TMTB Morning Wrap

Good morning. QQQs -35bps. Yields mixed. BTC -60bps. China +90bps.

We get GOOGL’s I/O at 10am pst - you can watch on their YT channel. PANW earnings post-close.

Let’s get straight to it…(not much on 3p front this morning)

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MDB: Loop downgrades MongoDB on 'lackluster' Atlas adoption and reduces PT from $350 to $190

Loop indicates their latest industry checks reveal that MongoDB's Atlas platform "continues to show lackluster market adoption" particularly regarding new workload growth, with expectations this trend might persist and potentially slow AI-related workload implementation. LC anticipates Atlas consumption growth will continue decelerating until MongoDB demonstrates progress with its enterprise customer penetration strategy. Loop notes industry feedback suggests MongoDB's target cloud database platform market "remains highly fragmented and has yet to consolidate around the top vendors," potentially complicating standardization decisions when customers adopt GenAI technology. LC states this scenario could delay AI workload growth on MongoDB's platform and explains they're reducing their FY26 Atlas revenue growth projections from 22% to 19% and FY27 estimates from 21% to 18%, while maintaining their belief that current valuation "fairly reflects the company's near-term risks offset by positive long-term growth prospects."

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PANW bogeys for tonight

FQ3 NN NGS ARR: $320-$330M vs Street $282.6M vs Guide $250–300M
FQ3 Total Revs: 6% yy vs Street 15% vs Guide 14–15% (in line with historical beats)
FQ3 Prod Revs: 10% yy vs Street 8%
FQ3 RPO: 21% yy ($13.7B) vs Street 20.5% vs Guide 19–20%
FY25 Total NGS ARR: 32-33% vs prior 31–32%
FY25 Total Revs: 14–15% yy vs prior 14%
FY25 FCF: reit prior 37–38%

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HPE: ISI Upgrades to Buy citing positive risk/reward

ISI indicates "the probability for UPSIDE ($25-30) is more likely while the downside is protected around $15-16." ISI examines four key scenarios that could unfold at HPE given the JNPR transaction, Elliott engagement and operational issues. In scenario one, ISI states the Juniper deal closes as expected, potentially enabling HPE to "deliver double-digit EPS growth in year 1 through $300M of cost synergies," with EPS potentially reaching $2.25-$2.30 and driving the stock to approximately $24. Their second scenario explores "HPE 2.0" where the Juniper deal fails but HPE implements significant cost-cutting initiatives across segments, potentially achieving 20% operating margins in key divisions and driving EPS to $2.58 or $0.72 upside from their FY26 estimate, with potential stock appreciation to $26-$31. ISI notes their least favorable third scenario "HPE 1.0" would leave the stock range-bound at $15-16 support levels, while their final "Sum Of the Parts" analysis suggests the stock could be worth $25-30 with various segments gaining "premium" multiples. ISI concludes by raising their price target to $22.

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QBTS +20%/IONQ +4%/RGTI +7%: Called this out y’day — JPM hosting virtual Quantum day with all major Quantum stock CEOs today…all these charts looking better as of late as QBTS breaking out to new highs (+ve tea leaf for animal spirits)