GS TMT SPEC SALES AI complex and semis benefit from Nvidia

GS TMT SPEC SALES – Wednesday 12th of August

TODAY’S WRAP: Market overnight: US markets were broadly unchanged in a quiet session ahead of the July CPI print, with overall activity light and the floor around a 3/10. The main positive was continued strength across the AI complex and semis, helped by NVIDIA’s $500bn financing partnerships and a solid set of AI infrastructure results: Supermicro rose after hours on strong FY27 guidance and record backlog (see GIR take), Lumentum pointed to rising demand for high-power CPO lasers and external laser source modules (positive Nokia in Europe), and CoreWeave +15% AH after results showing strong demand, a $104bn backlog and better operating leverage. This morning Korea also rallied, with the Kospi +4.6% and Samsung Electronics / SK Hynix up c.5-6% on shareholder-return optimism, while China ADRs were weaker. Nvidia preview: reports 2Q earnings on 26th Aug; we expect a solid quarter with meaningful upside to guidance supported by tight GPU supply/demand trends, but think the bar for the stock is elevated given its +12% move in two weeks; details here: Link

Neoclouds outperformed on the NVDA $500B partnership and better numbers from CoreWeave + 15% AH with the key positive being stronger-than-expected operating leverage: operating income was around 5% of revenue, ahead of c.3% bogeys, even though revenue was slightly lighter. Demand also remains strong, with $104bn of backlog excluding more than $25bn of new customer commitments signed early in 3Q, plus RPO up $4bn q/q. The main pushback is still capital intensity, with capex of $9.4bn versus c.$8.5bn bogeys, but active power of 1.5GW is tracking well against the FY guide of 1.7GW, with capacity additions still back-half weighted. NBIS was +6% in sympathy it reports pre US market today See Alex Nebius preview with the key debates around whether strong AI infrastructure demand and pricing can support current/future ARR (the key number the FY ARR target), whether Meta’s cloud ambitions create real competitive pressure for Nebius, and how quickly capacity expansion can ramp without regulatory or execution issues.

Interesting datapoint that I missed on the day Cloudflare reported (See GIR take). Cloudflare’s CEO Matthew Prince reported on the company’s Q2 2026 earnings call that non-human traffic overtook human traffic on its network in May 2026 — well ahead of earlier forecasts that had pointed to 2027. He noted that if current trends continue, non- human traffic could reach as much as 1,000 times the volume of human traffic within five years, describing a future in which humans become “a rounding error on the internet.” Cloudflare is unusually well placed to detect this shift first: it sits as a reverse proxy in front of roughly 20–24% of all websites, inspects traffic at the edge across a broad slice of the public web, and already runs sophisticated bot-classification systems plus its public Radar measurement platform.

The volume implications are already visible in commerce. Shopify reported that AI- referred sessions to its merchants tripled year-over-year in Q2 2026, with orders from those sessions also tripling. These agent-driven visits convert at higher rates, land more frequently on product pages, and disproportionately benefit the long tail of smaller and niche brands. Shopify is seeing relatively more upside than Amazon because it has opened its catalog and checkout to third-party AI agents through structured data and the Universal Commerce Protocol, while Amazon has kept a more closed approach that prioritizes its own ecosystem and restricts external agents. What was once a human-dominated web is rapidly becoming a machine-heavy environment in which a single user prompt can trigger dozens or thousands of automated fetches, forcing infrastructure providers, content sites, and platforms to treat agentic traffic as a first-class, high-growth layer rather than background noise.

This shift is also accelerating a between publishers and Google. The WSJ reporting late July that the long-feared “Google Zero” moment — when Google Search largely stops sending traffic to third-party sites —some publications are seeing traffic drops of more than 40%…