TMTB EOD Wrap
Good afternoon. QQQs +28bps managed to finish the day in the green after being down more than 100bps in the premarket. As we suspected yesterday, semis +2.3% led the way higher today helped by N&N (Neoclouds & NVDA) after some relative strength intraday yesterday while Internet/Software dn ~170bps led the way lower. TMT Mo was up 5%.
On the macro front, Oil jumped 4% on the back of Trump’s Iran war ceasfire is over comments and signs he might continue attacks. Yields rose 2-3bps across the curve as the market continues to price in 35bps worth of hikes in 2H.
Let’s jump straight into the good stuff
AI/SEMIS
NVDA +3.6% finally getting some love after Vivek was out defending this morning pushing back on the four dominant bear debates — HBM-driven margin pressure, ASIC competition, crowded ownership, and vendor financing — arguing the stock’s ~30–35% P/E discount to AMZN, Meta, GOOGL, MSFT, and AAPL (22x/19x CY27/28E) implicitly prices in an EPS haircut (30-35%) the firm sees as unwarranted, and thinks gross margins stay in the mid 70s as HBM content per rack rises only ~$0.2–0.3M from Blackwell to Rubin versus $2–3M of rack pricing uplift. Slow summer days tend to bring out some interesting commentary in TMTB Slack: