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.
0533 GMT - Shenzhen Longsys Electronics' shares are likely to stay volatile, but risk-reward is more attractive after a recent pullback in its shares, Citi analyst Kevin Chen says in a note. Longsys should trade at a premium to peers given its market position and in-house chip design, the analyst says. Citi expects 12X profit growth this year and moderate growth in 2027-2028 as gross margin normalizes. The bank initiates coverage of the stock with a buy rating and target prices of 325 yuan for A-shares and 195 Hong Kong dollars for H-shares. A-shares are up 0.5% at 246.30 yuan and H-shares are up 1.5% at HK$150.30. (venkat.pr@wsj.com)
0303 GMT - Montage Technology's recent selloff is mainly sentiment trade, Bernstein analysts say in a research note. Investors incorrectly linked the company to memory and oversold its shares. They reckon that Montage won't be hurt by the memory cycle and it is a proxy for server CPU demand. The rapid development of artificial-intelligence inference and agent applications is accelerating demand for high-performance server CPUs, which in turn acts as a massive growth catalyst for memory module and memory interconnect chips. "We think it is good time to buy the recent dip," the analysts say after Montage's preliminary 3Q results showed that its revenue rose 46% from a year earlier. Montage's Hong Kong-listed shares rose 10% to 224 Hong Kong dollars. (sherry.qin@wsj.com)
2216 GMT - SpaceX's Starlink is doubling down on its ambitions to become a "major mobile carrier in the U.S." that can compete with AT&T, Verizon, and T-Mobile, COO Gwynne Shotwell says. The company recently bought a large portfolio of 800 MHz spectrum, and got approval from the FCC to launch 15,000 satellites optimized for global 2GHz spectrum. "We will be building out our terrestrial networks," CEO Elon Musk says during a Tuesday earnings call, "so there's broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate." Musk says expects Starlink's total bandwidth to rise around one-hundredfold within the next three years. (elias.schisgall@wsj.com)
2203 GMT - SpaceX CEO Elon Musk offers an astronomical prediction of the company's annual recurring revenue by the end of next year: $500 billion to $1 trillion. Musk's remarks, on SpaceX's second-ever earnings call, come after the company swung to a profit in the third quarter, with revenue up 161% to $14.6 billion, mostly on the back of the company's AI business and compute deals. SpaceX CFO Bret Johnsen added that the company is on track to deliver $100 billion in annual recurring revenue by the end of this year. Shares of SpaceX gain 5% to $155.55 after-hours. (elias.schisgall@wsj.com)
2158 GMT - The long-hypothesized merger between SpaceX and Tesla, Elon Musk's two flagship public companies, may be coming closer to reality. Musk says that both companies have formed special board committees to discuss a potential merger, adding that he serves on neither committee and that no deal is guaranteed. "But I do think there is a lot of merit in combining the companies," Musk added. He says any merger would be put to shareholders for a vote. Tesla shares are up 1.5% and SpaceX gains 5% in after-hours trading. (elias.schisgall@wsj.com)
2027 GMT - SpaceX reports capital expenditures of $19.59 billion during the third quarter, highlighting the heavy costs associated with its artificial-intelligence buildout. AI CapEx accounted for $16.44 billion of that total, with that money helping to grow the company's nameplate compute to 1.7 gigawatts as of the end of September, up from 1.4GW at the end of June. The AI segment turned a profit during the quarter, however, boosted by SpaceX's lucrative deals to sell its data-center capacity to other AI companies. (elias.schisgall@wsj.com)
2024 GMT - SpaceX swings to a profit in its second-ever earnings report, boosted by a more-than-ninefold year-over-year increase in AI revenue to $7.6 billion. The company attributes this growth to cloud computing deals it activated during the third quarter, as well as the close of its acquisition of Cursor and increased adoption of Grok. SpaceX has found a lucrative line of business in selling data-center capacity to other AI companies such as Anthropic and Google, the latter of which agreed earlier this year to pay SpaceX $920 million a month beginning in October. (elias.schisgall@wsj.com)
2003 GMT - The Asia-Pacific region was Netflix's fastest-growing region in the third quarter, with revenue from the region growing 15% to $1.54 billion after excluding the impact of foreign exchange rate movements. That includes 18% revenue growth in India, where view hours were also up 24%. Latin America was the runner-up, notching 12% revenue growth to $1.6 billion. Revenue was up 11% to $5.63 billion in the U.S. and Canada, and up 9% to $4.11 billion in Europe, the Middle East, and Africa. (elias.schisgall@wsj.com)
2002 GMT - Netflix's recent round of layoffs will weigh on the streamer's margins. The company guides for a fourth-quarter operating margin of 26.0%, including a roughly 120 basis point impact from the layoffs. Netflix also updates its full-year margin guide to reflect a roughly 30 basis point negative impact. The layoffs, announced last week, are expected to impact around 1,000 positions in Netflix's product, tech, legal, and HR teams. "These organizational changes enable us to continue to aggressively invest in high impact areas to improve our service, and drive growth and innovation," the company says. (elias.schisgall@wsj.com)
2002 GMT - Netflix plans to continue investing in bringing third-party content to its platform, doubling down on external partnerships to improve its content offerings as it tries to revitalize engagement and subscriber growth. "We continue to expand our entertainment offering through licensing and bringing more third-party content to our service in new ways," Netflix says. "Our broad distribution (we're serving an audience approaching one billion people) and industry leading monetization make us great partners for studios, networks and creative talent." The company touts recent deals with Disney and Take-Two, the video game studio behind the highly anticipated Grand Theft Auto VI. (elias.schisgall@wsj.com)
2001 GMT - Netflix says that price increases it implemented this year haven't impacted the health of its user engagement. "Member response to our 2026 price changes is consistent with prior adjustments and our expectations, an indicator that our engagement - which encompasses quantity, quality and variety of viewing - remains healthy and that we continue to deliver strong value to members," the company says. Investors are expected to question Netflix executives about disappointing engagement during the company's earnings call later. (elias.schisgall@wsj.com)
1847 GMT - More people will be listening to audiobooks on Spotify following the music streaming company's announcement to offer audiobooks in more than 180 markets, Morgan Stanley analysts say in a note. The music streaming company will likely follow the same audio playbook it followed in 2024, though analysts don't expect a list of growth margins as meaningful as what was seen in that year. The launch reiterates how Spotify can leverage technology to drive growth, with a likelihood that AI tools will be used in expanding audio books. Spotify is scheduled to release its 3Q earnings on Thursday.
