TMTB Morning Wrap

Good morning. Futures +3.4% up big this morning as Crude plummets 18% after US and Iran agreed to a 2-week ceasefire yesterday evening (Israel also agreed) and Trump said he agreed to it as long as Iran agrees to “the complete, immediate and safe opening of the Strait of Hormuz.” Iran’s Foreign Minister has said that “safe passage through the Strait will be possible via coordination with Iran’s military.”

Asia up big overnight: TPX +3.32%, NKY +5.39%, Hang Seng +3.09%, HSCEI +2.61%, SHCOMP +2.69%, Shenzhen +4.35%, Taiwan TAIEX +4.61%, Korea KOSPI +6.87% (Samsung +10% /SK Hynix +16%). Yields are down 7bps across the curve. Fed expects are shifting more dovishly with market now pricing in 15bps worth of cuts this year, up from close to 0.

Memory names leading the way higher (SNDK/MU +9%) but plenty of names up 5%+ across the board.

Should be a fun one. Let’s get to it…

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Anthropic: Anthropic Set to Preview Powerful ‘Mythos’ Model to Ward Off AI Cyberthreats

WSJ:

Anthropic is taking steps to arm some of the world’s biggest technology companies with tools to find and patch bugs in their hardware and software. The company is making a preview model of its new AI model, called Mythos, available to about 50 companies and organizations that maintain critical infrastructure, including Amazon, Microsoft, Apple, Alphabet-owned Google and the Linux Foundation.

Mythos has proved to be so capable at potentially dangerous things such as finding and exploiting software bugs that Anthropic has, at present, no plans to release it to the general public, said Logan Graham, the head of Anthropic’s Frontier Red Team, which evaluates Claude for risks. “We need to know that we can release it safely, and it’s not exactly clear how we can do that with full confidence,” he said.

Capabilities look like a big step function up

And it’s really expensive:

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STX, WDC: Evercore ISI Raises PTs to $550/$378 (~20% Upside Each); HDD Industry Shifting From Cyclical to Growth Compounder

Evercore argues HDDs are the simplest way to play the structural memory shift, with both names positioned for >20% sales, EPS, and FCF CAGRs as nearline EB shipments grow mid-20s% driven by AI/cloud data creation (~25% CAGR to 527ZB by 2029). The industry is structurally healthier — consolidated to two players, nearline capacity sold out through CY26 with multiyear BTO/LTA programs, and pricing stable-to-up vs. historical secular decline. HAMR/ePMR technology transitions should drive 10–15% cost reductions and push GMs from low-50s toward 60%+ (both companies targeting ~50% incremental margins), while ~75–100% FCF return commitments could add 200–300bps to EPS annually. Evercore sees a path to 25–30x P/E multiples — levels reserved for infrastructure compounders — as the market re-rates the “new HDD model.”

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SNOW: Wells Fargo Says Cortex Code Could Add 1–2pts of Incremental Growth; Channel Checks Positive