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1. Leader industry as of 6:00 pm

Real Estate Dvlpmt/Ops related stocks: SUN HUNG KAI PROPERTIES LTD(SUHJY.US), CBRE Group, Inc. Class A(CBRE.US), CHINA RESOURCES LAND(CRBJY.US), KE Holdings(BEKE.US), Jones Lang LaSalle Incorporated(JLL.US), Grupo Aeroportuario del Pacifico SAB de CV Sponsored ADR Class B(PAC.US), Grupo Aeroportuario del Sureste SAB de CV Sponsored ADR Class B(ASR.US), Zillow Group, Inc. Class A(ZG.US).

Quick Summary and Outlook

The Great Capex Pivot: Software Budgets Crumble as Hardware Wins, Memory Bottlenecks Lock in Pricing Power, and Cybersecurity Becomes the Last Shelter.

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1. AI Chip Trio: Narrative Diverges, Broadcom and Nvidia Gain Support

NVIDIA Corporation(NVDA.US)’s roadshow feedback was positive, with management denying a delay for Rubin Ultra and disclosing a key counterargument: A frontier model previously built primarily on custom ASICs now has nearly 50% of its compute power coming from Nvidia. Broadcom Limited(AVGO.US) received strong support from Morgan Stanley, whose report "In Defense of AVGO's ASIC Share" noted that MediaTek's involvement in Google's TPU is a fact, but Broadcom, relying on its HBM supply and packaging advantages, can retain about 80% of the TPU share long-term, maintaining a $502 price target.

2. Memory: The Most Certain 'Bottleneck' with Exploding Profit Leverage

Fundamental supply and demand will remain tight until 2028, with memory defined by institutions as the "biggest bottleneck" for AI and CPUs. Operating margins for MICRON SOLUTIONS INC(MICR.US), SK hynix Inc. Sponsored ADR(SKHY.US), and Sandisk Corporation(SNDK.US) are at a staggering 80%, 72%, and 69%, respectively, as price increases are transforming into cross-cyclical cash flow. However, the market is concerned about peaking prices; Morgan Stanley expects the YoY growth rate of DRAM contract prices to peak in Q4 2026.

3. Software Sector Takes a Hit: IBM's Profit Warning Triggers a Capital Expenditure Exodus

IBM Corp(IBM.US)'s Q2 revenue of $17.2 billion missed estimates. Management stated that ahead of expected price increases, customers sharply shifted their capital spending towards server and storage hardware, squeezing software performance. The stock plunged 25%, dragging down the entire software sector. Conversely, cybersecurity companies became the biggest winners, with CrowdStrike and Palo Alto Networks surging against the trend.

4. Foundries & Equipment: Strong Supply and Demand, Capex Plans Revised Up Again

Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR(TSM.US)'s June revenue hit a record high (YoY +67.9%), with 2027/2028 capital expenditures potentially reaching $75 billion. ASML Holding NV ADR(ASML.US)'s Q2 results significantly exceeded expectations, with EUV capacity planned to expand 30% in 2027. Memory capital expenditure has become a bedrock of certainty, leading Goldman Sachs Group, Inc.(GS.US) to raise its ASML price target to €2,000.

5. Risk Warning: Clusters of Sell-Side Upgrades Often Signal Short-Term Tops

Research reports indicate that stocks like Intel Corporation(INTC.US), SanDisk, and Broadcom have all experienced single-day crashes or even distribution following a cluster of sell-side upgrades. While hedge funds are currently piling back in, semiconductor trade crowding has hit a record 82%, making the market extremely sensitive to any data that falls short of expectations.

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Investment Framework: 

1. Memory (HBM, DRAM, NAND) is the single most supply-constrained link in the AI chain, with shortages expected to persist through at least 2028. Prioritize stocks where pricing power and long-term agreements translate directly into operating leverage (e.g., Micron Technology, Inc.(MU.US), SK hynix Inc. Sponsored ADR(SKHY.US), Sandisk Corporation(SNDK.US)).

2. IBM Corp(IBM.US)’s earnings warning confirmed a massive, real-time shift: Corporate IT budgets are exiting software and moving to hardware (servers, storage, memory) to lock in supply. Buy the infrastructure beneficiaries (Dell Technologies, Inc. Class C(DELL.US), NVIDIA Corporation(NVDA.US), Broadcom Limited(AVGO.US) for interconnects); underweight exposed enterprise software until budget stability is confirmed.

3. Avoid the trap of "AI order hype." In a high-Capex, high-crowding environment (semiconductor consensus at 82% record high), the market is merciless on execution. Prioritize companies where:

• ASP (Average Selling Price) gains are locked in via contracts.
• Gross margins are stable or improving.
• FCF (Free Cash Flow) confirms the investment is yielding returns.

2. Breaking Out Today as of 6:00 pm

3. Near Breakouts as of 6:00 pm

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Disclaimer: The content is provided as general information only and should not be taken as investment advice. All the contents shall not be taken as a recommendation to buy or sell any security or financial instruments. Any action you take resulting from information, analysis, or commentary on this article is your responsibility. Please consult your investment advisor before making any investments.