Daily Brief TMT/Internet: NVIDIA Corp, Broadcom , Applied Materials, Intel Corp, CoreWeave, GLOBALFOUNDRIES , Adobe Systems, Salesforce.Com Inc, Baidu, Smaregi and more

• Who wins the AI race is like asking ”who won the Internet?” Amazon, Google, Meta, Microsoft? Wait, maybe it’s ASML and TSMC? Do you see how dumb this question is? 
• If you trade stocks, you enjoy the “Google is back” moment. Or maybe that was last week’s trade. The market wants profits and margins. Revenue growth is no longer enough.
• So, who wins the AI race? I will eventually buy,  hopefully early 2026: AMD, Google, LAM, Meta, Microsoft, Micron, Nvidia, TSMC. These are the category winners IMO

• Broadcom just had its worst stock day in nearly a year—and the culprit was something investors were previously cheering: AI.
• On the surface, the company had a strong quarter.
• Revenue hit a record $18 billion, AI chip sales surged, and its infrastructure software business delivered steady growth.

• Applied Materials recently concluded their fiscal year of 2025 with encouraging results, achieving record highs in revenue, gross margin dollars, operating profit, and earnings per share, despite facing significant headwinds.
• The company reported a 4% year-over-year growth in revenue to $28.4 billion.
• Notably, the Semiconductor Systems and Applied Global Services (AGS) divisions posted record revenues, even amidst tightened trade restrictions that notably impacted their market presence in China.

• Intel Corp. is reportedly nearing a $1.6 billion acquisition of artificial intelligence startup SambaNova Systems Inc., marking a potential inflection point in its strategic roadmap to reclaim dominance in the AI and semiconductor space.
• This potential deal—first reported by Bloomberg—could materialize as early as next month, and would give Intel a foothold in custom AI chip architecture at a steep discount compared to SambaNova’s last valuation of $5 billion in 2021.
• The move comes on the heels of a transformative year for Intel, highlighted by the U.S. government taking a 10% stake, major equity infusions from NVIDIA and SoftBank, and a public commitment from CEO Lip-Bu Tan to rebuild Intel’s AI, foundry, and inference capabilities.

• The $2.25bn convertible issuance underscores strong bond-market confidence in AI infrastructure, but equity markets are increasingly focused on leverage, dilution, and refinancing risk.
• With repeated debt raises and high fixed obligations relative to revenue, CoreWeave’s growth model is becoming more dependent on capital-market access than operating leverage.
• As credit conditions tighten across data-centre and infrastructure lending, the divergence between bondholder confidence and equity caution highlights a narrowing margin for error.

• GlobalFoundries Inc. recently reported its third-quarter financial results for fiscal 2025, showcasing a mixed performance across diverse segments and underscoring specific strategic directions aimed at driving long-term growth.
• The company’s revenue for the quarter stood at $1.688 billion, marking a slight 3% decrease year-over-year, though it aligned with the high end of the anticipated guidance.
• Gross margins saw expansion both sequentially and year-over-year, landing at approximately 26% due to shifts toward higher-margin product mixes and increased revenue from non-wafer technology services.

• Adobe’s dominant position in creative software, underpinned by a wide economic moat, is being reinforced by the strategic integration of Artificial Intelligence (AI) across its product suite, driving consistent double-digit revenue growth.
• The company’s successful transition to a subscription-based model with its Creative, Document, and Experience Clouds provides a highly predictable, recurring revenue stream, fostering financial stability and enabling continuous innovation.
• While facing emerging competition from more accessible alternatives and navigating the monetization of its AI features, Adobe’s entrenched ecosystem, high switching costs, and strong brand loyalty present formidable barriers to entry for competitors.

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• Salesforce is the market leader in the Customer Relationship Management (CRM) software space, benefiting from a wide economic moat driven by high customer switching costs and a strong network effect from its extensive AppExchange ecosystem.
• The company is demonstrating a successful pivot towards profitable growth, with significant non-GAAP operating margin expansion and robust free cash flow generation. The recent initiation of a dividend underscores this focus on shareholder returns.
• Future growth is anticipated to be driven by the integration of Artificial Intelligence through its ‘Agentforce’ and ‘Einstein’ platforms, the expansion of its Data Cloud offerings, and strategic, bolt-on acquisitions. However, the company faces intense competition and risks associated with integrating new acquisitions and macroeconomic headwinds impacting IT spending.

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• Baidu’s financial performance for the third quarter of 2025 highlights both strengths and challenges.
• The company reported total revenues of RMB 31.2 billion, which represents a 7% decline year-over-year.
• Baidu Core, a significant segment, showed revenue at RMB 24.7 billion, aligning with this downward trend.

• Smaregi is a high-growth, pure-play provider of cloud-based Point-of-Sale (POS) systems in Japan, capitalizing on the structural shift from legacy hardware to SaaS solutions among small and medium-sized businesses (SMBs).
• The company exhibits a robust financial profile, characterized by impressive revenue and earnings growth, expanding margins, and a rapidly growing base of high-margin Annual Recurring Revenue (ARR), which recently surpassed JPY 10 billion.
• While the company’s strategic focus on the underserved mid-sized retail and restaurant market presents a significant runway for growth, it faces intense competition and trades at a premium valuation, reflecting high investor expectations.

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