Track semiconductors, computing infrastructure and the technology cycle.
Third-quarter subscription revenue growth returned to 6% and margins reached a record high, but overall ARR growth eased slightly and the customer cohort not using paid AI weakened. Morgan Stanley raised its price target from $41 to $91, while arguing that the higher valuation premium has raised the bar for further earnings estimate upgrades.
Execution capabilities remain recognized, but widening credit spreads make the cost and availability of expansion funding harder to assess. Morgan Stanley cut its price target from 99 dollars to 70 dollars and maintained its Equal-weight rating; the key is whether customer contracts can continue to support attractive financing terms.
Third-quarter revenue and EBITDA beat expectations, and Bloom raised its guidance for the third time this year. Morgan Stanley raised its price target on improved delivery prospects, but the manufacturing ramp weighed on near-term gross margin expectations, and operating cash flow was also significantly weaker than consensus.
New games and overseas expansion have lifted revenue expectations, but customer acquisition, R&D spending and changes in investment income are weighing on profit conversion. Morgan Stanley is more focused on the slowdown in growth in 2027, cutting its price target from 449 yuan to 389 yuan while maintaining its Equal-weight rating.
Tencent has become a strategic partner of the 2026 APEC Leaders’ Meeting and will deploy media AI, real-time translation and cross-border payment services. Citi believes this will help raise awareness of the company’s technology brand and the Weixin ecosystem among overseas users; its HK$755 target price remains primarily supported by gaming, advertising and social businesses.
Goldman Sachs expects Kingsoft Cloud’s third-quarter revenue to grow 34% and AI cloud revenue to grow 81%, driven mainly by demand from Xiaomi and Kingsoft and improved GPU supply. But a return to normal expense levels weighs on operating profit, expansion depends on customer prepayments and leasing support, and the target price has been cut to 15.5 dollars due to a higher discount rate.
Faster growth in the price per TB drove Western Digital’s first fiscal quarter revenue and margins above expectations, while its second-quarter guidance also exceeded consensus. JPMorgan raised its earnings forecasts and price target, citing a return to growth in shipped capacity and the focus of new investment on heads, platters and technology transitions.
Nomura initiates coverage with a Buy rating and a target price of 79 yuan. The investment case is that mass production of AI server products will drive expansion in the higher-margin industrial business, but revenue growth coincided with a decline in profit in the first three quarters, and the bank’s profit recovery forecasts are also well below consensus.
Nomura sees new models from December 2026 to January 2027 as the first catalyst. First-person video and improved training efficiency are lowering the learning barrier, but commercialization also depends on continuous operation, an on-site data feedback loop and hardware consistency.
Tech giants have begun using external financing to bridge the AI investment gap, but Nomura still expects the race to continue. Long-term contracts support 2027 memory shipment volumes and price ranges, but power delays could first cause chip inventories to accumulate, and supply and demand could also loosen in 2028.
Barclays has left its Tencent revenue forecasts broadly unchanged but cut its 2027 adjusted net profit estimate by 14.3%. Heavy capital expenditure, R&D costs and chip prepayments come first, while commercial returns from AI assistants will take longer to materialize.
Following a follow-up with management, Citi said Western Digital has demand visibility through 2030–2031, while near-term growth is primarily constrained by supply. The transition to higher-capacity products is expected to increase capacity shipments, but also brings capital expenditure and near-term cost pressures.
After the equipment sector pulled back approximately 10% in a week, Citi turned its attention to supply constraints: AI demand remains strong, but parts shortages could limit shipments. Combining 2028 equipment spending scenarios with historical trough valuations, the bank estimates that the big three have approximately 10% and 30% of downside remaining under its base and bearish scenarios, respectively.
Bernstein believes the scale of the talks over 80 thousand towers moves SpaceX’s wireless ambitions beyond spectrum holdings toward a nationwide terrestrial network. The competitive impact may take years to emerge, but competition for spectrum in 2027–2028 and pressure on sector valuations could arrive sooner.
Paid subscriptions and gross margin were slightly above company guidance, but expenses continued to grow faster than revenue, and cash flow also fell short of Bernstein’s expectations. After improved fourth-quarter profit guidance, the research focus has shifted to whether marketing, cloud and AI spending can return to normal in 2027.
Deutsche Bank reviews Micron’s technology symposium: The company has chosen to advance DRAM along the 6F² path, emphasizes the role of hybrid bonding in HBM bandwidth, and is extending its AI opportunity to low-power memory and SSDs. As the roadmap broadens, differences in customer demand and the timing of the NAND ramp in the second half of 2027 will determine the pace of product development.
Subscriber growth and slower spending support margin improvement. Goldman Sachs raised its price target from $645 to $700, but its advertising forecasts were cut and third-quarter cash flow also fell short of expectations.
Increasing AI chip complexity is driving demand for etch and deposition equipment. Citi raised its earnings forecasts for Lam Research, but supply-chain bottlenecks are limiting the pace of industry expansion, and a lower valuation multiple has brought the price target down from $450 to $435.
Meta’s third-quarter cash capital spending fell short of consensus, but the company raised the lower end of its full-year spending guidance. J.P. Morgan is optimistic about year-end server supply-chain revenue and believes CPU demand from Muse adds a source of growth for general-purpose servers.
Fourth-quarter gross margin guidance of 33.8% exceeds JPMorgan’s prior estimate. Product investment and an advertising recovery support margin improvement in 2027, but seasonal pressure remains on the first quarter, and cash flow forecasts were not raised alongside revenue.
