Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Nvidia is reportedly close to throwing in the towel on the acquisition of ARM (although markets have assumed that outcome for awhile)</li>
<li>Softbank can still monetize the asset through an IPO but most likely at a lower valuation and with much fewer proceeds</li>
<li>We believe ARM was the primary source of buyback funds and with VF down $13bn QTD prospects for meaningful buybacks have been pushed out</li>
</ul>


Nvidia is reportedly close to throwing in the towel on the acquisition of ARM (although markets have assumed that outcome for awhile)
Softbank can still monetize the asset through an IPO but most likely at a lower valuation and with much fewer proceeds
We believe ARM was the primary source of buyback funds and with VF down $13bn QTD prospects for meaningful buybacks have been pushed out


Softbank Group - ARM News, Vision Fund Weakness Highlight That Share Buyback Will Be Back Loaded

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-01-25/nvidia-is-said-to-quietly-prepare-to-abandon-takeover-of-arm" target="_blank" rel="noopener"> Bloomberg reported</a> overnight that Nvidia was moving to accept reality and give up on the Arm merger. </li>
<li>This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. </li>
<li>It also highlights the overall negative environment for Softbank’s traditional business “strategy”.</li>
</ul>



 Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. 
This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. 
It also highlights the overall negative environment for Softbank’s traditional business “strategy”.


Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

Value Investing

Vladimir Dimitrov, CFA

<ul>
<li>From a market point of view, Intel's risk-reward profile appears more compelling than many of its high-flying peers.</li>
<li>From a business perspective, the company will likely continue to suffer in the short-term, however, strategic positioning is still strong.</li>
<li>What has historically been Intel's weak spot could prove to be its key competitive advantage over the coming years.</li>
</ul>


From a market point of view, Intel's risk-reward profile appears more compelling than many of its high-flying peers.
From a business perspective, the company will likely continue to suffer in the short-term, however, strategic positioning is still strong.
What has historically been Intel's weak spot could prove to be its key competitive advantage over the coming years.


Intel: Well-Positioned To Compete But Hardly A Short-Term Play

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>TSMC posted results at or above the top end of its guidance ranges for 4Q21 at the revenue, GPM and OPM levels. </li>
<li>Guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for the year. </li>
<li>We still suspect however that momentum could actually accelerate through the year.</li>
</ul>


TSMC posted results at or above the top end of its guidance ranges for 4Q21 at the revenue, GPM and OPM levels. 
Guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for the year. 
We still suspect however that momentum could actually accelerate through the year.


Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>It'll take another 3-5 years of further development for VR and AR products to reach the level of user experience and reduction in cost necessary for wide commercial adoption. </li>
<li>The emergence of blockbuster AAA content will aid the large-scale adoption of Metaverse hardware, user generated contents are much lower in development cost,  a trend pioneered by Roblox &amp;Epic Games.</li>
<li>A-Share listed companies mainly focus on hardware value chain. China's video game regulator hasn't approved any new titles since July 2021. Leading Chinese companies are focusing on the commercial application.  </li>
</ul>


It'll take another 3-5 years of further development for VR and AR products to reach the level of user experience and reduction in cost necessary for wide commercial adoption. 
The emergence of blockbuster AAA content will aid the large-scale adoption of Metaverse hardware, user generated contents are much lower in development cost,  a trend pioneered by Roblox &amp;Epic Games.
A-Share listed companies mainly focus on hardware value chain. China's video game regulator hasn't approved any new titles since July 2021. Leading Chinese companies are focusing on the commercial application.  


Virtual Smoke and Mirror—Vision to Reality

United States

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.  The Company's products provide interactive 3D graphics to the mainstream personal computer market.

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NVIDIA Corp (NVDA US)

Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. This highlights the overall negative...

Mio Kato

Intel: Well-Positioned To Compete But Hardly A Short-Term Play

From a market point of view, Intel's risk-reward profile appears more compelling than many of its high-flying peers. From a business perspective,...

Vladimir Dimitrov, CFA

TSMC – Exceptional as Usual

TSMC guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for...

Mio Kato

Virtual Smoke and Mirror—Vision to Reality

The recent surge in Metaverse have brought VR & AR back into the focus of the market. So is the Metaverse finally ready for prime time or still a...

Evelyn Zhang

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52-week Range

Market Cap (USDm)

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Softbank Group - ARM News, Vision Fund Weakness Highlight That Share Buyback Will Be Back Loaded

Shares never captured Nvidia upside so the collapse of the ARM sale is not surprising but it also removes the primary source of funds for the share...

Kirk Boodry

Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. This highlights the overall negative...

Mio Kato

Intel: Well-Positioned To Compete But Hardly A Short-Term Play

From a market point of view, Intel's risk-reward profile appears more compelling than many of its high-flying peers. From a business perspective,...

Vladimir Dimitrov, CFA

TSMC – Exceptional as Usual

TSMC guidance for 1Q22 was also punchy with the midpoint of revenue guidance 6.0% above consensus and mid to high 20s revenue growth guidance for...

Mio Kato

Virtual Smoke and Mirror—Vision to Reality

The recent surge in Metaverse have brought VR & AR back into the focus of the market. So is the Metaverse finally ready for prime time or still a...

Evelyn Zhang