Markets mixed as tariff updates alleviate inflation concerns

Analyst thesis

Our recommendation is based on:

• B2B digital services: DTE is growing its high-margin business‑customer segment by offering 5G private networks, secure connectivity (SD-WAN) and sovereign cloud services to a range of companies and public institutions, with strong demand from factories, ports and logistics hubs.

• T-Mobile US market share expansion: T‑Mobile US has transitioned from a low‑cost challenger to the best‑in‑class network, supporting a mix shift toward higher‑quality, prime subscribers while continuing to expand into under‑penetrated rural America.

• German fibre monetisation (FTTH): The decade‑long copper-to-FTTH migration acts as a structural value driver, boosting ARPU through higher‑speed tiers and convergent bundles, while progressively reducing network maintenance and fault‑repair OpEx.

• Disciplined capital allocation: While European peers remain constrained by leverage and higher interest rates, DTE is returning ~€2 billion annually via buybacks and steadily increasing its TMUS stake from 50.6% to 52.8%, enhancing exposure to US growth without compromising balance sheet resilience.

• Artificial intelligence (AI) and data centre optionality: Strategic partnerships with NVIDIA and Brookfield to build sovereign AI compute infrastructure in Germany provide medium-term upside optionality as European enterprises and governments seek local, secure AI cloud capacity.

Analyst thesis

Our recommendation is based on:

• Copper-leveraged portfolio into electrification: Anglo American’s increasing focus on copper and premium iron ore, supported by the proposed merger with Teck Resources, positions it as a key beneficiary of structurally higher copper demand driven by grid investment, renewables, electric vehicles (EVs), and data centres.​

• Structural copper deficit supports pricing: Industry analysis suggests global copper demand could grow by 40%–60% over the next two decades, with a sizeable supply gap set to emerge due to permitting delays, grade decline, and underinvestment constraining new projects. This dynamic underpins a supportive long-term price deck for tier-one producers such as Anglo.​

• Portfolio simplification driving quality: Excluding De Beers and other non-core assets, representing lower quality and lower margin businesses, Anglo’s core copper and premium iron ore businesses delivered strong margins in FY25, reinforcing a higher-return, lower-volatility earnings base.

• De Beers is a clear drag: De Beers’ loss-making performance and impairment in FY25 weighed on group returns. Management’s plan to separate or divest the underperforming diamonds business serves as a visible value-unlock catalyst, enabling investors to re‑rate Anglo based on its core copper and iron ore franchise.

Analyst thesis

Our recommendation is based on:

• The company is structurally shifting from lower margin ecommerce towards high margin, cash-generating web services through AWS, which accounts for 18% of net sales and 57% of operating profit. AWS’s revenue contribution has increased from 13% to 18% over the past five years.

• AMZN continues to generate strong cash flow in an environment with a drag on cash due to high capex needs. Operating cash flows rose 20% over this period and we anticipate similar growth in FY26 driven by robust AWS performance.

• Demand for artificial intelligence (AI) infrastructure platforms serve as a catalyst for long-term growth in cloud and AI services.

  Various competitive advantages across business segments, including scale, cost leadership and network effects in cloud and logistics, alongside differentiation through quick delivery and exclusive access to resources such as distribution networks and vast customer data.

• Key growth drivers going forward include:

  o Continued global cloud adoption accelerated by AI.

  o Margin expansion through higher AWS and advertising growth combined with fulfilment network efficiencies and automation.

  o Ongoing logistics expansion.

  o Long-term growth projects, including an $8 billion stake in Anthropic, Kuiper, Zoox and freight services.

• Attractive valuation levels from a P:E perspective compared to its own history.