TMTB EOD Wrap

QQQs +65bps back in risk on mode as yields pulled back today down 5-6bps across the board. AI sentiment and release cadence going hand in hand - today it was Anthropic releasing their new Claude/Sonnet 4 models. Hard to keep up with everything shipped, but I love it…BTC hitting ATHs at $112k. Early one today so some prices might be off from the close. Let’s get to it.

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Internet

• GOOGL +2% continues to outperform as there is palpable excitement around all their AI announcements - what a quick shift in sentiment in just 2 weeks. One thing I ask - how would investors react if margins disappointed but mgmt explained it away by going all-in on trying to gain AI mkt share? Assuming search is holding up, does that dip get bought? The Ives/OAI tie up increases the probability of AAPL announcing some sort of Gemini integration at WWDC as they both have a common enemy now..

• AMZN +1.5%: Pershing Square took a new position. Anthropic’s new Claude 4 model can run coding agents autonomously for 7 hours - that’s a lot of compute that can be running on AWS.

Investing.com on Ackman’s stake - nothing groundbreaking…:

Israel emphasized the strength of Amazon Web Services (AWS), which holds a dominant position in the cloud industry with over 40% market share. He projected a bright future for AWS, noting that currently, less than 20% of IT workloads are cloud-based, but this could rise to 80% in the future. The retail segment of Amazon, despite being less profitable than AWS, was also recognized for its ubiquity and customer-centric approach.

Pershing Square’s decision to invest in Amazon was driven by the stock’s price dip earlier in the year, which Israel attributed to concerns over a potential slowdown in AWS and uncertainties regarding tariffs. However, Pershing Square assessed these issues as temporary, and with Amazon’s shares trading at about 24.5 times earnings, the lowest multiple in the company’s history, they seized the opportunity to invest.

The investor call pointed out that despite the high valuation multiples historically associated with Amazon, the recent price offered an attractive entry point. Pershing Square’s confidence in Amazon’s ability to navigate through the AWS slowdown and tariff impacts, while maintaining a growth trajectory of over 20% in earnings per share, was a key factor in their investment decision.

• RDDT +3%: Nothing goes down a in straight line…

• DUOL +2% getting close to mor enew highs

• MELI +1% all time highs

Source: TMTB Chat

• CVNA +4% nice bounceback after yesterday’s underperformance

• CHWY +1.6% more new highs. 3p continues to track well here and mgmt sounded pretty good at JPM last week. Bull case here centers around operating leverage: Sponsored Ads can climb toward 2–3 % of sales; pharmacy and vet clinics (with ~10-point richer gross margins) are scaling; and further automation plus AI-driven logistics should keep gross margins widening. Mgmt sees a path to low-double-digit EBITDA margins—well above the Street’s ~7 % FY-26 # —while converting about 80 % of EBITDA to free cash. A low 20s multiple gets you to low 50s…

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Semis

The pace of AI releases/uses cases continues to accelerate…AI names generally stronger today: NVDA +1.3%; MRVL +3%; CLS +4.7%; AVGO +1%;TSM +2%...although CRWV -6% taking a much needed breather (funny how this has traded complete opposite of RDDT over past 2 weeks)

• ADI -4% lots of back and forth in bull vs bear debate today despite a beat and raise as the call created more uncertainty for the analog sector given pull-in demand comments. Bears were louder today pointing to fact that roughly half of Auto’s Q/Q jump was order pull-ins tied to tariff headlines, forcing a sequential decline next quarter; with five straight quarters of above-seasonal guidance, visibility into 2H remains low. They worry that higher variable comp and salary resets cap near-term margin expansion, and the unchanged full-year outlook now embeds an F4Q revenue drop, raising the risk of disappointment if macro or Auto demand softens. Bulls countered that the quarter confirms ADI has turned the corner: revenues are accelerating ahead of end-market PMIs, Industrial demand is still under-shipped to its long-term trend, and content gains in EVs and data-center optics plus disciplined channel inventory set the stage for operating-leverage expansion once variable compensation laps. They also note that management’s revenue guide is “clean” and margin guides historically prove conservative, implying upside to the unchanged FY guide.