Good morning. QQQs +1.33% / SP +55bps after last week’s rough stretch for Tech with QQQs - 6%, SOX -10%+, AI’s 2nd worst week ever, and Tech momentum down 20% (now down YTD). Jefferies mentioned last week was their largest sell skew in Tech in over 5 years and worst week for AI winners vs. AI losers.
But the past is the past and this week is starting on a better note. Semis +4% early with CRWV +7% on a GS upgrade to Buy (NBIS/miners +6-7% in sympathy), INTC +4% on a JPM upgrade, & BE +5% leading the way higher. Software/Internet +40bps lagging. DDOG +4% on a Bernstein upgrade; META +40bps lagging on mixed MS/3p notes ahead of earnings on Wednesday; AMZN +2.4% as MS makes it a top pick.
Asia mixed overnight but Korea was up after opening up down: TPX +0.04%, NKY -0.62%, SHCOMP +0.39%, Shenzhen +0.1%, Taiwan TAIEX -0.61%, Korea KOSPI +1.76%
This week, we get NFLX, LRCX, META, TXN and SPOT to kick off earnings. We’ll have some bogeys later today or tomorrow.
Lots to get to, so let’s get to it…
CRWV: Goldman upgrades to Buy/$106, says credit fears overstate funding risk and contract economics are stronger than market expects
Goldman upgrades CRWV from Neutral after the ~43% pullback, arguing investors are overstating financing risk: industry checks suggest new debt costs may be only ~100–200bps above CRWV’s current blended cost, while DDTLs are asset-/contract-backed and can still clear near or above original issue discounts despite unsecured bonds trading at ~13.5–15%. GS also sees upside to ARR/MW and unlevered IRRs as supply stays tight, with CRWV ranking top-2 among 300+ AI compute providers and delivering ~20% better performance/$ than peers. Forge/Omni further support a move up-stack beyond commodity GPU infrastructure. Buy, PT $106 from $139, ~73% upside.