Breakfast | Wall Street bullish on Taiwan Semiconductor, Musk reveals two major partners in xAI supercomputing

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Overnight Morning Market

On Wednesday, the US stock market was closed for a day due to the June holiday. The three major European stock indexes closed mixed. Yesterday, the three major indexes of the Hong Kong stock market strengthened unilaterally throughout the day, with the Hang Seng Index closing up 2.87% at 18430.39 points, and the Hang Seng Tech Index up 3.65%. The Hang Seng Industry Index rose across the board, with a total market turnover of HKD 112.758 billion.

Blue Chips and Hot Stocks

Taiwan Semiconductor's market value approaches $1 trillion, with Wall Street giants like Goldman Sachs raising target prices

Several Wall Street brokerages raised their target prices for Taiwan Semiconductor this week, citing a surge in demand for artificial intelligence and potential price hikes in 2025 that could boost Taiwan Semiconductor's profits. The most optimistic is Goldman Sachs, which raised its target price by 19% to TWD 1,160, as it expects prices for 3-nanometer and 5-nanometer chip manufacturing to rise by "low single-digit percentages."

JP Morgan stated that Taiwan Semiconductor may raise its revenue outlook for 2024 and could also increase capital expenditures to the high end of the guidance range. The bank expects artificial intelligence to account for 35% of total sales by 2028.

Last week, Taiwan Semiconductor's ADR surpassed Berkshire Hathaway to become the world's eighth largest company by market capitalization. The company's ADR has risen by 73% year-to-date, with a market value of $932 billion.

Market news: Amazon to invest €10 billion in logistics and cloud infrastructure in Germany.

Tianfeng International Securities' Ming-Chi Kuo stated that many people who bought Apple's mixed reality headset Vision Pro stopped using it after a few times. If this is a common user scenario, it cannot be solved simply by making a cheaper version.

Nio restructures its intelligent driving research and development department, merging perception and control into a large-scale model team. This means Nio will more clearly explore achieving advanced intelligent driving through end-to-end large-scale models.

Dongfang Selection revealed that from January to May, the company's self-operated product GMV exceeded RMB 3.6 billion, a year-on-year increase of 108% and a month-on-month increase of 74%.

Baidu Wenku announced the launch of a new product "Orange Article," the industry's first to generate 100,000-word long articles and multi-modal editing capabilities, becoming the industry's first "consult-create" one-stop AI free creation platform.

Chips and Artificial Intelligence

Market news: Former OpenAI Chief Scientist Sutskever to start a new company based on "safe superintelligence."

On social media, Dell's CEO mentioned collaborating with NVIDIA on an AI factory to support Musk's xAI. Musk responded that Dell is assembling half of the server racks for xAI supercomputers. When asked who is making the other half of the racks, Musk replied it is Supermicro.

According to Nikkei News: Micron Technology is considering producing artificial intelligence storage chips in Malaysia.

Startups and IPO Opportunities

Dida Inc. applies for an IPO in Hong Kong to issue 39 million shares. The price range is guided at HKD 5-7 per share. Pricing is expected on June 26th, with trading of the stock set to begin on June 28th.

Shanghai Soundon Information Technology Co., Ltd. conducts a listing hearing on the Hong Kong Stock Exchange.

Macro: Taking You Around the World

Hong Kong Financial Secretary: Consult closely with mainland regulatory agencies to allow mainland investors to buy Hong Kong stocks in RMB.

Fang Xinghai from the China Securities Regulatory Commission: The attitude of the CSRC towards companies listing overseas is to accelerate cultivation.

Pan Gongsheng: Including the trading of government bonds in the monetary policy toolbox does not mean quantitative easing is being pursued. Currently, jointly studying with the Ministry of Finance to implement and promote; in the future, considering specifying a certain short-term operating rate of the central bank as the main policy rate; need to study the inclusion in the M1 statistical scope; squeezing excess liquidity from financial aggregate data does not imply a change in the stance of supportive monetary policy.

The "newly emerged national team" under China's State Development & Investment Corporation (SDIC) and leading institutions such as GF Fund have cooperated to launch the CSI SDIC GEM Stock Connect SOE Dividend ETF, which officially started issuing. SDIC Investment subscribed to the initial shares of the ETF on June 19. This move sends a positive signal of firm confidence in the long-term value of Hong Kong-listed SOEs.

US officials are set to ask Japan and the Netherlands to impose new restrictions on China's semiconductor industry. Chinese Ministry of Foreign Affairs: Hope relevant countries can distinguish right from wrong.

Chinese Ministry of Commerce responds to UK sanctions on Chinese companies: Strongly oppose the UK's listing of 5 Chinese companies on the grounds of involvement with Russia. China will resolutely defend the legitimate rights and interests of Chinese companies.

US media: US officials claim Israeli Prime Minister Benjamin Netanyahu is "mentally unstable." Previously, Netanyahu criticized the US for holding back certain weapons destined for Israel in a video, in response to which the White House canceled a high-level meeting between US and Israeli security officials in Washington, DC