The massive new funding for OpenAI reinforces the long-term investment case for key AI supply chain stocks like NVIDIA (NVDA), Microsoft (MSFT), and Amazon (AMZN). Investors should watch NVIDIA's earnings report next week, as it is a critical event that could mark a bottom for the recent tech sell-off. To hedge against rising geopolitical risk, consider the energy sector (XLE), as stocks like Occidental Petroleum (OXY) are benefiting from higher oil prices. Be extremely cautious with high-growth and recent IPO stocks, as the market is punishing them even after strong earnings. Finally, Bitcoin (BTC) is showing significant short-term weakness and is not acting as a safe haven, warranting a cautious approach.

AI Sector & Key Players (OpenAI, NVDA, MSFT, AMZN, AMD)

• The biggest news was OpenAI finalizing the first phase of a new funding round expected to bring in over $100 billion, potentially valuing the company at $850 billion to $1 trillion.
• Strategic investors mentioned include Amazon (AMZN), SoftBank, NVIDIA (NVDA), and Microsoft (MSFT).
  • Amazon is reportedly looking to invest around $50 billion. The host notes this could be funded by their mixed shelf offering, which has been a headwind for AMZN stock.
  • NVIDIA is reportedly investing $20 billion.
• The host views this as very bullish for the entire AI sector. The key is that OpenAI will have the cash to pay its suppliers, which are many of the public tech companies investors own.
• This news is seen as a potential stabilizing force for large-cap tech stocks like AMD (AMD), Oracle (ORCL), and Broadcom (AVGO), whose stocks have been volatile partly due to uncertainty about OpenAI's ability to pay its bills.
• NVIDIA (NVDA) has earnings next week, which is seen as a critical event. A strong report, combined with the OpenAI funding news, could potentially mark a bottom for the recent sell-off in big tech.

Takeaways

• The massive funding for OpenAI reinforces the long-term investment thesis for the AI supply chain.
• This development is a positive sign for companies that provide computing power and infrastructure to AI leaders, including NVIDIA (NVDA), Microsoft (MSFT), Amazon (AMZN), and AMD (AMD).
• Investors should watch NVIDIA's earnings next week closely, as it will be a major indicator of the health of AI-related capital expenditures (CapEx).

Super Micro Computer (SMCI)

• The stock was up over 6% on a report from a boutique research shop.
• The report suggests SMCI will win a contract from Anthropic (a major AI competitor to OpenAI) to build server racks for their Google TPU infrastructure.

Takeaways

• SMCI continues to benefit from the AI infrastructure build-out beyond just NVIDIA.
• This potential contract with Anthropic shows SMCI is winning business from multiple major AI players, diversifying its customer base. This is a bullish sign for the company's growth prospects.

One Stop Systems (OSS)

• The stock was up 13% pre-market after landing $10.5 million in new U.S. Navy awards for the P-8A Poseidon program.
• This is the third contract the company has received this year, indicating strong business momentum.
• The host described it as one of the only small-cap stocks they like this year, viewing it as a pure play on the "Edge Compute" theme.
• The host mentioned the ultimate catalyst would be a billion-dollar contract, which would cause the stock to "explode" from its current $204 million market cap.

Takeaways

• OSS is a high-risk, high-reward small-cap play on the growing theme of edge computing, particularly in the defense sector.
• The company is showing consistent execution by winning multiple contracts. While speculative, it's a name to watch for investors interested in this niche tech sector.
• The small size of the company means its stock price can be very volatile.

Bitcoin (BTC) & Crypto Market

• The price of Bitcoin was struggling, falling below $66,000 during the podcast.
• The host noted that Bitcoin was not acting as a "safe haven" asset, as it was falling despite rising geopolitical tensions with Iran.
• Fed President Kashkari made a very bearish comment, calling crypto "utterly useless."
• Data showed significant outflows from crypto ETFs, with $647 million in weekly outflows, suggesting institutional selling.

Takeaways

• The short-term sentiment for Bitcoin is bearish, with price weakness, negative comments from Fed officials, and institutional investors pulling money out.
• The asset is not currently behaving as a hedge against geopolitical risk, which challenges one of the common bull cases for owning it.
• Investors should be cautious as the crypto market is showing signs of weakness and capital flight.

Rotation & Value Stocks (WMT, DE)

• Walmart (WMT) reported earnings that beat expectations, with revenue up 6% year-over-year. The host pointed out its high valuation of 45 times earnings for that level of growth.
• John Deere (DE) also had a strong earnings report, with revenue up 20%, but its earnings per share (EPS) were down 24% year-over-year. The stock was up 6% pre-market.
• Both stocks are described as "rotation names," where investors are moving money for "safety" and away from the volatility of big tech.

Takeaways

• The market is currently favoring perceived "safe" value and industrial stocks like Walmart and John Deere, even if their valuations are high or their earnings growth is negative.
• This trend highlights a defensive shift among investors who are concerned about the capital expenditure cycles and volatility in the tech sector.
• Investors considering these names should be aware they are paying a premium for safety, and this trend could reverse if sentiment shifts back towards growth stocks.

Growth & IPO Stocks (LMND, KLAR, FIGM)

• Lemonade (LMND) had a strong earnings report, beating on both revenue and EPS, with revenue growing 53% year-over-year. The stock was initially up over 11% but gave back most of those gains during the market open.
• Klarna (KLAR.ST) was down 17-20% after its earnings. The host used it as a cautionary tale about the dangers of investing in hyped IPOs, especially in a tough economic climate for its "buy now, pay later" business model.
• Figma (FIGM) had "amazing" earnings and was up nearly 20% at one point, but then sold off aggressively to near flat, which the host called "disgusting."

Takeaways

• The market environment is currently brutal for growth and SaaS (Software-as-a-Service) stocks. Even companies that report excellent earnings are not being rewarded and are seeing their gains quickly erased.
• Investors should be extremely cautious with recent or upcoming IPOs like Stripe or Discord. The public market is not giving high-multiple companies the benefit of the doubt right now.
• The price action in Lemonade and Figma shows that selling pressure on the growth sector is intense. It may be wise to wait for a clear shift in market sentiment before allocating significant new capital to these types of stocks.

Geopolitical Risk & Energy Sector (XLE, OXY)

• A major topic was the rising tension with Iran, with reports that the U.S. is preparing for a potential military strike this weekend.
• This is considered a major risk factor that could cause a "massive rug pull" in the market, as investors might sell positions to avoid holding risk over the weekend.
• These tensions are causing oil prices to spike, with Brent crude rising above $70 a barrel.
• The energy sector (XLE) is benefiting significantly. Occidental Petroleum (OXY) was highlighted for being up 9% after beating earnings by 82%.

Takeaways

• The entire market faces a significant short-term risk from potential military conflict in the Middle East. This could lead to a broad sell-off, particularly heading into the weekend.
• Rising oil prices are a direct consequence of this risk. This is a strong tailwind for energy stocks.
• Investors looking for a hedge against this specific geopolitical risk might consider positions in the energy sector, as seen by the strong performance of stocks like OXY.