TMTB EOD Wrap

QQQs flattish but another big rotation day under the surface. In the broader market, financials and healthcare, the two laggards all year continue to outperform as DOW was +75bps vs QQQs down. In Tech, profitability factor outperformed as there’s seemingly more appetite for more value oriented / GARP-y names with little to no hair on the idiosyncratic story (NFLX +2%; SPOT +1%). On the flip-side, that means we’re seeing pressure across several other buckets: Quantum names which are at the tail end of the risk spectrum (RGTI -10% / IONW -7%); names with perceived questionable business models / debt issues (ORCL -4% ; CRWV -3%; NBIS +8%; IREN -3%); names with perceived top of funnel / structural issues (DUOL -4%; MNDY -4%); names with opex issues (META -3%; SMCI -2.3%, ETSY, EBAY, RBLX); and even what are considered more high quality growers that have high valuations but no NT catalysts (NET -4%; PLTR -3.5%; SHOP 1.5%; DDOG -4%; RDDT -3%).

Is rotation to sectors outside tech the main cause hyperscaler weakness today (META -3%; AMZN /GOOGL -1.5%)? Or something else? The one thing that remains constant is this mix is good ol’ SNDK, up another 4% today.

What to make of all these moving pieces that’s being driven by a mix of macro (Gov’t shutdown, fed shifts, seasonality, OBB, etc.) and micro (AI skepticism)? Is it something temporary or a more sustained shift we’re seeing?