TMTB Weekly
Tokenmaxxing & Opensource; Software AI beneficiaries vs. disruptors; MU Earnings & Bogeys; GOOGL & Hyperscalers; RBLX
Note: The next TMTB weekly will be July 12th.
Happy Sunday and Happy Father’s Day to all of you celebrating out there. Another week of outperformance from semis as the SOX closed the week up 100%+ YTD.
A good week for names we have written up in the TMTB weeklies for the last couple of weeks: we talked about both HDDs and NBIS last week and BE the week before — all 3 were among the top 5 performing names in Tech this past week. Shows there is still incremental alpha to be made in sizing AI semi positions correctly near-term despite the big picture not changing much.
Near-term we are feeling fine to good about semis over the next month. We added some hedges mid-week in front of FOMC and in front of a post-expiry seasonally weak week, but took some of those off Friday. As long as this breakout holds (red line), we think path of least resistance continues to be higher for the SOX:
If it doesn’t hold, we’ll likely re-add some hedges.
Historical price action based on 1H of this year says this post-expiry week can be a bit weaker, but the first half of July is very positive:
Seasonality says the same with 1H of July the strongest half month of the year:
This vibes with how we picture things heading into earnings season. While price action has been stellar in AI semis, it’s more than been supported by amazing prints from almost everyone sans AVGO over the last few months. We think a likely very good print from MU late this week likely reinforces that set up in people’s minds and they’ll want to stay long ahead of earnings.
Tokenmaxxing & Opensource vs. Closed
Overall, the HOT AI SUMMER vibes continue in full force. The AI Agentic trend has been strong enough to shake off any fires starting from tokenmaxxing dying down or open-source models taking off and encroaching on the performance of frontier models.
On tokenmaxxing and opensource, a few interesting thoughts/datapoints we came across this week worth mentioning:
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