QQQs +10bps with a nice bounce back following early morning weakness as dips continue to get bought as investors continue to slowly gross up. Positioning still seems light. Here’s GS: “Our PB data still shows a significant underweight in the major U.S. tech names—though positioning has just begun to rebound from multi-year lows.” We keep it simple: stocks continue to act well and charts look good. Treasuries saw selling earlier on the Moody’s dg but bounced back and yields only finished down 1-3 bps across the curve. BTC +1.4% getting close to ATHs…
Let’s get to the recap:
Internet
RDDT -5% as Wells Fargo downgraded to Hold from Buy, basically saying they think Googl issues are more permanent. Ken views logged-out users (55% of total) as "critical to extending ad reach" despite contributing only 15% of ad revenue and zeroes out this portion of revenue by 2028. We agree and think RDDT is an inception short facing 2x structural issues and cyclical ad headwinds:
Yes, we’ll keep using that meme as much as possible…
CHWY +3.7% continues to hit ATHs as 3p data continues to track above street
AMZN +15bps - Yipit said QTD AWS only tracking to 16%, but given easier comps in May/June, likely ends up in mid 17s
NFLX -20bps shaking off the JPM downgrade like a champ
GOOGL flat as I/O conference kicks off tomorrow. You can watch it on GOOGL’s Youtube channel…MS had results of their Gen AI survey, saying Gemini showing the "biggest uptick" in the past six months to reach "near parity with GPT.” However, ChatGPT still dominates among 16-24 year-olds with nearly 70% monthly usage compared to Gemini's less than 50%. With 3p data and AI narrative improving, short’s not really that exciting, but we have trouble getting excited about a long…CEO Sunar was on the All-In podcast for those of you that missed it
SPOT +1.3% to ATHs
META flattish as 3p points to revs tracking to 17% QTD
RBLX flat: Cowen was out talking about RBLX gaming their algorithm to help certain games, but note felt like a bit nothing-burger to us. Analyst here has been a bear for a long time. Someone asked me in the chat what upside was here today…I don’t have a clear # in mind…On name like this where we like the medium/long term drivers and where valuation is less relevant, I typically ride it until the dataset changes: either 3p data slows, #s set up changes, we get less positive on medium/long term drivers, change in competitive environment (Fornite starts to gain traction for example), trading environment changes, chart shows a parabolic move up or gets v extended, or the set up going forward changes (one thing we have our eye is potentially tougher PS4 comps in late summer/fall). None of those seem at risk near-term. Initiatives like this (Roblox creators will be able to sell merch in-game) keep us excited about medium-term top line drivers. That’s my style though - everyone has their own. I wouldn’t fault someone for trimming to take profits as stock up close to 60% in a little over a month.
UBER +75bps new ATHs continues to act strong
Semis
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