TMTB: Morning Wrap Part 2

Covered most in Part 1 here earlier, but some few remaining items…

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OpenAI Plans to Slash Revenue Share to Microsoft After Restructuring

TheInformation:

One part of OpenAI’s plan involves reducing the percentage of revenue it shares with Microsoft. In financial projections OpenAI shared with investors, that percentage would drop by at least half by the end of this decade. Microsoft, whose servers power OpenAI products, still hasn’t signed off on OpenAI’s desired changes, according to a person who spoke with a senior Microsoft executive involved in the negotiations.

In an existing deal, OpenAI agreed to share 20% of its revenue with Microsoft through 2030—a year in which OpenAI has projected it would generate $174 billion in revenue. In recent weeks, though, OpenAI told some potential and current investors that by 2030, it would only share 10% of revenues with commercial partners including Microsoft, according to private documents.

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Earnings quick hits:

SMCI -6%: March‑quarter revenue missed even after a pre‑announcement; June guidance implies +30 % q/q but doesn’t erase the shortfall. Large GPU‑cloud customers such as CoreWeave are pausing until next‑gen chips arrive, leaving SMCI with older‑gen inventory it must sell to universities and smaller buyers. Order momentum is still solid, yet lumpiness and visibility have investors uneasy; SMCI said it remains confident but when asked about its $40bn FY26 target they said they are now not providing guidance for FY26 given tariff uncertainty and will update when the picture become clearer.

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ALAB -2%: Beat on both revenue and margins although margin guide a touch light. corpio retimers will ship in Nvidia GB‑200/300 systems and Amazon’s next custom ASICs in 2H‑25. Stock down a touch as Q1 of $160M missed buyside expects closer to $165M. PLTR showed today not a ton of appetite to buy high multiple stocks right now, so not surprising to see down a bit.

“…on the tariffs, we have not seen any material impact on our business, but it is fluid and the rules are still subject to change.”

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EA +2.5%: Better Q4 bookings while FY’26 bookings and EPS were above expectations.

EA: MoffettNathanson downgrades Electronic Arts, recommends 'more cautious stance'

TheFly: EA is "back to painting a picture of Swiss clock-like regularity in FC's growth," and perhaps they are right given that the team behind FC and Ultimate Team is "clearly one of the best in the business," the analyst tells investors. In addition, enthusiasm for Battlefield, which the firm generally shares, has EA "once again brimming with confidence," but with a share price "much closer to fair value," the analyst added. After "a very healthy run-up in the stock" since January's panic regarding EA Sports FC, the firm adds that it thinks "it's time to take a more cautious stance."

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LITE +5%: Solid Q1 beating revs, GMs, and EPS. The Q4 guide also came in strong beating on EPS (inline on revs). Cloud and industrial markets led the strength.

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KVYO +10%: Beat and raise with Q1 +33% vs expects closer to 31-32% and guide of 27%. Increased FY guide by slightly more than the beat although still sounds conservative:

“And while it remains healthy, we're mindful of the current macro-environment. And so we built a healthy dose of prudence into the guidance for the back half of the year. That gives us flexibility to adjust for unforeseen risks throughout the year.”

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OTHER NEWS: