TMTB Morning Wrap

Good morning. QQQs +1.3% led higher by semis again. It was analogs yesterday. Today it’s CPUs after INTC’s big beat which has it close to +30% early. AMD +12%/ARM +8%/AMKR +6% up in sympathy. The moves in AI semis over the past month have but been nothing short of amazing, but the prints (and news) have been almost equally as good, if not better. The HOT AI SpringSUMMER continues as this will likely be the 18th straight green day for semis. SAP +6% after their relief print.

Asia flattish: TPX +0.01%, NKY +0.97%, Hang Seng +0.24%, HSCEI +0.49%, SHCOMP -0.33%, Shenzhen -0.6%, Taiwan TAIEX +3.23% , Korea KOSPI flat. TSM +4% overnight after limits were eased on the amount of money local funds can invest in a single stock.

We’ll hit up INTC and SAP first then dive into the usual.

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INTC +27%: Broad beat and raise, with AI-agentic driven server CPU demand and better supply/yield execution along with better GMs and commentary inflects the narrative. Bullish call by LBT. Nits: PC softness and 18A/input-cost margin headwinds, but irrelevant in face of much better top line/GM/commentary.

Narrative inflecting print on multiple fronts with much CPU numbers putting them directly in line of fire of one of hottest themes in market and commentary around yields and packaging commentary much better. We sold our INTC before the print and went to bed wanting to buy it +20% after we read the call. We moved our feet way too slow, but we think this keeps going higher and see if we can get a good entry point. Valuation framework is a bit murky for us, but #s/narrative should continue to improve.

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