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.
1059 ET - Material shortages in the German manufacturing sector rose somewhat in September, Germany's Ifo Institute says. A total of 14.6% of companies reported shortages of intermediate products, up from 13.3% in August, although there is still no sign of a broad-based rise in supply, it says. "In individual industries, however, shortages of intermediate products are once again becoming a bigger problem," says Klaus Wohlrabe, head of surveys at Ifo. Supply remains strained in particular among manufacturers of data-processing equipment and electronic and optical products, where the share of companies with material shortages rose from 33.2% to 37.8%, Ifo says. "In parts of the electronics industry in particular, strong demand is running up against tight material supplies," Wohlrabe says. (edward.frankl@wsj.com)
0954 ET - Bitcoin is stuck around the $83,000 mark, constrained by a mix of high U.S. interest rates and a 5.24% 10-year Treasury yield, XS.com's Simon-Peter Massabni says in a note. Those two factors have kept capital flowing in safer, interest-bearing assets instead of cryptocurrency as investors get more cautious about risk exposure, Massabni says. U.S. spot Bitcoin ETFs recorded $678.9 million in net outflows last week, he says. There's been a single session of positive flows, indicating that withdrawal pressure has eased, but that's not enough to show that demand through ETFs has recovered sustainably, Massabni says. (dean.seal@wsj.com)
0859 ET - T-Mobile is used to competing against larger competitors, according to Raymond James in a research note. That's why recent fears over competition from SpaceX--which faces significant time and spectrum hurdles to realize its standing as a competitor--are overblown, analysts Frank Louthan and Rob Palmisano say. "Owning spectrum and building a robust five-nines modern mobile network that performs to the ubiquitous standards consumers are accustomed to are two different things, and we believe the incumbents (which now include TMUS, in our view) have significant advantages in terms of spectrum and terrestrial network capabilities," they say. Raymond James upgrades T-Mobile to outperform from market perform. (connor.hart@wsj.com)
0451 ET - It could be "extremely difficult" for CXMT to commercialize the new chip structure with reduced cell footprint, Morningstar analyst Jing Jie Yu says. The memory maker unveiled a new structure with around 30% reduced cell area over the weekend, and plans to debut a product with the new structure by the end of 2026. While it's a significant upgrade on paper, it'd be challenging to commercialize given uniformity issues during mass production, he says. However, should CXMT be able to successfully commercialize the structure, it means more bits can be produced per wafer, thereby lowering the cost per bit and improving CXMT's cost structure, he notes. Denser DRAM would also make CXMT's server products more competitive against global players, boosting its position in the AI memory space, he adds. (sherry.qin@wsj.com)
0416 ET - Shares of European semiconductor companies start the week mixed following a selloff in South Korean stocks exposed to artificial intelligence. SK Hynix closed 4.5% lower, while Samsung Electronics shed 4.4%. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are up 0.5% and 1.2%, respectively. BE Semiconductor Industries, the Dutch supplier of semiconductor assembly equipment, is down 0.1%. German chip maker Infineon Technologies stock loses 1.1%. STMicroelectronics shares are down 0.4%. Meanwhile, the E-mini Nasdaq 100 futures contract is 0.3% higher, pointing to a positive opening for tech stocks in the U.S. (mauro.orru@wsj.com)
0241 ET - Artificial intelligence stocks--accounting for up to half of Asian indexes--could drive up to 70% of the region's earnings growth in 2027, JPMorgan analysts say. Asia's AI exposure is concentrated in hardware, where tight supply is expected to persist through at least 2028, they say in a note. This should give companies significant pricing power. The biggest shortages are expected in advanced logic chips, chip packaging, semiconductor equipment, Ajinomoto Build-up Film substrates, high-end copper-clad laminate materials, high-bandwidth memory, and high-speed optical components, they add. JPMorgan forecasts net income across the AI ecosystem to exceed $1 trillion by 2028 and free cash flow to reach $700 billion. JPMorgan maintains its overweight recommendations on tech stocks, Taiwan and South Korea. (kwanwoo.jun@wsj.com)
0032 ET - The technology gap between China and the West seems to be narrowing, with China playing a critical role in both the U.S.-led global AI supply chain and its self-sustaining domestic AI ecosystem, Goldman Sachs analysts say in a note. The country is a pivotal exporter to the global AI supply chain due to its strong manufacturing capability and cost competitiveness. China's exports of rare earths, power equipment, printed circuit boards, optical transceiver and mature-node semiconductors represent over 50% of global market share in their respective segments, GS says. Meanwhile, China has gradually built an internally circulated AI ecosystem at home spanning certain "chokepoints" in the value chain that had been historically dominated by the West, in particular, advanced logic and memory chips, and chip packaging. (sherry.qin@wsj.com)
2244 ET - Earning season for 3Q will kick off soon and S&P 500 companies are expected to deliver earnings growth of 29.6% on year, according to FactSet, says James Ooi at Tiger Brokers. "With expectations already elevated, management guidance may matter more than the headline numbers, as investors look for evidence that current earnings momentum can be sustained into 2027," he says. Key will be major U.S. banks, which start the 3Q earnings season this week. Earnings of TSMC and ASML, key suppliers in the AI value chain, will also offer an early read on whether AI-related investment remains intact, he says in an email. TSMC's commentary on advanced-node demand and capacity utilization, and ASML's order outlook, will be closely watched as indicators of semiconductor capex plans, he adds. (monica.gupta@wsj.com)
1934 ET - Life360's bull at Bell Potter thinks the tracking-app provider's third-quarter result could be a catalyst for the stock, albeit mostly because expectations are low. Analyst Chris Savage doesn't necessarily anticipate any sort of material beat or upgrade to guidance, although he does point out that the dual-listed company has a track record of lifting its outlook. Savage tells clients in a note that Life360 has set a low bar by flagging an 18% Ebitda margin, down from 20% a year earlier. He says that the drivers are well understood and thinks any positives in subscriber or user metrics could be greeted enthusiastically. Bell Potter cuts its target price on Life360's Australia-listed stock by 5.9% to 32.00 Australian dollars. Shares are up 1.8% at A$20.70.
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