TMTB: EOD Wrap

Winners gonna win and losers gonna lose. Thats the theme of price action today as momentum factor/SOX continued to outperform. QQQs sold off later in the day to finish dn 40bps. BTC continued to ramp +7%, yields upticked and China fell 2%. Definitely some weaker price action today (breadth wasn’t good ex-semis) than we’ve seen over the past couple of weeks - some sw names like SNOW, WDAY, ESTC and ZS caught my eye as they had nice follow throughs to the downside after misses last week.

Investors continue to try find under the radar AI longs, which drove some of the moves today as hardware outperformed. I heard Ostrie (the spec sales guy at Gugg) morning note got play as he surveyed some on the buyside asking which AI names might be under the radar, and the list included TSM +4%, INTC +5.5%, MRVL +3%, HPE 11%, and COHR +6%, all names which had significant outperformance today. Reminds me of last year’s BAML e-mail on “AI Loser” basket which drove similar outsized moves at the time. QCOM also +2.5% and continues to break out as investors moving further out the timeline on AI exposure and looking to 2H ‘24 where AI at the Edge might become a bigger theme (INTC/HPE also beneficiaries of this 2H ‘24 look forward). On the flip side AAPL broke the 200d as it continues to be viewed as “AI laggard” and news flow wasn’t great given their EU fine and ISI removing them from tactical outperform list.

@TechFundies on X writing some good notes on MS presentations…

In internet, I got the most questions about the GOOGL -2.7% move. Heard various reasons trying to explain it: Perplexity CEO at MS tonight, EU fine on AAPL this morning means regulators have teeth, culture concerns (see here), Anthropic’s new Claude 3 model out, etc…the news flow wasn’t all neg": Sergey said 80% fixed on image and Gemini Pro doesn’t have these issues + layoffs in trust/safety, Waymo approval, tegus transcript stuff going around (here). We bought some next wk calls as think sentiment has gotten too lopsided and this was the “wtf going on” price action day (although out intuition says maybe a little more shake out tomorrow). Nothing big - a “B” idea.

DASH +4% on RBC’s upgrade raising PT to $175 and calling out that new verticals/international may on the verge of stabilizing profitability, which dovetails with bulls hopes for $2B in EBITDA. LYFT +4% on RBC’s upgrade as well calling out better 2024 EBITDA and potential partnership with DASH. RBLX -4% as data has decelerated throughout the month of May and 3p reports from M-sci and Yipit will likely be out this week (although DAUs/hours engaged still tracking above for the q). SE +7% as investors liked the 2H +ve Shopee EBITDA guide, but lots of fast money in the stock heading into the q so was only up HSD. CVNA -1.5% - CEO at MS tonight and we get Yipit report tomorrow which will likely show an acceleration in unit y/y growth. We were hoping for a little better price action today. EBAY +2% as investors get comfortable with the emerging bull case post EPS on a cheap stock: bulls will say EPS/GMV beat was solid, # of active buyers has stabilized, first guide for margin improvement since 2020, and #s going up showing EBAY’s ability to manage cost and drive eps acceleration. CART +1.4% continues to grind up. The bull case here is better margins + take rate on a <10x EBITDA stock while pre-covid cohorts growing 20% showing the real business is healthy (Sequoia’s open market purchases a couple weeks helped those worried about sellers after the lock up. W +2% as bulls hope for better data coming up. Losers continued to lose: MTCH -2.3%, ETSY-3%, CHWY -1.8%. China internet was weak with BABA -3.5%, BIDU -3%, JD -5%, PDD - 4%.