Breakfast | Software stocks led the market decline overnight, Intel surged 20% after hours

Market Overview

The situation between the U.S. and Iran has returned to a tense state, with the three major U.S. stock indices retreating, and the S&P and Nasdaq falling away from record highs; software stocks led the market decline, with ServiceNow, affected by the Middle East conflict, dropping nearly 18%, dragging down software stocks, Salesforce falling nearly 9%, leading the Dow, and Microsoft dropping nearly 4%; Tesla, which raised its capital expenditure forecast for this year, fell over 3%; IBM, with a slowdown in first-quarter revenue, dropped over 8%; the chip index rose nearly 2%, marking a 17-day consecutive rise, setting a new record for the longest consecutive increase, with Texas Instruments rising 19% on strong quarterly performance and guidance, and Intel, with first-quarter revenue and second-quarter guidance both exceeding expectations, briefly rising over 20% after hours; Nokia's European stock rose over 6% on better-than-expected first-quarter profits.

Iran reportedly activated its capital's air defense system to intercept "hostile" targets, while U.S. Treasury yields rose to a one-week high during the session; the U.S. dollar index accelerated its rise, reaching a nearly two-week high, and the offshore yuan briefly approached 6.84, setting a new low in over a week; Bitcoin briefly approached $77,000, dropping over 2% from its daily high.

In commodities, following the news from Iran, crude oil prices surged during the session, hitting a daily high, rising over 5%, and closing up over 3%, with Brent crude reaching a new high in over two weeks; gold hit a daily low, dropping over 1%.

During the Asian session, the ChiNext index fell nearly 1%, with computing hardware stocks declining across the board, Zhongji Xuchuang's market value breaking one trillion, and non-ferrous metals broadly declining, with the Hang Seng Tech Index dropping 2%, and tech stocks generally falling.

Key News

China

PwC agreed to compensate Evergrande shareholders HKD 1 billion for false financial reports, and was also fined HKD 300 million and suspended for six months.

Yao Shunyu submitted his first report, and Tencent's Mix Yuan 3 Preview large model was released, with a total of 295 billion parameters and 21 billion activated, focusing on enhancing Agent and Coding capabilities.

Overseas

Trump ordered the sinking of any vessels laying mines in the Strait of Hormuz, claiming to have "completely blocked" the strait until Iran is willing to reach an agreement, stating he has time and is "not in a hurry," but Iran is "on a countdown," wanting to reach a "permanent agreement" and will not consider using nuclear weapons against Iran, with the ceasefire in Lebanon being extended for three weeks.

Iranian media reported that Iran activated its Tehran air defense system to intercept "hostile targets," aimed at countering small drones, while Israel denied conducting airstrikes. Israeli media reported that the Iranian speaker resigned from the negotiation team; Pakistan stated that U.S.-Iran negotiations have reached a deadlock, with Iran's foreign ministry saying the focus of negotiations has shifted from nuclear issues to a complete ceasefire. The Central Bank of Iran stated that the first toll for passage through the Strait of Hormuz was recorded in "cash foreign exchange."

The U.S. April manufacturing PMI preliminary value reached a nearly four-year high, with stockpiling driving demand weakness, and inflation rebound putting the Federal Reserve in a dilemma.

OpenAI released its strongest model GPT-5.5, surpassing Claude, competing for the enterprise-level paid market. Anthropic's secondary market valuation soared to $1 trillion, surpassing OpenAI.

AI-driven Intel's Q2 guidance exceeded expectations, briefly rising over 20% after hours; SAP's Q1 cloud business revenue exceeded expectations, growing 19%, with U.S. stocks rising over 10% after hours; Nokia's AI cloud business exploded, with Q1 operating profit increasing by 54%, and its stock price reaching a 16-year high

Market Closing Report

U.S. and European stock markets: The S&P 500 fell 0.41% to 7108.40 points, the Dow Jones fell 0.36% to 49310.32 points, and the Nasdaq fell 0.89% to 24438.504 points. The European STOXX 600 index rose 0.05% to 614.20 points.

A-shares: The Shanghai Composite Index closed down 0.32% at 4093.25 points. The Shenzhen Component Index closed down 0.88% at 15043.45 points. The ChiNext Index closed down 0.87% at 3720.25 points.

Bond market: By the end of the bond market, the yield on the U.S. ten-year Treasury bond was about 4.32%, up about 2 basis points during the day; the yield on the two-year Treasury bond was about 3.83%, up about 3 basis points during the day.

Commodities: WTI June crude oil futures rose 3.11% to $95.85 per barrel. Brent June crude oil futures rose 3.1% to $105.07 per barrel. COMEX June gold futures fell 0.61% to $4724 per ounce. COMEX May silver futures fell 3.15% to $75.504 per ounce. LME copper futures fell about 0.6% to $13356 per ton. LME aluminum futures rose about 0.2% to $3620 per ton. LME nickel futures rose about 1.5% to $18737 per ton.

News Details

Global Highlights

China

PwC agrees to compensate Evergrande shareholders HKD 1 billion for false financial reports, also fined HKD 300 million and suspended for 6 months. The Hong Kong Securities and Futures Commission reached an agreement with PwC, under which PwC will compensate eligible independent minority shareholders HKD 1 billion for Evergrande's false financial statements in 2019 and 2020, marking a historic precedent. The Hong Kong Financial Reporting Council imposed a fine of HKD 300 million on PwC and a six-month practice restriction, with each of its two former partners fined HKD 5 million.

Yao Shunyu submits his first report! Tencent's Hongyuan 3 Preview large model released. Tencent Hongyuan released and open-sourced the Hy3 preview model, with a total of 295 billion parameters and 21 billion activations, focusing on high cost-effectiveness and practicality, emphasizing the enhancement of Agent and Coding capabilities, performing outstandingly in evaluations such as SWE-Bench and Terminal-Bench, and being competitive in tasks like ClawEval Zhongji Xuchuang's Market Value Exceeds One Trillion - Winning Big in Suzhou Under the Light! Zhongji Xuchuang started in Suzhou, with its core performance almost entirely derived from its wholly-owned subsidiary Suzhou Xuchuang, which contributed over 95% of the parent company's revenue. In the past year, the average increase in Suzhou's chip concept stocks among the top ten has reached 152.9%. From optical chips to PCBs, Suzhou has formed an industrial cluster covering the entire AI computing power industry chain, with the "half-hour supply chain circle" becoming its unique competitive advantage.

New Yisheng's Q1 Revenue Doubles, Surpassing 8 Billion Yuan, Net Profit of 2.78 Billion Yuan, Up 76.8% Year-on-Year. New Yisheng achieved an operating income of 8.338 billion yuan in Q1, a year-on-year increase of 105.76%; net profit attributable to the parent company was 2.78 billion yuan, up 76.80% year-on-year; net profit excluding non-recurring items was 2.768 billion yuan, up 76.44% year-on-year. The biggest variable affecting profit margins came from financial expenses: Q1 financial expenses were 522 million yuan, mainly due to increased exchange losses; at the same time, the company recognized asset impairment losses of 83 million yuan, which expanded year-on-year. The combination of these two factors dragged down net profit margin performance.

Zhongwei Semiconductor's Q1 Revenue Increased by 57.47% Year-on-Year, Net Profit Increased by 48.89%, Shipment Volume Exceeded 1.2 Billion Units. Zhongwei Semiconductor's Q1 revenue grew nearly 60%, with a net profit attributable to shareholders of listed companies of 51.248 million yuan, up 48.89% year-on-year. Driven by tight upstream wafer production capacity, the company's shipment volume in Q1 was approximately 1.2 billion units, a year-on-year increase of about 38%, with product prices rising simultaneously, driving gross profit margin up to 38%.

AI Demand Ignites High-End PCBs, ShenNan Circuit's Q1 Revenue Increased by 38%, Net Profit Increased by 73% to 850 Million Yuan. ShenNan Circuit achieved revenue of 6.596 billion yuan in Q1, a year-on-year increase of 37.90%; net profit attributable to the parent company was 850 million yuan, up 73.01% year-on-year, with AI computing power driving high-end PCB demand as the main driver. The net profit excluding non-recurring items was nearly on par with the net profit attributable to the parent company, indicating solid profitability in its main business. The net cash flow from operating activities decreased by 59.62% year-on-year, due to significant increases in procurement and salary expenses during capacity expansion. Capital expenditures accelerated significantly, with new factory construction progressing in an orderly manner, and financing activities providing support for capacity expansion.

Overseas

Trump Claims to Have "Completely Blocked" the Strait of Hormuz Until Iran is Willing to Reach an Agreement, Orders the Sinking of Any Vessels Laying Mines in the Strait, Iran Reportedly Activates Tehran's Air Defense System to Intercept "Hostile Targets" to Deny Airstrikes Trump once again emphasized that he feels no pressure to end the conflict with Iran and is not in a hurry to reach an agreement with Iran, stating that he wants to achieve the "best" and "permanent" deal. When asked if he would consider using nuclear weapons against Iran, Trump replied "no", and claimed that even without launching a nuclear strike, the U.S. has "completely destroyed" Iran.

• Israeli media reported that the Iranian Speaker of Parliament resigned from the negotiation team, and after the news broke, U.S. stocks fell further, with the Nasdaq dropping over 1%. Following reports of Tehran activating its air defense system, crude oil hit a daily high, rising over 5%. Iranian media later stated that the activation of the air defense system was aimed at countering small drones.
• According to Iranian media, Iran has developed a counterattack plan against potential military actions from the U.S. and its allies. A Pakistani diplomat stated that U.S.-Iran negotiations are "at an impasse." The Israeli Defense Minister threatened Iran: be prepared to restart the conflict, just waiting for the U.S. to "give the green light." The Iranian Foreign Ministry stated that the focus of negotiations has shifted from nuclear issues to a complete ceasefire.
• The Iranian leadership collectively denied internal strife and division, with the Supreme Leader stating that the unity of the people has caused division among enemies. Iranian media reported that in the past two days, four Iranian oil tankers have broken through U.S. military blockades. The Iranian Chief Justice stated that the U.S. does not dare to approach the Strait of Hormuz, and the Iranian fleet is on high alert in the strait. The Central Bank of Iran announced that the first toll for passing through the Strait of Hormuz has been recorded in "cash foreign exchange."

The U.S. military's USS Bush aircraft carrier is approaching the Middle East, Trump says he has plenty of time, but Iran is "on a countdown". Reports indicate that the USS Bush carrier strike group has over 5,000 personnel, and the USS Bush is likely to replace the USS Ford. During the handover period, it is expected that the U.S. military will form a deployment of three aircraft carriers: the USS Bush, USS Ford, and USS Lincoln in the Middle East. Trump reiterated on Thursday that he is not in a hurry to end the conflict with Iran.

• Trump states the ceasefire between Lebanon and Israel will be extended for three weeks. Trump announced on his social media that the ceasefire agreement between Israel and Lebanon will be extended for three weeks.
• “Security is not free”! Iran receives the first toll for the Strait of Hormuz, U.S. military claims to have intercepted two Iranian supertankers. The Iranian Deputy Speaker of Parliament stated that the first toll revenue from the Strait of Hormuz has been deposited into the central bank account. Iran's arrangement to charge transit vessels dates back to the initial ceasefire agreement. According to CCTV on April 8, the two-week ceasefire arrangement reached in early April included allowing Iran and Oman to charge tolls for transit vessels, and the funds raised by Iran will be used for post-war reconstruction.
• Last week, Iranian media reported that Iran suffered a "digital decapitation": before the enemy's missiles landed, a large number of American-brand routers within the country crashed, network paralysis caused radar disconnection, command links were interrupted, and troops were instantly "blind". Reports indicate that Iran's cyber laboratory will soon release more evidence and information showing that the relevant equipment manufacturing companies have technical cooperation with the U.S. and Israeli governments Previously, American media named Cisco, Microsoft, Google, Amazon, IBM, and leading AI company Palantir as providing technical support to the U.S. and Israel.
• The risk of war in Iran remains high, and the Trump administration may take action to further suppress oil prices, reports suggest plans to extend the Jones Act "vessel ban" exemption. Reports indicate that the announcement could come as early as this Friday, extending the suspension of the implementation of the Jones Act, though it is currently unclear how long the extension will last and what products it will cover.

With 51 votes against, the proposal to limit Trump's war powers has been rejected by the Senate for the fifth time; Democrats: We will continue to push for weekly votes until Republicans wake up. Senate Minority Leader Schumer stated, "The longer Trump delays in getting the U.S. out of this war, the deeper the U.S. will sink into the quagmire, and the harder it will be for him to extricate himself."

U.S. April manufacturing PMI preliminary value hits a nearly four-year high; stockpiling driven by weak demand, inflation rebound puts the Federal Reserve in a dilemma. The U.S. April composite PMI preliminary value rose to 52, reaching a three-month high, indicating moderate economic growth. The manufacturing PMI recorded 54, with part of the growth driven by tariff-induced precautionary stockpiling, not real demand; the services PMI rose to 51.3 but remains low, indicating weak demand. The increase in prices for goods and services is the largest since July 2022, intensifying inflationary pressures. Economist Williamson warned that against a backdrop of weak growth and rising inflation, the threshold for the Federal Reserve to cut interest rates has significantly increased.

Surpassing Claude, OpenAI releases the strongest model GPT-5.5, competing for the enterprise-level paid market. GPT-5.5 has comprehensively surpassed Claude and Gemini in tests in programming, scientific research, and knowledge work, achieving higher intelligence with reasoning delays comparable to previous generations. Engineers reported that it feels "like collaborating with a higher-level intelligent being." GPT-5.5 was made available to paid users of ChatGPT and the programming tool Codex on Thursday.

Altman's latest lengthy discussion: Many people are using AI incorrectly; computing power is not a cost, but a profit center! Altman and President Greg appeared together rarely, pointing out that many people are using AI incorrectly; they are stuck in reading articles to understand AI without truly using AI to turn ideas into reality. They clarified that OpenAI's core business logic is "computing power is not a cost but a profit center," achieving unlimited expansion by profiting from the difference in computing power. Strategically, the company decisively halted Sora and is fully betting on "agents" and "personal AGI." Surpassing OpenAI, Anthropic's secondary market valuation soars to $1 trillion. Anthropic's valuation in the private secondary market has surpassed $1 trillion, overtaking OpenAI's valuation of $880 billion. Driven by a surge in revenue and the popularity of Claude Code, the market has experienced extreme supply-demand imbalance, with sellers even asking for as much as $1.15 trillion. Anthropic shares have become a "hard-to-get" status symbol, reflecting the frenzied sentiment in the AI sector.

AI drives Intel's Q2 guidance to exceed expectations, stock rises over 20% in after-hours trading as market bets on CPU demand growth. Intel's quarterly report and second-quarter guidance have significantly exceeded expectations, with Q1 revenue growing 7% year-on-year to $13.6 billion, compared to the expected $12.4 billion; Q2 guidance revenue is projected to reach $13.8 billion to $14.8 billion, with a midpoint of $14.3 billion, against an expectation of $13 billion. The data center segment's revenue for Q1 was $5.1 billion, exceeding expectations with a 22% increase. The CEO stated that customer demand is enormous and is focused on ramping up production.

• Intel conference call: Spending on chip manufacturing equipment will increase by 25% year-on-year in 2026.

SAP Q1 cloud business revenue exceeds expectations with a 19% growth, stock rises over 10% in after-hours trading. German enterprise software giant SAP announced that its Q1 cloud business revenue was €5.96 billion (approximately $7 billion), slightly above the analysts' average expectation of €5.9 billion. The company maintains its full-year cloud revenue guidance unchanged at €25.5 billion to €26.2 billion.

Nokia's stunning transformation: AI cloud business explodes, Q1 operating profit surges 54%, stock price hits a 16-year high. Nokia's comparable operating profit for Q1 surged year-on-year to €281 million, primarily driven by explosive demand from AI and cloud customers, with related orders exceeding €1 billion in a single quarter and sales growing by 49%. The company also raised its full-year and mid-term growth expectations, forecasting an average annual growth rate of 27% in the AI and cloud market, which will accelerate the expansion of its network infrastructure business. Driven by the wave of investment in AI data centers, Nokia is transforming from a traditional telecom equipment vendor to a key network infrastructure provider.

Research Report Highlights

Why is the rising oil price a "warning," but the U.S. stock market remains indifferent? Oil prices have been fluctuating sharply due to the situation in Iran, yet the U.S. stock market has reached new historical highs against the trend—this rare "decoupling" is supported by a strong earnings season and the structure of options, creating a "paper prosperity." However, market breadth has fallen to its narrowest since the internet bubble, with the VIX returning above 20. The entire rally is built on the single assumption that "conflicts will eventually be resolved." Once a ceasefire breaks down, this sandcastle will collapse.

Will Waller bring “rate cuts + balance sheet reduction”? Chen Jiali from GF Securities believes that Waller is most likely to promote "visible but harmless" institutional reforms, such as reducing FOMC press conferences and canceling the dot plot. The pace of balance sheet reduction is expected to be slow, with no substantial new QT plans in the short term. Compared to balance sheet reduction, the probability of rate cuts is higher. Currently, the structural differentiation of the U.S. economy is significant, with high growth in the AI industry, but traditional sectors are under continued pressure in terms of employment and profits, which the Federal Reserve cannot ignore due to dual target pressures.

Is the doomsday for SaaS coming? After researching 40 companies, Goldman Sachs exclaims: This could be a larger growth narrative. Goldman Sachs believes that software companies are shifting their business models from selling functions and seats to selling "labor or productivity units," which means they will be able to tap into the labor budget market that far exceeds traditional software budgets, significantly expanding the overall Total Addressable Market (TAM). Meanwhile, value is being redistributed from cutting-edge large model laboratories to software application layers and runtime layers, and this structural shift provides positive support for the long-term valuation logic of SaaS stocks.

Taiwan Semiconductor Manufacturing Company (TSMC) calls it "expensive," ASML responds with a drop, analysts rush to "put out fires". Analysts generally believe that TSMC's attitude is not surprising and should not be overly interpreted as a warning signal for ASML's long-term demand outlook. ASML's monopoly position in the photolithography equipment field remains solid, while Intel and Samsung's attitudes towards high numerical aperture extreme ultraviolet (EUV) technology are noticeably more positive.

Domestic Macro

The General Office of the Central Committee and the General Office of the State Council issued the "Comprehensive Evaluation and Assessment Method for Carbon Peak and Carbon Neutrality": Formulate the "14th Five-Year Plan" carbon peak action plan to achieve peak coal and oil consumption. During the "14th Five-Year Plan" period, the National Development and Reform Commission should work with relevant departments to formulate the "14th Five-Year Plan" carbon peak action plan to ensure the achievement of the carbon peak target before 2030, with carbon emission intensity reduced by more than 65% compared to 2005 levels and non-fossil energy consumption accounting for 25% by 2030, achieving peak coal and oil consumption, reasonably controlling the scale of coal-fired power generation capacity and output, and striving for annual new clean energy electricity generation to gradually cover the newly added electricity consumption of the whole society.

Domestic Companies

Ningde Times: Lithium iron phosphate batteries for electric vehicles priced above 250,000 yuan are a disguised reduction in configuration! Gao Huan, CTO of Ningde Times, stated at the Super Technology Day that using lithium iron phosphate batteries in electric vehicles priced above 250,000 yuan is a "disguised reduction in configuration," believing that their low energy density leads to "heavy" endurance, severely damaging vehicle energy consumption and handling The company has launched the third-generation Kirin battery, achieving a range of 1,000 kilometers through high energy density while significantly reducing weight.

GoerTek's Q1 revenue increased by 14% year-on-year, net profit up 7% despite foreign exchange losses.

Xinwanda's Q1 revenue increased by 31% year-on-year, but net profit attributable to the parent company fell by 70% due to foreign exchange losses.

China Telecom's Q1 revenue and net profit both declined, while smart revenue grew nearly 40% year-on-year, with AI and cloud services becoming new engines.

Actors are starting to be eliminated in bulk, but their faces aren't worth even a day's salary. AI has made it so that stars can only earn money "by their looks," while ordinary faces are being "exploited" to feed AI for video creation? iQIYI's launch of the "AI Artist Database" has sparked collective protests from actors, with studios of Zhang Ruoyun, Yu Hewei, and others urgently denying authorization. From the Hollywood strike to domestic AI short dramas replacing live-action filming, driven by cost and efficiency, second- and third-tier actors face the crisis of being fully replaced by AI. More seriously, ordinary people's portraits are also being stolen for popular short dramas, making rights protection difficult. Although regulators have intervened, the boundaries of AI portrait rights remain unclear.

Overseas Macro

With the election approaching, Trump is indifferent to the economy, and the Republican Party is a bit anxious! Trump has recently shifted his focus to the Arc de Triomphe concept, White House UFC fights, celebrity gossip, and cultural and religious topics, rarely responding to people's livelihood concerns. The Democratic Party is seizing the opportunity to refocus on economic issues, while anxiety and signs of "defection" have emerged within the Republican Party, with 38 Republican representatives already announcing they will not seek re-election, compared to only 23 Democrats.

"Mad King" Trump, "Crazy War," and "Insane Market". A "mad king" president, called out of the war room by aides, has waged an unsolvable war with hourly reversals, creating a market that even mainstream media cannot comprehend. The latest disclosures reveal the true origins of this "madness and chaos" and where it may lead the situation.

Overseas Companies

Tesla officially enters the "money-burning infrastructure phase"! Tesla's current capital expenditure expansion covers multiple areas including manufacturing capacity, energy, automotive, and semiconductors, while also heavily investing in computing power and next-generation physical AI infrastructure. Morgan Stanley has raised its forecast for Tesla's 2026 capital expenditures to $26.1 billion (above Tesla's guidance of $25 billion), while the annual free cash flow forecast has been further downgraded from negative $8.4 billion to negative $11.6 billion Report: SpaceX plans to produce GPUs in-house and warns of "significant capital expenditures". SpaceX disclosed that it plans to produce GPUs independently to strengthen its AI infrastructure and address uncertainties in chip supply. This ambitious "Terafab" project aims to achieve full-chain autonomy from design to manufacturing, but also indicates extremely high technical barriers and capital expenditures.

Today's News Preview

U.S. April University of Michigan Consumer Confidence and Inflation Expectations.

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