Quick Summary Nvidia posted a 75.2% adjusted gross margin , among the highest in Big Tech AI hyperscalers plan US$650B capex in 2026 , much flowing to Nvidia Rivals like AMD, Alphabet and Amazon are gaining traction Long-term margin sustainability remains the key investor question Margins Steal the Show While investors already expected strong demand, NVIDIA Corp surprised with something even more impressive: Adjusted gross margin of 75.2% , the highest since late 2024 — and management expects similar levels next quarter. For a nearly US$5 trillion company , that margin signals extraordinary pricing power in AI hardware. AI Spending Wave Still Intact AI hyperscalers are forecasting ~US$650 billion in capex for 2026 , up roughly 60% from 2025. Nvidia remains the primary beneficiary as demand for data centre GPUs continues to surge. But maintaining 75% margins depends on two big factors: 1️⃣ Supply Constraints Rising memory costs remain a ris...
Quick Summary
PCHEM shares fell over 6%, extending 2026 losses to more than 14%
Analysts cut forecasts after another deeper-than-expected quarterly loss
Industry faces persistent oversupply and weak demand, especially from China
Majority of research houses now recommend ‘Sell’
Stock Extends Downtrend
Shares of PETRONAS Chemicals Group Bhd dropped to RM3.09 (-6%), reflecting mounting concerns over prolonged sector weakness.
Market cap: ~RM25 billion
YTD decline (2026): -14%
More than 9 million shares traded by midday
The latest quarterly results sank deeper into the red than expected, prompting analysts to downgrade outlooks.
Why the Pressure Continues
The petrochemical sector remains stuck in a structural downcycle driven by:
Persistent global oversupply
Weak downstream demand
Aggressive capacity expansion in China
According to Maybank Investment Bank, additional plants coming online in China will continue adding pressure to prices.
Key point: Supply growth is outpacing demand recovery.
Analyst Sentiment Turns Defensive
Current ratings breakdown (21 research houses):
11 Sell
6 Hold
4 Buy
Consensus target price: RM3.06, slightly below current levels.
Hong Leong Investment Bank expects another net loss this year, citing:
China’s ongoing capacity ramp-up
Uninspiring downstream demand outlook
Industry Backdrop
PCHEM produces:
Olefins
Polymers
Fertilisers
Methanol
Specialty chemicals
While China and South Korea have introduced measures to rationalise production, the impact on supply-demand balance remains uncertain.
Can PCHEM Return to Profit?
Some analysts believe the company could:
Return to profitability later this year
Benefit if production rationalisation gains traction
However, near-term visibility remains limited.
Bottom Line
The petrochemical downcycle is not over yet.
Until meaningful supply cuts materialise or demand strengthens, PCHEM is likely to remain under pressure, with analysts largely staying cautious.
Key Takeaways
Another weak quarter deepens losses
Oversupply in China remains the main drag
Majority of analysts now bearish
Recovery depends on supply rationalisation
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