TMTB EOD Wrap

QQQs +1.2% as markets continue to hit all-time highs. Investors saw the July CPI as "not as bad as feared” helping focus move to Powell confirming a Sept cut at Jackson Hole next Friday. 2 year dipped 4bps as a result while 10/30 year were slightly up. Many excited about the beginning of the Fed cutting cycle on 9/17 as stocks continue to show remarkable strength with any slight dip being bought quickly.

In Tech, it was semis again that drove outperformance with SOX +3%, but wasn’t your usual suspects: NVDA was only up 60bps. This time it was analogs leading names higher as NXPI/MCHP sounded good at Keybanc and Bernstein confirmed Asian press reports of them raising prices. Software was mixed with some names rallying but large cap app sw still stuck in the dog house. META +3% was the standout large cap.

Let’s get to it…

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Post-close earnings:

LITE +4%: Delivered a strong beat-and-raise, topping even the high end of its positive pre-announcement. Revenue came in at $480.7M, above consensus $468M and pre-announced range of $465–$475M. Gross margin was 37.8% vs. consensus 36.3%. For next quarter, guidance calls for revenue of $525M at the midpoint—well ahead of consensus $500M and above whispers of $520M. Timing around AI hitting $600M seems slightly improved. Shares have already been strong YTD on known hyperscaler ramps, but this print exceeds elevated expectations, with GOOGL likely a key ramping customer. ALAB posted a solid beat-and-raise last week, and COHR (another large GOOGL supplier) reports tomorrow night.

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CRWV -6% top line looks a little light with only a 12% beat vs expects for mid teens. Backlog seems to have come in line at $30B but I didn’t hear much around expectations/bogeys on this one going in so tough to gauge what expectations were. Focus moves to the lock up expiry in a couple days.

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INTERNET

• ETSY +7%: didn’t see any news, but 3p data continues to track around 0-2% vs street at -4% for Q3 GMS

• META +3%: lots of questions about what drove the strength today, but didn’t see any. Stock was coiling a bit post earnings, now breaking out. No big surprise. Tor recap, here’s what we wrote post-earnings:

Here’s the burgeoning narrative which the print cemented: Accelerating revenues driven by a ramping and accelerating content flywheel, new monetization levers with Whatsapp and AI chatbots on the horizon, and the AI all star team in place. Things are getting exciting, and that’s not to mention we are bullish on the glasses opportunity beginning in ‘26.

We think buyside moves up to $33-$34 in CY26 and first stop is $825: $33 x 25x.

However we think over the next 6-12 months, $1k is on the horizon which would be 30x $33 or 26x a 2027 $37 EPS number.

• DUOL -5%: AI DIY risk + Google search/seo top of funnel risk + user data slowing QTD + 65x ‘26 P/E…you know what that calls for…

Again, this isn’t about the “E” — bookings crushed and actually tracking decently so far QTD — but instead about the “P” as investors re-price terminal risk especially after the ChatGPT5 demo which showed GPT5 create a language‑learning tool from a simple user request—including features like flashcards, a progress tracker, and a simple game. Stock now down 30%+ from top of the squeeze last week. Not a bad spot to take some off the table if you’re short, but the stock likes to ride the 20d (both higher and lower) so we’d use that as a guide for risk management as its possible stocks continues to trend down.

• DASH +3% nice move back above the earnings gap / EXPE +5% showing similar price action after selling off the initial pop post print