TMTB Morning Wrap

Never a dull day in Tech land these days. The big news this morning is NVDA +3% planning to invest $5B in INTC +27%. Here’s Bloomberg:

Nvidia Corp. agreed to invest $5 billion in Intel Corp. and said the two will co-develop chips for PCs and data centers, a surprise move to help prop up an ailing archrival.

Nvidia will buy Intel common stock at $23.28 per share, the two companies said on Thursday. Intel will use Nvidia’s graphics technology in upcoming PC chips and also provide its processors for data center products built around Nvidia hardware. The two companies didn’t offer a timeline for when the first parts will go on sale and said the announcement doesn’t affect their individual future plans.

Jensen:

“This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms.“Together, we will expand our ecosystems and lay the foundation for the next era of computing.”

Injection follows the $2B softbank stake at $23/share and Treasury’s $8.9B investment at $20.50. For data centers, Intel will build NVIDIA-custom x86 CPUs that NVIDIA will integrate into its AI infrastructure platforms and offer to the market. For personal computing, Intel will build and offer to the market x86 system-on-chips (SOCs) that integrate NVIDIA RTX GPU chiplets.

Read-throughs:

NVDA: Partnering with INTC — a Trump back entity - signals NVDA’s alignment with the White House and potentially a better outcome in respect with being able to sell into China. Also NVDA:

TSM: Minimal impact near-term as NVDA is not committing to having its standalone chips build in INTC fabs, although long-term might be a different issue.

SNPS +12% rallying as INTC was the main issue for their miss last q.

ARM: near-term negative for the PC narrative since NVDA is opting for x86 RTX SoCs vs. an ARM PC part; neutral in DC where NVDA Grace (ARM) still exists and hyperscalers keep pushing ARM CPUs.

AMD: Biggest negative. No way to spin this in a positive way...forced to go with INTC instead of AMD bc of Trump — perception wise, NVDA will be seen as more tightly linked with Trump...NVDA plans to ship platforms with INTC-built custom x86 CPUs tightly linked over NVLink. That crowds out EPYC attach in NVDA-centric GPU racks....More competition in gaming PCs...Here’s ChatGPT’s take on potential impact fwiw, outlining a potential ~40c hit in a bear case assuming 40% of NVDA racks standardize on INTC custom x86 (I haven’t had time to double check the math or think deeply into it, so take it just as illustrative example…)

Moving on, futures are up 1%+ on the back of a more dovish tilt from the Fed meeting yesterday. BTC +1%; China -1.4% as yields are flattish.

Let’s get to it…

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CRWD +5% after giving out better NNARR guide for FY27 of 20%, above street at 14%. Mgmt reitearted tis $20B ARR target in F36.

Piper recaps FalCon this morning saying CrowdStrike outlined how agentic AI will reshape security and why the firm views it as the best-positioned platform versus peers like Falcon. Management pointed to acquisitions of Onum, Pangea, and Charlotte AI AgentWorks as key steps to enhance Falcon’s AI security capabilities, allowing customers to cut costs and boost efficacy as threats grow more sophisticated. Piper highlights the long-term vision of Security AGI, where a SOC could run autonomously without human input, with CRWD positioning itself as “the Reddit of security” thanks to its broad telemetry and proprietary data. On the near-term side, Piper notes the company sees AI Detection & Response (AIDR) as the next big opportunity, potentially driving ~15% CAGR through F’36, with estimates of a 90:1 agent-to-human ratio underscoring the scale.

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U -3% as META said its rolling out an updated version of the engine that powers Horizon World, called “Horizon Engine” and replacing original foundation of Horizon Worlds based on U