TMTB EOD Wrap
This will be the last TMTB Post through next week
Good afternoon. QQQs -1.6% with plenty of red on the screens across the board. Semis -4% led the way lower as the unwind/risk off continues, with Kimi 3 benchmarks near Opus 4.8 levels adding some fuel to the fire.
In TMTB Slack, we were finally able to communicate a more cohesive narrative picture of what has been going on in semis recently, something we’ve tried but struggled to clearly express over the last couple of weeks:
It's also the forward looking fears why names trading down on good news. What settles the model competition/open source debate? Right now, it's very open-ended with many questions around how the landscape evolves, particularly in respect to the labs viability, and how that flows into semi spending. No one has a crystal ball here -- we could debate endlessly, just look at X -- plenty of intelligent arguments arguing several paths (hiccup in spend, training spend slowing, opensource demand picking up the slack, everyone becomes a neocloud, etc.) So we're in an environment where good #s & datapoints (capex, token growth, & lab ARRs included) being brushed aside because no one is particularly confident on the broader questions. Just a tricky environment overall. Today was the first day where I felt the vibe from some bulls as acceptance we weren't going back to the May-early June days and that we might be entering new paradigm for the time being (not necessarily negative, just different which requires a different approach to AI semi investing like we've been writing about in our wraps/weekly recently)….part of the confusion is bulls want to brush aside the broader arguments by saying this is all mo unwind / leverage / positioning, but I think Tech investors are grappling with some very real questions that have arisen over the last month re: landscape
Arun added on in his own inimitable mental framework: