TMTB EOD Wrap

QQQs finished +28bps as AI semis took center stage again as top dog NVDA +2.6% broke out of its 2-month long consolidation to new ATHs as investors continued to digest the bullish Jensen BG2 comments + fashion choices (red glasses = a more subtle fuschia jacket statement?), positive Asian supply chain datapoints (the latest was KEYB today raising CoWoS #s), and an unrelenting pace of AI product rollouts (Sonnet 4.5 & OAI’s Sora 2 the latest this week - Sora 2 launch video worth a watch here…so far the hype/vibe on X likes it). Also heard Jensen/Collette on the east coast meeting investors this week and next.

Outside of AI semis, saw a lot of unwind-y action in internet and software as $’s continues to flow into the former, with some big down moves in HUBS -10% and DOCU -10% as OpenAI posted several videos overnight that some took as a competitive threat:

Sw investors continue to remain skittish around any sort of perceived disintermediation. We liked this cheeky comment from a TMTB reader describing OpenAI’s pace of product roll outs:

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Outside of Tech, worth mentioning that stocks exposed to the lower-end consumer got hit hard today: AFRM, COF, SYF, AXP all fell on worries about a deterioration in credit quality at the lower-end of the market. This has been caused by a slew of datapoints over the last several weeks, mainly from the auto space. Also, recall the UPST note yesterday calling out an increase in loan delinquencies. We’ll see if those fears begin to seep into other areas of tech - ad stocks would be some of the first ones hit given their cyclicality (and now Sora 2 adding a bit of fuel to the flames here…). Something we’re watching…

The gov’t shutdown news didn’t help either, although historically that hasn’t really impacted the market:

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Ok, let’s get to the recap:

INTERNET

• SPOT -4% after Ek announced he was moving to a Chairman role and GS downgraded on mainly valuation. Sounds like Ek will still be very involved int he company:

• ETSY -11% giving back gains from yesterday, which now look more like short covering as MS came out and said the stock pop was overdone as ChatGPT only accounts for 0.3% of ETSY’s US traffic. Also some pushback around how impactful in product checkout will be (we covered in our morning note)…Oppenheimer was also out with a negative note in the morning calling out weak app spend/user growth…SHOP -60bps fared much better.