EQUITY RESEARCH MORNING RESEARCH SUMMARY June 11, 2020

What's Inside Focus Items Initiation ShockWave Medical, Inc. (SWAV) Suraj Kalia, CFA DKNG O DraftKings, Inc. Market Flows Overshadowing Fundamentals; Moving to Perform from Underperform Rating Change GRUB NR → GrubHub, Inc. HEALTHCARE Michael Wiederhorn SWAV P ↑ ShockWave Medical, Inc. Election Series: Biden's Healthcare Plan + Payor Impact

Estimates & PT Revisions Jack in the Box, Inc. (JACK) Brian Bittner, CFA ADBE O ↑ Adobe Systems Incorporated JACK Is Back; Raise Target To $89 AXGT P ↑ Axovant Sciences Ltd. Yum! Brands Inc. (YUM) Brian Bittner, CFA ↓ FIVE O Five Below Encouraging Business Update; Reiterate Outperform JACK O ↑ Jack in the Box, Inc. ORCL P ↓ Oracle Corporation Adobe Systems Incorporated (ADBE) Brian Schwartz PRPL O ↑ Purple Innovation, Inc. F2Q Preview: Transitory Quarter and Model Update ROKU O ↑ Roku, Inc. Oracle Corporation (ORCL) Brian Schwartz SBUX O ↓ Starbucks Corporation Oracle's F4Q Preview and Model Change VRNS O ↑ Varonis Systems, Inc. YUM O ↑ Yum! Brands Inc. CrowdStrike Holdings, Inc. (CRWD) Shaul Eyal Investors' Meeting Takeaways Updates TECHNOLOGY Shaul Eyal ADI O Analog Devices Virtual Bus Tour Highlights: CyberArk and Varonis CRWD O CrowdStrike Holdings, Inc. CYBR O CyberArk Software Ltd. Analog Devices (ADI) Rick Schafer INTC P Intel Corp. Notes from the Road MPWR O Monolithic Power Systems NVIDIA Corp. (NVDA) Rick Schafer MRVL O Marvell Technology Group Bus Tour Notes Takeaways MXIM P Maxim Integrated Products NVDA O NVIDIA Corp. Marvell Technology Group (MRVL) Rick Schafer SWKS P Skyworks Solutions, Inc. Notes from the Road

Estimates/Ratings/Price Target Updates Roku, Inc. (ROKU) Jason Helfstein Annual Estimates Advertising Recovering Faster Than Anticipated; GOOG/TCL Current FY Next FY Ratings Price Targets Headlines Overblown; Maintaining Outperform

Company Ticker Prev Curr Prev Curr Prev Curr Prev Curr Other Headlines Technical Analysis Ari Wald, CFA, CMT Adobe Systems ADBE 9.75 9.25 11.80 10.85 O O $410.00 $430.00 Incorporated Color for Fundamental Focus Calls: ADBE, ORCL, NVDA, UNH,

Axovant AXGT (2.35) (1.73) (2.25) (1.63) P P NA NA NDAQ, ROKU Sciences Ltd.

Five Below FIVE 3.63 1.52 4.40 3.70 O O $140.00 $140.00 For analyst certification and important disclosures, see the Disclosure Appendix.

Oppenheimer & Co Inc. 85 Broad Street, New York, NY 10004 Tel: 212-667-7990 Morning Summary - June 11, 2020

GrubHub, Inc. GRUB ------P NR NA NA Axovant Sciences Ltd. (AXGT) Jay Olson, CFA Jack in the Box, JACK 3.77 3.82 4.96 4.97 O O $75.00 $89.00 Quarterly Update Outlines Key Catalysts Inc. Oracle ORCL 3.91 3.79 4.31 4.06 P P NA NA GrubHub, Inc. (GRUB) Jason Helfstein Corporation Just Eat Takeaway.com to Acquire GrubHub for $7.3B; Moving to Purple PRPL 0.51 0.63 0.55 0.57 O O $19.00 $19.00 Innovation, Inc. Not Rated

Roku, Inc. ROKU ------O O $135.00 $140.00 DraftKings, Inc. (DKNG) Jed Kelly, CFA ShockWave SWAV (2.32) (2.32) (2.08) (2.08) U P $23.00 NA Sharp Side on Proven Executor in Fast-Growing Sports Betting Medical, Inc. Market; Initiating with Outperform and $48 Price Target Starbucks SBUX 1.42 0.81 2.59 2.57 O O $85.00 $85.00 Corporation TECHNOLOGY Ittai Kidron Varonis VRNS (1.15) (1.15) (0.50) (0.50) O O $70.00 $95.00 Systems, Inc. Virtual Bus Tour Highlights: VMware and Citrix

Yum! Brands YUM 2.81 2.92 3.83 3.83 O O $93.00 $103.00 Inc. Intel Corp. (INTC) Rick Schafer Bus Tour Notes

Monolithic Power Systems (MPWR) Rick Schafer Virtual Bus Tour Notes

Maxim Integrated Products (MXIM) Rick Schafer Notes from the Road

Skyworks Solutions, Inc. (SWKS) Rick Schafer Notes from the Road

TECHNOLOGY Rick Schafer Daily Chip Clips

Starbucks Corporation (SBUX) Brian Bittner, CFA Thoughts on Recent Update; Maintain Outperform

Five Below (FIVE) Brian Nagel, CFA Long-term EPS Power for FIVE Intact

Purple Innovation, Inc. (PRPL) Brian Nagel, CFA Adjusting Model to Reflect Upbeat Business Update

2 Morning Summary -June 11, 2020

Snap Commentaries - Equities Updates Suraj Kalia, CFA HEALTHCARE 212-667-5387 ShockWave Medical, Inc. (SWAV - $46.67) Medical Devices

Rating / Prior Market Cap Price Target / Prior Earnings Type 2019A 2020E 2021E

P / U $1,486.9M NA / $23.00 EPS (1.80) (2.32) (2.08)

Market Flows Overshadowing Fundamentals; Moving to Perform from Underperform

We are upgrading ShockWave to a Perform rating (from our prior Underpeform/$23 PT). Consistent with the broader market, SWAV has rallied ~40% since early April (vs. the S&P 500 up ~24%), and now trades at ~15x FY21E P/S, one of the highest valuations in medtech-land. Recent news about C-codes for IVL is, in our view, adding more "speculation" into the name, despite the same codes currently being used for IVL billing. This "cost-analysis" exercise by CMS will be used to determine final rates, which might take a few years. Our overall frustration should be obvious in this note. We have been dead wrong on the timing of the downgrade. We do, however, stick with our field checks on the fundamentals.

HEALTHCARE Michael Wiederhorn 954-356-8312

Election Series: Biden's Healthcare Plan + Payor Impact

As we are fast approaching the important 2020 presidential election, we are taking a look at how policy could look in 2021 and beyond. We believe the COVID-19 pandemic is certain to bring healthcare to the forefront of the upcoming election, especially in light of the rapidly growing unemployment rate that is certain to affect insurance coverage throughout the country. Former VP Joe Biden is reportedly leading President Trump in the polls, although the election remains months away. At this point, we have a good sense for how HHS will operate under President Trump, but in today's report, we took a closer look at how policy might look under a Biden administration and more specifically how an expansion of Medicare would impact the insurers. The former VP has presented various healthcare policies that would strengthen the ACA, expand Medicare to the age 60–64 population, implement a public option, and allow prescription drug price negotiations.

Brian Bittner, CFA CONSUMER 212-667-7127 Jack in the Box, Inc. (JACK - $71.03) Restaurants

Rating Market Cap Price Target / Prior Earnings Type 2019A 2020E / Prior 2021E / Prior

O $1,610.4M $89.00 / $75.00 EPS 4.35 3.82 / 3.77 4.97 / 4.96

JACK Is Back; Raise Target To $89

Ahead of JACK's participation in Oppenheimer's Consumer Conference on 6/16, the company provided a business update which implies SSS are positive high-singles since early-May. These recent trends are industry-leading and above consensus despite JACK's higher exposure to breakfast and late-night dayparts. Based on our work, we believe positive EBITDA revisions

3 Morning Summary -June 11, 2020

to '21E will be a key theme. Yet the model remains underappreciated by the market with valuation still a massive 30%+ discount to peers all while incoming CEO (starts next week) adds another layer to an improving story. Reiterate Outperform, raise estimates and increase target to $89 from $75.

Brian Bittner, CFA CONSUMER 212-667-7127 Yum! Brands Inc. (YUM - $95.56) Restaurants

Rating Market Cap Price Target / Prior Earnings Type 2019A 2020E / Prior 2021E

O $28,762.2M $103.00 / $93.00 EPS 3.73 2.92 / 2.81 3.83

Encouraging Business Update; Reiterate Outperform

After evaluating YUM's June 10th business update, it appears global SSS for TB and PH are recovering ahead of consensus while KFC's recovery appears to be in line. We carefully apply all moving pieces to our updated financial model and our 2021 EPS stays unchanged at $3.83, which sits above the Street's $3.73E. We view the global KFC business as the most important potential upside driver from here given: 1) it represents the largest business segment (roughly half of YUM's profits); 2) consensus underwrites negative SSS through year-end; and 3) opportunities for a stronger KFC recovery are now taking shape. Reiterate Outperform and raise price target to $103 from $93.

4 Morning Summary -June 11, 2020

Brian Schwartz TECHNOLOGY 415-399-5732 Adobe Systems Incorporated (ADBE - $406.82) SaaS/Applications Software

Rating Market Cap Price Target / Prior Earnings Type 2019A 2020E / Prior 2021E / Prior

O $196,006.2M $430.00 / $410.00 EPS 7.87 9.25 / 9.75 10.85 / 11.80

F2Q Preview: Transitory Quarter and Model Update

We believe Adobe remains well-positioned to achieve its long-term financial goals. Our industry checks reveal good enterprise demand for Adobe with the company increasingly viewed as a cornerstone of customer-engagement-and-experience driven digital transformations. Certain segments of the business (i.e., commerce, messaging, e-signature, analytics) are experiencing accelerating demand during the Covid-19 pandemic while cycles for the distressed industries extend. Last, use cases in marketing departments are shifting from driving consumer-traffic via behavioral-targeting to brand promotion and messaging. This shift should benefit bookings by increasing usage and adoption of Adobe's creative software and Experience Cloud technologies. Bottom Line: We see F2Q as a transitory-quarter. Beyond F2Q we expect customers will continue viewing Adobe's technology as mission-critical driven by the immediate needs for digitizing, brand promotion and messaging. Raise PT to $430 (from $410).

Brian Schwartz TECHNOLOGY 415-399-5732 Oracle Corporation (ORCL - $54.18) SaaS/Applications Software

Rating Market Cap Price Target Earnings Type 2019A 2020E / Prior 2021E / Prior

P $170,861.2M NA EPS 3.52 3.79 / 3.91 4.06 / 4.31

Oracle's F4Q Preview and Model Change

We maintain our Perform rating and revise lower our forecast. The model revision reflects the negative impacts to Oracle's operating environment from the COVID-19 pandemic during F4Q and limited visibility from the macro uncertainty. Positively, Oracle looks well-positioned to benefit from the digital transformation pull-forward cycles and has a large install-base to virtually sell into. Bottom Line: While Oracle has reported a full year EPS decline only twice since 2001 (in FY2015 & FY2016 from a cloud-model-transition), its earnings power has actually improved. Recurring revenues (subscriptions/maintenance/ support) comprised ~70% of revenues last quarter, up from ~50% in FY2014. Logic holds that a greater percentage of recurring revenues and earnings growth that are superior to the S&P 500 this year should support valuation, and could narrow a valuation gap with the market.

5 Morning Summary -June 11, 2020

Shaul Eyal TECHNOLOGY 212-667-8411 CrowdStrike Holdings, Inc. (CRWD - $97.22) Infrastructure Software

Rating Market Cap Price Target Earnings Type 2020A 2021E 2022E

O $20,998.9M $110.00 EPS (0.42) (0.07) 0.05

Investors' Meeting Takeaways

Key takeaways from investors' meeting with management (CEO, CFO, VP IR) include: 1) Work-from-anywhere (WFA) accelerates enterprises' digital transformation processes, and we view CRWD as an immediate beneficiary near to LT. 2) We view CRWD's TAM as greater than $27B underpinned by expansion of IT Ops. use cases, cloud container security supported by AWS partnership and others. 3) Favorable customers' cloud module adoption rate greater than 55% for 4+ modules and >35% for 5+ module leaves ample room for further growth. 4) CRWD's sales motion remains uninterrupted as the product is delivered frictionless via the cloud and consolidation of point solutions/agents remains key. 5) Comments from the CEO's 100x100 tour are positive, as we view the IT spending environment largely intact. Outperform and PT at $110.

TECHNOLOGY Shaul Eyal 212-667-8411

Virtual Bus Tour Highlights: CyberArk and Varonis

We hosted the management teams of CYBR and VRNS during our virtual software bus tour. CYBR's CFO Josh Siegel and VP of IR Erica Smith participated in the fireside chat while CFO Guy Melamed, Field CTO Brian Vecci, and head of IR Jamie Arestia represented VRNS. Key takeaways from each session are featured in today's Industry Update with Changes report. Also, we are maintaining our Outperform rating and PT at $115 for CYBR given PAM's leadership and ongoing Idaptive integration. For VRNS, we are maintaining our Outperform rating and are raising our PT from $70 to $95 on positive tailwinds for data security being a mission critical component in a remote workforce environment.

Rick Schafer TECHNOLOGY 720-554-1119 Analog Devices (ADI - $122.88) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2019A 2020E 2021E

O $45,272.0M $140.00 EPS 5.50 4.75 5.52

Notes from the Road

We had the opportunity to meet with ADI IR Director Michael Lucarelli Tuesday as part of our annual Semiconductor & Software bus tour, virtual edition. Tone was upbeat as Mr. Lucarelli highlighted improving conditions in the supply chain and discussed strength in 5G/Medical/Defense. Mgmt. is sensitive to the potential for double ordering given the uncertain macro backdrop and began enforcing an existing 35 days non-cancel policy. Within Comms, the Huawei ban and transition from 4G to 5G created lumpiness in 1H, but we see growth recovering in 2H as China macro BTS deployments proliferate. In our view, medical, defense, and 5G RAN offer a hedge against potential downside risk in GDP-sensitive auto and broad industrial segments. We

6 Morning Summary -June 11, 2020

applaud mgmt.’s proactive cost control efforts, structural growth opportunities in 5G RAN, and industry-leading GM/OM/FCF profile. We remain long-term buyers.

Rick Schafer TECHNOLOGY 720-554-1119 NVIDIA Corp. (NVDA - $374.67) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2020A 2021E 2022E

O $230,422.1M $400.00 EPS 5.80 7.48 9.45

Bus Tour Notes Takeaways

Tuesday we hosted Nvidia Director of IR, Stewart Stecker, on our annual Semiconductor and Software Bus Tour, virtual edition. There was no change to commentary provided on NVDA's earnings call few weeks ago as Stecker remains bullish on the company's artificial intelligence (AI) and gaming opportunities long-term. Data center growth remains robust, expected +93% Y/ Y and +11% Q/Q (ex-Mellanox) reflecting accelerated hyperscale spend. We expect this strength to persist into 2H. He views flexibility of newly launched A100 (scale-up for AI training, scale-out for AI inferencing) as a key factor for its strong ramp vs. V100/T4/P4, etc. In our view, A100's impressive early ramp is telling, given AI customer installed base and model complexity are far larger/greater now than prior launches. Nvidia has ~100% share of AI training, and has made meaningful headway in AI inference (estimate inference share ~20% today). We see A100, with 7:1 virtualization (each instance has better performance than V100), accelerating share gains vs. CPU as new workloads proliferate. The Mellanox acquisition strengthened Nvidia’s position as full-stack DC AI provider. Mr. Stecker sees revenue synergy from cross-selling NVDA/MLNX solutions. We see likely above-average gaming refresh on tap this year as ray-tracing enabled content hits critical mass (30-plus titles) and NVDA's GeForce sees step-function performance improvement with expected move to 7nm. Mgmt expects PC gamers to continue established trend of migrating up the stack in gaming-GPU. Recently launched GeForce NOW (exited beta Feb. 2020) allows NVDA to expand installed base of few hundred million gamers by appealing to more of the 1B gamers worldwide. GeForce NOW has 650+ games, with another 1,500 waiting to be on-boarded. The service has added LSD million subscribers since Feb. We remain confident in Nvidia’s ability to remain dominant in AI-accelerator and Gaming markets. We see support for continued structural growth and GM expansion and reiterate Outperform.

Rick Schafer TECHNOLOGY 720-554-1119 Marvell Technology Group (MRVL - $35.06) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2020A 2021E 2022E

O $23,325.4M $35.00 EPS 0.66 0.92 1.45

Notes from the Road

We had the opportunity to meet with MRVL CFO Jean Hu and IR Head Ashish Saran Tuesday as part of our virtual Semiconductor & Software bus tour. Tone of the meeting was bullish supported by structural growth opportunities in 5G RAN, Cloud, and Auto, as well as recovery in storage. Mgmt. sees Q/Q growth in networking led by 5G/Cloud. Storage troughed in F1Q reflecting supply constraints and should gradually rebound to normalized $1.2–1.3B annual run rates into 2021. MRVL has $3K-plus content with lead 5G RAN customer, Samsung, which is ramping now. NOK begins to ramp Phase 1 late this year (baseband). We expect added MRVL content (eCPU) at NOK beginning in a couple of years. MRVL acquired ERIC/ZTE through last year's Avera acquisition. We estimate MRVL could see an incremental $2B in 5G RAN revenues over the next 3–4 years. MRVL's Cloud opportunity (Avera, Smart NIC, Nearline storage) could be larger than 5G. We estimate TAM at $4B (ex-

7 Morning Summary -June 11, 2020

Thunder). We see semi-custom chips ramping in various verticals incl. 5G/Cloud going forward. Recent custom SSD controller win is ramping now and will accelerate into F3Q, adding $150–200M to topline by 2023. MRVL remains our top 5G RAN play. DC/Cloud presents upside optionality into 2H. We reiterate Outperform and remain buyers.

Jason Helfstein INTERNET 212-667-6433 Roku, Inc. (ROKU - $113.80) Internet

Rating Market Cap Price Target / Prior Earnings Type 2019A 2020E / Prior 2021E / Prior

O $13,737.8M $140.00 / $135.00 EBITDA ($/mil) 35.8 (7.7) / (16.3) 72.5 / 70.3

Advertising Recovering Faster Than Anticipated; GOOG/TCL Headlines Overblown; Maintaining Outperform

We are raising our target to $140 (from $135) and maintaining our Outperform rating as checks suggest 2Q ad spending is recovering faster than anticipated and we view concerns over value-priced GOOG/TCL TVs in Best Buy as overblown. According to Pixalate, 2Q programmatic advertising exited May at pre-COVID-19 levels from -30% trough in early/mid-April. Moreover, our checks suggest that direct deals have also significantly increased off the bottom. Meanwhile, ROKU-partner TCL's early 2Q North America Smart TV market share increased 300bps sequentially to 18.4%, suggesting further share gains for ROKU, and Nielsen reporting OTT viewership still 30% over pre-COVID-19 levels. Lastly, we are encouraged by announcement of Kroger deal leveraging ROKU data through dataxu acquisition.

TECHNICAL ANALYSIS Ari Wald, CFA, CMT 212-667-5279

Color for Fundamental Focus Calls: ADBE, ORCL, NVDA, UNH, NDAQ, ROKU

Jay Olson, CFA HEALTHCARE 212-667-8126 Axovant Sciences Ltd. (AXGT - $3.45) Biotechnology

Rating Market Cap Price Target Earnings Type 2020A / Prior 2021E / Prior 2022E / Prior

P $139.2M NA EPS (2.93) / (3.02) (1.73) / (2.35) (1.63) / (2.25)

Quarterly Update Outlines Key Catalysts

AXGT reported quarterly (March 2020) results including EPS of ($0.54), in line with our ($0.58) and ($0.56) consensus estimates. A business update highlights progress despite COVID-19 challenges with key catalysts remaining on track, including: 1) AXO-Lenti-PD Ph2 SUNRISE-PD trial Part-A dose-escalation Cohort-2 (N=4) completed enrollment with data expected 4Q20, and Part-B randomized portion is expected to initiate by YE20; 2) AXO-AAV-GM1 Ph1/2 trial Part-A low-dose cohort of Type-II GM1 patients (N=5) completed enrollment with data expected 4Q20, and high-dose cohort of both Type-I/ II patients is expected to initiate dosing in 2H20; and 3) AXO-AAV-GM2 IND clearance for pivotal trial initiation is anticipated in 2020. Cash balance of $80.8M provides expected runway into 2Q21 and total debt of $15.7M was prepaid. We maintain Perform based on valuation. Details in the full report, dated June 10.

8 Morning Summary -June 11, 2020

Jason Helfstein INTERNET 212-667-6433 GrubHub, Inc. (GRUB - $59.05) Internet

Rating / Prior Market Cap Price Target Earnings Type 2019E 2020E

NR / P $5,429.9M NA EBITDA ($/mil) -- 187.0 71.0

Just Eat Takeaway.com to Acquire GrubHub for $7.3B; Moving to Not Rated

Moving to Not Rated from Perform after Just Eat Takeaway.com announced a definitive agreement to purchase GRUB in an all-stock deal for $7.3B or $75.15/GRUB share, a 29% premium. Deal price suggests 4.5x 2021E EV/ANR vs. TKWY.NL at 6.1x, a 38% premium to GRUB's 18-month historical NTM EV/ANR multiple of 3.3x. While deal is accretive to TKWY.NL P/S, we struggle with the logic of this transaction given: 1) limited synergies (partial R&D, at best); and 2) lack of "real" consolidation in US will cause sustained promotions and incentives, now funded by TKWY.NL. As result, we would expect UBER/DoorDash or DoorDash/Postmates to pursue deals, even in the face of regulatory scrutiny, which could become moot if fee caps remain permanent.

Jed Kelly, CFA INTERNET 212-667-8196 DraftKings, Inc. (DKNG - $39.41) Internet

Rating Market Cap Price Target / Prior Earnings Type 2019A / Prior 2020E / Prior 2021E / Prior

O $13,238.5M $48.00 / EBITDA ($/mil) (84.0) / -- (184.0) / -- (133.0) / --

Sharp Side on Proven Executor in Fast-Growing Sports Betting Market; Initiating with Outperform and $48 Price Target

We are initiating coverage of DraftKings, Inc. (DKNG) with an Outperform rating and a 12-18-month PT of $48. As more states legalize sports gambling, we believe competencies in product development and customer acquisition that DKNG utilized to become the DFS market leader (over 60% share) will allow the company to be a critical player in accelerating the shift in US sports betting from ~$150B wagered illegally/offshore to licensed domestic operators. Legalized sports betting and iGaming markets are in their very early stages of growth, and we see an $18B revenue opportunity at scale, that also benefits from a sophisticated in-game wagering market. While a premium valuation and high cash flow burn likely create above-average volatility near term, we emphasize the long-term nature of our rating.

TECHNOLOGY Ittai Kidron 212-667-6292

Virtual Bus Tour Highlights: VMware and Citrix

We hosted executives from VMware and Citrix as part of Oppenheimer's Virtual Software & Semiconductor Bus Tour. Participants from the companies included: (1) Raghu Raghuram, COO, Products and Cloud Service; and Richard Gu, Senior Director, IR, from VMware; and (2) PJ Hough, Chief Product Officer; Traci Tsuchiguchi, VP, IR; and Kathy Wagner, VP, Global Finance and Administration, from Citrix. Below are our key takeaways from each of the management discussions.

9 Morning Summary -June 11, 2020

Rick Schafer TECHNOLOGY 720-554-1119 Intel Corp. (INTC - $63.87) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2019A 2020E 2021E

P $270,425.6M NA EPS 4.87 4.66 4.95

Bus Tour Notes

On Tuesday, we hosted Intel VP & GM of Mobile Client Platform Group, Chris Walker, and Senior Director IR, Tony Balow, on our annual Semiconductor and Software bus tour, virtual edition. The tone of the meeting was positive, with Mr. Walker noting near-term Notebook strength from WFH/LFH/Gaming trends. COVID-19-related supply chain disruptions noted in 1Q appear to have dissipated, with both capacity and component supply back to normal levels. Notebook gaming continues to proliferate in what has traditionally been a Desktop dominated market. He also added that 300M PCs WW are over four years old, and due for refresh (gaming/high-end NB have a 3-year cycle), which can aid demand through 2020, and beyond COVID-19-related near-term benefits. Demand from Data Center remains strong into 2Q, with limited visibility later into 2H20. DC spend has evolved from new chip launch cycles previously, to “build” and “digest” cycles, as spending dollars move to Cloud/Hyperscale. Mgmt. expects to re-gain some PC CPU share from AMD, on the heels of 10nm Tiger Lake. On the Artificial Intelligence (AI) front, the recent acquisition of Habana adds to INTC's broad product portfolio, including CPU, FPGA, and ASIC. We expect Habana to help INTC compete in AI inferencing. Intel also expects to add a GPU for the AI market by the end of next year. Mgmt. noted that some of its 2020 Capex ($17B guide) could slip into 2021 (1Q was below that run rate), with over half of spend on "bleeding" edge 7nm/5nm/3nm geometries. We believe INTC benefits near term from better NB (gaming/ thin & light/2-1) and server (DC/Cloud) demand and potential share gains. We see better growth/capital return opportunities elsewhere and maintain our Perform rating for now.

Rick Schafer TECHNOLOGY 720-554-1119 Monolithic Power Systems (MPWR - $229.85) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2019A 2020E 2021E

O $10,283.5M $210.00 EPS 3.88 4.11 5.60

Virtual Bus Tour Notes

Tuesday we hosted Monolithic Power CFO, Bernie Blegen, on our annual (Virtual) Bus Tour. Mr. Blegen’s comments on near term demand were bullish with a strong order book. For 2020, we see multiple growth drivers, DC/cloud server, NB, gaming console and 5G RAN. In response to solid customer demand signals and below target internal inventories, mgmt is pulling-in the ramp of MPS' 300mm foundry by 3–4 quarters to 4Q20. Near term, management is actively managing COVID-19-inspired “double ordering” by nervous customers and hasn't seen increased order cancellations. Quantifying some of the LT growth drivers: (1) In servers, Mr. Blegen sees MPS content going to $70/server with the move from Intel Purley to Whitley, and expects share in core power to increase from 5% currently to ~30% over time. GPU attach and move to 48V can provide additional content upside to $100+/server. (2) Within Auto, MPS sees a 15–20% increase in content offsetting IHS expectations for a 20% decline in 2020 Auto SAAR, and expects mix accretive wins in lighting, body-control, and ADAS to show up in 2H, followed by BMS in 2021. We estimate ADAS adds at least $30–40/vehicle. (3) In Gaming, MPS expects to return to 2017 revenue this year, 4x 2019 gaming revenue, following the launch of new consoles in 4Q20. (4) We see MPS' 5G RAN opportunity as big/bigger than servers and auto long-term. (5) MPS' recent expansion into signal conversion (ADC/ DAC) adds significant future revenue stream next year while bolstering MPS' position in medical (x-ray, ultrasound). Huawei remains a significant customer (5G RAN) as MPS' IP and manufacturing are non-US (and non-TSM). We see MPS as the rare

10 Morning Summary -June 11, 2020

semiconductor company capable of delivering DD % topline growth this year as secular greenfield growth drivers continue to multiply. We remain long-term buyers.

Rick Schafer TECHNOLOGY 720-554-1119 Maxim Integrated Products (MXIM - $59.96) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2019A 2020E 2021E

P $15,986.9M NA EPS 2.70 2.49 2.27

Notes from the Road

We had the opportunity to meet with MXIM CFO Brian White and VP IR Kathy Ta on Tuesday as part of our virtual Semiconductor & Software bus tour. Tone was positive as Mr. White shared updates on supply chain and outlook. The Philippines facility returned to normal operations early, 1.5 weeks ago, and is now running full capacity. Mgmt. continues to watch for signs of double ordering. To mitigate risk, MXIM implemented a 45-day no cancel policy. Mgmt. sees immaterial cancellations and solid backlog heading into F1Q (July). Industrial is broadly improving as MXIM benefits from its lean inventory levels and sub-segment medical/financial terminal/test exposure (one-third of industrial). As auto OEMs reopen factories, we see a case for June Q bottom for MXIM and auto peers, though the shape/pace of recovery remains unclear. Mgmt. executed well during the 2019 semi-correction, protecting margins/FCF/capital return. Uncertainty surrounding GDP proxy verticals auto and industrial keeps us sidelined here.

Rick Schafer TECHNOLOGY 720-554-1119 Skyworks Solutions, Inc. (SWKS - $131.90) Semiconductors & Components

Rating Market Cap Price Target Earnings Type 2019A 2020E 2021E

P $22,005.7M NA EPS 6.17 5.43 6.04

Notes from the Road

We had the opportunity to connect with SWKS VP IR Mitch Haws as part of our annual Semiconductor & Software bus tour Tuesday. Tone was optimistic as Mr. Haws highlighted improvements in the supply chain, Mexacali, and incremental 5G content in smartphones. SWKS manages 80% of the supply chain assembly and test at the company's Mexicali facility. Production was suspended for a few weeks in April in response to COVID-19. Operations quickly resumed and mgmt. sees di minimis impact on supply/revenues. Mgmt. sees share shifts to non-Huawei Chinese handset vendors (Oppo, Vivo, Xiaomi) as the former remains at the epicenter of US/China trade tensions. We estimate 5G smartphone RF content up $5–7 vs. 4G, in both flagship and Tier 2 China devices. On a percentage basis, the ASP lift is highest in China. SWKS' SkyFive RF platform is baseband agonistic and offers scalability. WiFi 6 will be a key contributor to broad markets growth as WFH/LFH drives up household connectivity demands. SWKS is positioned to grow with rising 5G RF content/complexity. Our near-term neutral stance reflects our concerns over expected DD (%) declines in 2020 smartphone units.

11 Morning Summary -June 11, 2020

TECHNOLOGY Rick Schafer 720-554-1119

Daily Chip Clips

■ Highlights of the Day: TSMC Seeking US Uubsidies for Arizona Fab Project (Digitimes)

■ A Competitive Apple ARM Core Could Finally Break x86’s Long Computing Monopoly (Extreme Tech) ■ Nvidia RTX 3080 and Ampere: Everything Tom's Hardware Knows (Tom's Hardware)

Brian Bittner, CFA CONSUMER 212-667-7127 Starbucks Corporation (SBUX - $79.01) Restaurants

Rating Market Cap Price Target Earnings Type 2019A 2020E / Prior 2021E / Prior

O $92,307.4M $85.00 EPS 2.83 0.81 / 1.42 2.57 / 2.59

Thoughts on Recent Update; Maintain Outperform

After digesting SBUX's financial update, we lower earnings estimates through F21. Our new F21E EPS is $2.57 vs. Street's $2.73. As the business moves beyond the near-term reopening recovery, our work continues to suggest the Street's sales/profit restoration assumptions for '21 tilt too aggressively as explained in our recent note. This dynamic forces us to remain more cautious in the near term while our longer-term Outperform rating is unchanged. For the current quarter, US trends are tracking in line with consensus (down 40–45%) while int'l trends and overall profit flow-through are tracking below.

Brian Nagel, CFA CONSUMER 212-667-8381 Five Below (FIVE - $113.67) Consumer Growth & eCommerce

Rating Market Cap Price Target Earnings Type 2019A / Prior 2020E / Prior 2021E / Prior

O $6,337.8M $140.00 EPS 3.12 / 3.09 1.52 / 3.63 3.70 / 4.40

Long-term EPS Power for FIVE Intact

Earlier this week, Outperform-rated Five Below (FIVE) reported Q1 (Apr.) results. As discussed in a prior comment, we came away from the FIVE announcement quite encouraged with indications from management that, as the company started to re-open stores, sales at the chain are rebounding rather quickly, with comps at more-opened units tracking at +8% thus far in Q2 (Jul.). In the full report (dated June 10), we include an updated FIVE financial model. In our view, unique Five Below merchandising is apt to resonate well with potentially budget-conscious, yet entertainment-starved consumers, as COVID-19 headwinds abate. On the other side of the pandemic, FIVE continues to represent one of the most compelling new unit growth concepts in retail. Our price target of $140 (unchanged) suggests upside potential of +20% from current levels.

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Brian Nagel, CFA CONSUMER 212-667-8381 Purple Innovation, Inc. (PRPL - $16.04) Consumer Growth & eCommerce

Rating Market Cap Price Target Earnings Type 2019A 2020E / Prior 2021E / Prior

O $1,037.5M $19.00 EPS (0.31) 0.63 / 0.51 0.57 / 0.55

Adjusting Model to Reflect Upbeat Business Update

Earlier this week, Outperform-rated Purple Innovation (PRPL) issued a business update for May. As indicated in a quick comment published Jun. 9th, we look upon figures outlined in the PRPL press release as further indication of underlying, positive momentum at the company. In our full report of June 10, we detail updates to our PRPL financial model. PRPL continues to represent a top pick amongst smaller caps and preferred COVID-19 recovery play within our Consumer Growth & eCommerce coverage.

Oppenheimer Marketing Events June 16-17, 2020 20th Annual Consumer Conference Boston, MA (Virtual Conference)--next Tuesday and Wednesday June 18, 2020 Biotech Emerging Science Summit ft. Stanford University's SPARK Program Stanford, CA (Virtual Conference)--next Thursday August 11-12, 2020 23rd Annual Technology, Internet & Communications Conference Boston, MA (Virtual Conference)

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Disclosure Appendix Oppenheimer & Co. Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

The published date of the recommendations contained in this report can be found by accessing disclosures (https:// opco2.bluematrix.com/sellside/MAR.action). This report was produced at June 11, 2020 07:19 EDT and disseminated at June 11, 2020 07:19 EDT.

Other companies mentioned in this report: 1810-HK 2330-TW 2454-TW AAPL ADBE AMD AXGT BBY CRWD CTXS DKNG ERI ERIC.B-SE ETSY FIVE FLTR-LN GOOG GRUB IGT INTC KAMBI KR MGM MPWR MTCH MXIM NDAQ NFLX NOKIA-FI NVDA ORCL PANW PDYPY PENN PINS PRPL PTEC.LN PTON PYPL ROKU SBUX SGMS SHOP SNAP SNOWFLAKE SPOT SQ SWKS TTD UBER UIPATH UNH VMW W WDAY WIX WMH.LN YUM ZM

Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by Oppenheimer & Co. Inc.: Stock Prices as of June 11, 2020 Apple Inc. (AAPL - NASDAQ, 352.84, OUTPERFORM) Adobe Systems Incorporated (ADBE - NASDAQ, 406.82, OUTPERFORM) Advanced Micro Devices (AMD - NYSE, 57.44, PERFORM) Axovant Sciences Ltd. (AXGT - NASDAQ, 3.45, PERFORM) Best Buy Co. Inc. (BBY - NYSE, 81.70, OUTPERFORM) CrowdStrike Holdings, Inc. (CRWD - NASDAQ, 97.22, OUTPERFORM) Citrix Systems, Inc. (CTXS - NASDAQ, 141.37, PERFORM) DraftKings, Inc. (DKNG - NASDAQ, 39.11, OUTPERFORM) Etsy, Inc. (ETSY - NASDAQ, 79.81, OUTPERFORM) Five Below (FIVE - NASDAQ, 113.67, OUTPERFORM) Alphabet Inc. (GOOG - NASDAQ, 1,465.85, OUTPERFORM) GrubHub, Inc. (GRUB - NYSE, 59.05, NOT RATED) Intel Corp. (INTC - NASDAQ, 63.87, PERFORM) The Kroger Co. (KR - NYSE, 32.57, PERFORM) Monolithic Power Systems (MPWR - NASDAQ, 229.85, OUTPERFORM) Match Group, Inc. (MTCH - NASDAQ, 88.45, OUTPERFORM) Maxim Integrated Products (MXIM - NASDAQ, 59.96, PERFORM) Nasdaq Inc. (NDAQ - NASDAQ, 120.01, OUTPERFORM) Netflix, Inc. (NFLX - NASDAQ, 434.48, OUTPERFORM) NVIDIA Corp. (NVDA - NASDAQ, 374.67, OUTPERFORM) Oracle Corporation (ORCL - NASDAQ, 54.18, PERFORM) Palo Alto Networks Inc. (PANW - NYSE, 232.68, OUTPERFORM) Purple Innovation, Inc. (PRPL - NASDAQ, 16.04, OUTPERFORM) Peloton Interactive (PTON - NASDAQ, 47.11, OUTPERFORM) PayPal Holdings, Inc. (PYPL - NASDAQ, 159.91, OUTPERFORM) Roku, Inc. (ROKU - NASDAQ, 113.80, OUTPERFORM) Starbucks Corporation (SBUX - NASDAQ, 79.01, OUTPERFORM) Shopify Inc. (SHOP - NYSE, 743.64, PERFORM) Snap Inc. (SNAP - NYSE, 21.20, OUTPERFORM) Spotify Technology S.A. (SPOT - NYSE, 189.40, PERFORM) Square Inc. (SQ - NYSE, 91.91, PERFORM)

14 Morning Summary -June 11, 2020

Skyworks Solutions, Inc. (SWKS - NASDAQ, 131.90, PERFORM) The Trade Desk, Inc. (TTD - NASDAQ, 368.52, OUTPERFORM) Uber Technologies, Inc. (UBER - NYSE, 34.83, OUTPERFORM) UnitedHealth Group, Inc. (UNH - NYSE, 305.75, OUTPERFORM) VMware, Inc. (VMW - NYSE, 144.79, OUTPERFORM) Wayfair Inc. (W - NYSE, 182.38, OUTPERFORM) Workday, Inc. (WDAY - NYSE, 183.05, OUTPERFORM) Wix.com Ltd (WIX - NYSE, 221.58, OUTPERFORM) Yum! Brands Inc. (YUM - NYSE, 94.09, OUTPERFORM) Zoom Video Communications (ZM - NASDAQ, 221.02, PERFORM)

All price targets displayed in the chart above are for a 12- to- 18-month period. Prior to March 30, 2004, Oppenheimer & Co. Inc. used 6-, 12-, 12- to 18-, and 12- to 24-month price targets and ranges. For more information about target price histories, please write to Oppenheimer & Co. Inc., 85 Broad Street, New York, NY 10004, Attention: Equity Research Department, Business Manager.

Oppenheimer & Co. Inc. Rating System as of January 14th, 2008: Outperform(O) - Stock expected to outperform the S&P 500 within the next 12-18 months. Perform (P) - Stock expected to perform in line with the S&P 500 within the next 12-18 months. Underperform (U) - Stock expected to underperform the S&P 500 within the next 12-18 months. Not Rated (NR) - Oppenheimer & Co. Inc. does not maintain coverage of the stock or is restricted from doing so due to a potential conflict of interest. Oppenheimer & Co. Inc. Rating System prior to January 14th, 2008: Buy - anticipates appreciation of 10% or more within the next 12 months, and/or a total return of 10% including dividend payments, and/or the ability of the shares to perform better than the leading stock market averages or stocks within its particular industry sector. Neutral - anticipates that the shares will trade at or near their current price and generally in line with the leading market averages due to a perceived absence of strong dynamics that would cause volatility either to the upside or downside, and/or will perform less well than higher rated companies within its peer group. Our readers should be aware that when a rating change occurs to Neutral from Buy, aggressive trading accounts might decide to liquidate their positions to employ the funds elsewhere. Sell - anticipates that the shares will depreciate 10% or more in price within the next 12 months, due to fundamental weakness perceived in the company or for valuation reasons, or are expected to perform significantly worse than equities within the peer group.

Distribution of Ratings/IB Services Oppenheimer & Co. Inc.

IB Serv./Past 12 Mos.

Rating Count Percent Count Percent BUY [O/B/OP] 404 66.45 181 44.80 HOLD [N/P/SP] 202 33.22 68 33.66 SELL [UP/S/U] 2 0.33 0 0.00

Although the investment recommendations within the three-tiered, relative stock rating system utilized by Oppenheimer & Co. Inc. do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, Oppenheimer & Co. Inc. has assigned buy ratings to securities rated Outperform, hold ratings to securities rated Perform, and sell ratings to securities rated Underperform. Note: Stocks trading under $5 can be considered speculative and appropriate for risk tolerant investors.

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In the past 12 months Oppenheimer & Co. Inc. has provided investment banking services for CRWD, PRPL, CYBR, PTON and SHOP.

In the past 12 months Oppenheimer & Co. Inc. has managed or co-managed a public offering of securities for CRWD, PRPL and PTON.

In the past 12 months Oppenheimer & Co. Inc. has received compensation for investment banking services from CRWD, PRPL, CYBR, PTON, SHOP and UBER.

Oppenheimer & Co. Inc. expects to receive or intends to seek compensation for investment banking services in the next 3 months from CRWD, PRPL, ERI, MGM, MTCH and SNAP.

In the past 12 months Oppenheimer & Co. Inc. has provided non-investment banking, securities-related services for WIX.

In the past 12 months Oppenheimer & Co. Inc. or an affiliate has received compensation for non-investment banking services from WIX.

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