TMTB Morning Wrap

Good morning. Futures +75bps as stocks bid while Oil -5% as more news out since the close that Trump wants to deescalate and rumors of ceasefire coming. Here’s VK:

The administration has sent a 15-point plan to Tehran (via Pakistan) and JD Vance is set to play a major role in the negotiations (a gesture by the White House to demonstrate its seriousness about the talks), but the Pentagon is still bringing fresh equipment/soldiers into the region, fighting continues relatively unabated, and Iran still sounds skeptical of the whole process, which is why markets remain doubtful that the burst of diplomacy will yield an actual resolution.

Yields down slightly, BTC +1.5%

Asia mainly green overnight: TPX +2.57%, NKY +2.87%, Hang Seng +1.09%, HSCEI +0.98%, SHCOMP +1.3%, Shenzhen +1.96%, Taiwan TAIEX +2.54%, Korea KOSPI +1.59%…Softbank +8%

CPU trade finally seeing some activation this morning as ARM (+12%) CEO put out a $25B Rev / $9 EPS targets for “within five years”, way ahead of street, and said agentic AI is driving 4x more CPU capacity in DCs per GW vs previously. Nikkei is also out saying shortages driving CPU prices higher for INTC (+4%) /AMD (+2.4%). This comes on the back of what has been positive checks/commentary from mgmt teams over the last couple months given the huge ramp in Agnetic AI to start the year.

Memory/HDDs a bit weaker on GOOG’s TurboQuant announcement, which helps compress KV cache; interesting but not much given labs have been actively trying to drive more KV cache efficiency for a while now. Still, that and OAI shutting down Sora has memory/HDDs as early underperformers.

Lots of interesting stuff to get to today, so let’s get to it…

ARM:

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ARM: Raymond James Upgrades to Outperform on AGI CPU Launch and Fabless Model Expansion, Sets $166 PT

Raymond James upgraded ARM to Outperform with a $166 price target, citing its shift toward a fabless semiconductor model and the introduction of its internally developed AGI CPU. The firm notes the chip—co-developed with META—targets agentic AI workloads with higher bandwidth and performance, positioning ARM as a more direct participant in AI infrastructure. Raymond James adds updated guidance implies ~$1B incremental revenue by FY28 and ~$15B by FY31, with royalties growing ~20% CAGR, supporting a meaningful step-up in EPS to ~$3 in FY28 and ~$9 longer term.

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ARM: Evercore ISI Reiterates Outperform, Raises PT to $227 on Agentic CPU Opportunity

Evercore ISI reiterates Outperform on ARM and raises its price target to $227 (from $170), citing its entry into the server CPU market as a key beneficiary of agentic AI. The firm sees ARM’s CPU architecture as well-suited for inference workloads, positioning it as a potential “orchestrator” layer with server CPU TAM expanding from ~$50B today to ~$100B by FY31. Evercore adds ARM’s ecosystem and royalty model support durable ~20% CAGR growth, with agentic AI driving higher CPU attach rates and long-term earnings power.

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ARM: BofA Reiterates Neutral, Raises PT to $155 on AGI CPU but Flags Execution and Competition Risks

BofA reiterates Neutral on ARM while raising its price target to $155, citing incremental upside from its new merchant “AGI CPU” and expanding TAM. The firm notes strong early customer interest (incl. META, OpenAI, telcos), but sees FY31 EPS targets (~$9) as ambitious vs. its ~$6.50 base case. BofA adds risks remain around competition, unit share, and smartphone/server demand, with execution needed to justify long-term upside.

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INTC/AMD: Supply crunch in Intel, AMD CPUs deals fresh blow to PC and server makers

Nikkei: