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.
0726 GMT - Tencent's strategic partnership with APEC Summit is an important validation of its enterprise artificial intelligence, cloud and digital ecosystem capabilities, Citi analysts say in a research note. The analysts say that it provides a good opportunity for Tencent to showcase its generative AI and cloud stack on an important global stage. "This important deployment will significantly enhance Tencent's brand awareness to international representatives while driving broader foreign user familiarity and adoption across the WeChat Mini Program ecosystem and local merchant network," they note. Citi maintains its buy call on Tencent and deems the recent share-price weakness to be a good buying opportunity. Shares are last 1.1% higher at 386 Hong Kong dollars. (sherry.qin@wsj.com)
0359 GMT - The Malaysian telecommunications sector may be supported by solid mobile business, attractive dividend yields and data center connectivity demand, Kenanga Investment Bank analyst Kylie Chan Sze Zan says in a note. However, 5G infrastructure company Digital Nasional's financial performance could weigh on earnings of mobile operators CelcomDigi and Maxis, which hold stakes in the 5G infrastructure firm. While further funding needs appear manageable, recurring cash calls could eventually constrain shareholder returns, she says. Mobile operators may benefit from higher average revenue per user, enterprise growth and cost savings, while fixed-line operators stand to gain from rising demand for data-center connectivity, she adds. Kenanga maintains a neutral rating on the Malaysian telecommunications sector.(yingxian.wong@wsj.com)
0343 GMT - Baidu's AI business likely maintained solid momentum in 3Q, according to Citi analysts in a research note. Citi expects Baidu's AI cloud infrastructure growth to reach 99% on year during the quarter, thanks to strong AI demand. That said, Citi cautions there are downside risks to consensus forecast for Baidu's net profit, due to its high investment in model training and AI applications. Citi expects its AI cloud Infrastructure revenue to grow 14% sequentially in 4Q. Citi remains a buy rating on undemanding valuation and multiple catalysts ahead, including first-ever dividend payment announcement. The bank cuts Baidu's target price of its ADRs to US$154.00 from US$166.00 due to sector de-rating. Its ADRs last traded at US$77.98. (tracy.qu@wsj.com)
0319 GMT - The AI selloff likely supports investor appetite for U.S. Treasuries, says Tiger Brokers' James Ooi. The market is increasingly focused on how AI's financing needs compete with U.S. Treasuries for investor capital, Ooi says. When confidence in AI is strong, expectations of heavy AI-related borrowing may draw funding away from Treasuries, he notes. However, as recent financing concerns emerge, expectations of slower AI borrowing support Treasury prices, he says. "Falling yields may therefore reflect weaker sentiment in the AI trade, rather than simply providing valuation support for tech stocks," he adds. (sherry.qin@wsj.com)
0235 GMT - Japan's equity market is entering a phase that rewards active stock picking over chasing the rally, Eastspring Singapore's head of Japan equities Ivailo Dikov and client portfolio manager James Ying say in a note. The market is no longer as broadly undervalued as before, but valuations should be viewed alongside improved profitability, capital efficiency and governance, they say. The market's valuation masks wide dispersion, with some artificial intelligence and technology stocks richly valued but less-favored areas still offering attractive opportunities. This dispersion reinforces the importance of valuation discipline and bottom-up stock selection, the note says. The benchmark Nikkei is down 2% at 61640.41. (venkat.pr@wsj.com)
0215 GMT - Axiata's earnings outlook is likely to improve, with stronger operating performance at its subsidiaries partly offsetting lower contributions from associates and currency headwinds, CGS International analyst Prem Jearajasingam says in a note. Asset sales, particularly the planned monetization of tower unit edotco, remain a key catalyst for unlocking shareholder value. The analyst raises Axiata's EBIT estimates for 2026 by 21.9%, for 2027 by 2.6% and 2028 by 2.1%, to reflect stronger subsidiary performance. CGSI cuts Axiata's target price to 2.67 ringgit from 2.87 ringgit to factor in lower estimated value of the company's assets, but maintains an add rating. Shares are 1.2% higher at 1.63 ringgit. (yingxian.wong@wsj.com)
2245 GMT - Investors focused on the computing power that goes into AI systems may be neglecting the data that comes out of them, Western Digital CEO Irving Tan says on an earnings call. "While much of the conversation around AI focuses on compute, we believe the more enduring opportunity is in data," Tan says. AI systems of all sorts produce voluminous data, which needs to be deliberately stored and managed, he says. "As AI adoption continues to expand across industries worldwide, data creation and storage requirements are expanding with it," Tan says. Shares decline 4.8% to $337.20 in after hours trading. (elias.schisgall@wsj.com)
1758 GMT - Tesla's capital expenditures came in below consensus, but StoneX analysts think the company could be deferring spending. Tesla lowered its capital expenditure outlook for the year to $20 billion, from $25 billion. However, the analysts think spending will expand again as the robotaxi fleet, Optimus robots and other AI products scale. Tesla did say its operating expenditure base will keep rising until new products commercialize, the analysts say. They lower their 2026 through 2028 adjusted earnings estimates, citing the higher operating expenditures. (katherine.hamilton@wsj.com)
1751 GMT - Tesla is spending more on operating expenses to fuel its transition from autos to AI, Truist analysts say in a note. The company ramped OpEx, despite lowering capital expenditure guidance for the year. The operating spending is going toward AI projects, including robotaxi, cybercab, Optimus robots and a semiconductor fab. "We continue to believe these investments will pave the way for TSLA's AI transition, but they will weigh on margins and cash flow for a while," the analysts say. They believe near-term earnings are less important than Tesla's broader progress in transitioning toward AI. (katherine.hamilton@wsj.com)
1742 GMT - Tesla's commentary about Optimus could have been a disappointment to investors, Oppenheimer analysts say in a note. Initial Optimus production has started, but the company is going through a pronged ramp as the complexity of the supply chain, manufacturing and training will lead to challenges, the analysts say. This timing will likely disappoint bullish investors. Plus, Chief Executive Elon Musk didn't share many more details on a potential merger between Tesla and SpaceX. This leaves questions about valuation and could weigh on the stock, the analysts say. Tesla is down 2%. (katherine.hamilton@wsj.com)
1725 GMT - A New Mexico judge's order that Meta pay $25 billion for misleading users about data-privacy practices remains a legal overhang for the company, and may impact its efforts to scale the Muse AI agent, Truist analysts say in a note. Meta is planning to appeal, while New Mexico intends to ask the judge to mandate changes to the company's platforms, leaving the final outcome unclear. But the unresolved proceedings may create a risk for Muse, the analysts say: "Trust is paramount to the success of personal agents; renewed scrutiny of Meta's handling of personal data is particularly relevant as it asks users to connect email, calendars, and payment methods, so this remains a risk worth monitoring." (elias.schisgall@wsj.com)
1703 GMT - Results from Meta's core business in 3Q, including 3% growth in daily active people on the company's family of apps to 3.64 billion, support a positive view of Meta's AI investments, Truist analysts say in a note. Even with Meta in a nascent stage of monetizing its AI products, the AI work is also improving advertising returns and engagement in more established areas of the business, the analysts say. "We believe these are incremental, tangible proof points that Meta's AI investments are continuing to power gains across its FoA while expanding adoption of its newer products," they say. Meta drops 7.4%.
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