Daily Brief Thematic (Sector/Industry): Nvidia–OpenAI US$100bn Partnership: Asia Hardware Supply Chain Implications and more

• Nvidia–OpenAI tie-up: A US$100bn LOI to deploy 10 GW of GPUs by 2026 highlights the unprecedented scale of AI compute build-out, anchored in Asia’s memory, packaging, substrate, and testing ecosystem.
• SK hynix (HBM leader, backlog sold out to 2027), TSMC (CoWoS packaging), Ibiden/Ajinomoto (substrates), and Advantest/TEL/Disco (test/tools) are positioned as key winners.
• While the deal confirms multi-year order visibility, much of the “good news” may be priced in — execution of capacity ramps and sustained demand will determine further upside.

• A U.S. executive order, “Project Firewall” has imposed a substantial one-time fee of USD100,000 on new H-1B visa applications, directly impacting the primary talent pipeline for Indian IT services firms.
• This policy change represents a catalyst that will accelerate Indian IT companies towards higher offshore delivery and greater local hiring in the United States, thereby reshaping their global operating models.
• The initial panic has eased, the fee is now seen as manageable, with its real impact unfolding through profitability pressures and evolving talent strategies amid tighter regulations.

• Calbee: Profitability pressured by rising input costs, but valuation is attractive at 11x EBIT vs sector 14x, leaving it exposed to potential M&A interest.
• Eiken: Strategic shareholders near 30% with governance changes underway; growth steady, but trajectory points toward a likely management buyout.
• Pacific Industrial & AI Holdings: Pacific reflects Japan’s activist-driven MBO scrutiny, while AI stands out as a rare compounding “buy and build” platform with activist backing.

• Asia mirrors the U.S. “boring tech” rally: storage, memory, and components once seen as cyclical are being re-rated as AI infrastructure enablers.
• Valuation gaps present opportunities: Kioxia and SK Hynix trade at meaningful discounts vs Seagate/WDC/Micron, while Murata and TSMC command premiums; Chinese names appear expensive.
• Key risks remain: cyclicality in DRAM/NAND, potential subsidy overbuild, and currency volatility could pressure valuations if AI demand slows.

• U.S. equities closed at record highs Monday, with the S&P 500 up 0.44% and the Nasdaq rising 0.70%
• Nvidia surged 3.9% after announcing a $100 billion investment in OpenAI to expand data centers,
• Mitsui & Co. announced that Warren Buffett’s Berkshire Hathaway increased its stake above 10%

• The Federal Reserve cut interest rates by 25 basis points to a range of 4 to 4.25%, citing a shift in risk and uncertainty in the economy.
• Tensions within the Fed committee highlight divisions on future rate cuts, with projections ranging from 2.9% to 4.4% by year end.
• Stagflation concerns have emerged as inflation rises, complicating the Fed’s ability to support the job market with aggressive rate cuts.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.
• Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.
• If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

• The turnaround basket outperformed the Topix benchmark by 40% in the past 12 months, with only three stocks underperforming.
• Fundamental research added value to the simple one-factor model, as seen with top performers like Shift and Rohm.
• The unusual market conditions last year favored turnarounds, but future performance is expected to return to normal levels.

• JP Morgan predicts STI may reach 6,000 points in a 12-month optimistic scenario.
• UOBKH views OKP Holdings as a bargain in Singapore’s infrastructure upcycle.
• Bumitama’s valuations are now reasonable after a share price adjustment.

• Market sentiment at the Beaver Creek Precious Metals Summit is positive, with attendees not complaining about high costs and feeling optimistic about the sector
• There is a sense of euphoria among investors, but also a realistic view of project outcomes with only a few expected to be highly profitable
• IM Gold is seen as an attractive acquisition target, with speculation about a potential takeover in the near future, possibly within the next 12 months

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.