TMTB Morning Wrap
Good morning. QQQs +20bps (SPX +50bps), Oil -7% and yields down 5-7bps across the curve after Trump called off strikes with Iran and said talks on a “rapid” deal would begin today.
In the U.S. semis -2% while hyperscalers are +2% as China news weighing on the former: a new memory fab from CXMT in the works and a pair of new open-source models released (Deepseek V4 Flash and Qwen 3.8). We wrote about the cleaner narrative setup on hypers vs semis in our weekly yesterday in case you missed it. Software +2% and Internet +1%.
Overnight action was mixed in Asia: TPX -1.08%, NKY -0.94%, Hang Seng +0.48%, HSCEI +0.46%, SHCOMP -0.59%, Shenzhen -0.33%, Taiwan TAIEX +0.62%, Korea KOSPI -5.12%. Memory names down big with Hynix -11% and Samsung -10% following their 20%+ gains on Friday.
Going to be a busy earnings week. We’ll have some bogeys out later today or early tomorrow.
Lots to get to, so let's get to it…
BABA +4%: Qwen 3.8 Max released
Input: $2/M tokens. Output: $6 / M tokens. Against GPT-5.6 Sol, Qwen is 60% cheaper on input and 80% cheaper on output. Against Claude Fable 5, it is 80% cheaper on input and 88% cheaper on output.
Deepseek V-4 Flash also released Friday
Opensource AI: The Race to Build an American Alternative to Cheap AI From China - WSJ
The Journal says Arcee, Reflection AI and Poolside are racing to counter increasingly capable and cheaper Chinese models such as DeepSeek, Qwen and Kimi. Despite strategic demand for U.S. alternatives, WSJ notes that VCs remain wary of open-weight models’ monetization and their potential to undermine investments in OpenAI and Anthropic. Nvidia has emerged as the ecosystem’s biggest supporter, backing several startups as concerns grow that China is pulling ahead in open AI.
GOOGL:
Memory: CXMT plans second chip plant in Beijing and is in talks on its funding, sources say
CXMT China’s largest chipmaker by market value, is considering building a second memory-chip plant in Beijing and is in financing talks with a tech manufacturing hub backed by the local government, two sources familiar with the matter said.
Reuters previously reported that CXMT was building new plants in Shanghai and Hefei and was in discussions with authorities elsewhere about another facility. Those projects, when fully operational, could double its capacity to more than 600,000 wafers per month. The new Beijing 12-inch plant would be built in Yizhuang, about 20 km (12 miles) southeast of central Beijing, where CXMT already operates a fab producing dynamic random access memory (DRAM) chips, the sources said. They declined to be identified as the plans are not public. CXMT is seeking at least 60 million yuan ($8.9 million) in support from the development zone’s governing body, also known as the Beijing Economic-Technological Development Area, and other state-owned tech companies have also expressed interest in participating in the financing, they said. The planned capacity and total investment for the proposed fab were not immediately known. CXMT operates two 12-inch DRAM fabs in Hefei and one in Beijing, each with capacity of about 100,000 wafers per month, the people said.
SPCX: Apptopia flags two consecutive negative m/m growth months for Starlink, which has not happened since 2024.
Reminder, earnings tomorrow. Possibly happening given their px increase in June. No view here, just flagging.
SPCX: Bernstein Reiterates Outperform but Sees Lockup Expirations as a Near-Term Technical Overhang
Bernstein reiterates Outperform and a $239 price target, but Bernstein says staggered lockup expirations beginning August 6 could pressure shares through year-end as roughly 20%–30% of locked stock becomes eligible for sale initially and free float potentially rises toward 40% by December. Bernstein says the well-telegraphed overhang is already keeping some investors sidelined, making the upcoming earnings call important for clarifying Starship’s path to full reusability, higher launch cadence and orbital data-center deployment.
GLW: Truist Upgrades to Buy as Pullback Creates a More Attractive Entry into Optical Growth
Truist upgrades GLW to Buy from Hold and sets a $175 price target, down from $205, arguing the roughly 45% July pullback creates a more reasonable entry point despite stronger 2028 EPS estimates. Truist says Optical and Solar should drive roughly 18% revenue CAGR from 2026–28, while long-term hyperscaler agreements and rising AI/data-center capex improve visibility. Truist also sees upside to operating margins and ROIC through 2030, with margins on incremental revenue in the mid-30% range, and Truist forecasts roughly 30% EPS CAGR from 2026–29, though consumer electronics and auto remain softer offsets.
AMAT: Citi Opens 30-Day Upside Catalyst Watch on Stronger WFE Outlook
Citi opens a 30-day upside Catalyst Watch on AMAT ahead of August 13 earnings, expecting October-quarter guidance above Street with revenue/EPS roughly 3%/2% higher. Citi says peer commentary from KLAC, LRCX and TEL supports 2026 WFE above $150B and points to $190B–$200B in 2027, with upside from AI-driven DRAM and logic capacity, advanced packaging and improving visibility into 2028. Citi believes this broader WFE acceleration creates a favorable setup for AMAT into the print