secured a second round of GPU financing covering 100% of the hardware purchase price, with additional financing efforts underway [4]

Core Insights - Broadcom Inc. is enhancing VMware Cloud Foundation (VCF) to accelerate enterprise adoption of Private AI as a Service, with nine of the top 10 Fortune 500 companies already committed to VCF and over 100 million cores licensed globally [1][2] - VCF 9.0 will integrate VMware Private AI Services as a standard component, positioning it as an AI-native platform for secure and scalable private cloud infrastructure [1][3] Group 1: AI Innovations and Features - VCF is designed to support AI workloads with GPU precision, enabling organizations to run, move, and govern AI models securely [3] - Native AI services included in VCF 9.0 will enhance privacy and security, simplify infrastructure, and streamline model deployment, with availability expected in Broadcom's Q1 FY26 [3] - Upcoming AI innovations will include support for NVIDIA Blackwell Infrastructure, enhancing the capabilities of VCF for demanding workloads [4] Group 2: Developer and Infrastructure Enhancements - VCF provides a vSphere Kubernetes Service (VKS) for agile app development, allowing developers to focus on applications rather than infrastructure [7] - The integration of GitOps and Argo CD will streamline secure application delivery, ensuring consistent and auditable deployments [11] - Multi-tenant Models-as-a-Service will enable secure sharing of AI models while maintaining data privacy and isolation [5] Group 3: Collaborations and Ecosystem Expansion - Broadcom is collaborating with AMD to enhance enterprise AI infrastructure, allowing customers to leverage AMD ROCm™ and Instinct™ MI350 Series GPUs for AI workloads [6] - The partnership with Canonical aims to accelerate the deployment of modern container-based and AI applications [11] Group 4: Customer Testimonials - Grinnell Mutual reports enhanced agility, efficiency, and security through VCF, fostering collaboration across traditionally separate teams [9] - New Belgium Brewing Company highlights cost efficiencies and improved IT operations with the integrated VCF 9.0 platform [9]

Core Insights - NVIDIA Corporation (NVDA) and Broadcom Inc. (AVGO) are pivotal semiconductor companies driving the AI revolution, with NVIDIA focusing on GPUs and Broadcom on networking chips and custom ASICs [1] - Both companies have experienced significant stock price increases in 2023, with NVIDIA up 35.5% and Broadcom up 31.9% year to date [2] NVIDIA Overview - NVIDIA is central to AI computing, with strong demand from cloud providers and enterprises, leading to a 73% year-over-year increase in data center revenues to $39.1 billion in Q1 FY26 [6][9] - The company is rapidly adopting its new Hopper 200 and Blackwell GPU platforms, with expectations for further performance improvements from upcoming versions [7] - However, NVIDIA faces challenges from export restrictions to China, resulting in a loss of $2.5 billion in H20 chip sales during Q1 FY26 and an expected $8 billion loss in Q2 [8][9] - Despite these challenges, NVIDIA received approval to sell H20 chips in China under a revenue-sharing agreement with the U.S. government, which may impact margins [11] Broadcom Overview - Broadcom is a key player in the AI ecosystem, supplying networking chips and custom AI accelerators (XPUs) essential for hyperscale data centers [12][13] - The company is experiencing strong demand for its products, with AI-related revenues expected to rise 60% year-over-year to $5.1 billion in Q3 FY25 [16] - Broadcom's next-generation 3-nanometer XPUs are set for volume shipment in the second half of FY25, with plans for 2-nanometer AI XPU packaging [14][15] Financial Performance Comparison - NVIDIA's fiscal 2026 earnings estimate is $4.26 per share, reflecting a 42.5% increase over fiscal 2025, while Broadcom's fiscal 2025 estimate is $6.63 per share, indicating 36.1% growth [17] - Broadcom has consistently surpassed earnings estimates, while NVIDIA has had mixed results [18] Valuation Insights - Both companies are considered overvalued, with NVIDIA trading at a forward P/E of 36.26X and Broadcom at 38.46X, indicating NVIDIA may appear as the better deal [19] - Broadcom's premium valuation reflects its diversified business model and steadier earnings profile compared to NVIDIA's exposure to regulatory changes and competition [22] Investment Recommendation - While both companies are positioned to benefit from AI, Broadcom presents a more attractive risk-reward balance due to NVIDIA's near-term challenges and growth uncertainties [23] - Broadcom currently holds a Zacks Rank 2 (Buy), while NVIDIA has a Zacks Rank 3 (Hold), suggesting Broadcom is the preferred investment option [24]

Core Viewpoint - The article discusses the potential investment opportunities in companies involved in artificial intelligence (AI) and quantum computing, highlighting that these technologies are in the early stages of significant disruption and can lead to substantial profits for investors. Group 1: Companies Involved - Alphabet is a pioneer in AI, having developed key technologies like transformers and acquired DeepMind, with its Google Gemini Pro being a leading large language model [4][6]. - Microsoft has integrated OpenAI's AI models into its software suite and is the second-largest cloud services platform with Azure, benefiting from the growing demand for AI applications [9]. - Nvidia is a crucial player in AI, providing GPUs that power AI systems, and is positioning itself as a key enabler for quantum computing through its research center [12][14]. Group 2: Financial Performance and Projections - Alphabet is projected to generate close to $400 billion in revenue and over $100 billion in profits this year, indicating strong financial health [7]. - Microsoft is heavily investing in quantum computing, introducing its Majorana 1 quantum chip, which could lead to scalable quantum computers [10][11]. - Nvidia's strategy to support quantum computing efforts positions it as a significant player in the future of both AI and quantum technologies [14][15]. Group 3: Technological Advancements - Alphabet's Google Quantum AI has achieved milestones in quantum supremacy and error correction, showcasing its leadership in quantum computing [6]. - Microsoft is exploring new materials for quantum chips, which could revolutionize the quantum computing landscape [10]. - Nvidia is facilitating advancements in quantum computing by combining its GPUs with quantum chips, creating a hybrid computing approach [14].

Group 1: Investment Trends - Investors are increasingly focusing on technology stocks, especially those related to artificial intelligence (AI), driven by FOMO rather than informed decision-making [1] - The cloud computing sector is rapidly evolving to accommodate the demands of AI, despite being over 20 years old [2] Group 2: Infrastructure Development - The shift towards generative AI and machine learning necessitates significant upgrades in data center infrastructure, including power, cooling, and network capabilities [3] - The "cloud build-out" will require years and substantial capital expenditures, presenting a clear investment opportunity [4] Group 3: Company Insights - Prologis is pivoting towards data centers and AI infrastructure, leveraging its logistics real estate expertise to support hyperscalers [5][6] - Prologis stock has seen a 4.1% increase in 2025, with a consensus price target of $119.67, indicating potential upside [7] - Super Micro Computer specializes in high-performance server systems for AI and cloud computing, experiencing rapid growth with triple-digit revenue increases [8][9] - Super Micro stock has risen 69% in 2025, but is considered expensive at around 27x forward earnings, with a price target of $42.89 [10] - Arista Networks provides essential networking equipment for data centers, holding contracts with major companies like Meta and Microsoft [12][13] - Arista stock has increased 59% in the last three months, reflecting the capital expenditures from hyperscalers [13]