Bear markets don't usually end in two trading days. |
Semiconductor stocks rallied more than 5% Tuesday, clawing back a chunk of last week's sharp selloff as investors looked past higher oil prices, tariffs, and rising bond yields.
The market's attention has already shifted to what really matters now: whether Big Tech can justify the billions it's spending on AI. |
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⚡ Closing Bell:
→ Dow Jones: ▲ 0.74% to 52,224.64 › Strong earnings from industrial heavyweights like 3M and Northrop Grumman helped lift blue-chip stocks.
→ S&P 500: ▲ 0.89% to 7,509.20 › Nine of the index's 11 sectors advanced as investors looked past geopolitical tensions and focused on earnings season.
→ Nasdaq: ▲ 1.29% to 25,837.21 › Chip stocks powered the rally as investors rushed back into AI ahead of earnings from Alphabet, Intel, and Texas Instruments.
→ Russell 2000: ▲ 1.53% to 2,987.40 › Small caps joined the risk-on rally as investor optimism broadened beyond megacap tech ahead of a pivotal week of earnings.
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Macro Moves:
→ 10-Year Treasury: ▲ 4.63% › Yields climbed to a two-month high as rising oil prices revived inflation concerns, reinforcing expectations that the Fed could keep interest rates higher for longer.
→ 2-Year Treasury: ▲ 4.26% › The policy-sensitive two-year yield climbed as traders scaled back expectations for near-term Fed easing amid renewed inflation concerns from higher energy prices.
→ U.S. Dollar Index: ▲ 0.23% to 101.15 › The dollar strengthened for a fourth straight session as higher oil prices and rising Treasury yields boosted demand for the greenback.
→ Bitcoin: ▲ 2.0% › Bitcoin climbed to its highest level since early June as investors embraced risk assets ahead of Big Tech earnings, shrugging off higher Treasury yields and a stronger dollar. |
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❗❗❗ Looking Ahead:
Earnings from Alphabet, Tesla, and IBM could determine whether this week's rebound in AI stocks has staying power. |
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#TRUTH:
❗❗❗ ❝ The best revenge is not to be like your enemy. ❞ ~ Marcus Aurelius |
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Get rid of overpriced AI stocks before a scheduled announcement on July 31st threatens to reshuffle the stock market's winners and losers. Smaller, lesser-known names are now showing the overwhelming potential to dethrone AI's Magnificent 7. On July 31st , this little-known stock in particular could soar while Tesla faceplants. |
Get the name and ticker of this stock on your radar now...
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$60 Billion Problem. |
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Supermicro, the AI server maker, didn't just announce more orders—it said those orders are becoming far more profitable. |
It expects gross margins to nearly double to 15%-17%, up from previous guidance of 8.2%-8.4%, while revealing it ended fiscal 2026 with a record $60 billion backlog after receiving more than $60 billion in new orders during the fourth quarter alone. |
Shares surged 18% after hours. |
The update suggests the AI infrastructure buildout is becoming a higher-margin business as demand shifts toward more valuable systems and customers. |
There’s another interesting detail. Last month, CEO Charles Liang revealed Supermicro is co-building a gigawatt-scale AI data center for SpaceX and xAI, underscoring how closely the company sits at the center of the AI infrastructure race. |
A $60 billion backlog—and rising margins—suggests the bottleneck may no longer be demand, but how quickly companies can deliver the hardware.
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AMD Hasn’t Even Taken The Stage Yet. |
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One day before AMD’s Advancing AI conference, Nvidia released new performance numbers for its next-generation Vera Rubin platform—effectively setting the benchmark before its biggest rival could unveil its latest hardware. |
According to Nvidia, cloud provider CoreWeave is seeing 10x more tokens per watt running DeepSeek’s R1 model on Vera Rubin compared with the previous-generation Grace Blackwell platform. The company also says its new Vera CPU delivers up to 1.9x better agentic AI performance than AMD’s EPYC Turin processor. |
AMD is expected to showcase its new Helios AI server this week—a direct challenger to Nvidia’s NVL72 platform. |
The timing wasn’t subtle. |
Nvidia still dominates the AI infrastructure market, generating $215.9 billion in fiscal 2026 revenue versus AMD’s $34.6 billion in fiscal 2025. But with every major cloud company building custom AI chips, leadership increasingly depends on convincing customers your next generation is already ahead before competitors even finish their presentations. |
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The $116 Billion Question. |
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SpaceX’s biggest test next month may not happen on a launch pad. |
Beginning August 6, as much as $116 billion worth of insider shares will become eligible for sale, marking the first major lock-up expiration since the company’s blockbuster IPO. |
Today, only about 639 million shares are available to trade. By early December, that figure is expected to swell to 5.33 billion shares as additional restrictions expire. |
That’s a dramatic shift. |
More shares available doesn’t mean insiders will rush to sell. But it does mean investors must absorb a much larger supply of stock, while short sellers gain more shares to borrow and trade. Roughly 30% of SpaceX’s current public float is already sold short, according to S3 Partners. |
The first unlock comes just two days after SpaceX reports earnings, setting up what could be one of the stock’s biggest catalysts since going public.
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Gains & Pains: |
Gains:
→ Aehr Test Systems (AEHR): ▲ 27.86% › Aehr Test Systems surged after reporting record quarterly bookings and a $100 million effective backlog, reinforcing investor optimism around AI infrastructure and semiconductor demand. |
→ Nebius Group (NBIS): ▲ 18.78% › Nebius Group extended Monday's rally after Nvidia disclosed a strategic investment in the AI cloud provider, adding momentum to the broader rebound in AI infrastructure stocks. |
→ Cerebras Systems (CBRS): ▲ 17.92% › Cerebras Systems jumped as investors rotated back into AI hardware names ahead of a pivotal week of Big Tech earnings, with semiconductor stocks leading Tuesday's market rally. |
→ Ouster (OUST): ▲ 17.00% › Ouster gained alongside autonomous technology and AI infrastructure stocks as investors embraced higher-growth names during Tuesday's risk-on session. |
😬 Pains:
→ Danaher (DHR): ▼ 10.99% › Danaher posted the session's biggest decline after lowering its full-year core revenue growth outlook, overshadowing an otherwise better-than-expected earnings report. |
→ MSCI Inc. (MSCI): ▼ 10.14% › MSCI tumbled after raising its full-year operating expense forecast, disappointing investors despite reporting quarterly revenue above Wall Street estimates. |
→ Tenable Holdings (TENB): ▼ 9.72% › Tenable Holdings fell sharply as software stocks lagged the broader technology rebound. No material company announcement or regulatory filing was released Tuesday. |
→ ChronoScale Holdings (CHRN): ▼ 12.15% › ChronoScale Holdings remained under pressure throughout the session, with no material company-specific news identified to explain the selloff.
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Escapes: |
Salvation Mountain 📍 CA 🇺🇸 |
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Commodities Check : ✔️ |
→ WTI Crude Oil: ▲ 2.0% to $84.91/barrel › Oil settled at its highest level since June 11 after Houthi threats against Red Sea shipping and escalating U.S.-Iran tensions renewed concerns over Middle East supply disruptions. |
→ Brent Crude: ▲ 2.0% to $91.01/barrel › Brent closed above $91 for the first time in five weeks as traders priced in higher geopolitical risk to global oil flows. |
→ Gold: ▲ ~2.0% to around $4,080/oz › Gold climbed as investors sought safe-haven assets amid escalating Middle East tensions, offsetting pressure from higher Treasury yields. |
→ Soybeans: ▼ 0.29% to $12.22¾/bushel › Soybeans eased on profit-taking after Monday's multi-month rally as better-than-expected USDA crop ratings eased supply concerns. |
→ Corn: ▲ 0.72% to $4.75¼/bushel › Corn edged higher as traders balanced stronger-than-expected U.S. crop conditions against ongoing weather uncertainty. |
→ Wheat: ▲ 0.59% to $6.78/bushel › Wheat gained after the USDA lowered U.S. spring wheat condition ratings and Russia's Sovecon cut its wheat harvest forecast, tightening global supply expectations. |
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The stinger: |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
This publication is for informational and educational purposes only. It does not constitute investment, trading, or financial advice and is not based on any individual’s financial circumstances, goals, or risk tolerance. We are not registered investment, stock, or commodity advisors. Always consult a licensed financial professional before making investment decisions. |
Information provided in this newsletter (and on any affiliated website) is obtained from sources believed to be reliable; however, accuracy and completeness cannot be guaranteed. Opinions expressed are those of the authors and are subject to change without notice. |
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