TMTB Morning Wrap

Futures +30bps to start the day on what is a much quieter morning than yesterday as GS TMT wraps up today. We also get ANET analyst day and ADBE #s post close.

Asia was mainly up overnight: Nikkei +1.2%, Hang Seng -0.5%, SHCOMP +1.6%, TAIEX +0.09%, KOSPI +0.9%, India +0.2%

BTC +50bps. Yields flattish ahead of CPI at 8:30am.

Let’s get to it…

AMZN: Morgan Stanley Adds Top Pick, Targets $300 on $600B Fresh Grocery Push

Morgan Stanley named Amazon a Top Pick and reiterated an Overweight rating with a $300 price target, pointing to the company’s expansion into the ~$600B U.S. fresh grocery market. The firm estimates every 1% share captured equates to ~120bp of U.S. GMV upside by 2026, noting Amazon already has the logistics network in place and is leveraging a $25 minimum basket size to support profitability. Morgan Stanley says this effort could double Amazon’s grocery business, with higher-margin fresh merchandise and expanded utilization of its fulfillment infrastructure driving EBIT dollar gains. While grocery logistics are complex, the analyst argues unit economics should remain manageable, helped by larger basket sizes, “top-off” purchases, and margin profiles at the high end of retail categories.

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NVDA: Nvidia upgraded to Buy at DA Davidson on growth in AI compute demand

As previously reported, DA Davidson upgraded Nvidia (NVDA) to Buy from Neutral with a price target of $210, up from $195, citing the belief the growth in AI compute demand will drive enough demand to sustain growth into next year and likely beyond. The firm's "increasingly optimistic view" of the growth in AI compute demand supersedes its concerns about cross-currents it has highlighted in the past, including the increased competition from customers through ASICs, especially Google's (GOOGL) TPUs and increased competition and volatility in demand in China, the analyst tells investors.

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MU: Citi Raises PT to $175, Sees Strong AI-Driven Upside