TMTB Morning Wrap

Memory remains choppy but trends higher on tight supply through 2028

EOD Wrap: Micron (MU) First Takes

Good afternoon. QQQs +25bps on the last day of the quarter, fading from +97bps at the highs with most of the give-back in the last 40 minutes. Software over AI SI infra was the trade today: software +1.2% led, with the names hit by META’s enterprise push and OAI Dev Day bouncing hardest ( MNDY +3% HUBS +3.7%; PATH +4.2% ), while semis +21bps lagged ( AVGO -1.1%; ASML -1.2%; SKHY -1.4% ) and AI infra/power bled ( JBL -10.1% despite a decent set of numbers & CBRS -8.9% reports they won’t be used in Ultrafast led the way lower) Mega caps held in ( AAPL +1.1%; AMZN +1%; GOOGL +93bps; MSFT +77bps ), META -1.8% the lone man out. GOOGL was up 2% heading into the close before Bloomberg reported they were “grappling with internal skepticism over how well the flagship artificial intelligence model performs in key areas.” Then GOOGL actually dropped Gemini 4 “Argon” post-close and it actually looks pretty solid and right around the frontier on benchmarks: Cost is same price as Opus 5.5. The glass half full from bears will likely be: still 1-2 months behind and now what’s the catalyst for bulls to look forward to while search fears still abound… Lets touch quickly on the macro today as its top of mind for investors: another bear steepener, this time on softer data. August core PCE came in at +0.2% m/m and 3.0% y/y vs. 0.3%/3.3% expected (a 6-month low, helped by a BEA methodology change) and ADP was +90K vs. ~70K; yields dipped on the print and then turned higher, with the 2Y -1bp to 4.88% , the 10Y +3bps to 5.29% (highest since 2007) and the 30Y +5bps to 5.64% . As @jturek18 on X put it (h/t Arun Dhar in TMTB Slack here ): “dovish data right now is more pressure on the backend than it is relief on the front end.” Fed pricing went the other way: ~35% odds of a hike on 10/28 (from ~50% Tuesday and ~71% Monday), ~30bps of hikes priced for the rest of 2026 and another ~60bps in 2027. Just before the close (~3:50pm), Trump said on Truth Social that Fed Governor (and former Chair) Powell should resign over the Fed HQ renovation after an inspector general report, or be sued “for either corruption or incompetence.” WTI +1.4% to ~$90.6 as Trump denied an Axios report that he’d ease Iran sanctions. BTC flat at ~$83.7K. Post-close: MU +2%: Big revenue/EPS beat and strong FQ1 guide, with gross margin the only real blemish. MU beat across the board, with FQ4 revenue well above Street and EPS above even the buyside bogey, while FQ1 revenue/EPS guidance also cleared expects. The one nit is gross margin guide: FQ4 hit the ~87% bogey, but FQ1 guides down to 86.25% vs. ~87-88% buyside, although initial read seems like it’s all due to mid-shift to HBM and they are saying Q1 will be floor for GMs in ‘27. Call ongoing. “We anticipate fiscal Q1 to be the floor for gross margins in fiscal 2027 . As Sanjay mentioned, we made a decision to increase fiscal 2026 incentive compensation in fiscal Q4. Most of the increase in fiscal 2026 incentive compensation pertaining to manufacturing was absorbed into inventories in fiscal Q4. As a result, the effects from the sale of these higher cost inventories principally impact fiscal Q1 gross margin. Fiscal Q2 benefits from less of this fiscal Q4 related compensation expense, but this benefit is offset by the impact of higher fiscal 2027 incentive compensation. We expect higher gross margins beyond fiscal Q1 for the remainder of fiscal 2027, with a more moderate rate of price increases.” FQ4 revenue: $54.23B vs. ~$51B Street FQ4 EPS: $33.42 vs. ~$31.50 Street / $33+ bogey FQ4 gross margin: 87.0% vs. ~87% bogey FQ4 operating margin: 82.3% FQ4 operating cash flow: ~$44B FQ4 adjusted FCF: ~$33B FQ1 revenue guide: $60-63B, midpoint $61.5B vs. ~$57B Street / ~$60B bogey FQ1 EPS guide: $37.15-39.15, midpoint $38.15 vs. ~$36 Street / ~$37.5 bogey FQ1 gross margin guide: 86.25% vs. ~87-88% bogey Let’s get to the good stuff… AI/SEMIS SNPS +4.8% had a busy day: a $1B+ AWS license deal spanning Graviton, Trainium and Nitro generations

TMTB Podcast Intel: OpenAI DevDay Coverage, CoreWeave’s (CRWV) CEO on the First Vera Rubin Customer, SAP’s CEO on Whether the SaaSpocalypse Is Over, Spotify (SPOT) Co-Founder Daniel Ek

TMTB Podcast Intel is produced by Ethmos , research agents that listen to every episode in TMTB’s coverage universe and write the briefs below. Try Ethmos — Get briefs like this covering executive appearances for every company you follow. Today’s Essential Episodes: OpenAI CEO Sam Altman at DevDay on Agents That Simplify Work, the Compute Buildout, Simpler Model Choice and the Unsolved Alignment Problem TBPN with John Coogan and Jordi Hays, and Sam Altman, CEO of OpenAI (the Altman segment) OpenAI’s Asad Awan on How ChatGPT Advertising Works, Conversational Intent vs. Keyword Matching and the Trust Trade-Off Mobile Dev Memo with Eric Seufert, and Asad Awan, who leads monetization product and engineering at OpenAI OpenAI CFO Sarah Friar on DevDay, Why OpenAI Still Needs More Compute, Safety and the IPO Question CNBC’s Closing Bell with Kate Rooney, and Sarah Friar, CFO of OpenAI (the Friar segment) CoreWeave CEO Michael Intrator on Cognition as the First Production Customer on Vera Rubin, Data-Center Rules and Demand CNBC’s Squawk on the Street with Carl Quintanilla and Jim Cramer, and Michael Intrator, CEO of CoreWeave (the Intrator segment) SAP CEO Christian Klein on Whether the SaaSpocalypse Is Over, SAP’s Moat as Models Improve, Token Spend and Cheaper Models Big Technology with Alex Kantrowitz, and Christian Klein, CEO of SAP Spotify Co-Founder Daniel Ek on Life After Spotify, Open vs. Closed Models, Compute Regulation and Neko Health All-In, and Daniel Ek, co-founder of Spotify Read the Brief on Ethmos | Listen | Watch Read the Brief on Ethmos | Listen Read the Brief on Ethmos | Listen | Watch Read more

TMTB Morning Wrap

Good morning. QQQs hovering around flat as macro was relatively quiet overnight. Oil +1.6 % while yields are flat. In Tech, we get SNPS analyst day, HPE Networking event (stock +4% after raising FY27 networking growth to highs teens/low 20s and increasing synergies target to $800M vs. $600M), and MU earnings (bogeys below). CBRS -5% the main loser after reports Ultrafast is using NVDA chips instead of theirs. HOOD +3% after more agentic announcements yesterday. GOOGL +1% the Megacap standout as rumored benchmarks of Gemini 4 Pro continues to make the rounds on X. Overnight, Asia mixed to green: TPX +1.67%, NKY +1.94%, Hang Seng +0.37%, HSCEI +0.5%, SHCOMP +0.31%, Shenzhen -0.23%, Taiwan TAIEX +0.65%, Korea KOSPI -0.48%. Softbank +6.5% following OAI proxies up after ARR numbers. Lots to get to this morning, so let’s get to it… CRWV/NBIS: William Blair initiates OP, sees neocloud market growing ~10x to $250B by 2031 William Blair estimates global neocloud revenue grows from ~$25B in 2026 to ~$250B by 2031, supported by inference, agentic workloads, enterprise AI, hyperscaler offload and sovereign compute; CRWV, NBIS, IREN and Nscale already have roughly $275B of customer commitments. Blair initiates CRWV and NBIS at Outperform, calling them the best-positioned scaled players given power/capacity access, financing capability and execution, with both increasingly moving up-stack into broader cloud/software services. The key debate is whether today’s attractive economics survive normalization: GPU pricing has been stickier than expected and paybacks are shrinking, but returns remain highly sensitive to utilization, pricing and leverage as hyperscaler-owned capacity ramps. CBRS: Semianalysis says OpenAI Ultrafast not running on Cerebras OpenAI: Source: TaeKim on X AI Safety: WH Meeting seemingly goes well Reuters reports President Trump and AI executives signed a voluntary safety pact that includes independent audits and internal controls to prevent unauthorized access to computer networks. The administration also backed further data-center expansion. Trump is considering a roughly 10-person oversight committee and plans to name a new AI official, while the agreement relies on voluntary commitments rather than new binding federal regulation. APP: Wells says eComm pixel acceleration looks like a false start, mostly APAC/no-traffic sites Wells says recent APP pixel additions have accelerated, but the inflection is largely APAC Shopify sites with little or no web traffic; when weighted by traffic, adoption remains roughly flat, suggesting no meaningful customer-growth inflection exiting 3Q, sees customer acceleration unlikely before 2027; stays EW/$325. MBLY: Barclays downgrades to EW as advanced ADAS wins lag and VW/China risks rise Barclays downgrades MBLY to Equal Weight from Overweight and cuts PT to $9 from $14, arguing the company still has not landed enough large advanced-content wins to validate the longer-term ASP/growth thesis despite resilient near-term results. Barclays sees added risk around the VW ramp, where SuperVision carries ~$1,300 ASP vs. ~$50 today and Surround ADAS ~$125 vs. ~$46 base ADAS, but launch delays and potential competition from Horizon/Rivian could pressure the expected ramp. CEO transition adds execution risk while China is also becoming a bigger overhang as Horizon has reached roughly half of the China L2 ADAS market versus MBLY at ~25% WDAY: 2.5% RIF focused on product/tech, FY27 guide intact WDAY announced a 2.5% RIF focused mainly on product/technology, alongside select office reductions, while still planning to hire in strategic areas, suggesting a shift toward AI talent. FY27/F3Q27 guidance was reiterated except for lower GAAP operating margin from $65–80M of restructuring charges; non-GAAP estimates are unchanged. MU Bogeys: Read more

TMTB EOD Wrap

Good afternoon. QQQs +19bps in a choppy session: +55bps at the open, flat by late morning with the 30Y pushing through 5.6%, and modestly green into the close. Semis +1.2% led the way higher, though well off the +2.4% highs from just before 11am, with semicap ( AMAT +5.2%; KLAC +3.9%; ASML +3.6%; LRCX +3% ) bid on the TSM Texas report and optical ( LITE +5.7%; GLW +4.7%; COHR +3.5% ) bouncing off Monday’s ECOC hangover. Software -20bps lagged for a second day as app software ( MNDY -3.8%; HUBS -2.5%; ADSK -1.9%; TEAM -1.4% ) made its lows mid-keynote at an OpenAI Dev Day where the main focus was selling agents into the enterprise, while consumer internet names hit on Monday bounced ( DUOL +6.2%; CVNA +5.2%; DASH +4.9% ). Macro didn’t help. The Conference Board’s September confidence print was ugly (81.9 vs. ~89 expected, the lowest since April 2014, with respondents citing fuel costs and jobs), and the curve bear-steepened: 2Y -3bps to 4.89% on the data while the long end kept selling off, with the 10Y +2bps to 5.26% (+30bps in a week) and the 30Y +3bps to 5.59% for the first time since 2002. NY Fed’s Williams said at 2pm that “one further upward adjustment of the federal funds target range may be appropriate late this year,” with no urgency after the September hike; the market still has ~70% odds of a 25bp hike on 10/28, ~40-50bps of hikes for the rest of the year and ~100bps cumulative through next September. Crude -3.6% to ~$89 as Saudi Red Sea exports recovered, Gulf flows got back above 90% of pre-war levels and DOE offered a 40M-barrel SPR exchange. BTC flat at ~$83.5K. OpenAI was in focus all day, even before Dev Day. First Tibo was on X saying they are lowering usage on the $200 Pro Plan: Then, Axios reported around 10:15am that OpenAI’s annualized revenue run rate is up more than 70% since the start of 3Q to almost $70B, with B2B revenue more than doubling over the same period and more consumer revenue added in 3Q than in all of 2025. Compare that with the last number given to the media ($40B on 8/13) and Yipit’s ~$43B (9/17). RI and PHC dug into the math for us in TMTB Slack: Read more