Fortnightly Publication Highlighting Latest Insights From IRF Providers
Company Research
Applied Optoelectronics (AAOI US) US
Technology
Rosenblatt reiterates their Buy rating and Top Pick status on AAOI. The company invested $209m in capex in 2026 with a focus on increasing laser and transceiver capacity in Texas. This ongoing investment is poised to drive a tripling of Data Centre revenues in 2026 and even faster growth in 2027. Amazon and Oracle 800G demand are the primary revenue drivers in 2026 along with Microsoft's solid 100G and recently renewed 400G demand. By 2027, all these customers should also be buying 1.6T. Rosenblatt’s 2026 revenues/EPS estimates increase to $1.02bn/$1.18. For 2027 their respective figures are $3.3bn/$6.25. Their new TP of $125 is based on 20x CY27 EPS forecast - a conservative multiple to account for execution risk.
Edition: 231
- 06 March, 2026
Nvidia's circular financing
Technology
Veritas has been flagging NVDA’s customer financing activities well before they hit the headlines: in 2023, they first highlighted the issue in “Nvidia & The Tech Sector's Circular Cash Flows” and reiterated their concerns earlier this year in “Nvidia’s CoreWeave - A Familiar Story”. Following the Oracle/OpenAI deal, the sell side is now echoing Veritas’ warnings, drawing parallels to the dotcom bubble, when Nortel, Lucent and Cisco extended credit to customers to enable their internet infrastructure buildout. Veritas does not expect this risk to be priced into NVDA's stock until revenue growth slows. If investors doubt customers can generate returns on their chip investments, these large negative cash flow purchases will not be well received.
Edition: 221
- 03 October, 2025
SAP (SAP GR) Germany
Technology
SAP completes the acquisition of SmartRecruiters, strengthening its position in AI-powered talent acquisition, competing with Oracle and Workday; the deal enhances SAP SuccessFactors with advanced recruitment automation and candidate experience tools. However, GR20 believes what is ultimately at stake for SAP is the relevance of its AI infrastructure - ensuring it is well-positioned to benefit from the rise of AI agents in enterprise environments. They anticipate that it will take a few more quarters before SAP and its peers are able to monetise AI at scale. This will depend on customers accelerating the consolidation of their data into unified semantic models.
Edition: 220
- 19 September, 2025
Technology
ORCL is entering a new phase of AI-driven growth, with a forecast 20-27% EPS CAGR through 2029. Abacus believes the company's success in cloud infrastructure (OCI) is now well-established, underpinned by accelerating demand and supportive long-term bookings. AI is driving a data layer investment cycle, boosting demand for modern databases - an area where ORCL is gaining share. A major potential upside comes from the $30bn Stargate contract, which Abacus forecasts will add ~$3.59 to EPS from 2028, leading to their FY29 estimate of ~$15.50 and supporting their TP of $400 (+70%). Despite some recent multiple expansion, they argue the full earnings potential is not yet priced in.
Edition: 215
- 11 July, 2025
IT Spending: Sentiment weaker than last quarter
Technology
SPR’s latest channel checks reveal disappointment that the second half pick up that many expected has not materialised. Stock specific feedback includes: ServiceNow - all very positive - probably the strongest indications for any vendor. Crowdstrike channels and end users see the vendor moving quickly past its recent crash. SPR has picked up mixed feedback re. Fortinet’s recent security breach and whether it negatively impacted Sept Qtr end deal flow. Outside of security, the vendors seeing an increase in positive comments include IBM, Oracle, Microsoft, Arista and Juniper/Mist. It has been easy to pick up comments on share loss by Cisco.
Edition: 197
- 18 October, 2024
ITV (ITV LN) UK
Communications
Following publication of its FY23 annual report, Iron Blue increases their ITV score to 31/60 (still top decile) from 29/60 to reflect: 1) FY23 cost strip outs hit a decade high. 2) Capitalisations of programme & other rights expanded +10% Y/Y, also to a decade high. 3) Increased use of provisions accounting. 4) DB pensions liability discount rate of 4.75% vs. 3.8% average. 5) A new contingent liability relating to the UK CMA investigation into non-sport TV content production and broadcasting. They also note that five of management’s principal risks were deemed to have increased Y/Y and FY23’s Oracle Fusion IT platform launch saw various processes and controls not operating as anticipated.
Edition: 185
- 03 May, 2024
Technology
67% of Woozle’s sources* reported positive outlooks for the next 6 months. New business has started to pick up again and SGE appears poised to win market share, especially among SMEs, as well as a growing presence in the enterprise market with the expansion of Intacct. Competitive pricing, product simplicity and flexibility with SaaS has put the software company on pace to beat 1H23 consensus estimates.
*Woozle conducted interviews with ERP software resellers, channel partners and consultants. Their sample evenly reflects both SAP and SGE, with some sources selling both brands, as well as Oracle and Microsoft. Regional split: 60% Europe / 40% N.America.
Edition: 160
- 12 May, 2023
Giant layoffs loom as Tech firms face customer budget freezes
Blueshift’s IT sector sources are pointing at Oracle’s plan to cut c.30k jobs as the crack in the dam that is going to trigger a resizing of workforces across all of tech - as one recruitment executive said, “They have literally been making up jobs for the past several years to beat each other to talent. It had nothing to do with rightsizing. It was a competition to impress investors.” Sources were unanimous that earnings forecasts for the rest of the year across most vendors in all verticals of DIY enterprise networking are going to be poor. Companies covered include Arista Networks, Cisco, CrowdStrike, Dell, Fortinet, IBM, Palo Alto and Zscaler.
Edition: 140
- 22 July, 2022