TMTB Morning Wrap

Good morning. Futures off 20bps to start the day. Yields flattish. All eyes still on Powell on Friday. Relatively slow news day with main piece of item being talked about news of Korea that Samsung qualified at NVDA after CEO’s trip to the U.S. earlier this week.

Let’s get to it…

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ADI +4%: Solid results relative to a weak analog reporting season, with both the quarter and guidance ahead of buyside expectations.

Call onging…Bulls want mgmt to signal confidence in a 2H recovery

• FQ3 results: Revenue $2.88B (+4% y/y) vs. Street $2.77B; OpMgn 42.2% vs. 41.7%; EPS $2.05 vs. $1.95. Gross margin a slight miss at 69.2% vs. 69.9%.

• Segment detail: Industrial roughly inline ($1.29B vs. $1.28B), while comms ($373M vs. $326M), auto ($850M vs. $808M), and consumer ($372M vs. $355M) outperformed.

• FQ4 guide: Revenue $3.0B vs. Street $2.83B; OpMgn 43.5% vs. 42.3%; EPS $2.22 vs. $2.03.

Management noted “continued backlog growth and healthy bookings trends, notably in Industrial,” while acknowledging trade/tariff uncertainty.

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Memory/MU: Samsung’s HBM4 Sample Sent to Nvidia ‘Passes’… Mass Production Imminent

MU -5%…Seuol Daily a decent news source fwiw…

SEDaily:

Samsung Electronics’ 6th generation High Bandwidth Memory (HBM4), sent last month to Nvidia, the unrivaled No.1 in the AI semiconductor sector, has passed reliability testing and entered the final pre-mass production stage at the end of this month. If the final tests proceed smoothly, mass production could begin as early as the end of the year. Analysts say the external activities of Samsung Electronics Chairman Lee Jae-yong, who reportedly met Nvidia CEO Jensen Huang during an overseas trip, have paid off. According to the semiconductor industry on the 20th, the HBM4 sample Samsung delivered to Nvidia last month passed the initial prototype and quality tests and will enter the “Pre-Production (PP)” stage at the end of this month. A key industry insider stated, “It received positive evaluations regarding quality, including yield, and has entered the PP stage for mass-production testing,” adding, “If it passes PP, mass production will be possible in November–December.”

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MU: Citi Reiterates Buy, $150 PT — Sees Path to 50% Gross Margins on AI Demand

Citi came away from investor meetings with Micron more confident that gross margins can push above 50%, surpassing the prior cycle peak of 47.4% in 2021. Upside is being driven by stronger DRAM pricing and an increasing mix of high-margin HBM, with HBM sales expected to grow from 17% of revenue in F3Q25 to 21% in F4Q25. Channel checks show accelerating AI-driven demand following higher cloud capex, boosting DRAM and NAND pricing. Citi models HBM sales rising nearly 50% QoQ in F3Q25 and 53% QoQ in F4Q25, with yields improving, and believes Micron’s inventory is now at optimal levels to leverage pricing strength. The biggest risk, according to Citi, is Samsung qualifying at Nvidia for HBM, which could pressure Micron’s multiple and margins into 2026.

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SNOW: BofA Upgrades to Buy, Raises PT to $240 on AI-Driven Demand Momentum