All posts by Michael Comeau
Nvidia: The Force Awakens
What a week! We had a light jobs report. SanDisk (SNDK) and Western Digital (WDC) hit me where it hurt (my account). And SpaceX delivered its first earnings report as a public company. So let’s jump into what you need to know right now, including the earnings season boom, Nvidia’s (NVDA) monster comeback… and even how Caterpillar (CAT) turned into an AI stock.Earnings Season Has Been Awesome. But Not for SanDisk.Q2 earning season has been ridiculously strong, according to FactSet data. 86% of reporting companies have beaten EPS estimates, the highest percentage since Q2 2021. And earnings are coming in a ridiculous 29.2% above expectations, the highest since at least 2008. Excluding Alphabet (GOOGL) and Amazon’s (AMZN) large one-time investment gains, earnings would still be 10.9% above estimates. Earnings growth is tracking at a whopping 32.0% excluding GOOGL and AMZN. Unfortunately, our biggest, brightest shining star SanDisk (SNDK) got taken to the woodshed. The flash memory maker delivered a strong report, but its guidance disappointed and the stock got smacked around. The same happened with Western Digital (WDC). Now SanDisk is almost 50% off its highs! But fun fact: SanDisk is still the #1 stock in the S&P 500 index this year: Get JR Romero’s latest take on SanDisk here.Meet the Guidance MonsterLast Friday, I said power management semiconductor stock Monolithic Power (MPWR) may be the new SanDisk. And I bought the stock on Monday. SanDisk and Western Digital’s (WDC) guidance disappointments took them out of a unique category of AI stock I call “Guidance Monsters.” These are the AI stocks that deliver revenue guidance so strong that even the biggest bulls can’t believe it. Monolithic Power is seeing wild demand from data center clients. And last week, its Q3 revenue guidance came in 17% above consensus. You have to think that the company plans to handily beat that guidance. See the lines going up and to the right? Those are consensus earnings estimates:This is exactly what you want to see with high-octane growth stocks. Note: I also own SanDisk and Western Digital, so I didn’t have a bang-up week on the AI front.The Nvidia Value Trap Debate Ends for NowI’ve been suggesting Nvidia might be a value trap based on its cheap valuation. That was dead wrong because the stock just woke up:This week, the stock got a nice boost when Elon Musk said SpaceX (SPCX) will exclusively buy Nvidia chips over AI chipmakers like AMD (AMD). I’ve been wondering myself where Nvidia could find its next big customer, and SpaceX may be just that. I have my doubts about how soon we’ll see fully operational data centers in space, but SpaceX’s capex spending is going through the roof. JP Morgan said “we now project capex of nearly $200B in both 2027 & 2028.” A decent chunk of that will flow through to Nvidia.It’s Gonna Be Another Busy Week for AIWhile most big companies have reported, multiple key AI/semiconductor names will report earnings next week, including: Tuesday: Lumentum Holdings (LITE), CoreWeave (CRWV), Super Micro (SMCI)Wednesday: Cisco (CSCO), Coherent (COHR), Cerebras Systems (CBRS)Thursday: Applied Materials (AMAT) So we’ll have even more inputs to help us deal with the ultimate question: Will the spending ever stop? Everyone from Alphabet (GOOGL) to Meta (META) to Amazon (AMZN) to SpaceX is throwing wild amounts of money at AI infrastructure projects. Heck, Caterpillar (CAT) raised guidance because of AI data center buildouts. So maybe we’ll add CAT to our list of AI stocks… Here’s the full calendar for next week:Traders Are… Confused?The AAII Sentiment Survey shows that investor sentiment is just all over the place week to week. 37.0% of investors are bullish, which is right in-line with the long-term average of 37.5%. This follows two straight weeks of bearish readings.This continues the trend of there being no real trend from week to week. Meanwhile, CNN’s Fear & Greed Index popped to 63/100, signifying modest Greed: Of course, if the market dips 2% next week, sentiment will swing back bearish in the blink of an eye. So it’s getting harder and harder to make sense of sentiment data, because there’s never any sustained string of positive or negative readings. Oh well… Have a great weekend!
Continue Reading -->The Next AI Chip King?
What a week! Microsoft (MSFT) and Amazon (AMZN) dropped beautiful earnings reports. Kevin Warsh delivered a short and sweet FOMC statement. And hedge fund Situational Awareness choke on leveraged AI stock bets before a rescue by Ken Griffin’s Citadel. Now let’s drill down for the most interesting things happening in markets now. We go over what’s been an awesome earnings season, a candidate for the next AI chip King, and 2 semiconductor stocks that appear to on the edge of greatness… or failureEarnings Season Has Been Awesome27% of S&P 500 companies have reported, according to FactSet.And the numbers are pretty dang amazing.86% of companies reported positive EPS surprises. And 80% beat revenue forecasts.The strongest numbers are coming from the financials, tech, and energy. And utilities are lagging.Q2 EPS growth is tracking at 37.9%, the highest growth rate since Q3 2021, which had the benefit of an easy year-over-year comp from the pandemic:That 37.9% number was boosted by a $98 billion one-time gain by Alphabet (GOOGL). Excluding that, earnings growth is still tracking at 25.9%, which is still spectactular. Plus that 25.9% was calculated before this week’s beats by Microsoft (MSFT), Amazon (AMZN), Apple (AAPL), Seagate (STX), Lam Research (LRCX) and Monolithic Power (MPWR). And odds are we’ll see positive earnings surprises from Palantir (PLTR), AMD (AMD), SanDisk (SNDK), and Western Digital (WDC) next week.Interestingly, the data shows that the market is not reacting well to reports. This goes for companies that beat AND companies that miss. So Microsoft and Amazon’s booms this week were exceptions to the rule!We May Have a New AI Semiconductor KingI’ve heard of the company Monolithic Power (MPWR), but never paid any attention to it. Until I saw its earnings report on Thursday, July 30. MPWR reported $980.6 million in sales, 9% above consensus. EPS was 11% above estimates. And revenue guidance for next quarter was 17% above expectations, which reminds me of SanDisk since it came public again last year, and Nvidia in 2023. Look at how fast analyst estimates are rising:Again, just like prior boom periods for SanDisk and Nvidia. And what does Monolithic Power do? It designs and develops power management solutions that go into everything from AI GPUs and TPUs to batteries to robots. And it’s seeing booming demand for AI data center and server applications. With a $72 billion market cap, this isn’t exactly a top-secret micro cap, but there’s surprisingly little discussion about it. So put Monolithic Power stock on the radar. It could be the next SanDisk, and it’s at the top of my personal watchlist. Related: check out JR Romero’s Greatest Hits: SanDisk Edition.The Nvidia Value Trap Debate ContinuesLast week, I suggested Nvidia might be a value trap at 21X forward earnings. Well, now it’s trading at 20X forward earnings, even with Microsoft (MSFT) and Amazon (AMZN) showing huge cloud and AI growth.This is Nvidia’s cheapest valuation in decades. The problem remains the same. Nvidia is so well-known that it’s hard to deliver a major positive surprise. And major AI infrastructure tech buyers like Alphabet and Amazon have made major strides in developing chips in house. Which means more competition for Nvidia’s high-priced GPUs. Plus from a basic market mechanics perspective, attention and money has shifted to the memory/storage names, which are posting much bigger earnings beats and upside guidance. Sure those stocks are more volatile, but that’s where the momentum money goes when the market is in a good mood,SK Hynix Is in for a FightKorean memory superpower SK Hynix (SKHY) made a huge splash when it listed in the US on Friday, July 10. The $26.5 billion deal priced at $149 per share, and the stock hit $194.80 on July 14, its 3rd day of trading. On July 29, it hit a low of $124.80 after an Earnings Miss. It’s since rebounded to $149+. But now the fight begins. 2026’s other two big IPOs have been messes. SpaceX (SPCX), which also made a high on its third day of trading, is down over 60% from its peak. (FYI: SpaceX delivers its first earnings report on Tuesday, August 4 after the close) Cerebras Systems (CBRS) made itsarecord high on its May 14 IPO day, and has since dropped about 50%. And aside from sagging sentiment towards these mega-issues, traders are concerned about Chinese memory giant CMXT disrupting the likes of SK Hynix, Micron, and Samsung.Traders Are… Bearish?The AAII Sentiment Survey shows that the topsy-turvey downside action in tech stocks may be impacting the mood. Just 31% of surveyed investors are bullish, which is the second straight week of below-average bullishness.So it looks like the crowd is leaning bearish. The tricky thing with sentiment data is that it’s lagging, and AAII tends to bounce around from week-to-week. However, if we get another below-average reading next week, that could signify real negativity. Meanwhile, CNN’s Fear & Greed Index is at 38/100, signifying modest Fear.
Continue Reading -->The 2 Ugliest Charts in the World
What a week! Alphabet (GOOGL) failed on earnings and there’s no peace in the Middle East. So let’s go over: The 2 ugliest charts in the world Why it’s hard to be an AI hyperscaler right now Why Nvidia may be a value trap Where sentiment sits Let’s go. Ugliest Chart in the World #1 SpaceX (SPCX) was hot for 4 days. Now it’s been cut in half. We identified $150 as an obvious line in the sand. And SpaceX just cut through it like a knife through butter: And let’s give credit to Sami Abusaad! He got short at $154.89 and has been riding it down the whole way. So why is this stock getting dumped? Because the more the stock drops, the more attention is paid to the danger on the horizon (insider lockup expirations). That’s created a race to the exits. Meanwhile, Wall Street banks (many of whom earned paid big fat IPO underwriting fees from SpaceX) love the stock. According to Koyfin, the average analyst target price is $236.71: So they think SpaceX will double. Do you? Now let’s talk about its twin… Ugliest Chart in the World #2 This is Oracle (ORCL) over the past year. Oracle has a major problem. It’s a hyperscaler with potential credit problems. While other AI stocks like Microsoft has heaps of recurring revenue and free cash flow to reinvest in capital expenditures, Oracle does not. Just so you understand the difference in scale here, Microsoft generated almost $73 billion in free cash flow over the past 12 months. Oracle (ORCL) had NEGATIVE free cash flow of almost $24 billion. So it has to borrow tons of debt to power its AI dreams. Maybe too much. It’s Hard Out Here for a Hyperscaler The AI market remains split between “haves” and “have nots.” The AI hyperscalers are most certainly have-nots in 2026, given these performance numbers: Alphabet (GOOGL): +2.8% Amazon (AMZN): +2.3% Meta (META): -7.9% Microsoft (MSFT): -19% Oracle (ORCL): -36% Meanwhile, the VanEck Semiconductor ETF (SMH) is up a whopping 61%. This makes sense because the hyperscaler buildout is a wholesale transfer of cash flow to the likes of Nvidia (NVDA), AMD (AMD), ASML (ASML), Micron (MU), SanDisk (SNDK), etc. Think of it this way. Google sucks up money selling ads. Then that money goes straight to hardware and chips from the likes of Nvidia, AMD, Micron, Dell, etc. Which flows down to networking gear, semiconductor equipment, etc. At some point the trend reverses, but for now – hardware looks like easy money. Especially when we have Alphabet raising its capex forecast. And Meta, Microsoft, and Amazon might do the same when they report earnings this week. Is Nvidia a Value Trap? Many traders and investors are zeroing in on Nvidia’s (NVDA) valuation. The stock is now trading at 21x forward earnings, which looks cheap for the flagship AI chip name: But I wonder if Nvidia is a value trap. As in, it looks cheap but goes nowhere. I see Nvidia’s biggest challenge as a lack of sex appeal relative to other places within the AI landscape. Right now, the market is excited about the memory and storage names, because that’s where the biggest supply-demand imbalance is. On Thursday’s earnings call, Intel (INTC) CEO Lip-Bu Tan said “…memory has become the big supply constraint challenge.” Yes, Nvidia is most likely still supply-constrained. Just not at the level of a Micron (MU) or SanDisk (SNDK). But we’ll know for sure this coming week. If we see Meta, Microsoft, and Amazon signal higher capex spending and Nvidia does nothing, then maybe the thrill really is gone. We’ll see. In the meantime, I recommend watching this interview with Cerebras (CBRS) CEO Andrew Feldman, who shares some interesting points about the AI chip universe. He discusses why Nvidia’s CUDA platform may be losing its competitive moat, though you should obviously take that with a massive grain of salt: Investors Are Bearish… for Now The AAII Sentiment Survey shows that just 29.6% of investors are bullish. This is well below the 37.5% long-term average. And it’s a massive decline from last week’s 44.9% reading (above average bullishness). So are investors bearish? Kind of. These sentiment surveys have been topsy-turvy all year, so we never get any sustained bullishness or bearishness. That reduces the predictive power of these numbers, which wasn’t all that great to begin with (outside of real extremes). Meanwhile, the CNN Fear & Greed Index is at 41, which is slightly fearful. Add it up and it looks like investors are far from euphoric. But they’re not down in the dumps either.
Continue Reading -->The 5 Horsemen of the AI-pocalypse
What a week! We may have peace in the Middle East, SapceX is fighting for its life, and we have a new AI powerhouse trading in the US: Meet the 5th Horseman, SK Hynix I called these stocks the 4 Horsemen of the AI-pocalypse: SanDisk (SNDK) Micron (MU) Western Digital (WDC) Seagate (STX) AI has created unprecedented demand for storage and memory to the point that they comprise 4 of the 5 best S&P 500 stocks this year: And now we may have a new horseman in the form of South Korean memory giant SK Hynix (SKHY), which had a blockbuster US market debut Friday. The $26.5 billion deal priced at $149 per share, and the stock was trading around $169 as of 2:33 pm ET. Pretty solid first day. And CEO Kwak Noh-jung is telling the right story. He told Reuters “We forecast that next year will be the worst year in the industry’s history from the supply perspective.” And he added that demand will exceed supply beyond 2030. Nothing drives momentum like a massive supply-demand imbalance. So I’m making SK Hynix a probationary “5th Horseman of the AI-pocalypse.” Get David Prince’s take on SK Hynix here: Meanwhile, another high-profile IPO is fighting its own battle: SpaceX Fights for $150 We all know the bear case for SpaceX (SPCX). IPO lockup expirations will flood the market with shares. The valuation is outrageous. The Nasdaq 100 addition didn’t help the stock. At the same time, it is stubbornly holding the $150 area: That looks like a major psychological line in the sand. And maybe this situation is as simple as a hard break above or below this level will dictate the next big move. For more on SpaceX, check out this video: And since we’re on the topic of IPOs and AI… Bank Earnings Should Be HUGE This Year This coming week, we get earnings from the big banks like JP Morgan (JPM), Goldman Sachs (GS), Bank of America (BAC), and Morgan Stanley (MS). And now that I think about it, maybe the banks are a stealth AI play. Especially the capital markets focused names like Goldman and Morgan Stanley, which are up nicely in 2026: Aside from the massive SpaceX IPO and the prospective OpenAI and Anthropic deals, there’s been a ton of capital markets activity related to AI, like: Alphabet (GOOGL) raising $85 billion in equity Oracle (ORCL) raising $40 billion to help fund its AI buildout Super Micro (SMCI) raising $7 billion to buy components to fill new $39 billion in AI server orders According to Crunchbase, global venture funding hit $510 billion in the first half of 2026. That compares to $440 billion for all of last year. Crunchbase also said that this is the strongest exit market since 2021. All this capital markets activity should mean fat fees for Wall Street banks. Earnings Season Is About to Go BOOM Q1 earnings season was huge, thanks to massive beats in tech, particularly in the semiconductor industry. As noted above, this coming week, Q2 results kick off with the likes of JP Morgan (JPM), Netflix (NFLX), and ASML (ASML). I’d argue ASML is the biggest report of the week since it sells into the AI/Semi giants like Samsung, AMD (AMD), SK Hynix (SKHY), Micron (MU), Intel (INTC), and Taiwan Semi (TSM). Note: Taiwan Semi also reports next week. There’s a whole lotta optimism out there. FactSet data shows that 111 S&P 500 companies issued guidance. 57% issued positive guidance, well above the long-term average of 41%. This is the highest percentage of companies issuing positive guidance since Q3 2021. And tech guidance is at a record high. Analysts are also pumped. They are now estimating 23.3% growth, up from 18.8% on March 31. And looking forward, Q3 growth is forecast at 26.8%, and Q4 is 24.1%. This is bad. Because the bar is very high. Plus, if results come in as expected or better, we are going to be facing some tough year-over-year comparisons next year. But even as companies and analysts are positive, investors and traders show no signs of joy: Sentiment Remains Neutral The AAII Sentiment Survey shows that 36.3% of investors are bullish. This keeps sentiment in neutral territory. And while we’ve had a few positive or negative readings here and there, there hasn’t been a true extreme reading (in either direction) since early 2025. Meanwhile, the CNN Fear & Greed Index is at 47, smack in the middle at neutral. On balance, this is all bullish because it shows little euphoria on the part of market participants.
Continue Reading -->How Meta Can Hit $1,000
We’re cruising into the July 4 holiday so let’s take a look at the 5 things you need to know right now. How Meta Can Hit $1,000+ On Thursday, Bloomberg reported that Meta (META) is planning a cloud infrastructure business called “Meta Compute” to sell excess compute capacity for AI and other applications. If this is real, it would put Meta in competition with the likes of Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL). You could argue this a million different ways. The bears will say Meta should not have excess compute capacity, and it’s entering battle with aggressive competitors. Or maybe this gives Meta the potential for a higher valuation because it’s hitching a more direct ride to the growth of AI. But I ask myself, couldn’t Meta make way more money by just selling ads to AI companies? This seems like the easy money instead of rolling the dice with hundreds of billions in AI infrastructure investments. Yes, Meta should use AI for things like improving ad targeting and speeding up code development. Everybody knows that. But it seems far smarter to be the cash register counting up all the ad dollars from OpenAI, Anthropic, etc. Call me crazy. But if Meta backs off from its wildly aggressive AI spending plans, I think it’s going straight to $1,000. Because earnings estimates will go through the roof. The problem is that this could take years. I mean, how long did it take before they realized the Metaverse sucked? Techflation Is Here In 1965, Intel (INTC) co-founder Gordon Moore observed that the number of transistors in a chip would double about every two years, with the price dropping by half. That was declared “Moore’s Law.” It’s something of an outdated concept for technical reasons. For example, transistors can only get so small. But what if AI, to some degree, has given us Moore’s Law, only upside down? Prices for SSDs, DRAM, CPUs, and even old-school spinning hard drives are going up. This SanDisk (SNDK) SSD drive cost T3 Live $150 in January 2023: Today, it’s going for $280+ on Amazon: News reports indicate that Intel is raising prices for desktop CPUs. These are not super-powered AI chips. But it looks like we have an upward pull on everything related to computers, smartphones, and tablets. If people are paying higher prices for SSD drives, why not everything else too? Recently, Microsoft (MSFT) announced higher prices for its Xbox video-game consoles. It expects storage and memory prices to double by the fall of 2027. And Apple (AAPL) jacked up prices on Macbooks and iPads. Welcome to techflation. Did Warsh and the Jobs Report Shift FOMC Expectations? The Nonfarm Payrolls report was slightly light today. And yesterday Fed Chairman Kevin Warsh said inflaation risk are declining. So have FOMC rate hike expectations shifted lower? Nope. The CME’s FedWatch tool shows that markets are pricing in a 79% chance of higher rates by year-end. This compares to 83.1% yesterday and 80.8% a week ago. So nothing’s changed on that front. And the expectation of higher rates is boosting this name: Robinhood Rockets! Sami Abusaad has been super bullish on Robinhood (HOOD). And it’s been on a tear: One reason is the expectation of higher interest rates. Higher rates means bigger profits on margin loans. And margin loans have been at record levels. Plus, based on Interactive Brokers’ (IBKR) June 2026 numbers, we can assume Robinhood is seeing heavy trading volumes. And if the crypto market can turn the corner, that would give Robinhood even more rocket fuel. Crypto revenue has been a sore spot for Robinhood, so if that reverses, it could be off to the races at an even faster pace. FYI: IBKR is one of my biggest positions. Wait. Are Investors and Traders Bearish? The AAII Sentiment Survey shows that investors flipped back to bearish this week. Just 31.4% of investors are bullish on stocks for the next 6 months, a substantial drop from last week’s 44.9%. This is the sixth bearish reading in the last seven weeks. It seems like folks are still worried about the economy, the direction of the FOMC, and the sustainability of the AI/semi boom. Meanwhile, CNN’s Fear & Greed Index is at just 31, indicating moderate fear. Plus, the CBOE’s equity put-call ratio is at 0.69, which is in the neighborhood of neutral. No sentiment indicator can help you nail the market every time. But rampant euphoria often coincides with market tops. And we are nowhere near that.
Continue Reading -->Micron Put Apple to the Test
What a week! Micron (MU) dropped a blockbuster earnings, report, Apple (AAPL) raised prices, and oil came crashing down. Let’s talk about what’s going on in this fun-filled market: This Really Is the 90’s Era All Over Again It’s been hard out there for the AI hyperscalers like Meta (META), Alphabet (GOOGL), and Microsoft (MSFT), who are spending ungodly amounts of cash on hardware like memory, storage, and networking equipment. That means they are transferring their cash flow to companies like SanDisk (SNDK), Intel (INTC), Western Digital (WDC), and this week’s earnings superstar Micron (MU). So it’s no shocker that the 2026 S&P 500 leaderboard looks like this: Virtually all of these companies cashed in by selling picks and shovels in the 1990’s Internet boom. Now it’s rinse and repeat with AI. Instead of Pets.com and Ask Jeeves and American Online, the end application is Claude or ChatGPT! Just look at Micron’s monster earnings report on Wednesday. They beat revenue expectations by 16%. SanDisk beat by 26% in its last quarter. These picks and shovels (DRAM, flash memory, and even freaking old-school hard drives) are getting so expensive that Apple (AAPL) just raised prices on MacBooks and iPads. And that means… Apple Is Being Put to the Test Apple has an affluent user base that is willing to pay premium prices for a superior user experience. And this MacBook/iPad price hike feels like a test for something even bigger: iPhone price increases. Last quarter, Mac and iPad sales accounted for just 14% of total sales. So when Apple drops its next earnings report (about one month from now), we’ll see how much customers are willing to pay up for the brand. I suspect Apple will do fine because its devices are more or less consumer staples. Some people will choose cheaper models. But who’s going to give up their screens in 2026? Or even worse – switch to Windows/Android? I’m in the market for a new phone myself, and I’d rather pay an extra $100 to $300 to Apple than deal with an inferior user experience. I’m an Apple shareholder, so I won’t pretend I’m unbiased. SpaceX Plays Great Defense I sold my SpaceX (SPCX). And I might have screwed up. Because this stock has been doing a great job of holding that $150 area: We all know the issues with this company. It’s overvalued. A ton of shares will hit the market when lockups expire. We might not see a data center in space for many years. But the buyers keep stepping up This could be a situation where the bear case is way too obvious to be right. At least for now. Because those lockup expirations will pack a big punch. Are We Getting the Fed Wrong? The market continues to brace for higher rates. The CME’s FedWatch Tool shows that the market is pricing in a 77% chance of higher rates by year-end. This hasn’t changed much over the past month. But it is a pretty big sea change from earlier in the year, when we were debating how many cuts we’d see. Though interestingly, this chart from Apollo has been making the rounds: The market is almost always wrong about what the Fed will do, per Apollo: pic.twitter.com/yluOOKYynD — unusual_whales (@unusual_whales) June 26, 2026 Apollo argues the market is usually wrong in sniffing out Fed policy. Which makes sense because the Fed itself isn’t very good at predicting anything. Remember when inflation was “transitory” for about 98 straight years? So maybe, just maybe the smart move is to bet on lower rates? Sentiment Suddenly Flips Bullish. Sort Of. The AAII Sentiment Survey shows that 44.9% of investors are bullish on stocks. This is a big jump from 36.9% last week. And it’s the first above-average bullish reading since May 13. The market peaked on June 2 at SPX 7620, so it took a few weeks for the mood to catch up. And during that time, the market’s slipped a bit. On balance, it would be better to have less bullish sentiment, because it implies there are still doubters on the sidelines. However, this is still far from euphoric sentiment, which we haven’t had in quite some time. Meanwhile, CNN’s Fear and Greed Index is at just 25, in the extreme fear category. Keep in mind Fear and Greed is calculated by market indicators, while AAII is determined by an actual survey, reflecting people’s actual feelings. Add it up and investors/traders are ‘sorta’ bullish.
Continue Reading -->SpaceX: The Hard Questions Are Here
Peace is coming (hopefully) to the Middle East, sending oil lower while equities stabilized. But if you expected a sleepy summer, you’re disappointed. Because this market remains action-packed. So let’s talk about what’s happening: SpaceX Comes Down to Earth Last Friday, SpaceX (SPCX) came public in the biggest IPO of all time. And it hit Earth with a bang. The deal priced at $135. The stock opened at $150 on the dot and hit a high of $225.64 on Tuesday, from where it started sliding: Even after this 20% drop, its $2.36 trillion market cap is larger than: Broadcom (AVGO) Tesla (TSLA) Meta (META) Micron (MU) Walmart (WMT) JP Morgan (JPM) Analysts expect SpaceX to grow revenues from $35.9 billion this year to $130.9 billion in 2029. Elon Musk himself said he expects SpaceX to generate about $1 trillion in revenue in 2030. But now the tough questions are coming: Was the entire rally engineered through limiting the supply of stock and giving more retail traders access to the IPO? Can Elon Musk sell SpaceX the way he’s sold Tesla? Even if SpaceX can hit growth targets, is the valuation out of control? Will the stock collapse when insiders get the green light to sell? Will the company have to raise even more capital? There are now reports of a potential $20 billion bond offering on the way. I own a whopping 10 shares of SpaceX myself. And I’m thinking about selling, and buying some out-of-the-money puts. Because if SpaceX crashes, it’s bound to be ugly. JR Romero had some harsh words for SpaceX (the stock, not the company) here, and we went deeper into the potential dangers facing this iconic name: The Epic Semiconductor Run Won’t Stop, and Has Another Catalyst The VanEck Semiconductor ETF (SMH) might be incapable of going down. It’s up 83% this year and hit another record high on Friday thanks to big moves in names like Intel (INTC), Taiwan Semi (TSM), and AMD (AMD). And it would be up even more if SanDisk (SNDK) was in the ETF. SanDisk is the #1 stock in the S&P 500 this year with its 819% gain. Plus, there’s another catalyst on the horizon: Micron’s (MU) earnings report on Wednesday after the close. Based on the number of AI-related capital raises we’re seeing from the likes of Alphabet (GOOGL), Nvidia (NVDA), SpaceX, and others, demand for memory remains insatiable. So Micron should extend what’s been a monumental winning streak for semiconductor earnings. Warsh Confirms the Drift Towards Higher Rates New FOMC Chairman Kevin Warsh made a big splash at his debut meeting on Wednesday. Warsh shortened the post-meeting statement, ditched the dot plot, announced five new task forces, and declared war on inflation. Warsh’s hawkish show came as a surprise to many because he was viewed as a loyalist to President Trump, who has been vocal in wanting lower rates. And 9 of 18 Fed officials now expect at least one rate hike this year. The market was already leaning in the direction of higher rates, and the Fed reinforced that. Now markets are pricing in an 85% chance of higher rates by year-end, according to the CME’s FedWatch Tool. So the breakdown of expectations is now as follows: 15% chance of rates staying unchanged 37.6% chance of 25 bps in hikes 33.3% chance of 50 bps in hikes 12.5% chance of 75 bps in hikes 1.7% chance of 100 bps in hikes This isn’t a major change from last week. It was more a reinforcement of what the market is looking for. Still, I’m eager to see if the President starts tangling with the independent-minded Warsh. Stocks Go Up, Traders Go “Meh” The latest AAII Sentiment Survey shows that 36.6% of investors are bullish. This is up from last week. But it’s still the 5th straight week of below-average bullishness. That’s even with equity markets hitting record highs, and a US-Iran deal coming together. Meanwhile, CNN’s Fear & Greed Index is at 37, smack dab in the Fear category. But overall, the numbers are healthy because it shows that not everyone is bought into this rally. The last thing we need is euphoric sentiment, which typically happens around tops.
Continue Reading -->The SpaceX IPO Was Boring?
We’ll skip the preambles this week. You know what you want to hear about: 1. SpaceX IPO = Boring? The SpaceX (SPCX) IPO is a hit. The deal priced at $135, and the stock opened at $150 before hitting $176+. That was a sizable move, but it felt rather almost too orderly. Just boring. I expected more back-and-forth violence because of the crazy day-one action in Cerebras (CBRS) in May, along with the presence of Elon Musk cultists, and the huge valuation assigned to SpaceX. It felt combustible. But as of 1:25 pm ET Friday, this feels like an anticlimax in terms of volatility. It’s downright boring. I picked up a whopping 10 shares of SpaceX at the offering, so I’m not complaining. Every tick higher is good for me. Now it will be interesting to see if Elon’s true believers stick with the stock and hold it up. You can get our team’s full reaction to the IPO here: 2. SpaceX Sets a Hilarious New Mark for Leveraged ETFs This morning, Defiance ETFs relaunched their Defiance Daily 2X Space ETF (SPCL), saying this: “Effective June 12, 2026, all or a predominant portion of SPCL’s Target Portfolio consists of exposure to SpaceX (Nasdaq: SPCX), making SPCL the world’s first and only ETF to have 2X exposure to SpaceX on IPO day. The fund’s SpaceX exposure was established at the $135 IPO price.” So we got a leveraged SpaceX ETF the same day as the IPO. And it was trading before SpaceX opened at 11:46 am ET. Based on the Defiance website, it looks like the SPCL ETF went to cash before buying 52,888 shares of SpaceX at the $135 IPO price. That’s why SPCL has a trading history. And it had a notable price and volume explosion today: It traded just 49K shares Thursday, but was at 941K on Friday as of 1:42 pm ET. However, “normal” SpaceX leveraged ETFs will hit the market soon after the SEC delayed listings to avoid mucking up the IPO. 3. SanDisk Refuses to Stop On May 29, JR Romero predicted SanDisk (SNDK) hitting $2,000. And it crossed that mark today. Close enough for government work? The stock is now up 717% year-to-date, making it the #1 stock in the S&P 500 by a long shot. The #2 name Micron (MU) is up “only” 249%: And as you can see, the leaderboard is dominated by semiconductors and tech hardware names. Because it feels like there is near-unlimited demand for AI hardware, based on recent news like: Oracle (ORCL) raising $40 billion to help fund its AI buildout Alphabet (GOOGL) selling $80 billion in equity to expland AI infrastructure Super Micro (SMCI) raising $7 billion to buy components to fill new $39 billion in AI server orders And a lot of this money is going towards flash memory, DRAM, hard drives, processors, and all the other stuff that powers AI. 4. Higher Rates? The ECB raised rates on Wednesday and traders are thinking the US will follow suit following the hot CPI and PPI reports. The market is now pricing in a mere 39.4% chance of rates remaining unchanged for the rest of 2026. This is down from 61.8% a month ago. And now the following rate hike odds are being priced in: +25 bps: 41.0% +50 bps: 15.1% +75 bps: 2.1% +100 bps: 0.1% So in total: Traders are pricing in a 58.3% chance of higher rates by year-end. Remember when we debated how many cuts we’d get? Of course, next week we get the first FOMC announcement and press conference from new Fed Chair Kevin Warsh. It will be interesting to see what tone he sets to kick off his term. And if he’ll signal he will go along with President Trump’s wish for lower rates. 5. Sentiment Is Bearish? The latest AAII Sentiment Survey shows that 30.4% of investors are bullish. This is the lowest reading since March 18, when the S&P 500 closed at 6224. It’s also the fourth straight week of below-average bullishness. AAII says the #1 concern is “the economy and/or inflation.” That makes sense given this week’s hot CPI report, plus ongoing concerns about AI taking jobs. Meanwhile, the CNN Fear & Greed Index is at just 33, squarely in the “Fear” category. So the decline from the early June highs has taken a clear toll on the mood.
Continue Reading -->SpaceX-Mania Is Here. So What’s the Problem?
Stocks hit record highs this week, but tumbled after a semiconductor giant inspired a sell-off to close the week. Meanwhile, the biggest IPO of all time is about to land right on our heads: SpaceX-Mania Is Coming The SpaceX IPO is next Friday, June 12. Elon Musk’s baby will trade under the ticker SPCX. Word on the street is the deal is oversubscribed, maybe thanks to brokers like Fidelity lowering account size requirements to get on the deal. I have my order in to buy 10,000 shares. Whoops, that was a typos. It’s actually 10. As in ten. Enough to give me a thrill, but not enough to ruin my life. But after hearing JR Romero and Sami Abusaad talk about it, I’m thinking about cancelling my order: SpaceX aims to sell 555.55 million shares at $135 to raise $75 billion. That’s a target valuation of $1.75 trillion, which would give SpaceX the 8th largest market cap of any publicly-traded US company. Bigger than luminaries like Meta (META), Micron (MU), and Eli Lilly (LLY). To put that in perspective, the entire US 2025 IPO market (including SPACs and other such vehicles) was $70 billion, according to the SEC. And with AI giants Anthropic and OpenAI also coming public this year, we’re on track for a blockbuster year for IPOs. If all three companies come public, 2026 will likely sport the three biggest IPOs of all time. Saudi Aramco holds the record at $29.4 billion in its 2019 offering, which should easily be dwarfed by The Big Three. But there’s a catch. The market tends to top out in years with surges in public offerings: It happened in 2021, 2014, 2007, and 2000. Why? Likely because we get surges in offerings when capital markets conditions can’t get any better. So call me a little cautious. Speaking of Caution… First Broadcom, Now Oracle? The AI/Storage/Semi stock boom was raging out of control, until Broadcom’s (AVGO) underwhelming AI chip forecast ended the party Wednesday. AI-levered companies have been knocking the ball out of the park, so Broadcom’s disappointment felt out of nowhere. Broadcom is indeed growing like a weed. Just not fast enough for the hungry masses. And there’s no evidence it means AI demand is slowing, let alone dying. But the stakes go up on Wednesday, June 10 when software giant Oracle (ORCL) reports earnings. Oracle is a major AI player, and the market may not react well to another AI-related disappointment, no matter how small it is in the grand scheme of things. Rate Hike Odds Are Going Up Following Friday’s strong job report, traders are pricing in increasingly higher rates. Right now, the market is pricing in a 28.5% chance of rates staying the same through year-end: That’s down from 54.4% last week. Meanwhile, these are the implied odds of each level of rate hikes: Odds of one 25 bps hike are at 42.9%, up from 36.4% last week. And odds of 50 bps in hikes are at 22.5%, up from just 8.1%. I bet new Fed Chair Kevin Warsh is going to have some very interesting conversations with President Trump… What Happened to Bitcoin? I’ve heard people call Bitcoin a “store of value” and “a hedge against inflation.” But it’s one of the worst asset classes of 2026, dropping 30% in a banner year for risk assets. The bulls’ last hope is a double bottom at the $60,000 area: The big question is why? Some blame the US dollar and the prospect of higher rates. I think the problem is much simpler. People saw how fast semiconductor and AI stocks were rising, and took their capital elsewhere. Look at this Bitcoin vs. SMH chart: They were very loosely correlated until last November, when they took divergent paths. One to the promised land. The other to the wasteland. Sentiment Remains Neutral The latest AAII sentiment survey shows that 36.3% of investors are bullish on stocks. This is the second straight neutral reading in a market that’s made record highs. Meanwhile, the CNN Fear & Greed Index is 50, right in the neutral zone. This is healthy to see. Because it shows some caution out there, even with stocks blasting into orbit. Or maybe not everyone caught the hot semiconductor/AI trade, which was brutally strong up until Broadcom.
Continue Reading -->Dell Is Partying Like It’s 1999
The stock market hit record highs again this week as AI-mania won’t stop. And the funny thing is, the tech highflyers of the late 1990s are dominating 2026, led by names like Dell (Dell). Yes, Dell. Dell Is Partying Like It’s 1999 It’s 1999 all over again. The New York Knicks are in the NBA finals. Kids across America are wearing Doc Martens. And Del is once again a stock market darling. On Thursday after the close, Dell dropped a huge earnings beat with shocking forward guidance thanks to momentum in its AI server business. And now the stock is up 234% year-to-date, making it the 3rd best name in the S&P 500. Furthermore, look at this list of the best-performing S&P stocks: Many were late 90s dot.com favorites, including Ciena (CIEN), Texas Instruments (TXN), and NetApp (NTAP) in there. What goes around comes around. Turns out that AI is driving demand for memory, processors, and networking tools. Just like the Internet explosion did. And on a random note, I looked up what happened to JDS Uniphase, another 90s superstar. In 2015, it split into networking names Viavi Solutions (VIAV) and Lumentum Holdings (LITE). Both are AI monsters, up well over 100% this year: The Software Short Squeeze Software has made a massive rebound from the April lows, when the “AI will eat software” theme caught fire. The iShares Expanded Tech-Software Sector ETF (IGV) is now up 29% from its 52-week low on April 10. And interestingly, the average individual name in IGV is up a whopping 65% from its 52-week low. Some examples: D-Wave Quantum (QBTS): +133% Datadog (DDOG): +133% Palo Alto Networks (PANW): +84% Oracle (ORCL): +51% ServiceNow (NOW): +34% And interestingly, it looks like the software rally was at least partly a short squeeze. Of the 106 stocks in IGV: 30 have short interest over 10% 75 have short interest over 5% And because of heavily shorted individual names like SoundHound (SOUN) and MARA Holdings (MARA), the average stock has short interest of 8.9%. For comparison, the average QQQ name has short interest of just 3.4%. Remember Rate Cuts? Seems like just yesterday we were thinking about how many times the Fed would cut rates in 2026. But the CME’s FedWatch tool shows traders are now pricing in a 0% chance of rate cuts until July 2027. So presumably, the market does not believe new Fed Chair Kevin Warsh will automatically cut rates as President Trump wants. Today’s PCE Price Index Report showed that inflation accelerated for the 3rd straight month to 3.8%. Excluding food and energy, it rose 3.3%. Because everything is more expensive. Oil, imports, insurance, healthcare, etc. No wonder consumer confidence is in the dumps. The Bulls Are Not That Bulled Up The $SPX just hit a new record high at 7565, but are investors euphoric? Nope. The latest AAII Sentiment Survey shows that just 35.6% of investors are bullish. This is the 2nd straight week of below-average bullishness. Meanwhile, CNN’s Fear & Greed Index is at 61/100, showing modest greed. However, the options market is showing elevated bullishness. The CBOE equity put-call ratio was just 0.43 Wednesday, which shows low demand for puts. But add it up, and it’s hard to say sentiment is anywhere near euphoric.
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