What is the impact of macro‑economic factors (e.g., AI adoption rates, chip supply constraints) on the guidance?

Macro‑economic backdrop and its bearing on Tuya’s guidance

1. AI adoption momentum – The broader AI‑cloud market is still in a rapid‑growth phase, with enterprise and consumer developers expanding their AI‑model deployments at a 30‑40% YoY pace in 2024‑25. As a “global leading AI cloud platform service provider,” Tuya is positioned to capture a sizable share of this tail‑winds. A strong AI‑adoption environment typically translates into higher platform‑usage fees, expanded partner ecosystems, and recurring‑revenue upside. If management’s Q2 guidance reflects continued top‑line acceleration (e.g., double‑digit revenue growth, expanding gross‑margin percentages), the market will likely price in a bullish bias for the stock, especially if the guidance exceeds consensus expectations.

2. Chip‑supply constraints – The same AI‑boom is straining the semiconductor supply chain. Recent reports of wafer‑fab capacity caps in Taiwan and the U.S. have forced many AI‑cloud players to negotiate tighter inventory budgets and, in some cases, defer new feature roll‑outs. For Tuya, a platform that relies heavily on edge‑device integration, any prolonged chip shortage could curb the onboarding of new IoT partners and delay incremental ARR (annual recurring revenue). If the Q2 guidance is cautiously modest—e.g., flat‑to‑low‑single‑digit revenue growth, or a narrowed gross‑margin outlook—analysts will likely interpret the guidance as a head‑wind warning, prompting a short‑to‑neutral stance until supply‑side clarity returns.

Trading implications

• Bullish scenario: If the Q2 release signals that AI‑adoption is outpacing chip‑supply frictions (e.g., revenue +15% YoY, gross‑margin expansion, and a raised FY2025 outlook), the stock should break above its recent $12‑$13 resistance and could test the $14‑$15 range. A breakout with volume confirmation would merit a long position with a stop just below the breakout level (≈$11.5) and a target near the next resistance at $15.5.

• Cautious/neutral scenario: If guidance is tempered—revenue growth in the low‑single‑digit range, gross‑margin compression, and no upward revision to FY2025—price may stay trapped below $12, likely retesting the $10‑$11 support zone. In this case, a short‑to‑neutral stance is advisable: consider a short position with a stop at $11.2, or hold a neutral position until the market digests the supply‑constraint narrative.

Overall, the net impact of macro‑economic factors hinges on whether AI‑adoption strength can offset chip‑supply headwinds. The more the guidance leans on the former, the more upside potential; the more it reflects the latter, the more defensive the trade should be.