TMTB Morning Wrap

Futures +10bps as semis are looking for their 19th straight win. Oil +1%. Yields ticking down 2-3bps across the curve. Asia generally green overnight: TPX +0.5%, NKY +1.38%, Hang Seng -0.2%, HSCEI -0.22%, SHCOMP +0.16%, Shenzhen +0.5%, Taiwan TAIEX +1.76%, Korea KOSPI +2.15% Hynix +6% / Samsung +3% overnight.

I hope everyone rested up this weekend because we have a big week of earnings ahead of us:

Let’s get straight to it…

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AAPL -2% /QCOM +13%: OpenAI Set to Redefine Smartphones

Ming-Chi-kuo:

OpenAI is working with MediaTek and Qualcomm to develop smartphone processors, with Luxshare as the exclusive system co-design and manufacturing partner. Mass production is expected in 2028.

• MediaTek and Qualcomm are processor co-development partners and could benefit from long-term replacement demand:
1. Specifications and suppliers are expected to be finalized by late 2026 or 1Q27.
2. Taking MediaTek × Google TPU Zebrafish as an example, the revenue contribution of a single chip is roughly equivalent to 30–40 AI agent smartphone processors. If the initial target is the global high-end smartphone segment, which ships about 300–400 million units per year, the replacement cycle could become another major growth driver.

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AMD: Northland Downgrades to Market Perform, Cuts PT to $260 on Rising Competition and AI Growth Risks

The firm says increasing competitive pressure from INTC and NVDA, alongside TSMC allocation dynamics, is likely to constrain AMD’s share gains and margin expansion. The analyst notes CY27 expectations appear too high with risk of a reset, as AI infrastructure demand growth slows and hyperscaler capex faces constraints. The firm adds elevated R&D spend and supply advantages favoring NVDA limit near-term upside despite solid execution. Northland downgrades to Market Perform, citing a more challenged competitive and demand backdrop.

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AMD: Citi is closing their positive catalyst watch on AMD give recent rally

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META: China Bans Meta’s Acquisition of Manus on National Security Grounds

According to WSJ, China’s National Development and Reform Commission has ordered Meta Platforms to unwind its $2.5 billion acquisition of AI startup Manus on national security grounds, citing concerns that the deal would encourage other Chinese firms to relocate without approval. Manus developed an AI agent capable of sophisticated tasks and was originally founded in China before relocating most operations to Singapore with Meta’s investment in December. Chinese authorities have detained the company’s co-founders and are concerned about the precedent of Chinese technology companies moving abroad, reflecting Beijing’s broader efforts to protect its AI capabilities amid intensifying U.S.-China tech competition.

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ADBE: Mizuho Downgrades to Neutral, Cuts PT to $270 on AI Monetization Concerns and Rising Risk

The firm says weakening estimate conviction and increasing competitive pressure from AI-native tools are raising risks to ADBE’s long-term growth and margins. The analyst notes monetization of generative AI remains limited (~2% ARR contribution), while demand is shifting from content creation toward editing, pressuring the Creative Cloud value proposition. The firm adds growth remains stuck in HSD with FY26 guide implying ~9–10% revenue growth, while incremental AI investment could weigh on margins. Mizuho downgrades to Neutral, citing a more balanced risk/reward and limited near-term upside.

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TSM: Fubon/Jefferies See 2027 Foundry Shortage Driving Aggressive Wafer Price Upside