Tweeted by FundaAI@9
Tweeted by FundaAI@978741625
Weekly|Kimi K3 "DeepSeek Moment" Jitters, TSM and $ASML Beat-and-Raise, $ATI & the Starship Supply Chain, $INTC , $AXTI , $NBIS
Semis got smoked this week, with the indexes closing out weekly losses on fears of another “DeepSeek moment” after Kimi K3’s release. We think that read gets K3 exactly backward. K3 is a 2.8-trillion-parameter model priced at $3/$15 per million tokens - in line with Claude Sonnet, not the cut-price disruption playbook - and it currently runs only at maximum reasoning effort, which means it very likely burns more compute per task than its US frontier peers. A Chinese lab scaling up aggressively and pricing at frontier levels is evidence that scaling still works and that demand for inference compute keeps climbing. That is not a bearish datapoint for the compute chain.
The fundamentals told a story opposite to the tape. TSMC and ASML - the two most important prints of the season - both delivered beat-and-raise quarters. TSMC lifted its full-year 2026 USD revenue growth guidance to above 40%, raised CapEx again, and C.C. Wei described AI demand as getting “stronger and stronger” through 2029-30. ASML raised its 2026 revenue guide to EUR 43-45bn (midpoint 12% above consensus) and is expanding both EUV and immersion DUV capacity by 30% in 2027, with another 30% under study for 2028. Yes, TSMC’s 3Q gross margin guide came in light - but the culprit is a faster-than-expected 2nm ramp, which is the kind of margin problem you want to have.
When the supply chain’s two most important companies are guiding like this while the market frets over a model release that actually reinforces the compute-demand thesis, we are comfortable treating this week’s selloff as positioning, not fundamentals. We stay constructive on the AI compute chain.
This Week’s Reports
Kimi K3 - scaling still works, and it is not cheap. K3 lands in the global top tier on coding, agents, and long-horizon tasks. However, prices at Claude Sonnet levels and runs only at max reasoning effort - more proof that frontier capability still costs frontier compute.
https://t.co/VmMISRiE6m
TSM & ASML - the supply chain says demand is accelerating, not slowing. Both quarters were beat-and-raise: TSMC surprised on CapEx and lifted full-year growth to 40%+, while ASML guided 2026 revenue 12% above consensus with 30% EUV capacity expansion ahead. The 2nm-driven margin dilution at TSMC is noise next to the demand signal.
https://t.co/fQzxAoy72H
https://t.co/h7oCS954MC
ATI - the materials chokepoint of the Starship era. Superalloy content per Starship stack is 25-30x a Falcon 9, and specialty melting is the one layer SpaceX cannot vertically integrate - yet ATI trades at the lowest multiple of the Big Three melt names—one of the few structural public-market entries into the SpaceX supply chain.
https://t.co/c3jphb9ksC
Premium Report Snapshot
A portion of our research is reserved for Premium subscribers and is not distributed via Substack. Below is a snapshot of what Premium subscribers received this week beyond the Substack feed.
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Selected Weekly Expert Interviews
A snapshot of the expert calls conducted for Premium subscribers this week. Full transcripts and takeaways are available on the FUNDA platform.
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Claude Deployment Spend, ROI and Governance Constraints
Employee of AI Department, Aviva Canada
Aviva’s Canadian Claude rollout is seeing strong consumption in coding and insurance workflows, but ROI remains uneven, and governance limits broader adoption.
AI Agent usage
Former Engineer, Google
Google DeepMind’s Gemini app commercialization is framed as advancing through harness-system buildout, but consumer monetization, execution discipline, and coding competitiveness remain challenges.
Detailed Report
https://t.co/PbbSgbIU6g