In today’s briefing:
- Microsoft CEO On AI CapEx: Show Me The Money!
- Ohayo Japan | Nvidia Beats, Stock +3.7%
- Singapore Banks – Giving Back Many Billions of Capital, Suggests Outlook for Lending, Not Great
- What Do Detailed 2024 Semi Stats Tell Us?
- Japan Morning Connection: NVDA Results Enough to Quell Concerns over AI Slowdown
- Themes of India: Fertilizer Industry Q3 FY25 Update~ Growth Catalysts and Strategic Outlook
- Furniture/Furnishings Weekly – Chinese Shipbuilding Targeted; IKEA Update
- Biopharma Week in Review – February 24, 2025
- #110 India Insight: Tata Play-Airtel Merger, 5.1% IT Growth in FY25, HCLTech CEO on GenAI
Microsoft CEO On AI CapEx: Show Me The Money!
- Microsoft dominated the technology news cycle recently on the back of a report by a TD Cowen analyst that the company is cancelling data centre leases in the US
- Dwarkesh Patel’s podcast with Microsoft CEO Satya Nadella last week provided a fascinating insight into his thinking when it comes to AI compute build out, AI winners & losers etc.
- Mr Nadella’s approach to AI compute build out has always been a pragmatic “show me the money and I’ll build some more compute” approach. Now we better understand why.
Ohayo Japan | Nvidia Beats, Stock +3.7%
- The Nasdaq gained 0.3% after rising as much as 1%, while the S&P 500 finished flat
- Nvidia reported Q4 revenue of ¥39 billion, exceeding expectations of ¥38 billion
- Itochu has declined to participate in Seven & i Holdings’ planned buyout by its founding family
Singapore Banks – Giving Back Many Billions of Capital, Suggests Outlook for Lending, Not Great
- The idea of investing in banks is to put your capital to work by lending to corporates or consumer in any given economy or several at once
- Singapore’s banks are telling us with their more than SGD11bn of dividends announced, that they are not able to deploy their capital
- We must expect that lending growth will remain subdued in the Singapore home market, in Malaysia, and in Greater China
What Do Detailed 2024 Semi Stats Tell Us?
- Despite the chip market’s 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications. A turn in the AI business could cause a collapse.
- Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry’s historical growth rate of 3.9%, but is nowhere near the 19% overall number.
- The US’ trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.
Japan Morning Connection: NVDA Results Enough to Quell Concerns over AI Slowdown
- Tech rebound into NVDA print, which came in slightly ahead of estimates. Server related up on SMCI gains.
- Expect this to be enough to spark dip buying for Japan SPE plays such as TEL, Disco, as well as likes of Fujikura and MHI.
- Hoya has bottomed in the last 2-days and looks primed for more upside after excessive weakness.
Themes of India: Fertilizer Industry Q3 FY25 Update~ Growth Catalysts and Strategic Outlook
- Chambal Fertilisers & Chemicals (CHMB IN)’s Capacity expansion in IMACID, focusing on phosphoric acid production, Technical Ammonium Nitrate (TAN) project, and entry into biologicals.
- Coromandel International (CRIN IN) is also expanding capacity that include a 7.5 lakh tons of NPK facility and a 2 lakh tons phosphoric acid plant at Kakinada.
- Deepak Fertilisers & Petro (DFPC IN) Capacity expansions for technical ammonium nitrate (TAN) and nitric acid. Investments in a world-scale ammonia plant, and shift to specialty products.
Furniture/Furnishings Weekly – Chinese Shipbuilding Targeted; IKEA Update
- A down week for furniture and furnishings stocks amid a broader small-cap pullback against a background of increased policy uncertainty.
- The WTR Commercial/Contract Furniture Index declined 4%, the Residential Manufacturers & Suppliers Index fell 2.3%, and the Home Goods Retailers Index fell 10.1%, while the broader market indexes declined 1.7% and the R2K fell 3.6%.
- The administration’s plans to target Chinese shipbuilding could increase costs for importers.
Biopharma Week in Review – February 24, 2025
- Vaccine makers (PFE, MRNA, BNTX, NVAX) had an up-and- down week, as the HHS postponed the CDC’s first scheduled ACIP (vaccine experts panel) meeting of the year.
- Deeper concerns came with reports of RFK Jr.’s plans to overhaul the committee (Politico), possibly replacing members with vaccine skeptics.
- Ending the group’s week was a new bat coronavirus identified in China with transmission potential to humans.
#110 India Insight: Tata Play-Airtel Merger, 5.1% IT Growth in FY25, HCLTech CEO on GenAI
- Tata Play and Airtel Digital TV are merging, with Airtel taking majority stake, to consolidate DTH, broadband, and telecom services.
- Indian IT sector set for 5.1% growth in FY25, with $300 billion target by FY26, adding 126,000 jobs.
- HCL Technologies (HCLT IN) CEO C Vijayakumar highlights that GenAI disrupts IT’s traditional model, pushing for productivity and specialized skills over headcount.
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