The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1214 ET [Dow Jones]--Cerebras Systems' selloff following the company's second-quarter results represents a buying opportunity, both UBS and Morgan Stanley analysts write in notes. For Morgan Stanley, Cerebras can unlock upside by executing on compute capacity and successfully commercializing disaggregated inference solutions with AMD and Amazon Web Services. Despite the volatility, they write, "we see little in the quarter that gives us pause." UBS analysts also underscore the importance of ramping capacity, and note that new platforms will free up room for upside next year after margins bottom out in the third quarter. Cerebras is down 12% at $230.42. (elias.schisgall@wsj.com)
1158 ET--The post-earnings selloff of Cerebras Systems shares "largely misses the forest for the trees," Wedbush analyst Matt Bryson writes in a note. He sees the volatility as a result of high expectations going into the print, as well as the company reporting a sequential dip in hardware sales and leaving fourth-quarter expectations roughly unchanged. But these factors are secondary to Cerebras's broader story, Bryson writes. "Cerebras's success will be dictated by its ability to gain meaningful share over time (we believe it will) in the extremely large growing market for accelerators," he writes. "We believe Q2 earnings told us little about this journey, with next week's Supernova event a more likely positive catalyst for the stock." Cerebras falls 14%.
1049 ET - Technology sector credit valuations look fairly attractive, CreditSights' Logan Miller says in a webinar. The sectors faces pressure due to rapidly rising debt issuance by AI-linked companies. However, tech credit selloffs present opportunities for investors to buy the assets given that valuations are likely to hold up, Miller says. (miriam.mukuru@wsj.com)
0859 ET - U.S. technology sector credit could continue facing headwinds over the coming years due to rising debt issuance, CreditSights' Logan Miller says in a webinar. U.S. investment-grade tech sector credit supply so far this year is at a record level driven by hyperscalers' debt issuance, Millers says. Hyperscalers are large technology companies that manage data centers and provide advanced computing services. Heavy debt supply is contributing to higher corporate yields and sovereign yields, he says. Valuations on tech sector credit, nonetheless, look relatively attractive given the underlying corporate financial positions and credit metrics, Miller says. (miriam.mukuru@wsj.com)
0704 ET - Chip maker CXMT dethroned tech giant Tencent as China's most valuable company, taking the crown after surging capital spending pushed Tencent's stock down 4.5% in Hong Kong. The Chinese memory maker's shares ended 1.2% lower in Shanghai. That put CXMT's market capitalization at the equivalent of roughly $524 billion versus about $510 billion for Tencent. Although Tencent more than doubled its capex in 2Q for compute procurement to support its AI model and agents, its management's response to expected returns on AI investments appeared vague to some analysts. Investors have also cooled on Tencent lately, leading shares to fall more than 20% this year. By contrast, CXMT has been an investor darling, with the chip maker widely seen as a proxy of China's push for chip self-sufficiency. (sherry.qin@wsj.com)
0558 ET - Baidu faces greater risks than peers such as Alibaba and Tencent, despite its advantages in the search-engine market, strong AI capabilities and a large net cash position, says Fitch Ratings, which downgrades the company's long-term issuer default rating to A- from A. "Tencent's and Alibaba's EBITDA scale are significantly larger, have greater revenue diversification and stronger cash-generation," Fitch says. The two companies' social network and e-commerce platforms also have a larger share of advertising spending than Baidu's search engine, Fitch adds. (tracy.qu@wsj.com)
0550 ET - The structural decline in Baidu's search ad business prompts Fitch Ratings to downgrade the company's long-term issuer default rating to A- from A. Emerging AI search and competing chatbots are also likely to erode Baidu's search business monetization, Fitch says in a note. Baidu's lower profitability reflects a weakening legacy business and relatively lower margins for non-marketing business, but Fitch reckons growing AI business revenue can largely offset the legacy decline. Baidu has integrated AI-generated content in its search results, which can help retain some user traffic. Fitch's stable outlook on the company reflects the view that it has the opportunity to capture growth across the AI value chain to drive Ebitda recovery. Fitch also expects Baidu to maintain a net cash position medium term, despite higher capex and shareholder returns. (fabiana.negrinochoa@wsj.com)
0324 ET - AEM Holdings seems poised to benefit from the artificial-intelligence-driven test cycle, given that the Singapore semiconductor test company raised its 2026 guidance for the second time, says DBS Group Research. The company's 1H earnings tracked ahead of DBS's expectations, partly boosted by strong AI and high performance computing customer ramp-up, says analyst Amanda Tan in a note. The higher full-year guidance of 630 million Singapore dollars to S$680 million implies S$383 million-S$433 million of revenue in 2H. This represents a 55%-75% increase from 1H. Tan sees scope to raise her 2026 earnings estimates. DBS maintains its buy rating and S$11.80 target price. Shares are up 13% at S$10.87. (megan.cheah@wsj.com)
0134 ET - Lenovo delivered a strong, broad-based beat in its latest results, reinforcing the AI-driven growth narrative, Citi analysts say. Revenue surged 43% on year in its fiscal 1Q, beating Citi's forecast in part due to explosive growth in the Infrastructure Solutions Group unit, itself driven by robust AI server demand. The AI server pipeline rose 157% on quarter, reflecting the ramp of agentic AI workloads among enterprise customers, Kyna Wong and others write. AI services revenue grew at a triple-digit annual rate. Gross profit also topped Citi and consensus views, as did gross margin, while Lenovo's share of the global PC market share reached 24.2%, widening its lead over the No. 2 player across commercial and consumer segments. Citi has a buy on Lenovo, which was up 17% at HK$34.08 post-results. (fabiana.negrinochoa@wsj.com)
0029 ET - AI, robotics and biotech will drive China's economy into the future, but these industries will need far fewer workers, says Louise Loo, head of Asia Economics at Oxford Economics. The new sectors need roughly half the labor of the old ones they displace, she says. Chinese labor supply is falling by only 0.5%-0.7% a year in the medium term, but labor demand may be falling even faster. Demography alone won't tighten labor markets enough to rebalance the job market if capital keeps moving to industries that need half the workers, Loo says. (james.glynn@wsj.com;@JamesGlynnWSJ)
2328 ET - The share-price drop that followed Telstra's annual result announcement comes as no surprise to Citi analyst Siraj Ahmed. Shares in the Australian telco are down by 4.5% at 4.775 Australian dollars despite its increased dividend and announcement of a further A$1 billion on-market share buyback. However, Ahmed points out in a note to clients that guidance for fiscal 2027 cash earnings of between A$4.75 billion and A$4.95 billion represents a downgrade relative to consensus. He adds that the share price had also held up well heading into the result. Citi has a last-published neutral rating on the stock and a target price of A$5.50. (stuart.condie@wsj.com)
2310 ET - Toppan Holdings is poised for future growth as increasing output from its new semiconductor-related production line and a rising share of AI-related products boost its chip business, according to company CFO Takashi Kurobe. The Japanese packaging and printing company also supplies high-tech components used in advanced AI chips. Shares surged more than 14% on Thursday, briefly hitting their daily limit, after the company reported strong quarterly earnings. Net income jumped 2.3-fold to 21.6 billion yen. Analysts say contributions from the new production line and a growing mix of AI-related products helped drive higher sales and profits in the company's semiconductor operations.
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