TMTB Morning Wrap
Good morning. QQQs -20bps to start the day. Yields are down 1-2bps across the curve while Oil +1%.
In Tech, Semis -0.5% led lower by NBIS -7% who announced a $4.5B convert, which is taking down CRWV -4% and ORCL -3% as well as some miners. SKHY+3% higher after announcing ~$30B buyback plan (50% of FCF from ‘25-’27)
Asia mainly weaker overnight with Kospi -5%, Nikkei -3%, Taiex -1.5%. Samsung -2%. Softbank -10%. SK Hynix +0.2%
Let’s get to it…
ADI +1%: Solid Q3 beat and better Q4 guide, with the revenue midpoint ~5% above Street and slightly above the ~$4.25B buyside bogey.
Looks solid especially after a tepid analogs earnings season. Q2 solidly above and Q4 better: the $4.30B midpoint implies ~7% q/q growth, well above normal seasonality and ~5% above Street, while also clearing the ~$4.25B buyside bogey. Auto/Comms drove upside with Industrial roughly in line, and margin/EPS guidance was better than feared. Main nit is GM stepped down 50bps q/q although a down q/q is what investors were expecting. The key question for the call is how much of the Q4 strength is true end-demand versus pricing/channel pull-forward ahead of the September increase, and what that means for the slope of recovery and incremental margins into FY27.
Key KPIs vs. Street
Q3 Revenue: $4.02B vs. Street $3.93B
Q3 Non-GAAP GM: 72.5% vs. Street 72.6%
Q3 Non-GAAP OM: 50.0% vs. Street ~49.2–49.4%
Q3 EPS: $3.45 vs. Street $3.34–$3.35
Q4 Revenue guide: $4.20–4.40B, midpoint $4.30B vs. Street ~$4.08–4.09B and buyside bogey ~$4.25B; midpoint implies ~+7% q/q
Q4 Non-GAAP OM guide: 51–53%, midpoint 52% vs. Street ~50%
Q4 EPS guide: $3.81–4.01, midpoint $3.91 vs. Street ~$3.55
OpenAI: OpenAI’s Second-Quarter Sales Show Tepid Growth Compared With Anthropic - WSJ
A bit backwards looking since we got the ~$40B of July ARR #, implying ~$3.3B of monthly revenue, versus $6.7B of revenue for all of Q2.
WSJ says OpenAI’s Q2 revenue rose 18% q/q to $6.7B from $5.7B, but its operating loss widened to $12.3B from $9.3B, disappointing some investors looking for faster progress ahead of an IPO. Anthropic, meanwhile, more than doubled revenue to $11.6B and posted a small adjusted operating profit, surpassing OpenAI revenue for the first time. OpenAI told investors growth has improved since new model launches in July.
Anthropic: Anthropic Prepares Supervoting Power for Founders as it Readies for Mega-IPO - TheInformatoin
The Information says Anthropic is preparing to give Dario Amodei and its other co-founders supervoting shares ahead of a potential late-September IPO, helping preserve founder influence despite Amodei owning only ~2% and the founders collectively holding a small minority stake. Anthropic also plans to retain its unusual Long-Term Benefit Trust structure, which can elect a majority of the board, creating a governance setup that splits control between founders and nonshareholder trustees.
NBIS: NBIS Nebius Group announces proposed private offering of $4.50 billion of convertible senior notes
SK Hynix/Memory: SK Hynix plans $28.6 billion buyback - Reuters
Reuters says SK Hynix will buy back and cancel 40T won ($28.6B) of treasury shares and now plans to return more than 50% of 2025–27 cumulative FCF to shareholders, with additional buybacks/dividends potentially coming alongside Q3 results. The move is a major step-up in capital returns despite heavy AI-memory capex, and management’s willingness to commit this much capital suggests confidence that the current memory cycle remains durable.
Memory: CXMT Rival YMTC Moves Closer to China’s Next Big Chip IPO - Bloomberg
Bloomberg says YMTC has completed its pre-listing tutoring process, moving closer to a China IPO after CXMT’s $9.9B debut. The raise would give China’s #3 NAND supplier more capital to expand capacity, adding to longer-term supply concerns for global memory.
NVDA: China eases limits on Nvidia H200 chips as AI race escalates - FinancialTimes
FT says China has begun allowing small batches of Nvidia H200s into the mainland, with ByteDance and Tencent each receiving ~10,000 chips, while regulators consider approvals for other groups. Beijing is still limiting most H200 imports to support domestic suppliers like Huawei, but the easing reflects recognition that Chinese AI labs still need Nvidia GPUs for cutting-edge training; Nvidia reportedly has ~500,000 H200s in inventory largely intended for China.
NVDA: Nvidia’s AI moat is shifting from chips to capital - CNBC
CIEN: Northland Upgrades to Outperform / $500 PT on Larger-Than-Expected Optical Market
Northland says recent peer results point to a bigger demand opportunity for Ciena than previously assumed, with Lumentum’s strength and plans to increase critical pump-laser capacity 4x reinforcing the outlook. The firm sees this supply expansion supporting a stronger optical cycle and more upside to Ciena’s growth than reflected in estimates. With shares having pulled back from above $600, Northland sees a more attractive risk/reward and raises its PT to $500 from $450.
DUOL: Inadvertently releases 27% DAU y/y growth for August (street at 22.5% y/y for Q3) - 8-k
On August 18, 2026, during an in-person meeting with certain investors at the Company’s offices, a screen in the meeting room inadvertently displayed information indicating that the DAU growth rate on August 17, 2026 was estimated to be 27.4% relative to the comparable day of the prior year and there had been similar estimated growth rates for the previous days in August.
The Company has not completed its normal review and validation of its preliminary internal data, and this information should not be read as indicative of the Company’s expected results for Q3 2026 or any future period.
RDDT: Reddit’s share of ChatGPT Search citations fell from an average 3.8% between July 18 and Aug. 7 to just 0.5% from Aug. 14-17, an ~86% drop. Back in April, RDDT was the single most-cited domain in ChatGPT Search, accounting for 4.14% of citations (Promptwatch) (h/t J. Kulina)
Guess now we know reason for weakness past couple days post SPX add
Samsung: Samsung hikes chipmaking prices by up to 15% on demand spike, Reuters
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