TMTB EOD Wrap...DELL, NTAP, ESTC earnings

Well that was quite an ugly day as QQQs - 2.8% led lower by semis -6% and a relentless sell off the last 2 hours of the day. NVDA with a heavy reversal down 8.5% after being up 2-3% early bringing down he whole AI semi complex. Every attempt at a bounce over the last few days has been sold heavily and not many signs of any positive tea leaves like the ones we were seeing earlier in the week - we added to a few names key levels earlier in the week but clearly not seeing the follow through we’d like. PnL protection mode remains the name of the game right now.

Stocks were up early today but as was the case Wed the rally was undercut by another Trump Tariff tape bomb insisting 25% Mexico, Canada tariffs will go into effect next week along with an incremental 10% duty on Chinese imports. Investors also didn’t like the jump in weekly jobless claims as it was the latest sign DOGE might be creeping into the economy as growth scare fears remain top of mind — seems like they will continue to do so until Powell acknowledges potential growth risks and hints at cuts.

On macro side, yields were flat to up despite the equity carnage and fed expectations didn’t move much with the market still pricing in 60bps worth of cuts.

JPM had some intg stats on the unwind and what inning we’re in. A few key points: 1) ~10% momentum decline compares with 10-17% declines in recent years 2) HF crowding metrics show limited de-grossing compared to past corrections as momentum net exp remains elevated (89th percentile since 2018). JPM says reasons for limited degrossing and “HODL” attitude: relatively stable global returns despite 1-2% North American losses, early-year timing after January gains, and strong short performance offsetting long positions.

Post-close earnings:

DELL -2%: Mixed as revenues and rev guide weaker, but better storage revs drove big ISG margin beat and AI server backlog increased to $9B although that includes $5B from xAI and ex that would be a bit below buyside bogeys which were closer to $4.5B. PC revs ok, though margins weak. $10B buyback (hopefully helps stem the usual flow of Michael Dell/ Silver lake selling post EPS)…On the call so far, noting Blackwell margins were lower than the hopper margins and remain so today and PC refresh weighted more to 2H and expects GM to decline 100bps in FY26 which is taking down the stock.