GS Johnstone GS TMT SPEC SALES Hot CPI and credit concerns; TSMC solid; VAT beats; Ericsson beats; Havas beats; Eutelsat up

GS Johnstone - GS TMT SPEC SALES Hot CPI and credit concerns; TSMC solid; VAT beats; Ericsson beats; Havas beats; Eutelsat up 15 Oct 2026 Sean Johnstone · Goldman Sachs · TMT Specialist Sales 15 Oct 2026

GS TMT SPEC SALES – Thursday 15th October

Markets overnight: Global equities sold off sharply after hotter-than-expected US core inflation revived rate-hike concerns and intensified the unwind in AI trades. The Nasdaq - 2%, SOX - 4.5% and software lost 3%, with neoclouds, servers and optical names hit hardest; the weakness spread to Asia this morning, where Korea’s Kospi fell 8%, Samsung and SK Hynix dropped more than 9%. %. High-beta, growth, momentum and liquidity factors all underperformed, hurting TMT-focused funds, while defensive areas such as telcos and selected application software held up better.

The main concern was credit & AI financing - CoreWeave unsecured bonds traded into distressed territory (<80 cents, yields >15%), drawing ‘Yikes’ from Musk and highlighting leverage risks across AI neoclouds and credit markets. Spillover hit Nebius and Oracle equity and credit. Gartner’s report did not help sentiment as it expresses the view that much of the sector’s planned investment may struggle to earn an adequate return. Plus, some pointing to the latest Ramp AI Index on employee spend slowing. A lot of pain out there as the GS Prime data showing (after the NY close) that Global Fundamental LS managers down 0.8%(-1.7 StdDev) mainly beta. Now down 2% MTD but still up 10.6% YTD. While TMT focused funds hurt the most: down 2.7% today (-2.6 StdDev), down 4.5% MTD but still up 13% YTD.

| • | TSMC Q3 results: modest beat raining FY revenue outlook while capex is unchanged. In Q revenue small beat, gross margin broadly in line at 66.4%, operating margin of 58.7% versus 58.1%, EPS 4% ahead. On Q4 guidance guides revenue above - at $52.3–54.3bn versus street at $50.35bn, gross margin of 65–67% and operating margin of 56.5–58.5%, while 2026 capex was maintained at $60–64bn. Should reassure that AI deployment remains on track, but the bulls had hoped for a further capex increase. |

| • | VAT Group - Orders +188% organic (record growth, 40% ahead of consensus), book-to-bill at 1.9x (highest ever). Commentary cites no double bookings or inflated orders, despite lead times now 9 months + vs 3 months at the end of 2025, partly due to expected price increases or concerns over availability going forward. Demand from Chinese customers also remains strong. 4Q sales is guided 420-450m (cons at 446m) and 2027 guidance is expected significantly above 1.7bn (cons at 1.9bn, GSe 2.1bn). Daniela sees consensus likely to move up by low dd. More from Daniela & team here. Feedback into the print has been bullish, only question was whether '27 guide upgrade would come today or at Q4. Market reaction today likely to be held back by global semis / AI risk-off (indication unch). |

| • | ERICSSON better than expected set of numbers with better cost control and was a consensus short so would expect a positive reaction to start and to be a relative outperformer in this tape (on Tradegate up 3% on low volumes). Q3 revenues 7% ahead at SEK59.48bn driven by a beat in Networks (beat is Asia, Oceania and India, while Americas declined) that drops though to Gross Margin that 8% ahead and better cost control sees EBITA beat by 28% at 10.12bn vs 7.93bn exp (margin 17% vs street at 14.3%). The company guided its 4Q26 Networks revenue to grow in-line with the 3-year average seasonality of +17% qoq (cons has +24% qoq growth but off a lower starting pt – implies 5% of street). Networks GM in 4Q26 guided in the range of 49% to 51% (vs cons of 48.3%). Cloud Software & Services Sales growth in 4Q26 is expected to be broadly similar to 3Y avg seasonality (+29% qoq…..street was 33% off higher base so 1% ahead). Net/net street estimate for the FY will go up on the topline circa3% and with better drop though. On the RAN market its guided as flat, geopolitical uncertainty remains elevated and component costs are headwind to GM next year. On AI saying its already seeing the efficiency gains from AI-enabled features in our portfolio being deployed in customer networks. See Alex…