ASML Holding N.V. (ASML)

• Shares plunged nearly 10% in one day despite reporting a strong quarter that beat expectations on both revenue and profit.
• The drop was caused by the CEO's comments during the earnings call. He could not confirm the company's 2026 growth forecast due to "increasing uncertainty driven by macroeconomic and geopolitical developments."
• These concerns were specifically linked to former President Trump's threat to impose a 30% tariff on Europe. The US market represents almost 20% of ASML's revenue.
• The podcast hosts note that ASML has a long history of being conservative with its forecasts ("under-promising and over-delivering") while consistently posting strong earnings.

Takeaways

• The podcast presents this as a potential buying opportunity.
• The market appears to be contradicting itself. It generally dismisses Trump's tariff threats as just talk (a concept the podcast calls the "taco trade"), but in this case, it sold off ASML stock based on those same threats.
• The core thesis is: If you believe the widespread market view that these tariffs are unlikely to happen, then ASML's 8-10% price drop is an overreaction.
• The sell-off is based on an executive's fear rather than a fundamental change in the business, which just reported an "excellent quarter." This dislocation could represent value for investors.

Johnson & Johnson (JNJ)

• The stock rose 6% after the company announced second-quarter earnings that were better than analysts expected.
• The company also provided a positive outlook regarding the potential impact of tariffs, suggesting they would be less severe than feared.

Takeaways

• This was a brief, bullish mention highlighting the company's strong performance and resilience in the face of macroeconomic headwinds like tariffs.

Bitcoin (BTC)

• The price of Bitcoin climbed due to "renewed optimism" surrounding potential crypto legislation in the United States.
• This optimism persisted even though the bill itself had stalled again in the House of Representatives.

Takeaways

• The price action suggests the market is sensitive to news about the regulatory landscape.
• Positive sentiment around potential future legislation can be a powerful catalyst for Bitcoin's price, even if the legislative progress is slow or faces setbacks.

Investment Theme: The "Taco Trade"

• The podcast introduces the concept of the "taco trade" (TAlk Co), which refers to the market's tendency to initially react to dramatic political threats (like firing the Fed Chair or imposing massive tariffs) but then quickly recover, realizing they are likely "talk only."
• The hosts argue that this is a recurring pattern, especially with Trump's announcements, and that the market is becoming less volatile in its reactions over time.
• The drama surrounding the potential firing of Fed Chair Jerome Powell is cited as a prime example: markets fell sharply on the news and immediately rebounded when Trump denied the rumor.

Takeaways

• Investors should be cautious about making knee-jerk reactions to headline-grabbing political news.
• There is an opportunity in recognizing that much of this political drama is a "distraction" that creates short-term volatility but may not impact long-term fundamentals.
• The sell-off in ASML is presented as an instance where the market failed to apply the "taco trade" logic, creating a potential opportunity for those who do.

Investment Theme: AI Startups vs. Big Tech

• The podcast highlights a major trend in the AI sector: Big Tech companies like Google and Microsoft are using "acqui-hires" and large licensing deals to absorb top talent and technology from promising AI startups.
• This strategy allows them to neutralize potential competitors without making full acquisitions that would attract heavy antitrust scrutiny from regulators. Examples mentioned include deals involving startups like Inflection, Scale, and Windsurf.
• The case of Windsurf is explored in detail:
  • Google paid $2.5 billion to license its technology and hire its CEO and top researchers.
  • However, the remainder of the company (product, IP, brand, and remaining employees) was then acquired by another AI startup, Cognition.

Takeaways

• The AI sector is experiencing a "war for talent" where Big Tech is aggressively consolidating power.
• However, the Windsurf-Cognition deal suggests a potential counter-strategy: smaller AI startups can join forces to create a stronger competitor against the tech giants.
• This dynamic suggests that while Big Tech is a dominant force, there is still significant value in the broader AI startup ecosystem. The "scraps" left behind by Big Tech can still be highly valuable, especially when combined.