TMTB Morning Wrap

Good morning. Futures +1.3% on the back of better news out of the Middle East and continued positive AI vibes following Lisa Su’s bullish earnings call. On the macro front, Oil -9% as Axios reported that US is getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations with US expecting an Iranian response in next 48 hours. Yields falling 6-8bps across the curve.

Asia green overnight: Hang Seng +1.22%, HSCEI +0.8%, SHCOMP +1.17%, Shenzhen +2.24%, SHCOMP +1.17%, Shenzhen +2.24%, Taiwan TAIEX +0.91%, Korea KOSPI +6.45%. Samsung +19% (not a typo); SK Hynix +15%, both hitting new highs.

AMD +19% is taking semis up along with it with the group +3.5%. CPU plays up in sympathy with ARM +12% ahead of earnings. GLW +20% on an NVDA partnership. HUT +40% after announcing a $10B DC lease in Texas taking neoclouds higher. Price action in AI semis as strong as I’ve seen it since the first year of the AI trade following ChatGPT’s launch. Even NVDA +2% getting some love this morning. Outside of that, internet doing its best not to get tossed aside with UBER +8% after a beat vs. very low expectations (DASH/EXPE/LYFT +4-5% in sympathy.

We’ll cover everything earnings first - AMD, ANET, ALAB, LITE, CPNG, UBER — then move onto the usual. Should be another fun one.

Let’s get to it…

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AMD +16%: Numbers largely in buyside (better revs, slightly lower GMs) but CEO Lisa Su stole the show on the conference call with bullish CPU/GPU commentary

One of the more bullish calls I’ve heard recently, and it doesn’t take much to ignite a flame these days in any AI name. The tone from Lisa was notably more bullish than last q, following INTC with bullish CPU commentary which is what investors are focused on. AMD doubled their server CPU TAM from $60B to $120B (35% CAGR through 2030), driven by a “meaningful acceleration” in customer demand, pointing to agentic CPU as the main driver. Q2 server CPU revs expected +70% in Q2 with further growth in 2H and into 2027. Similar to what we have heard from INTC and ARM, Lisa talked about CPU/GPU ratio heading towards 1:1, and talked up unit growth as main driver in Q1. On Long-term targets, she talked up growth target of 80%, and said she was very confident they could deliver $20+, which I took as setting a floor for 2028. On GPUs, mgmt said OpenAI and Meta engagements are going well, customer forecasts are above the initial 2027 plan, more customers are engaging on significant MI450 deployments, and many are already discussing MI500. She also answered some bear fears around lack of capacity supply, saying they have secured enough supply to meet or exceed targets.