All posts by Michael Comeau
Did Michael Dell Say Buy Micron?
ATTN: Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Check it out here.What a week! Elon Musk showed us a flying car. Inflation came in hot. And my portfolio got smoked. But… Michael Dell might have handed us a big new idea. Let’s dig in. Skip Ahead! Red October for TechDid Michael Dell Tell Us to Buy Micron?Earning Season Is Going Okay, But Could Be About to Go BOOMMeta Is Key to AISentiment Is NeutralRate Hike Expectations Subject to ChangeREMINDER: Join the Mentorship Red October for TechIt’s been a rough month for tech. QQQ is down 4.1%, while SPY is down just 0.1%. Meanwhile, DIA is up 1.9%. But bizarrely, every S&P sector is up aside from Tech and Communications.And Communications might as well be tech because it includes names like Meta (META) and Alphabet (GOOGL). If we did deeper into the QQQ’s, 55 of 101 names are up in October. Sounds decent. But the average winner is up 6.3%, while the average decliner is down 11.1%. That’s because the decliners list is dominated by beaten-up AI names like SanDisk (SNDK), Nebius Group (NBIS), and CoreWeave (CRWV). Speaking of beaten-up AI names…Did Michael Dell Tell Us to Buy Micron?A Friday Wall Street Journal article about Dell (DELL) included an interesting little nugget from company founder Michael Dell. When speaking about the memory supply crunch, he said “It’s gonna get worse.” Was he telling us to look at Micron (MU), which is trading at 5x forward earnings?Supply shortages favor sellers like Micron. And the longer the shortage, the better for Micron. However, it’s not easy to feel confident when the AI trade is taking the elevator down… Our own JR Romero is a big Micron fan. Here’s why:Earning Season Is Going Okay, But Could Be About to Go BOOMAccording to FactSet, 9% of the S&P 500 has reported earnings. 84% of companies have beaten estimates. However, Q3 earnings are now tracking to grow by 29.0%, slightly below the 29.4% expected last week. This is because earnings beats are smaller than expected, and are being offset by lower estimates in the Health Care sector. However, we are about to get a bunch of big tech earnings reports which have the potential to shift sentiment. Starting with…Meta Is Key to AIEarnings season heats up big time next week, especially in tech. Meta (META) is the biggie, especially when it comes to AI. The market is desperate for reassurance that AI infrastructure spending can keep growing. Because that spending has been key to earnings growth. So consider Meta’s capex guidance a major market catalyst. The higher, the better. (duh) Yes, we have important companies like Netflix (NFLX), Tesla (TSLA), and Lam Research (LRCX) reporting, but Meta is the big one.Sentiment Is NeutralThe latest AAII Sentiment Survey shows that 38.7% of investors are bullish.That’s pretty much in-line with the long-term average of 37.5%. By 41.6% of investors said they were bearish, which is above the 31.5% historical average. Plus, CNN’s Fear & Greed Index is at just 18/100, indicating Extreme Fear.So it looks this market’s short on joyous participants.Rate Hike Expectations Subject to ChangeEven with hot CPI and PPI reports this week, expectations for the October 28 FOMC meeting haven’t changed much, according to the CME’s FedWatch Tool. The market is pricing in a 17.2% chance of a 25 bp rate hike, down from 27.7% last week.And the market expects an 88.2% chance of at least one hike by year-end. Not a big change from last week.REMINDER: Join the Mentorship Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Learn about it here. Want to get to know them? Watch this webinar:
Continue Reading -->SpaceX the Phone Company?
ATTN: Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Check it out here.What a week! AI stumbled on reports of disappointing revenues at OpenAI. Middle East tensions kept oil prices high. US Treasury iields hit multi-decade highs. And Elon Musk’s SpaceX might be your new phone company! Let’s jump into it. Skip Ahead! October Is Getting BetterElon Musk Wants a Big Piece of the Phone/Internet/Cable PieJensen Huang Might Be Right About MarvellSentiment Is NeutralNext Week Will Be LoudRate Hike Expectations Subject to ChangeREMINDER: Join the Mentorship October Is Getting BetterSeptember was a very tricky month, with just 113 of S&P 500/SPY stocks up for the month. The average name was down 4.6%, and tech was the only major sector that was in the green. Things are broadening out in October. The SPY is up 2.1% for the month, and every sector is in the green, aside from Communications.And Communications would be positive if not for T-Mobile (TMUS) and Verizon (VZ), which got hit after Elon Musk’s SpaceX (SPCX) agreed to buy up wireless phone spectrum. Speaking of that news…Elon Musk Wants a Big Piece of the Phone/Internet/Cable PieSpaceX is looking to acquire low-band wireless spectrum from Grain Management. Upon FCC approval, SpaceX Mobile aims to become “a major mobile carrier in the US.” That’s because this new spectrum works indoors, unlike SpaceX’s Starlink, which generally requires a clear view of the sky. SpaceX also got FCC approval to launch 15,000 new Starlink satellites that supposedly offer 100 times the bandwidth of the current generation Americans spend hundreds of billions per year on phone, internet, and television service. Elon wants a piece of that pie. So before long, we might be paying Elon for combined phone and data service! That could mean tens of billions a year in revenue for SpaceX. By the way, here’s JR Romero’s take on SpaceX stock:Jensen Huang Might Be Right About MarvellIn June, Nvidia (NVDA) CEO Jensen Huang said Marvell Technology could be the next trillion-dollar company because of wild demand for networking infrastructure. It looks like Jensen might be right. I later bought Marvell stock, because I assume Jensen knows what’s getting bought in the world of AI infrastructure. And since Nvidia owns a $2 billion stake in Marvell, I gotta figure the companies will do lots of business together. Anyway…At Marvell’s Investor Day on Tuesday, the company issued FY2028 revenue guidance of $20 billion, and FY2031 guidance of $70 to $90 billion. These numbers were well above Wall Street estimates. This is just the latest in a stream of “all systems go” indicators for the AI industry. Because in recent weeks, we’ve seen AI-dependent companies like Micron (MU), Everpure (P), and Penguin Solutions (PENG) deliver huge results and guidance. This week, the market raised its eyebrows on a report that OpenAI’s revenues were lower-than-expected. But observers were comparing OpenAI’s reported numbers with Anthropic’s, which uses a different method of calculating revenue.Sentiment Is NeutralThe latest AAII Sentiment Survey shows that 40.3% of investors are bullish.That’s technically above the long-term average of 37.5%. However, it comes after three straight weeks of bearish readings. So that’s not exactly a sign of an ecstatic crowd. Plus, CNN’s Fear & Greed Index is at just 46/100, indicating neutral sentiment.So there’s not a ton of enthusiasm for a market near all-time highs. I’d guess people are still smarting from a rough September.Next Week Will Be LoudThis week was quiet. Next will be loud. We’ll get the critical CPI and PPI reports, and FOMC Chair Kevin Warsh will appear on an IMF Panel on Thursday. And earning season starts cranking Tuesday with JP Morgan (JPM), UnitedHealth (UNH), Goldman Sachs (GS), Wells Fargo (WFC), and Citi (C). We also have two major tech reports with semiconductor giants ASML (ASML) and Taiwan Semi (TSM). Investors want them to indicate that AI-driven semiconductor demand remains sky-high.Rate Hike Expectations Subject to ChangeThe market is pricing in a 19.4% chance of a 25 bp rate hike at the October 28 meeting, according to the CME’s Fedwatch Tool.And the market expects an 86.4% chance of at least one hike by year-end. However, based on the busy economic calendar next week, these numbers could change, big time.REMINDER: Join the Mentorship Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Learn about it here. Want to get to know them? Watch this webinar:
Continue Reading -->AI Earnings Boom: Never-Ending Story?
ATTN: Sami Abusaad and James Rich Young are hosting an Open House next week. Sign up now for 5 full days of day and swing trades, plus in-depth training. 100% free. September was a slopfest and rate hikes may be farther away than we thought. Meanwhile, the AI earnings boom just got more ridiculous. So let’s dig in to the biggest and baddest stories in the market. Skip Ahead! September Was RoughMicron & the Ridiculous AI Earnings Boom Sentiment Is Still Not BullishNo Rate Hikes?Next Week Is About RestREMINDER: Join the Open house September Was RoughSPY was down 0.3% in September, while the QQQs were up 3.3%. Not so bad. But things were way uglier below the surface. Just look at all the red in this table showing September ETF performance:Just 113 of S&P 500/SPY stocks were up for the month, and the average name was down 4.6%. And by the end of the month, the average stock was 21.1% off its 52-week high. Essentially, you had to be overweight the right tech names (mostly semiconductors) to have had a decent month.Micron & the Ridiculous AI Earnings Boom Memory maker Micron (MU) dropped another amazing earnings report after the close, and AI is the driver. This chart showing Micron’s quarterly earnings per share over the past 10 years illustrates just how transformative AI has been:Micron earned $33.42 per share last quarter, more than 10X the $2.59 it earned in its last quarterly earnings peak in 2022. By the way, JR Romero expects Micron to hit $1,434. See why here:And the AI earnings boom seems to get more ridiculous by the week. FactSet reports that analysts now expect S&P 500 earnings growth of 29.1% in Q3, which would be the third straight quarter of 25%+ growth. And AI monsters like Nvidia (NVDA), Dell (DELL), and Super Micro (SMCI) are leading the charge. Estimates are going up so fast that analysts expect 63.5% earnings growth in the Information Technology sector. That is wild. It’s not like this is the first year of a bull market where we’re working off easy year-over-year comparisons. We are almost 4 years into the AI cycle and it shows zero sign of slowing! Starting to feel like a never-ending story.Sentiment Is Still Not BullishThe latest AAII Sentiment Survey shows that just 34.6% of investors are bullish.This is the third straight week of below-average bullishness. Meanwhile, bearishness remains high at 46.5%. Plus, CNN’s Fear & Greed Index is at just 32/100, indicating moderate fear.So there remains little enthusiasm for the market as a whole.No Rate Hikes?Friday’s weaker-than-expected Nonfarm Payrolls report came in the wake of the Fed’s Williams saying there is no urgency for rate hikes. So now the market is pricing in a mere 20.5% chance of a rate hike at the October 28 meeting:That’s down from 64.2% last week. However, traders are still pricing in an 81.9% chance of at least one rate hike by year-end.Next Week Is About RestThis week had some key events like the Micron (MU) earnings report and the Nonfarm Payrolls report. Next week, we get to take a break. There are no market-moving earnings reports or major economic data. But remember, we could get news on Iran so keep an eye out.REMINDER: Join the Open house Sami Abusaad and James Rich Young’s Open House begins Monday. Jump in now! Want to get to know them? Watch this webinar:
Continue Reading -->Why Apple Is My Favorite AI Stock
What a week! Meta (META) became an AI superstar, bond yields hit new highs, and I found yet another reason to love Apple (AAPL). Let’s dig in! Skip Ahead! September = SlopWe Have Yet Another AI MonsterApple Is My Favorite AI StockSentiment Is Not BullishTraders Fear Higher RatesFed Expectations Point to HikesNext Week Is About Two ThingsREMINDER: The Pristine Mentorship Is Open September = SlopSeptember is historically the worst month of the year for the S&P 500, but we’ve squeezed into the green:However, just 137 of S&P 500/SPY stocks are up for the month, and the average individual name is down 3.1%. And only 2 of 11 S&P sectors are positive: Technology and Communication Services Interestingly, the Communication Sectors sector has a 22% weighting in Meta (META), which is up over 31% this month on the back of its Muse AI launch. It would be in the red if not for Meta. Related: Why META Is Going to $1,000 So while we could theoretically write a headline “SPY Is Up for September,” the underlying data stinks outside of tech. Meanwhile, small caps have been getting destroyed with IWM down over 3% because of higher interest rates. JR Romero explains here: We Have Yet Another AI MonsterEvery week, I learn about another company reporting blockbuster demand because of AI buildouts. Last week, it was power infrastructure name Forgent Power Solutions (FPS). This week, it was data storage play Everpure (P), which used to be called Pure Storage. The stock exploded Thursday after the company announced monster guidance for FY2028, thanks to AI-driven demand.On Friday, Goldman Sachs said it expects the 5 biggest US hyperscalers (Amazon, Alphabet/Google, Microsoft, Oracle, Meta) to spend $1.2 trillion on AI infrastructure next year. That’s up 54% from this year.Apple Is My Favorite AI StockThere is another AI infrastructure boom happening… at home. More and more people and companies are opting for open-source AI models that run on local computers. That’s because if you run locally, you avoid monthly or per-token charges, and you have greater control of your data. This market appears to be dominated by Apple’s (AAPL) Mac Mini and Mac Studio, which get rave reviews because of their warp-speed processing and low power consumption. Apple just released new Mini and Studio models on Tuesday. I spent some time on Apple.com researching different configurations to see how fast they ship. The earliest shipping date I could find for a Mac Mini was October 15-22. And some Mac Studio configurations don’t ship for another 15-17 weeks. The Mac accounted for just 9% of Apple sales last quarter. I suspect that number will go way up. The Information reported in August that Apple itself was surprised by how many enterprises are using Mac hardware for AI. And they also said Apple was considering a return to the server market. If that happens, let’s pray for the shorts. Apple is my largest stock position, so take what I saw with a grain of salt.Sentiment Is Not BullishThe latest AAII Sentiment Survey shows that just 32.7% of investors are bullish.This is up from 28.8% last week, but it’s still below the long-term average of 37.5%. Meanwhile, 48.8% of investors are bearish, which is well above the average of 31.5%. Plus, CNN’s Fear & Greed Index is at just 38/100, indicating modest fear.So there remains little enthusiasm for the market. And it looks like rates are an issue.Traders Fear Higher RatesOn Thursday evening, I asked members of the Alpha Team VTF® if they were worried about higher rates. 65% of members said yes. Plus, many more members manually typed out a “Yes” instead of taking the poll This wasn’t the most scientific survey in the world (sampling one room of active traders after a tricky day in the market), but rates are clearly a worry.Fed Expectations Point to HikesLast week, the FOMC raised rates by 25 bps, with Chair Kevin Warsh saying “The plain fact is that inflation is too high and has been for too long.” The CME’s FedWatch Tool now shows the market is pricing in a 64% chance of a 25 bps rate hike at the October meeting.That’s up from just 10% one month ago. And the market is pricing in a 51% chance of 50 bp in total hikes by year-end.Next Week Is About Two ThingsObviously, the market wants to see US Treasury yields and crude oil down. Plus some kind of deal between the US and Iran to get the Strait of Hormuz fully open. But as far as the official trading calendar goes, two things matter. The first is the Nonfarm Payrolls Report on Friday. And the second is Micron’s (MU) earnings report on Wednesday. I think this is bigger. As noted, demand for AI infrastructure just keeps going up, so in all likelihood, Micron will sing the same old song about being supply-constrained. But on the off chance Micron says anything negative, expect havoc in the market. Because AI is clearly holding the economy and market up. Anyway, if you care, this is what else is coming:REMINDER: The Pristine Mentorship Is Open Sami Abusaad and James Rich Young’s Pristine Mentorship is open and there are just 13 spots left. In this video, they take you through the 4 steps to becoming an elite trader.
Continue Reading -->The Survivor Market
Bad news? Who cares? This market is a survivor. Keep reading for the evidence. Skip Ahead! This Is the Survivor MarketWe May Have a New AI SuperstarCrypto Is Back on TopSentiment Is Not BullishThe Great Rate Debate ContinuesNext Week SHOULD Be QuieterThe Pristine Mentorship Is Open This Is the Survivor MarketSeptember is historically the worst month of the year for the stock market. And we’ve had plenty of tricky news to navigate, including:Hot CPI & PPI reportsThe FOMC raising rates and signaling more hikes comingThe 10-Year Treasury Yield hitting 5%OpenAI’s Sam Altman and Anthropic’s Dario Amodei calling for a slowdown in AI developmentCrude oil hitting $100+ because of ongoing Iran tensionsBut all things considered, we’re hanging in okay.The SPX is down 0.7%, while QQQ is up 0.1%. And the leading semiconductors are up, with SMH rising 1.4%. Technically, the S&P tends to fall an average of 0.6% in September. So we’re doing worse than usual. But falling just -0.7% in the face of all the aforementioned bad news is impressive. This market is a survivor. And it may be thanks to all this bullish AI news:We May Have a New AI SuperstarThe market got a short-term spook Monday when OpenAI’s Sam Altman and Anthropic’s Dario Amodei called for a slowdown in AI development. But we keep seeing more and more signs of staggering demand for AI infrastructure. This week, networking equipment maker Ciena (CIEN) announced it expects 30% compounded annual revenue growth through 2029. Power infrastructure name Forgent Power Solutions (FPS) skyrocketed this week after a monster earnings report thanks to data center demand. By the way, FPS is a clear candidate to be the next AI superstar. It’s growing like mad, dropped gigantic guidance, and it’s still 40% off the highs:Meanwhile, neoclouds CoreWeave (CRWV) and Nebius (NBIS) both implemented price increase for compute capacity. And Nvidia’s Jensen Huang said the company will double chip sales next year. The good times just keep on rolling. And that’s helping hold up the economy and market.Crypto Is Back on TopBitcoin and Ethereum have been a mess this year. But they’ve picked up steam, and the Grayscale Ethereum Trust ETF (ETHE) is now 70% off the lows. And it looks like it may be breakout out of its month-long range.Sami Abusaad just explained the bull case for ETHE on Wednesday, when it was trading at $19.33. Sentiment Is Not BullishThe latest AAII Sentiment Survey shows that just 28.8% of investors are bullish.This is down from 38.0% last week, and it’s well below the long-term average of 37.5%. Meanwhile, 53.3% of investors are bearish. This is the highest bearish reading since May 1, 2025. Yes, 2025. Not 2026. Plus, CNN’s Fear & Greed Index is at just 28/100. Fear & Greed was in the mid-60s in August. The crowd is not exactly in manic depression mode. But there is not a lot of joy out there.The Great Rate Debate ContinuesThe FOMC raised rates by 25 bps on Wednesday, with Chair Kevin Warsh saying “The plain fact is that inflation is too high and has been for too long.” The CME’s FedWatch Tool now shows the market is pricing in a 58% chance of a 25 bps rate hike at the October meeting.And it’s pricing in a 44% chance of a third hike at the December meeting. This has the 10-Year Treasury yield at just over 5%. And this is fascinating, because there was a time when people were worried about the 10-year hitting 4.5. Now we’re way past that and the stock market just keeps on chugging along.Next Week SHOULD Be QuieterBased on the calendar, you’d think the market should be quiet. We have no economic data Monday because of the Yom Kippur holiday. And after that, we have some Treasury auctions, Durable Goods, and Michigan Consumer Sentiment. And Costco (COST) is the lone big earnings report. However, it feels like anything could happen with Iran, and at some point, higher bond yields will matter.The Pristine Mentorship Is Open Sami Abusaad and James Rich Young’s Pristine Mentorship is open! (spots are limited) In this video, they take you through the 4 steps to becoming an elite trader.
Continue Reading -->This Is the New Palantir
What’s the new Palantir (PLTR)? JR Romero argues it is BigBear.ai (BBAI). And to watch the full interview with JR, you can watch here: In the extended video, JR discusses: Why SanDisk (SNDK) can hit $2800, and then $3400 What to make of Nvidia’s (NVDA) post-earnings selloff Why the Russia-Ukraine conflict could end soon. How the SPX could hit 8,000+ And more!
Continue Reading -->AI Just Went Bonkers
What a week! We had a jobs report, a massive earnings beat from Dell (DELL), and a big Tesla (TSLA) Robotaxi event. So let’s dig in: Skip Ahead! Dell & the Gang Confirmed AI Demand Is BonkersMemory Is Back on TopEuphoria Is Missing In ActionThe Great Rate Debate ContinuesNext Week Is Oracle and Econo-themedThe Pristine Mentorship Is Open Dell & the Gang Confirmed AI Demand Is BonkersNvidia (NVDA) impressed with its incredible guidance on its August 26 earnings report. And Dell (DELL) did the same on Tuesday, forecasting full-year revenues 11% above consensus. We also had strong AI-driven results this week from Broadcom (AVGO), Ciena (CIEN), Snowflake (SNOW), NetApp (NTAP), and Hewlett-Packard Enterprise (HPE). Demand for AI infrastructure is just bonkers. As good as industry earnings are, they’d be even better if not for shortages of inputs like memory and good old-fashioned electricity! Remember, Nvidia guided for 70% revenue growth vs. Wall Street expectations of 44%. But its growth would be more like 100% if it could actually meet demand. And this is a company that is facing increasing competition from its own customers, who are racing to build chips in-house! David Prince of T3’s Inner Circle discussed Dell and other key names in this video: Memory Is Back on TopWith all the bullish AI news, it’s no shocker that memory & storage stocks are leading the market to start September, with the Roundhill Memory ETF (DRAM) up 4%.DRAM has become one of the most popular ETFs in the market, trading over 23 million shares per day. SanDisk (SNDK) in particular had a big day on Friday, up 10%. Maybe we should have listened to Sami Abusaad Tuesday when he made SanDisk his #1 name. Euphoria Is Missing In ActionThe latest AAII Sentiment Survey shows that 39.7% of investors are bullish.This is the first week of above-average bullishness since July 15. So does that mean the crowd is positive? Not exactly. 39.7% isn’t even in the neighborhood of euphoric, and it’s not far from the long-term average of 37.5%. Plus, CNN’s Fear & Greed Index is at just 42/100.This is because many of Fear & Greed’s inputs like new 52-week highs are at historically low levels. Euphoria is missing from this market.The Great Rate Debate ContinuesOn Friday, President Trump told the Fed to cut rates. Or else he’ll stop trade with certain countries that have surpluses. But what is the market pricing in? The CME’s FedWatch Tool shows the market is now pricing in a 58% chance of a 25 bps rate hike this month. And it’s pricing in an 86% chance of higher rates by year-end. Next week’s CPI and PPI reports should impact expectations.Next Week Is Oracle and Econo-themedEarnings season is slowing to a crawl following this week’s biggies like Dell (DELL), Palo Alto Networks (PANW), Broadcom (AVGO), and Snowflake (SNOW). Next week, Oracle (ORCL) is the one to watch for three big reasons: 1) It’s an AI bellwether2) Investors are worried about the company’s debt load3) It will give insights into enterprise software demand But the real action will be in economics with CPI, PPI, ADP Employment, and the ECB rate decision coming in. Not to mention, markets will be watching bond auctions because of ongoing concerns over interest rates and the FOMC.The Pristine Mentorship Is Open Sami Abusaad and James Rich Young’s Pristine Mentorship is open! In this video, they take you through how to build a trading plan, then tell you all about the program. Highly recommended:
Continue Reading -->My Favorite Secret AI Stocks
What a week! Moderna (MRNA) announced a major cancer vaccine breakthrough. Rising Treasury yields have traders on edge, even with Treasury Secretary Scott Bessent cranking up buys of long-dated bonds. And Wal-Mart (WMT) announced disappointing sales. Now let’s dig into the most interesting stories in the market ahead of a very busy week for tech earnings and economics. Skip Ahead! Nvidia Needs a ShockJensen Huang’s Other Favorite Stock Is Reporting EarningsThese Banks Might Be the Best “Secret” AI StocksThe Great Biotech Short SqueezeTraders Are Still SkittishNext Week’s Calendar Is StackedThe Pristine Mentorship Is Open Nvidia Needs a ShockNvidia (NVDA) earnings are coming in hot on Wednesday, August 26.And it looks like we need a big monster beat and guidance to catapult the stock higher.The stock has sold off the day after earnings 4 straight times, and in 6 of the last 8 quarters. You can see this on the right-most column here:The culprit is shrinking revenue beats.Yes, the company is growing fast but gone are the days of giant revenue beats, which is the heart soul of momentum stocks.Nvidia always reports strong numbers, but they it’s been years since they’ve shocked the market with blockbuster sales and guidance.Will that change next week?With the way hyperscalers like Meta (META) and Alphabet (GOOGL)are spending money, anything is possible.But for now the bears seem to have the post-earnings advantage. Speaking of earnings…Jensen Huang’s Other Favorite Stock Is Reporting EarningsI’ll go out on a limb and say Nvidia CEO Jensen Huang’s #1 stock is Nvidia. His second favorite appears to be Marvell Technology (MRVL), a stock I bought myself. One reason I jumped on Marvell was because Mr. Huang called it “the next trillion dollar company” back in June. Marvell reports after the close Thursday. The company has its fingers in multiple AI data center applications, so we’ll get even more insights on AI infrastructure spending trends. Traders will also be eager for more details on Marvell’s monster chip deal with Google. To make a long story short, Google’s gonna spend a ton of money on Marvell chips. And in return, Google gets the right to buy up to 58,970,907 Marvell shares at $206.58. The more Google spends, the more Marvell shares it can buy. That’s great for Marvell shareholders because Google has a financial incentive in keeping Marvell’s stock price as high as possible. Jensen Huang gave me a reason to buy. Google gave me a new reason to stick with it. But with Marvell’s stock 44% off the June 29 lows, it’s hard to argue that expectations are anything but high:And on Friday, we saw an interesting piece of news from Marvell competitor Broadcom (AVGO), which makes me think…These Banks Might Be the Best “Secret” AI StocksBloomberg reported that Broadcom is looking to raise more than $60 billion in its newest AI debt financing deal.2026 has seen a wave of capital raises from the likes of Amazon (AMZN), Alphabet (GOOGL), Nebius (NBIS), CoreWeave (CRWV), Iren (IREN), Terawulf (WULF), and so on. And that money is going straight into AI infrastructure. Plus, it’s a major IPO year with SpaceX (SPCX), Cerebras Systems (CBRS), SK Hynix (SKHY), and eventually Anthropic, OpenAI, Databricks, and Stripe. And the M&A market has been quite strong thanks to megadeals like the Paramount/Warner Bros combination. This means lots of deal fees for investment banks like Morgan Stanley (MS) and Goldman Sachs (GS), regardless of which actual AI companies end up dominating. And as long as AI doesn’t put the bankers out of business (it won’t), Wall Street will print money from AI-related dealmaking. So they are next on my buy list.The Great Biotech Short SqueezeThe State Street SPDR S&P Biotech ETF (XBI) is up over 36% in 2026, putting it at #3 on our ETF leaderboard:Biotech got a turbo boost this week when Moderna (MRNA) announced successful trial results for an mRNA vaccine for melanoma. But what many people are missing about the biotech boom is the impact of short squeezes. The XBI ETF itself has short interest of 116%, because ETF shares can apparently be borrowed and shorted multiple times. And the average stock in the XBI ETF has short interest of 14.3%. For comparison, the average short interest of a stock in the VanEck Semiconductor ETF (SMH) is just 4.0%.Traders Are Still SkittishThe latest AAII Sentiment Survey shows that 35.5% of investors are bullish.This is the 5th straight week of below-average bullishness, which I chalk up to stubborn inflation (I mean the real inflation we feel, not government numbers) and other economic concerns. So even with equities near record highs, the crowd is unwilling to say “I love this and we’re going higher.” On balance, this is positive because it implies a lack of euphoria. Meanwhile, the CNN Fear & Greed Index, is at 57, indicating modest Greed.So sentiment remains neutral overall. There just aren’t strong feeling on either side.Next Week’s Calendar Is StackedAside from Nvidia and Marvell’s earnings, we have a lot going on next week. In economics, we have CB Consumer Confidence, Core PCE Price Index, GDP, and Durable Goods. And of course there’s a chance Fed Chair Kevin Warsh makes a market-moving announcement at Jackson Hole on Friday. And on the earnings side, we’ll be watching CrowdStrike (CRWD), Salesforce (CRM), AutoDesk (ADS), and Workday (WDAY), which will give us key insights on software demand amid concerns about encroachments from AI. Here’s the full calendar:The Pristine Mentorship Is Open Sami Abusaad and James Rich Young’s Pristine Mentorship is open! In this video, they take you through how to build a trading plan, then tell you all about the program. Highly recommended:
Continue Reading -->This Micron Chart Is Insane
What a week! Our hero SanDisk (SNDK) delighted investors with its Investor Day, earnings season kept on cruising along, and the CPI/PPI reports helped quell fears over inflation. So let’s dig into the 5 things you need to know about markets right now. Use the table of contents to skip ahead: Skip Ahead! It Was a BAD Week for Michael Burry and AI ShortsThis Micron Chart Is InsaneEarnings Season Has Been Amazing4 Reasons SanDisk Is KINGTraders Are a Little Bearish It Was a BAD Week for Michael Burry and AI ShortsMichael Burry of “The Big Short” fame made headlines this week. Among other moves, he increased his Micron (MU) short and put on a big QQQ put options position. The problem is that AI shorts are getting crushed. First, SanDisk’s (SNDK) Investor Day was very well-received, pushing up other AI stocks like Micron in sympathy. Second, did you see the monster post-earnings moves in Nebius (NBIS), CoreWeave (CRWV), and Lumentum Holdings (LITE) this week? They are the three most heavily shorted stocks in the Nasdaq 100.And they are among the top-10 performers in the index this month. Plus the QQQs have been grinding up, which eats away the value of put positions. So let’s talk about what makes shorting a stock like Micron so tricky.This Micron Chart Is InsaneHistorically, memory and storage have been highly cyclical. But thanks to the AI boom, demand is outstripping supply like never before. Micron can’t even meet half of customer demand, based on comments from a KeyBanc conference. Customers are insensitive to memory prices, and some are signing deals out to 2030. This supports the “this time it’s structural, not cyclical” argument. And if we look at historical earnings for Micron, you can see how things have changed.In the last two cyclical earnings peaks, Micron earned: -$2.59 per share in Q3 2022-$3.53 per share in Q4 2018 But in Q3 of 2026 the company earned $25.11 per share. By shorting Micron, you are saying this is the peak. But look at that chart again. If Micron can earn $25 a share in a quarter, how can you count out $50? Or $100? And the memory/storage boom is just one reason…Earnings Season Has Been AmazingQ2 earnings season has been absurdly strong, according to FactSet data. Q2 revenue growth is tracking at 15.0%. Back on June 30, analysts expected just 12.2% growth.This is the highest since Q4 2021, when the economy was rebounding from the Pandemic lows. The tech sector has been a major contributor with 35.9% growth thanks to huge numbers from AI-driven names like the aforementioned Micron and SanDisk. We can always say the most obvious thing in the world: “It can’t get much better than this.” But even 3 years ago, people were saying the AI bubble was going to pop. And AI spending just keeps going through the roof as companies trip over themselves to buy servers, GPUs, memory, and other hardware. Speaking of SanDisk…4 Reasons SanDisk Is KINGSanDisk’s Thursday Investor Day was going well. And then the company said it would return 100% Excess Cash to Shareholders. Then things started going REALLY well. The stock took off like a rocket:That was great for my 1,000 shares of SanDisk! Oh, excuse me. That was a typo. I own 1 share of SanDisk. (as in ONE) But the bull case here is obvious:Solid revenue growth back by long-term customer agreementsDirt-cheap valuationSuper-high margins and cash flowThe company will buy back tons of stock in the years to comeOf course, it’s hard to chase a stock that’s up 587% year-to-date. (my entry was $1,587 so I’m not pretending I caught it early) BTW, you can get David Prince’s takes on SanDisk and the AI landscape here:Traders Are a Little BearishThe AAII Sentiment Survey shows that investor sentiment is just all over the place week to week. 34.7% of investors are bullish, which is slightly below the long-term average of 37.5%.Technically, this is the fourth straight week of below-average bullishness, despite a string of all-time highs. I take this as positive, because it implies there is still a lot of doubt facing this market. Meanwhile, CNN’s Fear & Greed Index is at 65/100, signifying modest Greed: See you next week kids!
Continue Reading -->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!
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