EU Marketing Feedback

Research evidence excerpt

EU Marketing Feedback

t the potential contribution of AI to

mid-term earnings. We would like to see companies start quantifying AI-related earnings

contributions in their guidance, alongside updates on progress against their mid-term plans.

Most discussions centered on large-cap names, including Fujitsu (6702JP) and NRI

(4307JP). As NRI management was visiting Europe during the same week, we received a

significant number of questions on its outlook. Investor sentiment on NRI appeared somewhat

negative, with many expressing dissatisfaction with its conservative FY guidance and the new

mid-term plan. There was a view that the company could have presented a less conservative

outlook, particularly following the large write-off related to its overseas business.

High interest – BayCurrent (6532 JP): Capturing new projects from Defense

This stock came up in many meetings this week. BC is scheduled to report its Q1 earnings on

July 15, and expectations appear higher than we had anticipated. We continue to see some

pushback from investors, largely given its exposure to consulting. While we believe the market

is increasingly recognizing the acceleration in BC’s earnings, a key risk remains the persistently

negative sentiment toward consulting in the context of AI.

Trend Micro (4704 JP) as a contrarian idea: We have pointed out our recent upgrade of Trend

Micro to Buy here. What we will be looking for is ARR acceleration growth from H2 this FY as

the company is currently investing towards rebranding its AI products. Many investors are not

closely following TM. We pointed out that if its strategy and rebranding efforts work, we may

see ARR growth acceleration (currently 4% range) as the company targets 15% YoY ARR by

end of this FY.