TMTB EOD Wrap
Good afternoon. QQQs +1% to close at new ATHs as semis +2.5% led the way higher quickly making up for any lost ground yesterday and this morning after a hotter PPI print. Investors excited about the Trump/Xi meeting in China and hoping there could be tangible and positive developments on a number of fronts, specifically trade and Iran. Investors generally shrugged off the hotter PPI number (2nd hot inflation reading in as many days) with consensus being that energy/transportation is what drove increase and those things should reverse once an Iran deal is reached.
Post-close CSCO +17% with a nice topline and eps beat, but bigger deal is huge raise to their AI number, raising AI orders for FY26 from >$5B to $9B. Top line guide for Q4 also stronger than buyside was anticipating. A great print for the bulls and will strengthen narrative that CSCO is a cheap way to play AI. Another example that while the stock moves have been staggering, sometimes the beats/numbers have been equally as good.
Let’s get to the good stuff.
AI/SEMIS
Power theme strong today in analogs: STM +10%; TXN +4%; ON +11%; WOLF +16%…MS had their new Power basket out yesterday. Remember post open-claw basket those names got a T+1-3 day bid. Citrini was also out yesterday talking about the theme. We recapped and wrote about it a bit in our EOD wrap yesterday here.
NVDA +2.2% as Jensen got on Air Force One with Trump on their way to China
MU +5% / SNDK -33bps gap continues to grow. Only thing been seeing is spot DRAM has been strong than NAND: TrendForce’s noted “overall DRAM trading conditions improve following holidays in certain regions, with demand concentrated on DRAM suppliers’ DDR4 512×16 and 1Gx16 chips. In the NAND flash segment, the spot market carries on from last week’s lethargic sentiment, where differences in expectation continue to widen between market buyers and sellers.”