Moric Kocsa Pillmann @MoricPortfolio: "👀This week's story was AI..."

Hungary

👀This week's story was AI capex fear, not only geopolitics. We closed -0.7%, outperforming both benchmarks. The $SPX500 fell ~-1.0% and the $NSDQ100 dropped ~-2.6%. ⚠️𝐒𝐨𝐦𝐞 𝐧𝐨𝐭𝐚𝐛𝐥𝐞 𝐡𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐰𝐞𝐞𝐤: 🌍𝐆𝐞𝐨𝐩𝐨𝐥𝐢𝐭𝐢𝐜𝐬 𝐚𝐧𝐝 𝐫𝐚𝐭𝐞𝐬 - 𝐬𝐭𝐢𝐥𝐥 𝐚 𝐥𝐢𝐯𝐞 𝐫𝐢𝐬𝐤 --> Renewed U.S.-Iran conflict pushed $OIL prices back up, with Houthi attacks on Red Sea shipping adding fresh disruption risk --> 10-year Treasury broke above 4.70% for the first time since January 2025 with hike odds rising if oil stays elevated 🖥️𝐁𝐢𝐠 𝐓𝐞𝐜𝐡 𝐞𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐭𝐫𝐢𝐠𝐠𝐞𝐫𝐞𝐝 𝐭𝐡𝐞 𝐛𝐢𝐠𝐠𝐞𝐬𝐭 𝐬𝐢𝐧𝐠𝐥𝐞-𝐝𝐚𝐲 𝐌𝐚𝐠 𝟕 𝐝𝐫𝐨𝐩 𝐬𝐢𝐧𝐜𝐞 𝐀𝐩𝐫𝐢𝐥 𝟐𝟎𝟐𝟓 --> $GOOGL (Alphabet Inc Class A) beat on revenue (cloud +82% YoY) but raised its 2026 capex guidance to $195-205B (from up-to-$190B) - the market is now reading rising capex as margin compression, not growth --> Combined with a weak $TSLA (Tesla Motors, Inc.) print, the Magnificent 7 is down ~11% from their late-May peak --> Chip stocks were volatile as well: $INTC (Intel) jumped then fell ~8% despite beating estimates; $AVGO (Broadcom Inc) $AMD (Advanced Micro Devices Inc) $NVDA (NVIDIA Corporation) and $MU (Micron Technology, Inc.) all jumped then declined over the week but overall finished in the green 📊𝐓𝐡𝐞 𝐮𝐧𝐝𝐞𝐫𝐥𝐲𝐢𝐧𝐠 𝐞𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐩𝐢𝐜𝐭𝐮𝐫𝐞 𝐢𝐬 𝐬𝐭𝐢𝐥𝐥 𝐬𝐭𝐫𝐨𝐧𝐠 --> Per JPMorgan, S&P 500 earnings are expected to grow 23% YoY this quarter - a second straight quarter of 20%+ growth, last seen only once in 20 years (2018) --> IT is driving two-thirds of that growth (EPS +61%), and semiconductors alone are expected to generate nearly half of total S&P 500 earnings growth - chip buyers are effectively funding chip sellers' earnings boom 🧠𝐓𝐡𝐞 𝐤𝐞𝐲 𝐩𝐨𝐢𝐧𝐭: The market isn't questioning whether AI demand is real - it's questioning whether the spending will translate into returns. That shift from "growth story" to "monetization story" is what triggered this week's selloff - our $SOXL (Direxion Daily Semiconductor Bull 3X ETF) and $SOXX (iShares Semiconductor ETF ) exposure captured the upward momentum of semis nicely; that is why we outperformed regardless of the broader tech decline from the "receiver" end (e.g., tech companies investing heavily into AI) 💭 Earnings season is far from over - $META (Meta Platforms Inc) $MSFT (Microsoft) $AAPL (Apple) and $AMZN (Amazon.com Inc) report next week alongside the July FOMC decision (interest rate decision), so expect more volatility either direction. The AI capex debate is the one to watch closely from here. Let me know your thoughts or if you have any questions in the comments! Best, Moric Read here the JP Morgan article I was referring to: am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/

Not investment advice. The author may have financial interests in the mentioned instruments.