See, I'll pivot over to Brenn Talkington now as we await for those key earnings at the top of the hour. But this market is battling its way back from the depths of Tuesday's lows. Bren, >> you got to just buy the dip. You got to ignore the macro and buy the micro.And I just think we're going to continue, Scott, to see earnings come in. Intel aside, we can talk about that. Earnings come in very strong.And so, if you look at what's happening from the micro level, earnings are strong. And then the macro level, ...

Summary of Lingyi's 3Q25 Earnings Call Company Overview - **Company**: Lingyi (002600.SZ) - **Industry**: AI devices, foldable phones, automotive components Key Financial Highlights - **3Q25 Net Income**: Rmb1 billion, up 42% YoY and 177% QoQ, in line with estimates and midpoint guidance [1][3] - **Gross Margin (GM)**: Improved to 19.2% in 3Q25 from 15.0% in 2Q25 and 17.2% in 3Q24 [1][3] - **Revenue**: Rmb14 billion, up 13% YoY and 15% QoQ, 8% below estimates [3][7] - **Operating Expenses (Opex)**: Increased R&D expenses to Rmb657 million, reflecting commitment to AI server components [3][7] Growth Drivers - **Product Line Expansion**: Introduction of AI server components, including graphic card thermal modules and power supplies [1][3] - **Foldable Phone Components**: Upgrading dollar content in precision components for foldable and high-end smartphones [1][3] - **Automotive Component Business**: Expansion through the proposed acquisition of Xianglong, which specializes in automotive components [2][3] Acquisition Details - **Target Company**: Xianglong, established in 2006, serves major OEMs like Volkswagen and Toyota [2] - **Strategic Rationale**: Enhance automotive OEM client base and robotics component R&D/manufacturing capabilities [2] Earnings Revisions - **2025-2027 Net Income Estimates**: Increased by 1% for each year due to higher revenues and gross margins [8] - **2025 Revenue Estimate**: Decreased by 5% to Rmb52.78 billion, reflecting lower-than-expected revenues in 3Q25 [8] - **2026-2027 Revenue Estimates**: Increased by 1% and 2% respectively due to foldable phone component demand [8] Valuation and Price Target - **12-Month Price Target**: Raised to Rmb22.6 from Rmb21.1, based on a target P/E of 38.8x 2026E EPS [8][16] - **Current Price**: Rmb15.93, indicating an upside potential of 41.9% [16] Risks - **Market Risks**: Slower-than-expected penetration of foldable phones and AI terminals, potential competition, and weak macroeconomic conditions [15] Conclusion - Lingyi shows strong growth potential driven by product expansion in AI and automotive sectors, with a positive outlook on long-term growth despite market risks. The acquisition of Xianglong is seen as a strategic move to bolster its automotive component business.

Core Viewpoint - The target price for Apple is set at $280, which is approximately 8-7% above its all-time high, with AI being identified as a key catalyst for reaching this target [1][2]. Group 1: Key Issues and Catalysts - Apple needs to overcome three main concerns to achieve new highs: tariffs, clarity on the search monopoly case, and successfully implementing its AI strategy [2][3]. - The resolution of tariff issues has been addressed with an additional $100 billion from the administration, and the results regarding the search monopoly case were better than anticipated [3]. - The company aims to correct its third-party app distribution strategy, which is expected to be crucial for growth and is anticipated to be addressed by the developers conference in 2026 [4]. Group 2: AI Strategy - Partnerships are considered the most effective approach for Apple to enhance its AI capabilities, as large-scale acquisitions are not typically part of its strategy [6]. - Collaborations, such as with Alphabet's Gemini, are seen as a way to generate additional revenue linked to Apple's services business [8]. Group 3: Hardware and Market Opportunities - The launch of a foldable phone is deemed important for Apple, particularly in the Chinese market, where consumers show a strong preference for AI and foldable devices [9][10]. - If Apple successfully integrates AI and launches a foldable device with the iPhone 18 cycle, it could lead to sustainable growth, especially in China [10]. - Current market expectations for the iPhone 18 cycle are mid-single-digit growth, but with successful execution, Apple could see growth closer to 10-15% [11].

Analyst Downgrade & Target Price - Jefferies downgrades Apple to sell from hold, citing overly optimistic expectations for a super upgrade cycle [1] - Jefferies sets a target price of $20516 (Note: This appears to be a typo and should likely be $205 or $160, needs verification) [1] Smartphone Market & Innovation - The smartphone industry, including both Apple and Android, faces a structural slowdown due to a lack of innovative features [2] - Incremental improvements in smartphones are not enough to drive significant consumer demand [3][5] Foldable Phone Expectations - The foldable phone market, exemplified by Samsung's Galaxy F7 priced at $2,000, has limited volume potential [3] - Apple's potential foldable phone sales could be three times higher than Samsung's, but may still not significantly impact overall sales [4] - The foldable iPhone is projected to be a $2,000 phone, limiting its mass market appeal [11] iPhone 17 Cycle & Pricing Strategy - The iPhone 17 cycle is performing better than expected due to attractive pricing strategies [7] - Apple maintained prices for Pro and Pro Max models while increasing the price for the Air model [7] - Apple effectively cut the price of the base model by offering a higher memory version at the same price as the previous year's lower memory version [8] - In China, Apple sells the base model at a lower price to qualify for government subsidies [8] AI & Future Expectations - Investors are hopeful that the AI future will be integrated into Apple devices [9] - There is enthusiasm for next year's foldable iPhone as a new form factor [10] - Despite positive reception to the iPhone 17, structural headwinds remain a concern [10]

Product Highlights - Honor Magic V5 被誉为“全球最薄的可折叠手机”，最薄处展开后仅 4.1 毫米[1] - Honor Magic V5 除了尺寸外，还有其他值得关注的优点[1] Market Availability - Honor Magic V5 将不会在美国市场上市[1]

Market Trend - The foldable phone category is gaining momentum [1] - Sales of Samsung's latest foldable phone are exceeding the previous model by 50% [1]

Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the **US Communications Equipment and Hardware** industry, highlighting various companies including **Apple (AAPL)**, **Dell (DELL)**, **Arista Networks (ANET)**, **Cisco Systems (CSCO)**, **NetApp (NTAP)**, and **Super Micro Computer (SMCI)** [1][2][3][4][5][6]. Core Insights and Arguments 1. **Investor Sentiment**: There is a more bearish sentiment among investors towards hardware OEMs compared to component or networking stocks, primarily due to demand impacts from macroeconomic conditions and Section 232 investigations [1]. 2. **AI Networking Stocks**: After a significant underperformance in Q1 due to concerns over data center capex slowdown, AI networking stocks like **ANET** and **COHR** are regaining favor due to expanding total addressable markets (TAMs) for Ethernet and transceivers [1]. 3. **Smartphone/PC Market**: Positive news regarding higher sell-in for consumer stocks like **AAPL** and **HPQ** appears to be priced in, with investors lacking conviction to look beyond the September quarter [1]. 4. **Crowded Long Positions**: **CSCO** and **APH** are identified as crowded long positions, indicating a high level of investor interest [1]. 5. **Negative Sentiment on NTAP/SMCI**: There is a negative sentiment surrounding **NTAP** and **SMCI**, as indicated by the Citi Quant Crowding Composite scorecard [1]. 6. **Data Center Build-Out**: Continued expansion in data center build-out is expected to enhance the scale-out Ethernet TAM, with a focus on Tier 2 spenders like **Oracle** and GPU-as-a-service providers [2]. 7. **AI Adoption in Servers**: The broadening adoption of AI, including neoclouds and sovereigns, is a positive driver for AI-exposed server OEMs like **DELL**, although there are concerns about margin pressures on **SMCI** [3]. 8. **PC Sell-In Trends**: Better-than-expected PC sell-in in Q2 is seen as a short-term positive for PC-related OEMs and distributors, but lack of demand visibility may limit stock performance through the summer [4]. 9. **Storage Sector Outlook**: For **PSTG**, while there is optimism regarding the Meta deal, skepticism remains about additional hyperscaler announcements. **NTAP** faces skepticism regarding revenue acceleration drivers in 2H FY26 amid potential competition [5]. 10. **Component Sector Performance**: The HDD sector fundamentals are improving, with expectations that **WDC** shares may outperform **STX** in the near term due to STX's crowded position. Estimates for connector companies like **APH**, **TEL**, and **GLW** are expected to rise, although **APH** may take a breather due to crowding [6]. Additional Important Insights - The conference highlighted the importance of macroeconomic factors and regulatory investigations impacting investor sentiment and stock performance across the communications equipment and hardware sector [1][3][4]. - The potential for new product launches, such as a foldable phone from **AAPL**, is generating excitement, although there are concerns about regulatory risks associated with Google TAC payments [4]. - The overall sentiment in the industry reflects a cautious optimism, with specific stocks showing potential for recovery while others face challenges due to competitive pressures and market dynamics [1][2][3][4][5][6].

Product Development & Launch - Apple has been exploring foldable phone concepts for approximately 6-7 years [1] - Mass production of Apple's foldable phone is projected for the second half of 2026, targeting a fall or holiday launch [1] - Samsung recently launched an improved foldable phone, suggesting technology is advancing to a point suitable for Apple's entry [2] Market & Pricing - Samsung's foldable phone is priced at $2,000, double the cost of a standard smartphone [3] - A similar price point for Apple's foldable phone could boost revenue amid slowing iPhone sales [4] - Foldable phone technology remains relatively unproven, with popularity concentrated in markets like Asia, particularly China [4] - Foldable device sales are significantly lower than regular phone sales [4]

Product Development & Market Entry - Apple is reportedly considering launching a foldable iPhone as early as next year, aiming for a fall or holiday launch in 2026 [1][2] - The potential foldable iPhone launch is seen as a strategy to find the next growth driver, especially with Apple shares experiencing double-digit declines since January [1] - The foldable phone market is already established, with Samsung launching its latest version, priced at $2,000, indicating the high-end positioning of this technology [2][3] Pricing & Revenue Implications - A foldable iPhone could help Apple boost revenue amid slowing iPhone sales, but the unproven technology and high cost (potentially $2,000 or more) could be a barrier [4][6] - The high price point of foldable phones, exemplified by Samsung's $2,000 device, suggests Apple's version would likely be similarly expensive [3][6] - While the sticker price is high, consumers often use payment plans or trade-ins, mitigating the initial cost [7] Technology & Design - Apple has been exploring foldable phone concepts for six or seven years, with the technology now potentially mature enough for a viable product [1][3] - The improved design of foldable phones, such as Samsung's latest model, makes them more appealing and functional [3] - The foldable phone could potentially replace the need for both a phone and an iPad, offering a single device solution [6] Market Dynamics & Consumer Adoption - Foldable phones are popular in markets like Asia, particularly China, but their overall market share is still significantly lower than regular smartphones [5] - The technology has reached an inflection point where it is catching up to the ultimate vision, as seen with the Samsung device, suggesting Apple is nearing a similar stage [7][8]

Product Analysis - Samsung's Galaxy Z Fold 7 is the first foldable phone with the potential to win over mainstream consumers [1]