TMTB Morning Wrap

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Good morning. Futures -33bps. Fairly quiet overnight on the war front — fighting continues and multiple reports suggest ground troop deployments being considered as the key still remains Hormuz. Oil -1.5%. Yields up 3-5bps across the curve. The market is now only pricing in 3bps of Fed cuts this year. Asia mixed overnight: Hang Seng -0.88%, HSCEI -1.4%, SHCOMP -1.24%, Shenzhen -1.18%, Taiwan TAIEX -0.43%, Korea KOSPI +0.31%.

Relatively slow Friday on the Tech news front as well. No EOD Wrap today. Let’s get to it…

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SMCI: U.S. prosecutors charge Super Micro Computer employees with smuggling Nvidia chips to China - CNBC

SMCI has always been viewed as big price aggressor, so any throttling of SMCI’s chip allocation will be good for DELL +5%; HPE +3%. For reference, SMCI’s order book includes $13B in orders from Blackwell

Per CNBC, federal prosecutors in the Southern District of New York have charged three associates of Super Micro Computer — including co-founder and board member Wally Liaw — with illegally diverting roughly $2.5 billion in Nvidia-powered servers to China through a Southeast Asian middleman using fake paperwork and dummy servers. Super Micro has placed the employees on leave and said the alleged conduct violated company policy. Two defendants were arrested Thursday; the third remains a fugitive.

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ARM: HSBC Dbl Upgrades to Buy from Reduce, Raises PT to $205 on AI Server CPU Upside

HSBC upgraded ARM to Buy from Reduce and raised its price target to $205, citing a “game-changing” shift toward AI server CPUs that remains underappreciated. The firm sees upcoming product disclosures at the Arm Everywhere event as a catalyst, with hyperscaler adoption driving higher royalty rates and expanding TAM. HSBC adds server CPU royalties could grow at a ~76% CAGR through 2026–31, with merchant CPU offerings and higher ASPs supporting a potential re-rating.

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AMZN: Evercore ISI Reiterates Outperform, Sees AWS Growth Acceleration and Margin Expansion