TMTB Morning Wrap

Key Takeaways

• Iran's Hormuz seizure pushes futures down 50bps, oil up 6%.
• Morgan Stanley forecasts $32‑60 B CPU market growth by 2030.
• Memory demand could rise 26‑77% from AI agentic workloads.
• RBC cuts GitLab target to $25, citing pricing pressure.
• Evercore upgrades Arista Networks, citing AI networking upside.

Pulse Analysis

The Strait of Hormuz incident underscored how quickly geopolitical flashpoints can ripple through global markets. Futures slid 50 basis points as investors priced in heightened risk, while oil surged 6% on supply concerns. Asian indices rallied across the board, reflecting a risk‑on sentiment that often follows commodity price spikes. Traders will watch the cease‑fire deadline closely, as any escalation could reignite volatility in both energy and equity markets.

Morgan Stanley’s latest research flags a structural transition in artificial intelligence from pure generative models to agentic systems that require orchestration, memory, and coordination. This evolution is projected to add $32‑60 billion to the server CPU addressable market by 2030, with total server CPU TAM exceeding $100 billion. Simultaneously, memory demand could capture 26‑77% of incremental DRAM usage, benefitting manufacturers that can deliver high‑bandwidth, low‑latency solutions. Companies positioned across the compute‑memory stack stand to gain as data centers re‑architect workloads for persistent, multi‑step AI agents.

On the equity side, RBC’s downgrade of GitLab (GTLB) to sector‑perform and a reduced price target of $25 reflect mounting pressure from premium pricing erosion, slower seat growth, and broader corporate layoffs. Conversely, Evercore’s upgrade of Arista Networks (ANET) to tactical outperform highlights the upside from AI‑driven networking demand, especially as hyperscale providers scale out high‑performance interconnects. With earnings from GE Vernova, IBM, Tesla and Texas Instruments on the horizon, investors will gauge whether these macro and sector trends translate into earnings momentum or further headwinds.