China's first homegrown GPU company. More threads now reading a public debut in Shanghai, founded by some former Nvidia employees who are now looking to take on the US chip giant. Our dude Debosa has some details in today's tech check.Hey D. >> Hey, good morning Carl. So investors while they're gaming out the Google TPU threat to Nvidia, the real blind spot may be on the other side of the world.China, yes, it's building its own GPU stack and more threads IPO. It's 4,100 times overs subscribed. That's the ne ...

Core Insights - Alibaba reported earnings that exceeded revenue expectations, generating nearly $35 billion in the September quarter, but net profits fell by 53% due to increased competition, weak consumer demand, and rising AI costs [3][4] - The company's cloud infrastructure business saw a significant revenue increase of 34%, indicating a strong focus on AI and cloud investments [3][9] - Alibaba is undergoing a strategic transformation from a traditional e-commerce model to an AI-first, cloud-driven technology company, committing over $50 billion in the next three years to enhance cloud capacity and AI infrastructure [9][10] Financial Performance - Revenue for the September quarter reached approximately $35 billion, surpassing expectations, while net profits decreased by 53% [3] - Cloud revenue increased by 34%, showcasing strong growth in this segment [3][6] - Free cash flow declined, raising questions about the sustainability of increased capital expenditures on AI [5][4] Strategic Transformation - Alibaba is shifting its business model towards AI and cloud technology, investing heavily in AI infrastructure and chip development [9][10] - The company aims to build an end-to-end AI ecosystem, integrating AI across various sectors including commerce and logistics [10][11] - This transformation positions Alibaba for scalable growth and reinforces its competitive advantage against both domestic and global tech rivals [11] Market Sentiment and Technical Analysis - Following the earnings report, Alibaba's shares initially rose but later experienced a pullback, attributed to profit-taking and broader market sentiment [4][12] - The stock is currently trading below its 50-day moving average, indicating a bearish pattern that needs to be addressed for potential upside momentum [12][13] - Key resistance levels to watch include the October 29 high around $180 and the October 2 high around $190 [12][13] Competitive Advantages in AI - Chinese AI models, including Alibaba's, are noted for their efficiency and cost-effectiveness, optimized for scale [16] - China has made significant investments in renewable energy, giving it an edge in energy efficiency for AI development [17] - The large domestic user base in China allows for rapid commercialization and iteration of AI applications, providing a competitive advantage over US counterparts [19]

Group 1: Federal Reserve and Market Sentiment - Market confidence in a Federal Reserve rate cut has increased, with expectations now over 75% for a cut next month [2][10][54] - Federal Reserve Bank of New York President John Williams indicated that a December rate cut is a possibility, contributing to market optimism [3][11] - The CME Fed Watch tool suggests potential for rates to drop to around 3% by next Christmas, indicating a significant shift from current levels [13] Group 2: Technology Sector Developments - Alphabet's shares are expected to rise following a multi-million dollar deal with NATO for AI-enabled cloud services and the launch of its new AI model, Gemini 3 [4][40] - Alibaba's Quen app achieved over 10 million downloads post-relaunch, positioning it as a competitor to OpenAI's ChatGPT [5] - Nvidia's market performance remains under scrutiny due to concerns over an AI bubble and competition from China, despite strong earnings [14][40] Group 3: Retail Sector Insights - Upcoming earnings reports from major retailers like Kohl's and Best Buy are anticipated, with mixed consumer sentiment reflected in recent retail performance [7][16] - The economic landscape shows signs of a bifurcated consumer market, with some consumers feeling financial strain while others thrive [17][56] - Gap's CEO discussed growth strategies amid a challenging retail environment, emphasizing the importance of both physical and digital presence [57][58] Group 4: Defense and Agricultural Stocks - European defense stocks have seen a decline due to growing hopes for a peace deal between Russia and Ukraine, reversing earlier gains [35] - Eli Lilly has become the first trillion-dollar company in the agricultural sector, driven by its leadership in obesity drugs [38] - Bayer's stock is rallying due to progress in clinical trials for a new stroke prevention drug, while Nova Nordisk faces challenges with underwhelming trial results for Alzheimer's drugs [39]