Lenovo's earnings per share (EPS) of $0.02 fell short of the estimated $0.03, while revenue of $20.45 billion surpassed expectations.The company's revenue boost was attributed to the global adoption of Windows 11 and an expanding server business, amidst the artificial intelligence boom.Despite a 5% decline in second-quarter profit, Lenovo's adjusted net income rose by 25% year-on-year to $512 million, with an adjusted net income margin of 2.5%.On November 19, 2025, Lenovo Group Limited (PNK:LNVGF), reported ...

17 November 2025 | 4:09PM HKT Equity Research +852-2978-2930 | allen.k.chang@gs.com Goldman Sachs (Asia) L.L.C. Exhibit 1: Rising contribution from 800G/ 1.6T switch ports in 2025-27E Port shipment mix for AI data center 68% 20% 1% 57% 32% 4% 40% 46% 8% 79% 9% 0% - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 100G/ 400G 800G 1.6T 2024 2025E 2026E 2027E (k units) Red text shows AI data center switch ports shipment mix by speed Source: Company data Compared to our last publication in Nov 2025 (repo ...

Group 1: Market Performance - Major U.S. equities indexes declined at the start of the trading week, with the Nasdaq falling 0.8%, the S&P 500 sliding 0.9%, and the Dow dropping 1.2% [2] - Google parent Alphabet was the top performer in the S&P 500, with shares jumping 3% after Berkshire Hathaway disclosed a new stake in the company [6][8] Group 2: Company-Specific Developments - Dell Technologies shares dropped over 8% after Morgan Stanley downgraded the stock to "underweight" due to concerns about rising memory chip prices affecting gross margins [3][8] - Hewlett Packard Enterprise also faced a downgrade from Morgan Stanley, with shares sinking 7% [3] - Generac Holdings saw its shares decline around 7% following weaker-than-expected third-quarter results, attributed to a decline in power outages impacting residential generator sales [5] Group 3: Industry Trends - Rising prices for memory components are expected to pressure margins for several computer hardware manufacturers [3][8] - Google launched AI-enabled travel tools, which negatively impacted shares of competing online travel booking platforms, with Expedia Group losing nearly 8% [9]

Core Viewpoint - Morgan Stanley has issued downgrades for Dell, HP, and HP Enterprise due to rising memory costs and weakening demand for non-hardware products, while maintaining a bullish outlook on the memory sector [1][3][5]. Summary by Category Market Reaction - Dell, HP, and HPE stocks are down between 3% and 7% following the downgrades from Morgan Stanley [1][2]. - Dell experienced a double downgrade, leading to a decline of over 7% in its stock price [6]. Downgrade Details - Dell's price target was reduced from $144 to $110, with concerns over increased memory costs and a shift towards AI servers impacting margins [6][7]. - HP's rating was downgraded from equal weight to underweight, with a price target decrease from $26 to $24, citing potential margin compression despite a possible PC refresh cycle [7][8]. - HPE's rating was adjusted from overweight to equal weight, with a price target reduction from $28 to $25, acknowledging rising component costs as a profitability constraint [8][9]. Industry Trends - The memory sector is experiencing a "super cycle," with ND and DRAM spot prices increasing by 50% to 300% over the past six months, which is expected to impact hardware companies' earnings in 2026 [3][4]. - Historically, hardware OEMs face gross margin compression 6 to 12 months after memory costs rise, with expectations for this trend to affect earnings in 2026, contrary to previous forecasts of slight expansion [4][5].

Core Viewpoint - Rising memory costs and weakening non-AI hardware demand have led Morgan Stanley to downgrade ratings for major technology hardware manufacturers, indicating increasing margin pressure across the sector [1] Group 1: Memory Cost Impact - Analysts describe the current situation as a "memory supercycle," with NAND and DRAM spot prices increasing between 50% and 300% over the past six months, which is expected to negatively impact earnings until 2026 [2] - Historical trends show that hardware OEMs typically experience gross-margin compression 6-12 months after memory costs rise, with a projected median decline of 60 basis points in global OEM margins by 2026, contrary to Wall Street's expectations of slight margin expansion [2] Group 2: Company-Specific Downgrades - Dell Technologies has been double-downgraded to "underweight" from "overweight" due to its high dependence on memory-intensive products and a shift towards AI servers with lower margins [3] - Morgan Stanley has reduced Dell's price target from $144 to $110 and lowered its fiscal 2027 gross-margin forecast to 18.2%, a decrease of 220 basis points from previous estimates, alongside a 12% reduction in EPS estimates [4] - HP Inc. has also been downgraded to "underweight" from "equal-weight," with its price target cut from $26 to $24, as higher DRAM and NAND prices are expected to pressure its Personal Systems margins [4][5] - The fiscal 2026 gross-margin outlook for HP has been reduced by 90 basis points to 19.7%, leaving it 130 basis points below consensus, with a projected 9% decline in EPS despite an increase in revenue estimates to $56.5 billion [5] Group 3: Hewlett Packard Enterprise Adjustments - Hewlett Packard Enterprise's rating has been lowered to "equal-weight" from "overweight," with a price target reduction from $28 to $25, as integration challenges and rising component costs are anticipated to limit profitability [6] - The fiscal 2026 gross-margin forecast for HPE has been cut by 260 basis points to 32.9%, balancing expected benefits from networking with the negative impact of higher memory prices, and EPS estimates have been lowered to $2.18 from $2.52 [7]

Big Tech's back on a spending binge — only this time, it's not about COVID-19 pandemic-fueled growth or cloud land grabs. Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google are spending like it's 2021 again, with data centers, GPUs and AI infrastructure replacing metaverse dreams and remote-work hardware as the new capital obsession.Track META stock here.According to JPMorgan's Samik Chatterjee, the trio's combined capex jumped 23% quarter-o ...

Security Updates - Microsoft operating systems users should be prepared for security updates every second Tuesday of the month [1] - A new two-week security deadline for Microsoft Windows updates has been confirmed [1]

Core Insights - Hewlett Packard Enterprise (HPE) has projected annual profit and revenue figures that fall short of Wall Street expectations, indicating potential challenges ahead for the company [1] Financial Performance - The company is shifting its server business focus towards artificial intelligence and networking, which may impact its traditional revenue streams [1] Market Positioning - HPE's strategic pivot towards AI and networking reflects broader industry trends, as companies increasingly invest in these areas to drive growth [1]

Core Insights - Super Micro (SMCI) is launching a new business line called Data Center Building Block Solutions to assist customers in building complete data centers, which includes GPUs, servers, networking, cooling, and electrical systems from a single vendor [1] - The new offering aims to reduce the "time to online," which is the duration from when a customer orders data center components to when they are operational [1][2] - Super Micro's CEO, Charles Liang, emphasized that the new services will expedite data center construction and highlighted the efficiency of their liquid-cooling options, which are optimized for the latest generation of hardware [3][4] Industry Context - The demand for data center construction has surged due to the AI boom, with major companies like Amazon, Google, Microsoft, Meta, and others investing heavily in building large data centers [5] - Super Micro's liquid-cooling technology can potentially reduce power consumption by up to 40% compared to traditional air-cooled data centers [4] - The complexity of data center construction requires coordination of various components, including timely delivery of GPUs and appropriate ventilation systems [4] Company Performance - Super Micro's stock has increased by approximately 81% year-to-date, although it has only risen 15% over the past year [6] - The company faced challenges due to accusations of accounting irregularities and issues with export controls, leading to a significant drop in stock price following the resignation of its auditor, Ernst & Young [6] - An independent committee later found no evidence of misconduct by the company's executives or board, which may help restore investor confidence [7]

Core Insights - Dell Technologies Inc. has recently upgraded its outlook due to its exposure to artificial intelligence (AI), leading to a surge in its stock price while maintaining a competitive valuation [1] Group 1: Company Performance - Dell's stock has been rising significantly following the positive outlook upgrade, indicating strong market confidence in its future prospects [1] - Despite the price increase, Dell's valuation remains competitive, suggesting potential for further growth [1] Group 2: Market Trends - The article emphasizes the importance of observing megatrends and emerging technologies, which can provide valuable investment insights [1] - The focus on macrotrends and technological advancements is crucial for identifying companies that can capitalize on new opportunities [1] Group 3: Investment Strategy - The analysis highlights the necessity of paying attention to fundamentals, leadership quality, and product pipelines when evaluating investment opportunities [1] - The author has experience in evaluating startups and emerging industries, which adds depth to the analysis of Dell's position in the market [1]