Good afternoon. QQQs +1.1% opened +65bps and grinded higher most of the day, moving higher near the close when Treasury authorized the offloading of cargo involving some blocked vessels.
Semis +2.2% outperformed as SPCX’s guide, SMCI’s preannouncement, and some bullish Anthropic comments by Gerstner on CNBC had semi vibes feeling better than they have been over the past couple weeks. Software +1.8% was led by cyber on an AI-found PHP flaw (ZS +8%; OKTA +7.5%; CRWD +5.3%; S +3.5%). Internet -1% as travel lagged (EXPE -5%; BKNG -3.4%) ahead of META’s print (Zuck talking up Muse on the call) as the Consumer Agentic Winners vs Losers basket was up 5%. China internet lower again (BABA -4%; PDD -3.6%; JD -3.6%) as the HS Tech closed below 4,000 for the first time since Oct 2024. Telcos were also weaker after AT&T missed on phone adds (T -6.4%; TMUS -2.5%; VZ -2%), NFLX -5.3% on a weaker set of numbers and GOOGL -1.6% on mixed Cleveland’s checks.
On positioning, GS had some good color from their Prime team today saying short leverage near 5-year highs (99th percentile) with short sales outpacing long buys ~5 to 1 MTD, also saying the last two weeks were the largest net selling of Global Info Tech on record and Global AI stocks’ long/short ratio in the 6th percentile vs. the past year with Mag 7 net exposure at a new record high.
We sent out first takes on META, TXN, IBM, and LRCX here.
In macro land, rates took a soft 20-year auction in stride and the 10Y was little changed at ~5.12%. Odds of a 10/28 hike are ~15% (~13% yesterday), with December still priced for a hike. Crude gave back an early ~1.5% pop on Hormuz mine headlines, and late in the day the State Dept said reports it would order evacuations of some Gulf embassy staff were inaccurate, with its directive limited to non-emergency staff in Saudi Arabia. BTC ~$84.5K, +3% to its highest since 10/14.
Let’s get to the good stuff…
AI/SEMIS
Anthropic: Altimeter’s Brad Gerstner (an Anthropic investor) on CNBC’s Squawk Box this morning here. Asked whether the IPO goes at $2T or $1.5T, he put last week’s investor-day sentiment at “like a ten out of ten,” then: “The numbers that we have in the Altimeter forecast for this for next year, let’s call it 140 or $150 billion in GAAP revenue right for next year... If you apply a 10 times multiple to that, Andrew, you get to 1.5 trillion. If you apply 12 times multiple, you get closer to 2 trillion. So I think that’s the range that we’re talking about.” The math works off the $150B end (12x is ~$1.8T). This is roughly in line with his Oct 15th framing of $100B 2026 exit run rate doubling would be “like $200B ARR exit next year.” Some context on what that implies and what we’re hearing buyside is modeling: