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J.P. Morgan: AI Accelerators

> Rapid Overall Market Expansion: Total annual AI accelerator unit shipments are projected to grow dramatically from 3.3 million units in 2023 to 23.3 million units by 2027E.

> NVIDIA's Continued Dominance: NVIDIA GPUs lead the market significantly throughout the period, growing from 1.7 million units in 2023 to an estimated 9.9 million units in 2027E, though their share of total units shifts as competition scales.

> Surge in Custom/Alternative Accelerators (ASIC/XPUs): Alternative hardware lines—including Google TPUs, AWS Trainium/Inferentia, Meta MTIA, and Microsoft MAIA—are scaling rapidly. By 2027E, custom ASICs/XPUs are projected to make up 53% of total unit shipments, surpassing traditional GPUs (47%).

> Significant Short-Term Growth Spikes: The market saw triple-digit year-over-year growth in 2024 at 128%, with strong continued expansion expected through 2026E (62%) and 2027E (43%).

$NVIDIA(NVDA.US) $Marvell Tech(MRVL.US) $Amazon(AMZN.US) $Alphabet(GOOGL.US) $Meta Platforms(META.US) $Microsoft(MSFT.US) $Broadcom(AVGO.US)

A TON OF THINGS HAPPENED IN THE STOCK MARKET TODAY.

Here's a full recap:

1. Nvidia $NVIDIA(NVDA.US) announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to create independent AI compute financing platforms designed to mobilize more than $500 billion of third-party capital over time. The goal is to turn Nvidia compute and full-stack AI infrastructure into an investable asset class, helping fund the global buildout of AI factories while giving Nvidia customers access to large pools of capital at attractive rates. Jensen: “In AI, compute is revenue. NVIDIA compute is uniquely suited for this role. It is broadly adopted, flexible across models and workloads, fungible and transferable across customers and operators, and continuously improved through CUDA software. That is why we are bringing the world’s leading long-term capital providers together to independently underwrite AI infrastructure. These financing platforms will help customers access scarce compute at scale and build the DSX AI factories that will power every industry and country in the age of AI.”

2. Meta $Meta Platforms(META.US) released Muse Glimmer, a new 30B-parameter dense AI model with open weights that can run locally, with weights for Muse Spark 1.2 expected to follow soon. Meta CEO Mark Zuckerberg also said he believes everyone will eventually have a personal AI agent that understands them and what they care about.

3. Chinese humanoid robot makers accounted for more than 97% of global shipments in 1H26, with volumes more than tripling to 19,100 units. Agibot led the market with a 44% share, while industrial and commercial use cases made up over 70% of shipments. Unitree Robotics is also going public on the Shanghai Stock Exchange at a $9 billion valuation, with its IPO oversubscribed by retail investors by 8000%.

4. Microsoft $Microsoft(MSFT.US) plans to unveil its next-generation Maia 300 AI chip in September, according to The Information, marking progress after a slower start for its in-house silicon program. Microsoft reportedly plans to expand internal use of Maia while also targeting major external customers. The move could give Microsoft more control over the AI infrastructure powering its services as demand for compute continues to surge.

5. Rocket Lab $Rocket Lab(RKLB.US) reported Q2’26 revenue of $234M, slightly ahead of estimates of $231M, up 62% YoY. EPS came in at -$0.08 versus -$0.07 expected, while backlog reached a record $2.36B, up 137% YoY. For Q3, Rocket Lab guided revenue to $250M–$265M, above estimates of $239M, with non-GAAP gross margin expected at 35%–37%. Non-GAAP gross margin in Q2 was 41.5%, while net loss was $49.3M. Business highlights included the announced Iridium acquisition and the launch of GHOST, a globally deployable launch system. Management said backlog growth, combined with new Q3 deals, represents more than $1B in new contracts across launch and space systems, positioning Rocket Lab to become a self-launching, tier-1 space power.

6. The top 10 most active options today by contracts traded were $NVIDIA(NVDA.US) with 3.6M contracts, $Tesla(TSLA.US) with 1.9M contracts, $Apple(AAPL.US) with 1.2M contracts, $SpaceX(SPCX.US) with 1.2M contracts, $Microsoft(MSFT.US) with 1.1M contracts, $Micron Tech(MU.US) with 945K contracts, $Intel(INTC.US) with 880K contracts, $Palantir Tech(PLTR.US) with 803K contracts, $Amazon(AMZN.US) with 778K contracts, and $Meta Platforms(META.US) with 704K contracts.

7. Hims & Hers $Hims & Hers Health(HIMS.US) reported Q2’26 revenue of $753.2M, beating estimates of $700M, up 38% YoY. Adjusted EBITDA came in at $60.3M versus $47.2M expected, while subscribers rose 19% YoY to 2.891M. U.S. revenue grew 16% YoY to $621.8M, while Rest of World revenue surged 1,641% YoY to $131.4M, helped by the close of the Eucalyptus acquisition in June. For Q3, Hims guided revenue to $880M–$900M, well above estimates of $793M. For FY26, the company raised revenue guidance to $3.1B–$3.3B versus $2.93B expected, while reiterating increased conviction in its 2030 targets of at least $6.5B in revenue and $1.3B in adjusted EBITDA.

8. Earnings season is nearly complete, and results have been much stronger than expected. With almost 90% of S&P 500 companies reported, Q2 EPS is now projected to rise 30% YoY excluding investment mark-ups from Alphabet and Amazon, well above the 22% consensus forecast from July 1. Including those one-time gains, EPS growth jumps to nearly 50% YoY. Meanwhile, 76% of companies have beaten EPS expectations, matching last quarter’s beat rate, which was the highest since 2021.

9. Intel $Intel(INTC.US) announced a proposed $15B underwritten public offering of common stock, with proceeds intended for general corporate purposes, including CapEx and working capital. The company said customer demand remains strong, driven by major investment in AI compute, with growth opportunities across physical AI, purpose-built silicon, advanced packaging, and external wafers. Intel also expects to give underwriters a 30-day option to buy up to an additional $2.25B of common stock, while emphasizing that the raise is meant to support growth opportunities, maintain balance sheet strength, and preserve its investment-grade rating.

10. Trading volume across the 7 leveraged ETFs tied to $SK Hynix(SKHY.US) SK Hynix has collapsed nearly 90% to less than 100M shares/day after regulators raised the minimum cash deposit required to trade the products, effective July 31. The stock decline and tighter rules have shaken out retail investors who chased the rally, with roughly 1T won ($710M) in retail accounts facing forced liquidation in June and another 993B won ($700M) in July, the two largest forced-liquidation months this year. Margin loan balances have fallen to 27.4T won ($19.3B) as of August 4, the lowest level of the year. Morgan Stanley estimates the deleveraging process is now more than halfway complete, though foreign investors remain cautious after selling $30B in June, another $6.2B in July, and $4.3B so far in August.

11. Bank of America is sticking with its call for 75 bps of Fed rate hikes this year despite weaker labor data. U.S. payrolls fell by 23,000 in July, while prior months were revised down by another 103,000. The unemployment rate declined to 4.1%, wage growth slowed to 3.2%, and labor-force participation slipped. Even with hiring softening, BofA still expects the Fed to begin raising rates in September, arguing that inflation remains the central concern.

12. Micron $Micron Tech(MU.US) today said customers remain largely insensitive to memory pricing as data center demand continues to outstrip supply, with the company saying it cannot meet even half of current customer needs. Management also pointed to demand signals extending multiple years, though it did not provide a specific update to quarterly guidance.

WALL STREET IS THE GREATEST SHOW ON EARTH.

Source: amit

📢 𝗝𝗨𝗦𝗧 𝗜𝗡: $Meta Platforms(META.US) Zuckerberg Unveils Meta's AI Vision, Resumes Open-Weight Model Releases

👉 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:

➤ 𝗠𝗲𝘁𝗮 will resume releasing 𝗼𝗽𝗲𝗻-𝘄𝗲𝗶𝗴𝗵𝘁 AI models.

➤ Company supports allowing 𝗔𝗜 𝗺𝗼𝗱𝗲𝗹 𝗱𝗶𝘀𝘁𝗶𝗹𝗹𝗮𝘁𝗶𝗼𝗻.

➤ Zuckerberg seeks 𝗲𝗮𝗿𝗹𝗶𝗲𝗿 government cooperation on frontier AI.

➤ Meta proposes sharing 𝘁𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗰𝗵𝗲𝗰𝗸𝗽𝗼𝗶𝗻𝘁𝘀 with regulators during development.

➤ Meta plans a $𝟭 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝗙𝘂𝘁𝘂𝗿𝗲 𝗜𝘀 𝗙𝗼𝗿 𝗘𝘃𝗲𝗿𝘆𝗼𝗻𝗲 𝗙𝘂𝗻𝗱.

➤ Fund will support communities hosting Meta's data centers.

➤ Meta's board will oversee 𝗔𝗜 𝘀𝗮𝗳𝗲𝘁𝘆 standards and model approvals.

➤ Zuckerberg advocates industry-wide 𝗯𝗼𝗮𝗿𝗱-𝗹𝗲𝘃𝗲𝗹 AI governance.

➤ Vision centers on 𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗔𝗜 agents controlled by users.

➤ Zuckerberg calls for a fully 𝗽𝗿𝗶𝘃𝗮𝘁𝗲 AI mode protecting user data.

👉 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀:

➤ Signals Meta's renewed commitment to 𝗼𝗽𝗲𝗻 AI development.

➤ Could influence future 𝗔𝗜 regulation and government oversight frameworks.

➤ Reinforces investment in AI infrastructure alongside community benefits.

➤ Highlights growing focus on AI governance, privacy, and user control.

👉 𝗘𝘅𝗽𝗲𝗿𝘁 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁:

𝗠𝗮𝗿𝗸 𝗭𝘂𝗰𝗸𝗲𝗿𝗯𝗲𝗿𝗴, CEO of Meta:

Users, not developers, should set an agent's values, and AI should support a fully private mode where Meta or other providers cannot access or grant third-party access to user data.

Third Bridge experts on CPO:

> Despite the hype, mass commercial adoption is not expected before the second half of 2027. Traditional pluggable optical modules are expected to remain the industry standard throughout 2026.

> CPO is likely to see early adoption in "scale-out" networking (connecting switches, GPUs, and CPUs) within distances under 500 meters. Deployment into GPUs themselves and "scale-up" chip-level systems is a harder engineering challenge, likely not seeing broad adoption until 2030–2032.

> Experts note that training workloads (which require extreme bandwidth) are better suited for CPO, while inference workloads are deterministic and remain well-supported by traditional pluggable modules.

> A primary hurdle for CPO is maintenance. With traditional pluggable modules, a failed component can be hot-swapped. With CPO, a failure in the optical subsystem might require replacing an entire board, leading to significantly higher costs and operational disruption.

> Nvidia and Broadcom are expected to dominate the CPO market, potentially controlling 70% of it by 2028. Nvidia is expected to capture around 50% market share through its leadership in AI infrastructure, while Broadcom could secure roughly 20% through continued expansion of its deployment footprint.

> Large cloud providers (like Google, Meta, AWS, Microsoft) are cautious about CPO because it risks "vendor lock-in." Pluggable modules allow these companies to mix and match components from various vendors, whereas CPO ecosystems are more restrictive.

> Through substantial investments in optical component companies like Coherent and Lumentum, Nvidia is positioning itself to control the entire AI value chain—from GPUs and networking switches to the optical modules themselves.

> Experts expect pluggable optical modules to remain the dominant solution for cloud giants such as Microsoft and Amazon throughout 2026. CPO adoption is expected to begin in earnest during 2027, reaching approximately 20% to 30% penetration by 2028.

📊 𝐈𝐍𝐕𝐄𝐒𝐓𝐎𝐑 𝐍𝐎𝐓𝐄: Microsoft Leads Big Tech in Free Cash Flow as AI Spending Pressures Rivals - $Microsoft(MSFT.US) $Meta Platforms(META.US) $Oracle(ORCL.US) $Alphabet(GOOGL.US) $Amazon(AMZN.US)

👉 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:

➤ 𝗠𝗶𝗰𝗿𝗼𝘀𝗼𝗳𝘁 remains the only major U.S. hyperscaler generating positive free cash flow.

➤ Microsoft ended fiscal Q4 2026 with $𝟭𝟵.𝟲 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in cash.

➤ 𝗔𝗹𝗽𝗵𝗮𝗯𝗲𝘁 posted negative free cash flow of $𝟱.𝟵 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in Q2 2026.

➤ 𝗔𝗺𝗮𝘇𝗼𝗻's trailing 12-month free cash flow fell to -$𝟳.𝟲 𝗯𝗶𝗹𝗹𝗶𝗼𝗻.

➤ 𝗠𝗲𝘁𝗮's cash balance declined 𝟵𝟭% year over year to $𝟳𝟴𝟰 𝗺𝗶𝗹𝗹𝗶𝗼𝗻.

➤ Microsoft reported 𝟰𝟯% Azure revenue growth, with annual Azure revenue exceeding $𝟭𝟬𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻.

➤ Microsoft expects to remain 𝗳𝗿𝗲𝗲 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 positive in FY2027.

➤ Bank of America forecasts hyperscaler free cash flow turning negative $𝟲𝟰 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in 2026.

➤ Aggregate hyperscaler capex is projected to exceed $𝟴𝟲𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in 2026.

👉 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀:

➤ Highlights the growing financial divide among leading AI infrastructure companies.

➤ Microsoft's stronger cash generation provides greater flexibility to fund AI expansion.

➤ Rising AI infrastructure costs are pressuring cash flow across the hyperscaler sector.

➤ Investors will closely watch whether AI revenue growth can justify record capital spending.

👉 𝗘𝘅𝗽𝗲𝗿𝘁 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁𝘀:

𝗔𝗺𝘆 𝗛𝗼𝗼𝗱, CFO of Microsoft:

"If the demand environment changes, you just slow down what is, in fact, the largest component."

𝗔𝗻𝗱𝘆 𝗝𝗮𝘀𝘀𝘆, CEO of Amazon:

"Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too."

𝗪𝗶𝗹𝗹𝗶𝗮𝗺 𝗔𝗹𝘃𝗲𝘀, Chief Economist at Avenue:

"The companies themselves are saying they can't meet demand, which is why they need to invest more. They've finally managed to dispel concerns about an AI bubble."

AMD has added several marquee AI customers — OpenAI, Meta, and Anthropic — and this time also Microsoft.

Layered on top of prior 6GW and 2GW orders, the momentum looks hard to stop.

That said, the company did not raise its full-year AI GPU guidance, keeping it at $14–15bn.

MI455X — its first 'rack-scale' Instinct chip, positioned head-to-head vs. NVIDIA's Rubin — will only start shipping next quarter.

So the orders are real, but for now they are largely paper commitments.

Until MI455X ramps, the market remains cautious on how much of that backlog will convert to revenue.

That caution looks reasonable. $AMD(AMD.US)