Dolphin Research

This week, $PDD(PDD.US) posted disappointing results, sending the stock down nearly 15%.

The new L9 has launched and is now being delivered. Q2 GPM is expected to recover to ~10%.

Li Auto's 'distressed turnaround' still hasn't arrived

Below is Dolphin Research's Trans of $Costco Wholesale(COST.US) FQ3 2026 earnings call. For our earnings take, see 'Inflation Resurges, Costco Still Resilient'.

Global discount retail leader — $Costco Wholesale(COST.US) — reported after-hours on May 29 its FY2026 Q3 results for the period ended May 10. Overall performance remained very resilient, broadly in line with market expectations.

Below is Dolphin Research's Trans of DELL FY27 Q1 earnings call. For our earnings analysis, see 'Dell: AI is surging, legacy is warming up, fully fired up!'.

1) Key takeaways for $Dell Tech(DELL.US). Shareholder returns: DELL returned $2.1bn to shareholders in Q1, repurchasing 11 mn shares at an Avg. price of $147 and paying a dividend of approx. $0.63 per share. The company reaffirmed its capital return framework, with buybacks to remain strong.

In after-hours trading on May 29 (Beijing time), DELL.N reported FY2027 Q1 results (quarter ended Apr 2026).

Costco F3Q26 First Take: results remained steady with no major surprises. As usual, the print is a clean read-through on US and global consumption trends. Specifically:

1) For F3Q26 (ended May 10), sales rose 11.6% YoY, the first double-digit growth since 2022. Companywide comps increased 9.8% vs 7.4% last quarter, a multi-year high.

That said, traffic grew just 2.4% vs 3.1% in the prior quarter, while Avg. ticket jumped 7.3% YoY. The strong sales were driven by higher fuel and goods inflation after Middle East tensions flared. Traffic, a better read on spending willingness, softened.

Ex fuel and FX, comps grew 6.6%. That was slightly below last quarter's 6.7%, underscoring softer underlying demand.

2) Membership fee revenue grew 10.7%, down from ~14% in the prior three quarters. Paid members increased by approx. 0.8 mn (vs 0.7 mn last quarter), and the North America renewal rate, after roughly a year of sequential declines, ticked up 10bps QoQ. Membership growth and renewals thus appear resilient despite merchandise inflation.

This fee-per-member uplift began in Q3 last year, creating a high base. Fee revenue growth should therefore continue to ease toward member growth of ~4–5%.

3) While inflation accelerated tickets and sales, it also pressured costs, as Costco typically absorbs inflation before passing it through to consumers. This dynamic weighed on margins.

Specifically, GPM fell 21bps YoY. Efficiency gains and lower HQ costs reduced the opex ratio by 20bps, limiting OPM compression to just 1bp. As a result, OPM was 28.2%, with OP up 11.3% YoY, slightly below revenue growth.

DELL 1QFY27 First Take: Results beat across the board, with revenue up $10.5bn QoQ and growth reaccelerating. The quarter’s upside was driven mainly by ISG (servers) shipments.

AI revenue reached $16.1bn, up $7.2bn QoQ and ahead of the raised consensus (~$15.6bn). New AI orders were $24.4bn vs. market expectations of $10–15bn, taking backlog to $51.3bn by quarter-end and laying the groundwork for sustained high growth.

Street expectations for AI servers had already moved up ahead of the print. The biggest surprise came from traditional servers, where revenue hit $8.5bn (+92% YoY), far above the ~$5bn the market expected and the primary source of the beat.

The market had assumed traditional servers would be steady with a mild uptick. Demand is now clearly inflecting higher.

Guidance was the real positive surprise: next-quarter revenue is guided to $44–45bn, well above the Street’s ~$37.6bn. The midpoint implies QoQ growth of $0.2–1.2bn. Based on the current ~$50bn backlog and order visibility, we estimate AI revenue could be $15.5bn+ next quarter, likely a modest QoQ dip as the business remains ‘supply constrained’.

Shares have rallied on rising expectations for DELL’s AI servers. The platform is transitioning from GB200 to GB300, directly lifting ASPs. DELL currently benefits from both volume and price tailwinds, alongside a recovery in traditional servers, with AI outperformance pushing valuation beyond its historical range.

Management raised the full-year guide to $165–169bn, up $17bn vs. the prior $138–142bn. This quarter alone exceeded the previous quarterly guide by roughly $10bn. We view the new FY outlook as conservative, leaving room for further upward revisions.

Overall, DELL’s AI business is accelerating while legacy segments are clearly recovering, allowing the company to fully participate in this AI cycle with both earnings and valuation moving higher. For more, follow Dolphin Research’s subsequent takes and Trans. $Dell Tech(DELL.US)

Q2 overall GPM is expected to be roughly flat vs. Q1. Approx. 20.6%.

New-vehicle Cycle: Early Inflection

XPeng 1Q26 First Take: results modestly beat a low bar.

Q2 sales and revenue guidance came in above expectations.

Details below.

1) ASP reached RMB 175k, slightly above the street’s RMB 172k, up RMB 11k QoQ, driving auto revenue to RMB 11 bn vs. consensus RMB 10.8 bn.

2) Auto GPM was 12.1%, down 90bps QoQ as scale benefits faded and upstream materials costs rose, yet still above the street’s 11.3%.

3) Non-GAAP net loss was slightly wider than expected (actual -RMB 1.78 bn vs. -RMB 1.66 bn), mainly on higher R&D QoQ.

On Q2 guidance, where investor focus is higher, XPeng offered constructive signals.

1) Q2 deliveries guided to 100k–106k units, ahead of the street’s 97k.

2) Q2 revenue guided to RMB 19.6–20.8 bn, also above the street’s RMB 19.3 bn, primarily on stronger volumes.

Below is Dolphin Research’s Trans of the $Salesforce(CRM.US) FY27 Q1 earnings call. For our analysis, see 'Salesforce: neither growth nor profit — can the AI story still hold?'

I) Key takeaways: 1) Record shareholder returns. The company executed a $25bn accelerated share repurchase (ASR), the largest in its history and half of the $50bn buyback authorization. The ASR reduced diluted shares outstanding in Q1 by 10% YoY...

0528 | Dolphin Research Focus 🐬 Stock 1, $Taiwan Semiconductor(TSM.US) — Supply chain checks indicate that, on surging AI compute demand and fully loaded 3nm lines, TSMC plans to raise 3nm foundry pricing by up to 15% in H2, with a further 5–10% hike likely in 2027. Current 3nm capacity is approx. 160–175k wafers per month and remains in shortage.

As the legacy SaaS bellwether under pressure from the 'AI replacement' narrative, $Salesforce(CRM.US) reported FY27 Q1 (ended Apr.) after the U.S. close on May 28. Overall, the print was muted.

The quarter was fine, with most metrics roughly in line with the Street. There was little to flip the narrative.

Forward guide skewed soft. With no clear sign of revenue re-acceleration, management trimmed the margin outlook.

Specifically: 1) Growth remains uneventful. Core subscription revenue was approx. $10.6bn, up 12% YoY on a CC basis...

Below is Dolphin Research's Trans of Marvell's FY27 Q1 (FQ1 2027; period ended May 2, 2026) earnings call. For our earnings analysis, see 'Marvell: AI mega-interconnects bring another opportunity — can it support the Little Broadcom dream?'.

MRVL released its FY2027 Q1 results after-hours on May 28 (Beijing time). The quarter ended Apr 2026.

Salesforce F1Q27 First Take: results were broadly muted, with mixed prints across metrics and only small beats/misses. Details follow:

1) Total revenue grew 12% at cc, an acceleration of ~200bps QoQ and still grinding higher, but mostly from newly consolidated businesses; ex-M&A, the step-up is likely <100bps.

2) Data Cloud and AI-related revenue reached $850mn, up ~17% QoQ and accounting for 8% of total vs. 6.8% in the prior quarter.

3) On leading indicators, cRPO grew 13% at cc, flat vs. last quarter.

4) Total GPM contracted ~10bps YoY, slightly below the Street.

On the plus side, opex was disciplined; total expenses rose 10.6%, with S&M below estimates.

5) The company aggressively repurchased $27.1bn of stock this quarter.

6) While the in-quarter print was decent, the guide for next quarter was soft.

On profitability, management guided only GAAP diluted EPS at a $1.75 midpoint, implying >10% YoY decline vs. roughly flat consensus.

For FY27, management nudged up the low end of revenue guidance, but still expects 10–11% growth.

However, profit guidance was cut across the board: GAAP OPM was trimmed from 20.9% to 20.6%.

MRVL 1QFY27 First Take The print was broadly in line with expectations, with growth largely driven by Data Center interconnect products. Adjusted GPM was 58.9%, down 10bps QoQ after excluding amortization and related items.

Last quarter, the company regrouped reporting into two segments (Data Center; Communications & Other). Data Center was the key growth driver this quarter, up 11% QoQ, with ASIC softer and strength coming from optical interconnect demand.

MRVL guides next-quarter revenue to $2.7bn (+11% QoQ), ahead of the Street at $2.61bn. With a full-year outlook now provided, the next-quarter guide carries less weight.

Management again raised the annual outlook, now expecting FY27 revenue of $11.5bn (prior $11.0bn), up 40% YoY. It also lifted the FY28 revenue guide to $16.5bn (prior $15.0bn), implying 43% growth.

The higher annual guide is driven mainly by stronger-than-expected interconnect. Management now expects interconnect to grow over 70% in FY27 (vs. prior 50%+).

The recent rally reflects a major shift in the narrative. Earlier concerns centered on Trainium share loss, the 1.6T DSP ramp, and competition from Broadcom (AVGO). In an optical supercycle, even if custom ASICs are softer, interconnect products such as DSPs can still deliver strong and more predictable growth.

As AI moves into the inference phase, the stack is increasingly framed as 'storage + XPU + connectivity'. MRVL has leading opto-electronic connectivity and has enhanced its AI networking via acquisitions, while Street expectations had already moved higher; the new $11.5bn/$16.5bn FY27/FY28 guides are broadly in line with that.

Overall, beyond the visible, high-confidence growth in interconnect, ASIC, CXL memory expansion/pooling (Structera), and rack-scale solutions add further optionality. However, the latest annual outlook offered few surprises.

Below is Dolphin Research's Trans of $PDD(PDD.US) FY1Q26 earnings call (qtr ended Mar 31, 2026). For our take, see 'PDD: Old and arrogant, disliked by everyone'.

$PDD(PDD.US) Pre-mkt on May 27, released Q1 2026 results, with both revenue and profit missing expectations, making it the worst performer in the e-com group.

The following is Dolphin Research's Trans of the $Kuaishou-W(01024.HK) 1Q26 earnings call. For our earnings analysis, cf. 'Kuaishou: Comeback rides on Keling'.

$KUAISHOU-W(01024.HK) released its Q1 results after the Hong Kong close on May 27 (Beijing time). Overall, the quarter was broadly in line. The operating profit beat was driven by non-core other gains, which are unlikely to be sustainable.

PDD 1Q26 First Take: results missed, with both revenue growth and profit below Bloomberg consensus. Details follow:

1) Total revenue rose 11% YoY, below the 13.5% the market expected. The miss was driven by marketing/ad revenue rather than transaction revenue. Marketing revenue grew just 2.5%, well under the ~8% expected.

Peers’ e-com segments accelerated vs. 4Q25, but PDD uniquely slowed QoQ. With sector GMV improving, we infer a notable drop in ad monetization. We suspect tighter e-com tax normalization hurt PDD disproportionately.

2) Commission-based revenue grew nearly 20% YoY, accelerating QoQ and slightly topping the 18% consensus. Given weak growth in the domestic core marketplace, Temu (and possibly Duo Duo Grocery) likely outperformed. That said, precise Street expectations for Temu remain fuzzy.

We estimate Temu revenue growth at approx. 25% this quarter vs. ~20% in the prior quarter. Solid, but not as exciting as media headlines about Europe and LatAm would suggest.

3) OP grew 22% YoY, with adj. OP up 15.5% YoY. While profits rebounded from last year’s trough caused by state subsidies, the recovery was ~6% below the Street. Of the ~RMB 3.5bn YoY increase in group OP, most likely came from Temu’s narrowing losses, implying limited profit growth at the core site.

Marketing spend was ~RMB 33.8bn, up 1% YoY. Given last year’s peak company-funded state subsidies, both we and the market had expected a YoY decline. $PDD(PDD.US) $PDD(PDD.US)

Kuaishou 1Q26 First Take: Results were broadly in line; the OP beat was mainly driven by other income unrelated to the core biz., which is not sustainable.

1) Revenue was RMB 33.7bn, up 3.4% YoY. This was slightly above the 2.5% guidance and market expectation.

(1) Kolors was the bright spot, with Q1 revenue of RMB 650mn vs. RMB 500mn guided. ARR had reached $500mn as of Mar, and growth continued in Apr–May.

Media had reported ARR could reach about $1.3bn by Q1 '27. Progress on a potential spin-off/IPO would have the largest impact on Kuaishou’s valuation, so watch for related disclosure on the call.

(2) Growth in ads and commissions slowed, tied to pressure in the e-com biz. From this year, GMV is no longer disclosed; based on e-com revenue trends, take-rate changes and Street expectations, we estimate GMV growth at approx. 10%, a further slowdown vs. last year.

2) The user ecosystem expanded unexpectedly. Q1 user metrics were solid, likely boosted in the short term by CNY campaign programming. DAU rose 1.2% to 413mn, average time spent was said to be stable, but MAU accelerated by 5% (+31mn) to 770mn.

These trends differ somewhat from third-party data. Listen for management’s detailed explanation of user growth on the call.

3) GPM fell 400bps QoQ, driven by AI compute investment and ad rev-share for IAA short dramas. Last quarter, management guided FY Capex of RMB 26bn (incl. PP&E and ROU assets), up RMB 11bn YoY, largely for AI with Kolors taking most of the compute. On a 5-yr depreciation schedule, we estimate Capex alone trims FY GPM by roughly 1–2ppt.

4) Higher marketing spend, tighter headcount costs. Q1 S&M rose 4% YoY, mainly on promotion/marketing, while sales employee costs fell 8%. G&A declined 7.5%, reflecting team optimization; R&D grew 10% with a clear deceleration, largely driven by bandwidth/server costs (+18%).$KUAISHOU-W(01024.HK) $KUAISHOU-WR(81024.HK)