TMTB Weekly: Is TSLA primed for a big move into Jan/Feb?
Happy Sunday. Before we get started, a few housekeeping items:
This will the last weekly of the year. I’ll be around with my morning and EOD wraps through Friday
Going into 2025, I plan on writing a little more TMTB commentary in my morning and EOD wraps and at times making the weekly more succinct. There’s just so much going on each week and things are moving faster than ever in Tech. By the time Sunday rolls around, sometimes it feels like months have passed.
I hope you found the weekly’s fruitful for your trading/investing and also enjoyed reading them. The tech sector is as exciting and thrilling as ever and this was one of the most fun years in my investing career so far (it helps when the QQQs are +30% YTD). As you probably know by now, we don’t just focus on trade ideas here (and we don’t hand hold when we do). We try to stay on top of the current market zeitgeist, give unique perspectives on market action, catch inflections in sentiment/narratives early, stay on top dominant stock narratives, and provide color on sentiment/positioning along the way. And when we need to, drill down into the macro. I’m always appreciative of feedback — what you like, dislike or want to see more of; I’d love to hear from you.
I think we did several things well in 2024 here at TMTB: rode some big moves in less owned names (CVNA, PLTR, RDDT, TSLA), navigated the summer macro/AI swoon environment well but otherwise stayed long, positioned ourselves in the rt sw stocks (NOW, PLTR, ORCL, MSFT, DDOG, SAP), caught a nice move in CRM recently and hopped on the AI agents theme before it became consensus, stuck to the right compounders (META, AMZN, NVDA, MRVL, AVGO, TSM), were early on the NFLX Q4 catalyst trade, and caught some nice short-term trades in GOOGL and AMD among others. We got some things wrong (we sold too much of PLTR, CVNA, and RDDT way too early) and missed many. This was a year for longs so we focused mainly on those - not every year will be like this one. The two high level themes we should have been more on top of are AI power and AI networking, both of which I think still have further to go. Shifting some stuff around in my coverage universe to account for that miss. But for the most part - very satisfied with the year and hope you were too.
Appreciate you all being here - let’s keep the momentum going in 2025.
A bit of an odd week for the markets with SPX -0.6%, QQQs +1%, IWM -2.5% and Dow dn 8 straight days.
Before we drill down in stocks, some quick thoughts on the macro. We continue to think the macro narrative favors the bulls: robust growth, disinflation, Fed easing (along with SNB, BoC, and ECB), de-regulation friendly administration, oil subdued, and AI supercycle still providing plenty of winners. From a top-down Tech view, we still think the Large cap best in class compounders have good stories, undemanding valuations, and upside to estimates (META, AMZN, NFLX, TSM, AVGO, NVDA, MSFT, NOW, CRM), which is likely to support the QQQs.
Still, a few items worth watching popped up this week: headline US CPI/PPI points to disinflation slowing which means a lot more focus on Fed fwd guidance this week, yields rallied this week and 10 year getting close to 4.5% again. Lots of people calling out deteriorating breadth:
When I first looked at this chart, I said "uh-oh.” But then I went through all the Tech charts 1 by 1, and still plenty of beautiful looking charts. The dichotomy between winners and losers continues to grow. No sector is that more evident than in semis where the whole index has been stuck in a rut since July and remains 18% below the highs: