Enterprises shift to modular AI stacks, analysts project
CoreWeave reported second-quarter revenue of $2.58 billion, more than double the prior-year level, as the AI cloud services provider’s net loss widened to $626 million from $290 million. The company posted adjusted earnings before interest, taxes, depreciation, and amortization of $1.51 billion, an adjusted Ebitda margin of 59%. Shares ticked up 0.8% in after-hours trading Tuesday.
Chief Executive Michael Intrator said the company has “reached an important inflection point this quarter as our scale began to translate into expanding operating leverage.”
Truist analysts wrote that enterprises are likely to diversify their artificial intelligence model usage as part of a shift toward a “modular” AI stack. They expect businesses to approach model choice pragmatically, opting for lower-cost models for simple tasks, frontier models for more difficult problems, and customized open-weight models trained on proprietary data. “The broader implication is that enterprise AI is becoming modular,” the analysts wrote. “In our view, the companies that coordinate this increasingly complex ecosystem capture more durable value than those supplying any single component.”
Expanding AI data centers are having a growing impact on municipal bond markets, spurring issuance while presenting new risks, LPL Financial analysts Lawrence Gillum and Brian Booe said in a note. Power-hungry data centers require grid upgrades, leading to an increase of more than 25% in electric power issuance so far this year. “The gas prepayment sector, long a niche, has grown to more than 5% of the municipal index with roughly $100 billion outstanding,” Gillum and Booe said. Host communities can benefit from an increased tax base, they said, though backlash against higher utility bills associated with data centers represents a risk.
Bank of America analysts said ASML Holding’s productivity gives the Dutch supplier of semiconductor-making equipment a competitive edge over new rivals. Investor interest in alternatives continues to grow, they said, but the proliferation of lithography start-ups is evidence of ASML’s strategic importance rather than a sign of weakness. “ASML’s strongest defense is not preventing alternative technologies from emerging, but continuing to raise scanner productivity, overlay accuracy and reliability faster than competitors can close the gap,” they wrote. Shares were up 2.9% at 1,558 euros.
With the takeoff of agentic AI earlier this year, Bernstein analysts said the central processing unit market is set for faster growth and could become a new growth driver for TSMC. They now expect TSMC’s CPU revenue to hit the high $30 billion range in 2027, making up a mid-teen percentage of its total revenue, putting CPUs on par with AI accelerators such as GPUs and ASICs in terms of wafer revenue contribution. Bernstein raised TSMC’s target price to 3,300 New Taiwan dollars from NT$2,780, noting its valuation is cheap compared with peers. Shares last traded at NT$2,400.00.
Maybank IB analyst Tan Chi Wei said Axiata is likely shifting its asset monetization stance toward optimizing value over a longer period, which could delay the divestment of its infrastructure assets after the company previously targeted the sale of edotco and Linknet in 2026. Tan noted that the company’s earnings recovery and eventual balance-sheet improvement are potential re-rating drivers, with its dividend commitment seen sustainable at an assumed 0.11 ringgit per share in 2026, an implied yield of about 5.5%. Maybank maintains a buy rating on Axiata with a target price of 2.90 ringgit; shares were 0.5% higher at 1.92 ringgit.
Malaysia’s semiconductor sector could see an uneven recovery despite robust global sales growth driven by strong AI demand, TA Securities analyst Chan Mun Chun said. Growth is expected to be led by companies exposed to AI and data-center infrastructure, while players with significant exposure to traditional end markets such as computers and smartphones may face a more challenging environment due to rising memory costs. Geopolitical tensions and potential ringgit appreciation are key risks, Chan said. TA Securities maintains a neutral rating and pegs Dagang NeXchange as its top pick, citing its semiconductor unit SilTerra’s strong silicon-photonics orders amid growing AI and data-center demand.
CIMB Securities analyst Mohd Shanaz Noor Azam cited several near-term rerating catalysts for Malaysia’s technology sector in the second half, including an earnings upgrade cycle and potential inclusion of technology stocks if the KLCI expands to 50 constituents from 30. Ringgit depreciation against the dollar and election-related developments could also support investor sentiment, he said, with AI infrastructure demand a key growth driver and Vitrox, Malaysian Pacific Industries, Inari Amertron, and Nationgate seen as beneficiaries. The Wolfspeed-Liteon partnership also reinforces AI-driven silicon carbide adoption, benefiting Malaysian power-management players such as Malaysian Pacific Industries, he added. CIMB maintains an overweight rating on Malaysia’s tech sector.
Citi analyst Siraj Ahmed said Life360’s latest quarterly update carried a number of positives despite the lack of an earnings guidance upgrade, including strong growth in paying subscribers, a pickup in international user growth, a better-than-expected Ebitda margin, and U.S. price rises linked to the location-app developer’s launch of its pet tracker product. June-quarter advertising gross margin, however, fell short of Ahmed’s forecast, and he told clients that the unchanged Ebitda guidance means third-quarter earnings could miss consensus by a distance. Citi has a last-published buy rating on Life360’s U.S.-listed stock; its ASX-listed shares were down 14% at 25.38 Australian dollars.