Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>The “death” of Windows 10 refers to the end of its support life cycle, which Microsoft has set for October 14, 2025.</li><li>Essentially, while Windows 10 will continue to function on existing devices, it will become increasingly vulnerable to security risks as new threats emerge and are not patched.</li><li>Microsoft is offering an Extended Security Update (ESU) program. </li></ul>

The “death” of Windows 10 refers to the end of its support life cycle, which Microsoft has set for October 14, 2025.Essentially, while Windows 10 will continue to function on existing devices, it will become increasingly vulnerable to security risks as new threats emerge and are not patched.Microsoft is offering an Extended Security Update (ESU) program. 

Tech Talk: The "Death" Of Windows 10 What Will People Do? Will It Cause a PC Upgrade Cycle?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P500 INDEX</a> and capping changes will result in a round-trip trade of US$16.3bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.</li>
<li>The Select Sector index trackers and S&amp;P500 Equal Weight trackers will need to buy the adds to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P500 INDEX</a> and sell the deletes, further increasing flow for the stocks.</li>
<li>The flows will change over the next week as stock prices move around, and final capping is done after the close on 14 March.</li>
</ul>


Constituent changes to the S&amp;P500 INDEX and capping changes will result in a round-trip trade of US$16.3bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.
The Select Sector index trackers and S&amp;P500 Equal Weight trackers will need to buy the adds to the S&amp;P500 INDEX and sell the deletes, further increasing flow for the stocks.
The flows will change over the next week as stock prices move around, and final capping is done after the close on 14 March.


Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a>, S&amp;P Midcap400 Index and S&amp;P SmallCap600 Index for the March rebalance will be announced after market close on Friday.</li>
<li>There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.</li>
<li>The largest inflows will be in <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com</a>, <a href="https://www.smartkarma.com/entities/tesla-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla</a>, <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft</a>, <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA</a>, <a href="https://www.smartkarma.com/entities/alphabet-inc" target="_blank" data-smartkarma-citation="entities:33361:1" rel="noopener">Alphabet (GOOGL US)</a> and <a href="https://www.smartkarma.com/entities/electronic-arts-inc" target="_blank" data-smartkarma-citation="entities:1179:1" rel="noopener">Electronic Arts</a>. Largest outflows are from <a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom</a>, <a href="https://www.smartkarma.com/entities/meta-platforms-inc-class-a-facebook" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Meta Platforms</a>, <a href="https://www.smartkarma.com/entities/linde-plc" target="_blank" data-smartkarma-citation="entities:35233:1" rel="noopener">Linde</a>, <a href="https://www.smartkarma.com/entities/mcdonald-s-corp" target="_blank" data-smartkarma-citation="entities:1425:1" rel="noopener">Mcdonald's Corp</a> and <a href="https://www.smartkarma.com/entities/take-two-interactive-software-inc" target="_blank" data-smartkarma-citation="entities:14948:1" rel="noopener">Take Two Interactive</a>.</li>
</ul>


Constituent changes to the S&amp;P 500 INDEX (SPX INDEX), S&amp;P Midcap400 Index and S&amp;P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald's Corp and Take Two Interactive.


Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

<ul>
<li>Despite the chip market's 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications.  A turn in the AI business could cause a collapse.</li>
<li>Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry's historical growth rate of 3.9%, but is nowhere near the 19% overall number.</li>
<li>The US' trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.</li>
</ul>


Despite the chip market's 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications.  A turn in the AI business could cause a collapse.
Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry's historical growth rate of 3.9%, but is nowhere near the 19% overall number.
The US' trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.


What Do Detailed 2024 Semi Stats Tell Us?

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>Microsoft dominated the technology news cycle recently on the back of a report by a TD Cowen analyst that the company is cancelling data centre leases in the US</li>
<li>Dwarkesh Patel's podcast with Microsoft CEO Satya Nadella last week provided a fascinating insight into his thinking when it comes to AI compute build out, AI winners &amp; losers etc.</li>
<li>Mr Nadella's approach to AI compute build out has always been a pragmatic "show me the money and I'll build some more compute" approach. Now we better understand why.</li>
</ul>


Microsoft dominated the technology news cycle recently on the back of a report by a TD Cowen analyst that the company is cancelling data centre leases in the US
Dwarkesh Patel's podcast with Microsoft CEO Satya Nadella last week provided a fascinating insight into his thinking when it comes to AI compute build out, AI winners &amp; losers etc.
Mr Nadella's approach to AI compute build out has always been a pragmatic "show me the money and I'll build some more compute" approach. Now we better understand why.


Microsoft CEO On AI CapEx: Show Me The Money!

United States

Microsoft Corporation operates as a software company. The Company offers applications, extra cloud storage, and advanced security solutions. Microsoft serves customers worldwide.

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Microsoft Corp (MSFT US)

Tech Talk: The "Death" Of Windows 10 What Will People Do? Will It Cause a PC Upgrade Cycle?

Essentially, while Windows 10 will continue to function on existing devices, it will become increasingly vulnerable to security risks as new...

Water Tower Research

Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO

Constituent changes to the S&P500 and capping changes result in a round-trip trade of US$16.3bn for the Select Sector. ECE, DASH, AMZN, TKO, TSLA,...

Brian Freitas

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Capping changes for the Select Sector indices will result in a round-trip trade of US$13bn. Constituent changes will be announced after market...

Brian Freitas

What Do Detailed 2024 Semi Stats Tell Us?

The chip market saw 19% 2024 growth driven by AI semiconductors, but growth outside AI is modest. This is cause for concern. Meanwhile US trade...

Jim Handy

Microsoft CEO On AI CapEx: Show Me The Money!

Mr Nadella's approach to AI compute build out has always been a pragmatic "show me the money and I'll build some more compute" approach. After last...

William Keating

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Tech Talk: The "Death" Of Windows 10 What Will People Do? Will It Cause a PC Upgrade Cycle?

Essentially, while Windows 10 will continue to function on existing devices, it will become increasingly vulnerable to security risks as new...

Water Tower Research

Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO

Constituent changes to the S&P500 and capping changes result in a round-trip trade of US$16.3bn for the Select Sector. ECE, DASH, AMZN, TKO, TSLA,...

Brian Freitas

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Capping changes for the Select Sector indices will result in a round-trip trade of US$13bn. Constituent changes will be announced after market...

Brian Freitas

What Do Detailed 2024 Semi Stats Tell Us?

​The chip market saw 19% 2024 growth driven by AI semiconductors, but growth outside AI is modest. This is cause for concern. Meanwhile US trade...

Jim Handy

Microsoft CEO On AI CapEx: Show Me The Money!

Mr Nadella's approach to AI compute build out has always been a pragmatic "show me the money and I'll build some more compute" approach. After last...

William Keating

The chip market saw 19% 2024 growth driven by AI semiconductors, but growth outside AI is modest. This is cause for concern. Meanwhile US trade...