everyone knows Nvidia prints cash on GPUs. What almost nobody talks about is that Nvidia is quietly sitting on a massive ~$60+ billion portfolio of public and private equities.
Take the Intel trade. Nvidia drops $5 billion into Intel when Pat Gelsinger was getting dragged through the mud and Wall Street treated the stock like radioactive garbage. What happens? Intel rebounds, and that single position turns into over $20 billion.
Did Jensen do that because he has a soft spot for legacy x86 silicon? F**k no.
Its an insurance policy. Its packaging leverage. It’s keeping a domestic foundry on life support just enough to hedge TSMC and leverage the US govt, all while extracting a $15B profit off a beaten-down rival
If you actually pull their filings, this entire portfolio isn't a hedge fund, it’s an economic moat built out of leverage. 3 positions tell you everything you need to know about where this madness is heading:
1. Synopsys ($SNPS)
Nobody on Reddit talks about EDA (Electronic Design Automation) software because it’s boring as hell and impossible to explain to someone at a bar. But the reality is: you cannot lay down a 3nm or 2nm chip without Synopsys or Cadence.
Jensen pouring billions into Synopsys isn't just an "investment." It’s buying the pencil factory when the rest of the world is desperately trying to write code. It guarantees their prop architecture is hardwired into the design tools everyone else has to use.
2. Nokia ($NOK)
Most people still think Nokia is the company that made the indestructible brick phone their dad dropped in a lake in 2004.. Telco backhaul and optical networking are the actual bottleneck of hyperscale computing. You can stack 50,000 Blackwell GPUs in an air-conditioned concrete barn in Iowa, but if the data can’t move across the cluster at the speed of light, you just built a very expensive space heater. Nvidia throwing a billion bucks at Nokia is about owning the optical pipes.
3. Nebius ($NBIS)
My personal fav. This is the 1 that makes me laugh, because it exposes the dirty secret of the whole AI bull run: vendor financing. Nebius is a neocloud. What do they do? They buy Nvidia chips, shove them into racks, and rent the compute out. Microsoft just dropped billions on a contract with them. And who owns nearly 10% of Nebius? Nvidia.
Do you see the game here? Nvidia gives cash to a company, that company turns around and buys Nvidia silicon with that exact cash, and Wall Street rewards
Nvidia is spelling out the entire supply chain choke points..they are buying the software designers, the networking pipes, and literally subsidizing the customers who buy their chips.
It’s either the most genius industrial monopoly built in our lifetimes, or the most aggressive house of cards in modern tech. Either way, betting against the guy in the leather jacket feels like stepping in front of a freight train.
Do whatever you want with your money, I’m just a guy on the internet watching the billionaires rig the table.
Netflix (NFLX) stock fell 5% in after-hours trading on Tuesday as the streaming giant's Q4 revenue outlook came in below Wall Street estimates, signaling slower growth.
The company posted revenue of $12.87 billion in its fiscal third quarter, in line with analyst estimates. Earnings per share came in at $0.87, topping estimates of $0.82.
Fourth-quarter outlook for the company's topline, though, came in at $13.44 billion, short of the consensus analyst expectation of $13.51 billion.
SpaceX posted $4.4 billion in net income for Q3, cited AI as the main growth engine, and saw its shares jump over 8% in premarket. Both Tesla and SpaceX boards have now formed independent committees to review a potential merger, with Musk saying he sees merit in combining them but sitting on neither committee.
SpaceX generating real profit changes the math for Tesla shareholders. Buying into a merged entity means buying into satellite communications, AI computing, and robotics revenue that already has cash flow behind it, which is a very different conversation than a promise about future earnings.
Tesla holders voting on this deal is the moment that settles whether the $3.5 trillion framing holds. Do you think they approve it for the diversification, or reject it over dilution?
Musk said the boards at Tesla and SpaceX have formed special committees to discuss a potential merger “at the request of shareholders,” noting that these groups “consist of independent directors.”
Because Musk is a “conflicted party,” he said he can’t be in the discussions.
“I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating,” Musk said, referring to the development of software, chips and more.
“Do I think it would be a good idea? Yes,” Musk said. “But at the end of the day, the shareholders have to be supportive of this.”
Musk said that on the Tesla side, “we will need a 50% vote of all shares -- not just those who vote -- but of all shareholders, and that’s quite a high hurdle.”
Venture capitalist Ira Ehrenpreis is on the boards of both companies.
I was looking at the earnings calendar this morning and Wednesday after the close is packed. Meta, Lam, Tesla, IBM and TI are all in there.
The thing I keep coming back to is that a stock can go either way on earnings and nobody knows which beforehand. So holding through it feels like a bet on the reaction and not on the company.
Maybe that's just me though. Where do you disagree?
These 3 tickers are almost unanimously accepted as great buys, can't find an analyst that has a fairvalue lower than its current share price. As a "large" shareholder of these tickers, boy has it been frustrating.
Watching these stocks chop and bleed the last year has been painful to endure. The market rallies, they underperform the S&P - The market dips, they get absolutely hammered.
The tickers I believe to be great value as of right now:
VST @ 150
MU @ 890
AMD @ 550
UBER @ 70
CELH @ 30
NFLX @ 70
GOOGL @ 360
This portfolio is down about 8% on the month, hard to see a great bull run if these stocks can't at least outperform the S&P near term. With the impending "bubble pop" it's frustrating to see such great companies underperform during 'euphoric conditions'
What is your take on this? Are you bullish on these tickers?
Yesterday, markets bounced pretty much as expected, with SpaceX earnings being one of the main events of the day. I'll start with those, as I am fairly certain now that the timing of the release was partly intended to improve sentiment around the AI trade.
Before getting into the numbers, I want to make one thing clear. I've been long SPCX since the previous earnings report, and nothing in this release has changed my thesis.
What we're likely seeing now is the beginning of the profitability S-curve, where the massive investments made over the past few years are starting to generate meaningful returns.
One quote from the earnings stood out to me:
"At current pricing, new compute deployments are generating a payback of less than a year. Pricing is currently tracking slightly above the high end of the $30 to $50 per watt range we were discussing just last quarter."
This is important given that concerns around AI profitability and the returns on enormous infrastructure investments compared to the cost for funding them have been one of the main reasons behind the recent selloff. A payback period of less than a year goes a long way towards addressing some of those concerns, although it doesn't necessarily mean every AI investment will deliver similar returns.
There are a few other developments I want to include in todays commentary that continue to support my constructive view on the AI trade.
First, Taiwan and South Korea's chip exports have historically led US earnings growth by around six months, making them a useful early indicator of where the AI investment cycle might be heading. The latest export data shows little sign of a slowdown, thus the investment cycle still has room to run.
Another interesting development came from Anthropic's S-1, which provided further evidence of just how strong AI demand remains. H1 revenue jumped from $1.1B to $16.3B year over year. The reported $80B loss understandably caught plenty of attention, but roughly $72B of that comes from non-cash accounting adjustments.
What interests me far more is the potential $750B in compute commitments as Athropic is effectively telling us that capacity remains a major constraint and that it intends to spend aggressively to secure more of it. That's supportive of demand for semiconductors, memory and infrastructure names
Of course, this also brings us back to the question that has been hanging over the AI trade lately - can these companies generate enough returns to justify the enormous amounts of capital being committed?
I think there are a few indicators that help answer that.
For the AI investment cycle to remain sustainable, earnings need to keep expanding, and for that to happen, end-user demand and spending need to continue growing. So far, that's exactly what we're seeing.
Despite token prices falling, usage is growing at such a rapid pace that total spending continues to move higher. In other words, AI is becoming cheaper to use, but businesses are consuming more of it.
And importantly, we're beginning to see the economic benefits showing up in businesses themselves. This chart from BofA shows the improvement in revenue per worker, which is one way of measuring how technology and AI adoption are translating into higher productivity.
This is interesting because the AI trade cannot rely on infrastructure spending alone forever and eventually, the technology needs to deliver measurable productivity gains for the businesses adopting it. We're starting to see evidence of that
There is also another argument from the bears that I think is missing some important context, and that's the impact of higher bond yields on technology stocks.
The usual argument is that higher yields are bad for equities, especially growth stocks, because they increase the discount rate applied to future earnings. That's technically correct, but it ignores why yields are rising in the first place.
If AI investment itself is contributing to stronger growth, greater capital demand and higher yields, it's difficult to argue that the same investment cycle must automatically become the victim of those higher yields.
The enormous capex boom, whether financed through borrowing or operating cash flows, ultimately becomes revenue for semiconductor manufacturers, power providers, data centres and cloud infrastructure companies.
Higher yields can certainly pressure valuaions, but if earnings are expanding fast enough to offset that pressure, equities can continue moving higher. And so far, earnings growth across much of the AI complex has remained strong.
We've also seen valuations reset during the recent correction, which makes the setup more interesting than it was just a few weeks ago.
Putting all of this together, I remain constructive on the AI trade and have been gradually increasing my exposure through SOXX and individual names including AIP, SKHY, SPCX and NBIS.
That doesn't mean I expect everything to move higher in a straight line from here.
The AI trade could begin outperforming more consistently after the US midterms but until then, the choppiness we've been discussing and observing over the past few weeks could continue. One additional factor worth considering is the selling pressure from mutual funds harvesting tax losses ahead of their October 31 fiscal year-end. This could continue weighing on some of the names that have already have big drawdowns.
While short temr positioning remains challenging the backdrop is starting to improve
On the earnings side - we have META as the main focus with high conviction options flow leaning bullish especially yesterdays and the expected move being about 6.15% (+/- $43) . This will bring us near the main resistance at 750 while overall positioning remains v bullish going into them
Moving on to positioning, yesterday's bounce was encouraging, but I don't think we're out of the woods just yet.
SPY continues to a bit bearish from a positioning perspective, with 770 remaining the main resistance level. We're starting to see volumes build around the 780 strike, which is worth watching, but the current negative volatility regime means market makers can continue amplifying moves in either direction rather than dampening them.
For now, I remain neutral on the broader market and expect choppy price action until we see a more meaningful improvement in positioning.
QQQ bounced almost exactly from the 710 support level we highlighted in yesterday's analysis, which was encouraging to see. However, despite the move higher, we haven't seen a substantial improvement in the underlying options positioning. That makes me cautious about chasing the bounce until we see evidence that buyers are gaining more control.
SOXX tells a similar story. The semiconductor ETF found buyers around the 480–490 area we discussed previously and bounced higher, but positioning hasn't improved enough to suggest that the correction is definitively over. The next important level to watch is 520-30, which I would like to see cleared before becoming more confident about sustained upside momentum.
TL;DR: Yesterday's bounce was encouraging, but positioning suggests we're not out of the woods yet. I remain constructive on the AI trade as SPCX earnings point to improving infrastructure profitability, chip exports show no signs of a slowdown, and Anthropic's aggressive compute commitments reinforce the strength of demand. Growing AI usage, improving productivity and the recent valuation reset further support the medium-term outlook. I've been gradually adding exposure through SOXX, AIP, SKHY, SPCX and NBIS, although I expect choppiness to continue. META earnings are the next major catalyst, with options flow leaning bullish. On positioning, SPY remains in a negative volatility regime with 770 as resistance, QQQ bounced from our 710 support but underlying positioning remains weak, while SOXX needs to clear 520 for greater confidence in the recovery. Fundamentals are improving, but positioning hasn't caught up yet. I'm bullish on AI over the medium term, but patient on the broader market for now.
Diplomatic progress in The Middle East ! LOL ! Can someone show or tell me what that looks like , because I don't think anyone would recognize it if it actually happens.
WTI was about $111 this morning and now $103 , so got a nice reversal in indexes , but how in the world can $103 oil is great news and how can everyone think the consumer can keep going and going and going , sooner or later they will break and bring the rest down with them !
Developments in the Middle East remain in focus, with attacks on commercial ships transiting the Strait of Hormuz escalating in recent weeks. At least 18 vessels have come under fire over the past two weeks, according to ship tracker Kpler.
18 in a week ? Reports yesterday claim up to 30% of US Naval assets are involved in the gulf area. Anyone able to describe an endgame to this ?
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ARK Invest purchased 150,998 shares of Oklo (OKLO), worth approximately $4.11 million, on October 20. The purchase comes as OKLO has faced significant selling pressure in recent months. Cathie Wood’s continued investment is worth watching as Oklo advances its nuclear energy projects and positions itself to supply power to the growing AI and data center industry.
So I’ve been doing tons of research the past few days to figure out what exactly is going on in the AI trade. There are many factors at play but I think the BIGGEST is a report from Gartner that says based on their research that the AI revenue pie will not be big enough for all the AI players of today to survive by 2030. What this means is that since last week investors have been scrutinizing the AI companies with the weakest balance sheets, weakest business models and punishing them the most. Also, since AI revenues will come in light this means AI CapEx estimates for 2028 and beyond will have to be slashed significantly. This hurt semis and hardware stocks. Now some of yall might be wondering, “Who is Gartner and why should I care?” Gartner has a long successful track record as an IT research firm and their research has generally been directionally correct while sometimes even understating things. So basically, whatever Gartner says in their AI report is likely to actually end up slightly worse because that’s their track record. What this means is that AI revenues will come in even lighter than Gartners estimates.
Now Gartners report hinges on ONE THING: REAL INTEREST RATES. Basically real interest rates is all that matters. If real interest rates are below 1% AI CapEx is spent at maximum amount no matter what AI revenues are because money is cheap resulting in AI stocks RIPPING HIGHER. Is real interest rates are at 1.5% or higher? Then Gartners report comes into play and becomes reality resulting in multiple compression in AI stocks.
What is my base case? Real interest rates must stay low for one reason: the US government debt. The US government simply can’t afford high rates without it causing a debt spiral. For this reason real rates will stay low and AI stocks soar.
At a $5B market cap and roughly $3B in reported cash and marketable securities, you're looking at around $2B for the rest of the business.
Back in October 2025, when the stock hit $171.56, the market cap was around $25.3B, with less than $1B in cash. Subtract the cash and you get roughly $24.4B.
So the market value beyond cash has gone from $24.4B to about $2.1B in less than a year. That's a 91% decline.
And that's before considering the possibility that the latest $1B ATM adds more cash to the balance sheet. The full amount hasn't necessarily been raised, but if it were, the market would be valuing everything beyond cash at roughly $1B before accounting for subsequent spending.
Obviously, cash isn't free money for shareholders. Oklo has reactors to build, projects to finance and plenty of execution risk. But it's pretty remarkable how much the market's valuation of the business has changed.
The average analyst price target is still around $70, although targets have been coming down.
Has the market become so focused on the risks of commercializing nuclear that it’s overlooking the potential of what Oklo is building? With the market value beyond cash down 91% in less than a year, it feels like the pendulum may have swung a little too far toward pessimism.
The past few weeks have given markets plenty of reasons to sell off, yet SPY is still trading just 2% below its all-time high. One interesting development I wanted to highlight is what happened during Friday's OPEX, particularly in the VIX, where we saw a rather outsized move relative to the SPX.
Much of this came down to market maker positioning and what appears to have been a negative gamma feedback loop - as the VIX moved higher, the delta of call positions that had been building since last month increased, forcing market makers who were short those calls to buy more VIX futures to hedge their exposure, further amplifying the move. For context, the VIX typically moves around five times as much as the SPX in percentage terms, yet on Friday that ratio reached roughly 20x.
We can see a significant compression across the VIX term structure at the front end which supports that the spike was s driven by short-term hedging mechanics and is supportive for equities
The next two weeks will be very important as earnings season picks up. and while only about 14% of S&P 500 companies are reporting this week, we have both META and TSLA on Wednesday. The focus will likely be on META and what management has to say about AI spending and monetisation, while TSLA will be interesting given the growing speculation around a potential merger with SpaceX.
Speaking of SpaceX, the company confirmed its earnings for today after the market close, which is rather unusual given the relatively short notice.
Whether the timing is an attempt to stabilise sentiment around the AI trade is anyone's guess, but it certainly makes today's report one to watch
Below is what the options market is currently pricing for the earnings moves compared with the historical median moves over the past eight quarters. Do note that for SPCX, we're using the August 4 report, as that is the only post-IPO earnings reaction we have.
Turning to positioning, there isn't much support coming from CTAs at current levels. Systematic flows are likely to remain skewed towards selling, with the next meaningful positioning threshold sitting roughly 3% below the market, around SPY $740. In other words, we shouldn't expect CTAs to provide much of a cushion if we see further weakness in the near term.
The positive here is that corporate buybacks are starting to pick up again as we're looking at a record year for buybacks, and with companies gradually exiting their blackout periods, these flows should become an important source of support as we move into November.
Another thing worth noting is the massive deleveraging we saw across hedge funds last week. Whether someone got caught on the wrong side of the trade and triggered broader risk reductions is difficult to say, and I won't speculate on who, but the dynamics resemble some of the forced unwinds we've seen further amplified by market maker hedging.
Hedge fund net leverage has fallen to 43.7%, whichs the largest weekly decline since Liberation Day in April 2025 and the fourth-largest weekly decline over the past five years.
This is important because while forced deleveraging puts pressure on equities in the short term, it also creates room for positioning to rebuild. This means that high-beta names could reverse quite quickly if earnings come in better than expected and funds start putting risk back on. That doesn't mean the selling is necessarily over, but the positioning is becoming less crowded.
I also wanted to share an interesting finding from Bank of America's latest fund manager survey - investors indicated that a 10-year Treasury yield of roughly 5.9 -6% would be enough to trigger a more meaningful rotation out of equities and into bonds. Given where yields are currently trading, there is still some room before funds switch from sector rotation to equity risk-off
While we're on bonds, besides earnings, keep an eye on Wednesday's $13 billion 20-year Treasury auction as thiswill be a test of demand given the ongoing concerns around fiscal deficits and the amount of debt the Treasury needs to finance. As you can see from the chart, the 20-year yield is trading around 5.5%, even slightly above the 30-year, suggesting investors are demanding a premium to hold this part of the curve. The positive here is that duration has recovered from the early October selloff, bond volatility has started to ease, and trading conditions have become more orderly. So this is certainly more favourable than it was a couple of weeks ago, although the structural concerns haven't gone anywhere. What I'll be watching is whether the auction attracts solid demand without a meaningful tail, as a weak result could quickly put pressure back on long-end yields and, by extension, equities.
Finally, with reports of another potential escalation in the Middle East, I wanted to comment on oil markets. Traders are increasingly treating the disruption around the Strait of Hormuz as a more persistent problem rather than a temporary geopolitical shock. Brent futures for December 2027 are still trading close to $90 per barrel, so the risk premium remains priced into the market well beyond the immediate conflict while the equity market is holding up
Coming back to SPY, now that OPEX has passed, the index has stabilised around the $760–765 area, with Friday's session testing the lower end of that range, broadly in line with what we expected. The question now is whether improving earnings and the return of buyback flows will be enough to offset the remaining systematic selling pressure. With positioning having been reduced so aggressively, the setup for a recovery is certainly there, but we still need earnings to deliver.
For now, trading is likely to remain choppy with the options market pricing in a move of about 13 points which brings the lower end near the $750-55 level. Vol regime is negative so moves are going to be sharp while bellow $775. Immediate resistance is $770 while support is at $760. Volumes are neutral
In terms of volume, QQQ is starting to catch a bid, although options positioning remains heavily skewed towards puts. The nearest support sits around $710, where market maker hedging could provide some buying support. Worth noting that the options market is pricing in a move of roughly 13–14 points, which would bring us closer to the $700 level on the downside. I expect that to be a much stronger support area, esp given the positioning around it.
SOXX continues to chop around the $500 level, although we're starting to see volumes pick up around $480 and $470. This suggests we could see another leg lower towards those levels before the market finds support and resumes higher.
TL;DR: Markets remain resilient despite the recent volatility, with SPY just 2% below ATH. Friday's VIX spike appears largely driven by market maker hedging rather than a fundamental shift in sentiment.; aggressive hedge fund deleveraging has reduced crowded positioning, creating room for a recovery if earnings deliver. CTA flows remain a headwind, but returning corporate buybacks should provide support into November. META, TSLA and SPCX earnings, alongside Wednesday's 20-year Treasury auction, will be catalysts. For now, expect choppy trading, with SPY support at $760, resistance at $770 and sharper moves likely below $775. The setup for a recovery is improving, but earnings need to confirm it.
check out the charts for sugar, wheat, cocoa, and beans
forecasts say 2027 is going to be brutal weather-wise, logistics through the panama canal are constrained, and supply deficits are starting to pile up. chasing chocolate stocks right now is a trap, way too late.
how are you guys playing the supply side squeeze? looking at fertilizer, equipment makers, or ignoring agricultural markets entirely? what's on your watchlist?
The nuclear energy sector has seen 30-40% decrease in value in the past year. Some equities even more. Most research says the underlying companies within the ETF like: Constallation, BWXT, Nuscale, etc all increased in price too much too fast.
However, I continue to see news about SMR locations under contract to break ground. I also keep seeing titans of industry and talking heads discuss the growing energy demand that isn’t going to disappear. Nuclear seems like it has to be an option because solar only works when the sun is out, wind also doesn’t work 100% of the time, coal is dirty and natural gas is finite. Thats an oversimplified take on the other energy sources but Nuclear energy still looks like the future to me.
Thoughts?
