SpaceX's AI unit posted its first operating profit, while Lam Research's record quarter earned only an in-line outlook and a sell-off. The briefing's read is that profit is migrating along the AI chain to the hardest-to-replace links (memory, power, compute rental, wet-lab capacity). That supports the abundance thesis, but it also means paying up for growth alone no longer works.
Key signals
- SpaceX Q3 revenue was $14.58B (+161%). The Superintelligence (SI) segment brought in $7.56B (+830% YoY) and its first operating profit, $431M. Q1'27 revenue guidance is $33–37B. Q4 capex guidance is $35–40B.
- Lam Research guided December-quarter revenue to $8.6B against a consensus of $8.54B, and fell 7.41% after hours. AMAT fell 3.88% after hours. ISRG beat on earnings but plans to cut per-unit instrument revenue 3–5% in 2027.
- The Hang Seng Tech index closed at 3,994.77 (-1.26%), a low since October 2024. Tencent fell 4.04% to HK$393.80 and CATL fell 12.03% in A-shares. Memory was the one rally shared across US, Hong Kong and A-shares.
- The US 10-year yield is 5.13% and September CPI is 3.7%. The FOMC meets on 10-28, with an 86.2% probability of holding at 3.75–4.00%.
- Anthropic's draft IPO filing shows long-term compute commitments above $600B. Investors are reportedly pushing its valuation target down to about $1.5T from about $2T.
By theme
AI
- Compute rental is the newest profit pool. SpaceX SI's rated compute rose to 1.7GW, with a year-end target of 2.5–3GW and a $63B backlog.
- Memory and interconnect led: MU trades at a forward P/E of 4.42 on +379% revenue growth, and CRDO rose 6.28%.
- Model-layer pricing is under pressure. GPT-6 Sol's API price is 50% below GPT-5.6's promotional price, and DeepSeek released an open-source V4.1-Flash.
- Platforms that spend are being re-rated. Alphabet fell 1.62% and Tencent's capex rose 176% year on year.
Robotics
- Tesla's Q3 capex was $4.7B, versus $7.5B expected. That weakened the "all-in on AI and robotics" narrative, and Tesla was rated Watch.
- Profit sits in testing and core components. Teradyne's revenue grew 103.9%, while humanoid makers are still in the investment phase.
- Robot-component stocks in A-shares fell: Harmonic Drive (688017) -3.94%, Inovance -1.77%.
Space
- SpaceX rose 7.79% and five brokers raised targets, led by JPMorgan from 240 to 500.
- Rocket Lab, Firefly, Intuitive Machines and Redwire rallied in sympathy. ASTS fell 0.56% and is rated Sell, because Starlink Mobile (22M monthly active users) and a 800MHz spectrum purchase are eroding its lead.
- Legacy defense is diverging: LHX and LMT were downgraded to Watch ahead of earnings.
Biotech
- Medical was the strongest NASDAQ sector (+1.29%). Genomics and AI-biotech names ABSI, ILMN and TWST rose.
- ISRG's $450M antitrust settlement and per-unit price cut reinforce the Sell call.
- Nature papers on AI-designed enzymes suggest design is getting cheap. Scarcity is shifting to synthesis, sequencing, wet-lab work and clinical execution.
Hong Kong, A-shares and crypto
- Hong Kong and A-share tech kept de-leveraging. The Shanghai Composite is about 1% above its 52-week low. Southbound inflows over nine months were about HK$440B, versus HK$1.4T for all of 2025.
- Memory and optical names bucked the trend: Montage +5.36%, Innolight-chain Tianfu +5.10%.
- BTC is $84,133.56 (+1.43%), above both its 50- and 200-day averages. ETH, SOL and TAO were rated Watch, and FET Sell.
Rating highlights
| Ticker | Company | Call | Why |
|---|---|---|---|
| NVDA:NASDAQ | NVIDIA | Buy | Forward P/E 14 against 106% revenue growth; price about 4% above entry zone. |
| MU:NASDAQ | Micron | Buy | Forward P/E 4.4, revenue up 379%; scale in with a stop. |
| VRT:NYSE | Vertiv | Buy | Liquid cooling and power bottleneck; forward P/E 23; half position before earnings. |
| SPCX:NASDAQ | SpaceX | Hold (downgraded) | Fundamentals improved, but price ran about 8% above entry zone. |
| TSM:NYSE | TSMC | Hold (downgraded) | Price about 5% above entry zone; equipment-chain sentiment weak. |
| LRCX:NASDAQ | Lam Research | Watch | Record quarter, in-line guidance, 35% China exposure, fell below 200-day line. |
| LHX:NYSE | L3Harris | Watch (downgraded) | Two target cuts in a week; below both averages; earnings 10-29. |
| ASTS:NASDAQ | AST SpaceMobile | Sell | Starlink Mobile scale and spectrum purchase erode direct-to-phone lead. |
| ISRG:NASDAQ | Intuitive Surgical | Sell | Stop breached intraday; instrument pricing to fall 3–5% in 2027. |
| NVO:NYSE | Novo Nordisk | Sell | Revenue up only 2.1%; low P/E is a value trap. |
| 2513:HKEX | Zhipu | Sell | No pricing power in the model price war; P/S 162. |
| 300308:SZSE | Innolight | Buy | Forward P/E under 10 versus H1 profit growth of 242%; staged entry. |
| 688008:SSE | Montage Technology | Buy | Memory-interface chip bottleneck in a memory upcycle; staged entry. |
| 688017:SSE | Harmonic Drive | Sell | Forward P/E 183 with humanoid volume expectations being cut. |
| 601138:SSE | Foxconn Industrial Internet | Hold (downgraded) | Position already built; both averages overhead. |
Tenbagger radar
- The briefing contains no tenbagger section for this date, so there are no changes to report.
Risks to watch
- 10-22: LMT reports before the open, expected EPS $7.52 on revenue of $20.48B. Lam's after-hours drop may spill into A-share equipment names.
- 10-28: FOMC, plus MSFT (expected EPS $4.71) and GOOGL (expected EPS $2.99) after the close. Vertiv reports before the open.
- 10-29: Q3 GDP and September PCE; LLY, LHX, AMZN, INTC and COIN also report.
- Anthropic financing risk: a lower IPO valuation could ripple through compute contracts to SpaceX, given SI customer concentration. The Tesla–SpaceX merger is a binary event; Musk said there is "no guarantee."