Daily Brief Thematic (Sector/Industry): Ohayo Japan | Nvidia Flips Microsoft and more

• U.S. stocks rose as Nvidia topped Microsoft in value; job data beat forecasts, but global growth concerns grew amid tariffs and stalled trade talks.
• Meta signed a 20-year deal with Constellation to power AI growth with nuclear energy, supporting relicensing and expansion of an Illinois plant.
• Fast Retailing reported UNIQLO’s domestic same-store sales (including e-commerce) rose 13% year-on-year in May

• New smartphone offering from Micron lifts memory plays which may help EUV also.
• Comments from Onsemi management that auto has turned the corner positive for Rohm, Fuji Elec, Renesas.
• Kadokawa/Bandai Namco’s Nightreign sells 3.5m copies in 4-days, plus a new DLC on the way.

• China’s defence industry is poised to be another major focus going forward. Many stocks have corrected by 3-20% from their recent peaks, presenting interesting opportunities. 
• Most of them are A-share stocks, with business ranging from fighter manufacturing to optical system development to aircraft engine research and production.
• AviChina Industry & Technology H (2357 HK) is the best play, given its Hong Kong listing, undemanding FY25 PER of 13.5x and 56% discount to holdings in A-share subsidiaries.

• DRAM revenues for Q125 amounted to $28.6 billion, up 1.5% QoQ and up 57.4% YoY. 
• NAND Q125 revenues amounted to $13.3 billion, down 20.6% QoQ and down 5.5% YoY.
• Micron’s HBM revenues grew 50% QoQ. Sk Hynix will double HBM revenues YoY. HBM TAM on track to exceed entire DRAM industry 2024 revenues by 2030. Transformation incoming!

• Several Indian sectors have demonstrated a robust recovery in operating margins on a Year-over-Year (YoY) basis as of March 2025 (Q4 FY25)
• This broad-based improvement is primarily attributed to a confluence of industry-wide factors, predominantly the easing of input costs driven by moderating inflation.
• Sectors like Telecom, Metals, Cement, Consumer Durables, Capital Goods, Automobile, Healthcare, EMS are seeing uptick in margins

• U.S. investigates Adani over alleged Iranian LPG imports where Adani denies wrongdoing, calling the accusations baseless and mischievous.
• India’s defence sector hit INR 1.46T in FY25 with record exports, private growth, AMCA launch and INR 2T deals driving future upside.
• RBI may announce a 50-basis point rate cut in June to rejuvenate credit growth and mitigate economic uncertainties.

• Nvidia surpassed expectations in China despite challenges, indicating growth in other areas of their business
• Shift from training to inference era highlighted, with focus on customers buying Nvidia systems for inference
• Competition in the inference market could pose challenges for Nvidia, especially as costs grow and alternatives emerge like Google’s tpu

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• Trade policy volatility remains unabated, but this week the impact on the furniture and furnishings space was mixed.
• The WTR Commercial/Contract Furniture Index rose 2.6% and the Home Goods Retailers Index was up 2.3%, while the Residential Manufacturers & Suppliers Index declined 1.2%.
• The large-cap indices gained 1.9%, while the R2K gained 1.4%.

• The holiday-shortened week was fairly quiet on the macro front, as certain vaccine-related actions by health agencies were largely expected.
• Mainly affected was MRNA, which had a new COVID-19 vaccine approved with a restrictive label and HHS funding canceled for pre-pandemic bird flu vaccines.
• Public comments for the Section 232 investigation are rolling out, signaling pharma tariffs could be imminent, with expectations of ~25%.

• EV sales rose 9% MoM in May, showing early signs of recovery post-April dip; YoY growth strong at 29%.
• Ola Electric (OLAELEC IN) ’s market share slipped to 19%, while TVS Motor (TVSL IN) and Bajaj Auto Ltd (BJAUT IN) remained steady; market concentration continues.
• Affordability challenges remain, as lower subsidies pressure entry-level demand; OEM pricing and rollout strategies in focus.