AI summary
Summary of article:
Although chip demand is strong, Kioxia’s price rise has slowed, Intel’s outlook has faded, and Anthropic, OpenAI and Meta’s financing and credit rating concerns have caused the market to begin to test whether the AI boom can continue to be realized.
Demand for chips is strong, but the stock price can’t pay for it. Kioxia warns that memory price growth is slowingintel (Intel’s) weakening outlook, as well as credit rating and financing concerns from AI industry players, have forced the market to re-examine this boom: how long can prices continue to rise, can customers pay, and can manufacturing spending be sustained. The following six things are influencing the outlook for the chip stock market.
Kioxia estimates operating profit for the quarter at 2 trillion yen, lower than the market expectation of 2.35 trillion yen, and revealed that the selling price of NAND flash memory may be the same as last quarter. Average selling price growth declined to about 25% last quarter from 70% in the previous quarter.
But the demand is still not weak. Kioxia said its production capacity in 2027 has been sold out, and more than half of its expected shipments in 2028 are guaranteed by long-term contracts with hyperscale data center operators.
Kenji Yasui, head of Japan research at UBS Securities, asked at the press conference that since supply and demand are very low, prices should generally be expected to continue rising, “Are you more conservative?”
This is what the market is worried about: full orders may not bring the same dramatic price increases and profit growth. Kioxia’s ADR in the United States fell 17%, and even Sandisk, whose financial report was better than expected, was pulled down by 13.5%.
The Financial Times reported that Blackstone has told investors that Anthropic could receive a higher non-investment grade rating at the earliest after its listing, changing its previous expectation that it would achieve investment grade by the end of the year.
Anthropic plans to invest more than US$800 billion in building computing infrastructure by 2045. Without investment-grade ratings, investment-restricted insurance and pension funds may find it more difficult to attract funds, and may be more dependent on the support of highly rated suppliers.
In the latest $63 billion North Star financing, more than $42 billion of senior debt is guaranteed by Broadcom, and $18 billion of subordinate debt is backed by Anthropic Rent Payments. A technology portfolio manager said: “The key thing is whether you can borrow the money, which is very important… If Anthropic can’t get an investment grade rating, borrowing costs will go up, which is not good for anyone.”
At present the three major credit rating agencies have not officially announced Anthropic Rating. However, this risk reminds the market that huge chip orders must still be supported by customers’ future earnings and financing capabilities.
Intel’s revenue for the quarter is estimated at US$15 billion to US$16 billion, about US$17 billion less than market expectations. The share price fell 29% to close at US$65.76 on Friday.
Revenue from the data center and AI businesses grew 78% last quarter, but revenue from the PC business declined 5%. AI manufacturing has driven up memory prices, causing computer makers to raise prices and reduce shipments; Intel supplies have also been restricted due to raw material shortages and Israeli factory closures.
Asa Hiken, senior analyst at eMarketer, pointed out that although demand for server processors is strong, it is still not enough to overcome the current problem, especially as the PC industry remains weak.
