We should be moving from a downtrend to a fight between sellers and buyers - a range. I struggle to see sellers being stronger now considering the environment, but we shouldn’t rule it out. And I struggle to see buyers overwhelming sellers right away, but that is more likely than the contrary.

My expectation remains a range, as it has for weeks. But I am now more confident about the outcome direction of that range - higher, and its length - few weeks.

I didn’t expect the market to go straight up.

Even though that was a possibility, from a risk management perspective I preferred to let the market prove itself before getting aggressively involved. A healthy uptrend remains my base case today. Not yet confirmed, but increasing confidence.

The important part is that we are now getting what I wanted to see: a retest.

Most of the companies I have been covering broke out, proved their strength and are now coming back to test support. Volatility is violent but the trends remain largely intact. We now need buyers to step up on those supports and confirm my opinion of an healthy uptrend starting by doing so.

The S&P is the clearest example.

We had almost two months of range while funds worked at liquidating Leopold, followed by a breakout to new all-time highs once it happened.

After a move like that, I expected traders and holders to take profits or simply get out.

At this point, I see two major liquidity pressure points left:

• Citadel and traders offloading some positions on pumps, which could put some pressure on these names - and the global growth market.

• Retails and funds now buying back great fundamentals on great earnings and a healthy environment - except for Iran, cleared of most leverage and risk now that valuations have taken a large dump.

I’d expect the second to be the strongest, but I’d also expect the first to give buyers a a hard time short term.

That isn't a bearish chart. It’s what you want to see after a strong move higher.

The Nasdaq is weaker because it was more exposed to the liquidation, but it is still ranging between its previous high and its W21. Undecided, yes. Bearish, no.

If the market is indeed going higher, this is close to the best risk/reward.

You don’t chase a stock 30% above its support. You buy names that have proved they can move higher at levels where buyers should step in. We already have winners from the previous moves, some held for months like Soitec and Silicom, others bought during the latest bounce like AAOI, Harmonic and UiPath.

And earnings continue to confirm what matters: AI spending is translating into real demand, revenue and returns - proof 1, proof 2 and proof 3.

We also got another confirmation this week. Anthropic and OpenAI continue to grow revenues and ARR at double digit QoQ, with no evidence of the “slowdown”, circular financing or bad economics that have been used to justify a bear case for years now.

I have no doubts that we’ll have a bubble and that it’s forming.
But I believe the best is yet to come, not behind.

So what am I buying?

The market is giving us what I’ve been waiting for: retests.

It needed to digest the move. Strong names needed to come back to support. Traders needed to take profits and short. New buyers needed an opportunity to enter without chasing.

That’s healthy.

Some of today’s moves look violent, but I’d much rather have this than another straight-line move higher.

This is where you respect the system, no matter how hard it feels. That’s why you have one, to avoid making decisions on emotions and bias, and to buy based on concrete data and setups.

You don’t need to know whether the S&P goes up or down tomorrow. You need to know which setup offer the best risk/reward and how much you risk by taking it. If it fails, it’s alright. Can’t win them all. If it works, you’ll look back at this moment as one that shaped your year to date performance.

So let’s go through the best setups.

Read more

I didn’t call the bottom. I didn’t increase margin or use options. I simply went back to following my system: cutting weakness and concentrating on the strongest setups, increasing exposure as winners prove themselves.

The recovery came fast because the market gave us exactly what we were looking for: strong trends, clear support levels and earnings that confirmed the thesis. The key wasn’t knowing when the bottom was. It was being willing to act when the market proved us right, and cut losses when things got hard.

That is what I’ll review here: what happened during those two weeks, which positions drove the recovery, which decisions worked, which ones didn’t. And more importantly, I want to show why the system mattered more than any individual stock.

The warnings were here,

June was an obvious top in retrospective with two of the most important indicators flashing red: euphoria on social medias and extended stocks/indexes. This is when I wrote this article titled “The Breather is Coming”. Telling.

Not like I didn’t see it coming.
And yet…

I broke my own system

The drawdown wasn’t caused by one bad investment. It came from a combination of mistakes.

First, I overtraded. I had margin on and kept trying to buy setups while the market was telling me nothing would work. I’d understand why weeks later, but the reason didn’t matter. The signal did. When good setups consistently fail, the market is telling you something. Environment comes before individual stocks.

Second, I didn’t cut some losses quickly enough. The space sector corrected before the rest and I thought those names would bounce earlier. They did, but a month and a half later. That wasn’t useful. I had to take the trades; I didn’t have to hold them.

Intuitive Machines is the clearest example. I bought ~$20 on a W50 retest, with a strong narrative, a strong sector and a clear technical setup. I don’t regret taking that trade. It met all my criteria.

What was wrong was waiting until $14.70 to sell it, turning what should have been a ~11% loss following my system into a ~27% loss. Buyers didn’t step up where they should have - on the wick below the W50, so I should have listened. If buying zones aren’t bought, stocks go lower.

Third, margin. This one is more personal, but making those two mistakes while using margin obviously multiplied their impact…

The important point is that none of those mistakes required better stock picking to fix performance. They required better discipline.

Then the market changed

The drawdown had no bounces. Constant selling. Normal downtrends usually come with bounces and their absence was the most important information. Something happening. We just didn’t know what - we now do.

It marked the bottom as the selling pressure disappeared. I couldn’t be sure it was the case then, but for sure the risk reward had shifted. During inorganic selling, when the objective is reached, the selling pressure disappears while the strongest names were back at key supports. Back then, I wrote,

Talking about market mechanisms, chances are we’ve seen the bottom. This doesn’t mean we’re back in an uptrend, but means we’re good to buy again. And I believe the next few days will be key to the rest of our year’s performance.

Most of the selling pressure is behind us. Leopold has nothing left to sell, Citadel is now holding the chips and might - should, sell some, but not everything considering Leopold’s portfolio quality and latest earnings. The portfolio might be a bit outdated, as he had to sell some holdings, but its quality is undeniable.

That distinction matters. I didn’t need confirmation that the bottom was in. I needed confirmation that it was becoming worthwhile to buy again. I already had realized my mistakes and fixed them. I had cut losers, reduced margin and freed liquidity. I was then only looking for the best setup.

That was the turning point.

Concentrating on the winners

Nebius had already given us a clean W50 retest. Akamai was back at its W50. Soitec and Silicom were holding their trends. All of them were mentioned with subs. But one setup stood above the rest: Applied Optoelectronics.

The stock was retesting its W50 within a clear uptrend, with clear tailwinds and strong fundamentals/sector. I bought heavily.

Two weeks later, AAOI is up ~67% from that purchase.

This is where position sizing becomes more important than finding the best stcok.

AAOI wasn’t necessarily fundamentally superior to every other position in the book. But it was offering the better setup at that moment. I had a clear and very positive risk reward.

That’s the kind of situation where I go big.

The risk was clearly defined, not making the same mistake than Intuitive Machines. If buyers didn’t step up on this wick ~$76, I’d be out. A ~10% risk for a multiples in potential gains, assuming the trend holds.

That is very different from blindly buying a stock because I like the company.

You don’t need every trade to work

This is also why I don’t care about having a perfect hit rate.

The same week gave us AAOI HLIT PATH AXTI BE ON and a few more opportunities which I shared with subs. Some worked really well, some never gave the entry we wanted. Others, like Intuitive Machines, struggled to get their W50 back.

That’s alright. A ~10% loss is manageable if your winners can compound at multiple of that.

This is also why I don’t spread liquidity across every stock I like. If the market gives me ten decent setups, I don’t need ten positions. I just want ones where the narrative, trend, fundamentals and risk/reward are strongest.

The book’s recovery wasn’t one lucky trade, but a succession of actions after a succession of mistakes. I realized them, understood what needed to be done, and focused back on my system. I cut weakness, kept liquidity available, waited for the market to become “easy” again, bought retests and put size on the setups that deserved it.

The system

The last few months helped me reinforced my system.

Environment → strongest names → R:R setup → position size.

If the market confirms the thesis, I want to hold as long as possible, trim on extensions and add rather than search for a new position. Liquidity is always better spent on growing winners than new positions.

If the market doesn’t confirm, I cut weakness. I have no need to hold a stock buyers do not step up to buy where they should. There’s better elsewhere, or maybe it is time to slow down.

Nebius remains the prefect example to illustrate.

Breakout on clear volume marked “BO”. Clear extensions to trim marked “TP”. Clear W50 retests 40% lower marked “RT”. Repeat.

The system isn’t designed to eliminate losses. It is designed to make losses as small as possible and the wins as long as possible while increasing size on winners.

What the recovery actually proves

AAOI was a large contributor of the bounce, but the real contribution came from my own refocus into a winning system after having lost it in euphoria. Previous winners compounded while my refocus found new ones.

Nebius gave an excellent W50 retest. PATH and HLIT bounced really well. Akamai gave many buying opportunity to grow a position. The market started rewarding the setups that failed in July, and I became increasingly aggressive as it happened.

That is the part I care about.

The recovery wasn’t about becoming better at predicting what would happen. It was about recognizing that the environment had changed and adapting to it. When the market was difficult, I should have been smaller and more selective. When it became easier, I needed to do the opposite.

Press during easy times. Slow down during hard times.

It sounds obvious. It is much harder to actually do it when your portfolio is falling.

What happens now?

My stock picking book is back at ATH. But the return isn’t what matters most. What matters is that I lost the system during the drawdown, recognized it, went back to it and improved it.

I don’t need to predict the next correction. I need to recognize when the environment changes. When the market is difficult, I slow down. When it becomes easier, I need to press. Cut weakness, let winners run and concentrate liquidity where the market is proving me right.

I don’t need anything more complicated than that.

If you are interested in an actionable setup, this article details my latest position which is still buyable. If you are interested in the position planning, this article goes over the space sector bounce and two great opportunities. If you want to receive transactions live alerts and my buy target spreadsheet, you should consider the Founding Member subscription.

Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.

Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.

Space is slowly becoming a new region to colonize, with almost everything still left to build. The next decade will be a race to establish infrastructure, secure access and exploit the region’s opportunities. Controlling space will become a source of military power, geopolitical leverage and, eventually, economic value. This is why the U.S. government is accelerating spending, missions and R&D programs to develop the technologies required for this new infra.

Space is becoming one of the most important strategic regions in the world.

We see it with RocketLab and accelerating demand for launches/services.

For Launch Services, demand is extreme. In Q2 and since the end of the quarter closed, we have signed more than $437M in bookings for Electron, HASTE, and Neutron. This includes a record $266M contract for up to 18 suborbital missions for the U.S. Space Force, our largest launch contract ever. Also, we have seen a massive surge in Space Systems contracts with more than $581 million signed in Q2 and post-quarter.

Q2 and the weeks after saw us awarded significant contracts across Space Systems, including a $397 million contract to build and launch multiple Flatellite spacecraft for the Space Force Space-Based Airborne Moving Target Indicator program. This program is a high priority for the Department of Defense.

With ASTS with governmental contracts for communication systems.

Meanwhile, the U.S. government customer has been a major focus for us, and we see great progress this quarter, both in terms of revenue capture and building the backlog. We drove revenue against several existing contracts and received three new contract awards.

With Firefly for defense and space colonization hardware.

After seeing our end-to-end capabilities, Carlos shared that our recent MoonFall program award is not only important for space exploration, it is also important for national security as future missions could collaborate with the Space Force.

Additionally, space is a national security priority, as shown by significant year-over-year increases in the U.S. Space Force budget, major conflicts around the world, and evolving missile threats. Market signals from customers point to orbital launch only getting more supply-constrained. Demand for government and commercial constellations and missions outstrips the rocket capacity available both in the U.S. and globally. Moon Base, national security, Golden Dome, and assured access to launch are driving significant industry tailwinds for space.

Or with Voyager for the same reasons.

that demand across defense modernization, national security, and the rapidly expanding space economy continues to accelerate

One company saying this is interesting. Many companies saying the same thing is information. It gives us our thesis confirmation: space economy is moving forward.

And after months of weakness, we’re finally seeing the other part of the thesis start to work: price action. Not everywhere though. The market is clearly making a distinction between space and defense. Most companies operate in both, but not to the same degree. For now, the market rewards companies with stronger exposure to defense.

That distinction is creating the setups I care about.

Numbers Confirm the Thesis

All companies I follow had strong quarters. Not just optimistic commentary, but actual revenue, contracts and backlog growth.

Rocket Lab delivered a double beat despite a negative revenue mix and payment timing, a record $2.36B backlog with 45.5% of it expected to be recognized over the next 12 months, and management guided to 10% sequential growth.

But it came with two negatives.

1. Neutron first flight was delayed, which means more R&D spending and a longer wait for commercial revenue. But management’s explanation makes sense: more work to reduce risk and scale faster after the first launch. Not thesis breaker, this is just classic space R&D.

   Production currently lines up with our target delivery of Neutron to the pad in Q4 2026. While the window for an end-of-year launch is narrowing, the work we’re doing now is about risk trading, balancing the timing of our first launch against how quickly and seamlessly we can scale our 10th launch.

2. Iridium acquisition is a question mark. Rocket Lab wants to keep Iridium’s core business while using its spectrum for new services, without giving details yet. I’d trust them - they have the track record on their side, but this is still an execution risk.

   We will expand upon it and scale it into untapped markets and pioneer new space-based services.

   It is through these growth areas that Rocket Lab will put Iridium spectrum to more effective use, extracting substantially greater capacity and throughput from the same finite spectrum allocation.

Rocket Lab is the only space pure-play I follow that has reclaimed its W50. I shared an alert with Founding Members ~$75.5 when the stock retested after earnings as I believe this was a clear overreaction. The position is up ~6%, and I’ll detail my view on it later in this article.

AST SpaceMobile also delivered a strong quarter. There wasn’t much that changed the thesis. Management continues to execute satellite manufacturing, launches and contracts with proper cash management, while preparing for future cash generation once the constellation becomes operational.

If anything, the bull case got stronger as they announced new contracts (notably with Rakuten Japan for a $1B market) from different customers and different use cases, including commercial telecom and government.

This follows continued work with FirstNet emergency and first responder networks in the U.S., with partner AT&T, and recent announcements with multiple governments through partners like Vodafone and Rakuten.

Redwire is perhaps the simplest example of what matters for these companies.

Space stocks move on contracts, execution and balance sheets. Successful operations and sufficient financing capacity lead to more contracts. More contracts lead to higher revenue and future cash generation. Which leads to a higher stock price.

Simple.

Redwire reported a reduced debt load, strong execution and record backlog.

Guess what? Stock went up. How surprising. More on this later as well.

Firefly delivered more of the same, expanding manufacturing capacities to meet demand, while winning more lunar missions, commercial payload contracts and Golden Dome-related contracts, without major delays.

It isn’t my favorite company or setup, but the numbers confirm the broader thesis.

Intuitive Machines is similar. The company is involved across NASA lunar programs, Golden Dome and other national security programs, while its backlog grew from $1.1B to $1.8B, and confirmed the broader thesis.

Combined with our existing leadership in lunar transportation and infrastructure, we believe these capabilities have expanded our addressable market from roughly $20 billion only a few years ago to well over $150 billion across civil, commercial, and national security space sectors.

Again, the important part isn’t one contract. It is the pattern. Demand is spreading across all parts of the space economy.

And then, we have Voyager. I’ve been watching this name for several months after it appeared on my screener earlier this year, even if I never spoke about it. Here’s a brief recap of their business.

Voyager is a defense technology and space infrastructure company operating across three complementary businesses: Defense & National Security, Space Solutions, and Starlab.

Defense & National Security supplies propulsion systems, communications, guidance, navigation, signals intelligence, missile-defense technologies and edge computing to customers including the U.S. Department of Defense, Missile Defense Agency, U.S. Space Force and major defense primes such as Lockheed Martin, RTX and Northrop Grumman.

Space Solutions provides the infrastructure needed to operate in space, including spacecraft communications, mission hardware, robotics, science payloads and mission services for NASA, international space agencies, research institutions and commercial space companies such as Blue Origin.

Starlab is Voyager’s long-term growth project: a commercial space station being developed as a successor to the ISS after its planned retirement ~2030. The project is backed by NASA and developed alongside partners including Airbus, Mitsubishi, MDA Space and Palantir, positioning Voyager to become a long-term provider of commercial orbital infrastructure.

Before this quarter, the problem was simple: Voyager was spending on R&D without evidences that it would translate into meaningful contracts and revenue. The market doesn’t like that, not enough to reward a stock.

This quarter changed the picture.

Voyager reported a record $336M backlog up 51% sequentially with $113M of new bookings during the quarter, and management raised guidance.

Perhaps the most significant takeaway is that demand continues to build faster than what we’re converting into revenue. As bookings consistently outpace revenue, backlog continues to expand, reinforcing our confidence that today’s growth is supported by durable customer demand rather than quarterly timing.

Looking at the balance of the year, we continue to expect revenue to accelerate through the second half, with approximately 40% of second half revenue generated in the third quarter and 60% in the fourth quarter.

Starlab also reached $500M in signed commercial reservations. Clear long term demand for a NASA funded project paid per milestones. One step at a time. This quarter was about de-risking the stock with market fit confirmations and new significant contract wins - notably a partnership for the Golden Dome.

The market loved it.

My Favorite Setups

Space companies have different problems from the companies I normally cover, and their stocks move on different factors. They are not simply scaling revenue and margins. They receive contracts, build hardware, launch or deliver it, finance the next stage and repeat the process.

Execution matters enormously. Delays mean more spending, more financing needs, less trust and potentially fewer contracts. And because most of these companies also rely on debt or equity financing, dilution is another risk for the stocks.

Their playbook is simple: execute, control costs, secure contracts and raise capital strategically when the stock gives them the opportunity; similar to neoclouds.

The market tends to price the sector together. When one company wins, investors often buy the whole group, because government spending is spread across suppliers to maximize the chances of success. That creates a lot of volatility from sector sentiment, contracts, delays, financing, dilution… which give very interesting buying opportunities.

This quarter’s earnings continue to confirm the sector thesis. More importantly, price action is starting to tell us which companies the market believes will capture the most value.

Right now, I see two clear setups and one additional name worth watching.

I’ll go through why, where I want to buy them, what would make me change my mind, and why I’m staying away from the rest of the sector for now.

Read more

Some names are already back near ATHs, some are making new highs, and every short-term support level seems to be bought while earnings are confirming that AI is only getting started, with the first meaningful data on inference and what enterprises actually want from compute.

We’ve already had great results, $AAOI up ~50%, $NBIS accumulate ~$155. $AKAM giving many buying opportunities ~$105 or $HLIT bought at $11.5 now up ~30% after excellent results.

This is the kind of environment where we have to press.

Some will say “you aren’t a genius, it’s just the market”. So what?

I’ll gladly take advantage of an easy market.

Every major AI compute provider has now reported. The message is clear: demand is massive, customers want faster and cheaper tokens, and providers need to maximize compute per unit of space and energy.

One company sits directly at the intersection of those, and fell ~20% after an excellent quarter because the market is looking at the results through one very specific lens.

This article explains why I think that reaction is wrong, what needs to happen for the thesis to play out, and exactly where, how and why I’m willing to take the risk.

Read more

Here’s what we’ll cover:

• Networking remains the strongest AI theme with Arista, Astera Labs & AAOI.

• SiPho demand continues to accelerate with Tower Semi, GlobalFoundries.

• The 800VDC thesis is facing execution issues with SolarEdge and Fluence.

• Cyber-security companies are the largest AI SaaS winners with Akamai.

• AI SaaS is proving its value with Palantir and Zeta.

I also discuss two investing concepts through Fluence and Palantir that I believe are must-reads if you want to become a better investor.

Before we begin, a quick reminder that I comment on the market almost daily in the Substack chat. If you’re only reading the articles, you’re missing a large part of the subscription where I share market views, price action, portfolio updates, alerts and much more in real time.

Now, let’s dive into this earnings season.

The Networking Bull Run

Arista Networks

Core position in Substack portfolio | Bought at $141 on 14/05/26 | +39.9%

A quarter ago, the market sold Arista on what I believed were overblown concerns.

My first takeaway is that the market is treating Arista unfairly. Yes, gross margins are a bit hurt with component prices and the current memory supply shrinking and yes that could be the case for years, but that will impact every hardware providers’ margins eventually and Arista’s management has always been first class, with premium operating margins which aren’t moving. Their wrong this quarter was to have a too honest management, but the truth is that they are a leader in the component with the most demand at the moment: XPOs.

I bought Arista today at $141. I only built a 60% position size for now, and will buy the full position if we go closer to its W50.

The Few Bets That Matter Substack

This quarter confirmed my view.

Today, management confirmed they worked hard on resolving those supply issues and increased their guidance to 40% YoY growth with stable gross margins for the year, stating many times that the market was focused on networking solutions for scale-in/across/out with their products being flagship products for today’s concerns - while they continue to develop tomorrow’s architecture.

I have never witnessed the combination of rapid innovation and scale deployment that we are seeing in AI networks.

To match our capacity with customer demand, we’ve increased both our manufacturing and distribution capacity.

Ken Duda & Todd Nightingale, Arista Q2-26 Earning Call

Networking demand remains massive because inference requires faster and more efficient infrastructure and Arista continues to execute better than anyone else in the sector.

Investing wise,

AsteraLabs

No position | Would buy on opportunities

The thesis continues to play out, even though I had to exit the position in January after it lost its W50. Back then, my thesis was simple:

The necessary next step is optimized, more efficient compute, to help providers deliver more with less. This grows revenues and margins by reducing costs & will reassure the markets about the financial soundness of [hyperscalers] expansion.

Maximizing compute per unit of space & energy is core for any provider’s profitability. Demand for the hardware capable of doing so will grow because providers have no choice but to buy it. They are in a race against their own leverage & need efficiency to generate cash as fast as possible.

The Few Bets That Matter

This quarter confirmed exactly that.

Revenues are accelerating, margins remain stable; the main driver is growing demand for scale-up AI infra. Scorpio X entered volume production ahead of expectations, while Scorpio P continues to expand.

On the AI fabric front, Scorpio delivered significant growth in Q2. High-radix Scorpio X-Series has entered volume production and will continue to scale materially in the second half of this year. We expect Scorpio to become our largest product family in Q3, which is one quarter ahead of our prior expectations.

We are now shipping multiple configurations of Scorpio X-Series into scale-up applications to our initial customers, we remain on track to ship Scorpio X-Series to additional customers by year-end. Scorpio P-Series also continued to expand across multiple customers, with new shipments to hyperscalers and AI infrastructure providers. These programs are currently in pre-production and are expected to ramp more meaningfully in 2027. We are also closely engaged with our customers to support their future system architectures with purpose-built AI fabrics, including next-generation PCI Express and UALink protocols. Upcoming AI systems will employ more complex switching topologies to enable larger XPU cluster sizes and higher bandwidth. These designs are expected to drive a material increase in our silicon dollar content per XPU.

Jitendra Mohan, Q2-26 Earning Call

The thesis was about AI infrastructure becoming increasingly optimized. Nearly a year later, that’s exactly what we’re seeing - and it plays right into Astera’s hand.

Management also confirmed the optical roadmap remains intact, with NPO expected around 2027 and CPO further out, with products already being developed for both transitions.

Investing-wise,

Applied Optoelectronics

Core position ~20% of book | Bought at $91 on 03/08/26 | +42%

I am not one bit surprised by this monster quarter. It’s the continuation of what we already knew, and what the rest of the optical supply chain confirmed this earnings season. Hyperscalers are upgrading bandwidth, which means upgrading connectivity. That’s exactly where AAOI benefits.

The take away of this quarter is simple: demand outpaces supply, like for many other hardware sector.

Demand to support next generation AI infrastructure remains so robust that our near-term revenue is bounded almost entirely by production capacity and key component availability.

During the quarter, we saw continued robust customer engagement around our 800G and 1.6Tb products. We saw a strong volume ramp of our 800G product in Q2, which more than doubled sequentially. Forecast demand continue to outpace our production capacity through mid-2027.

Looking ahead, forecast demand for 800G and 1.6Tb modules are projected to continue to exceed our production capacity through mid-2027.

Thompson Lin, Q2-26 Earning Call

The message is clear: demand is not the question, capacity is. AAOI is expanding its fabs to meet it, partly financed by customer prepayments as hyperscalers race to secure supply.

Their capacity is expected to increase from ~200k monthly units today to 650k by year-end and ~900k next year while product mix should continue shifting toward higher-value modules. More units and a better mix means into higher revenue, margin and cash generation.

Everything is about execution from here. If management continues expanding capacity while meeting demand, the market will continue to reward the stock.

Investing-wise,

Photonics Foundries

Before diving into GlobalFoundries and Tower Semiconductor, let’s take a step back.

Both companies are expanding production to meet accelerating demand for silicon photonics, primarily driven by NPO deployments in AI data centers. That highlights one of the most interesting AI supply chains to own today:

Soitec (SOI wafers) → GFS/TSEM (SiPho manufacturing) → Arista (NPO and networking).

Marvell also plays an important role through its engineering.

Looking at the supply chain instead of individual companies reinforces my conviction in Soitec. If the two largest silicon photonics foundries are expanding capacity, demand for SOI wafers should naturally follow.

Global Foundries

Sold at $68.8 for a 63.8% gain | Could buy on opportunities

The thesis continues to play out. Demand for silicon photonics is accelerating - exactly what we discussed with Soitec a few days ago, led by pluggables.

Within this end- market, we saw strong customer demand for our silicon photonics and silicon germanium offerings. In both of these high-margin technologies, we’re ramping capacity and making the necessary investments to unlock increases in demand indicated by our customers.

Given the accelerating demand outlook from our customers, we now expect to achieve full-year 2026 revenue growth in the range of 50%-60% for our communications infrastructure and data center end-market, up from our prior expectations of high 30s percentage year-over-year growth, which we believe is an early indication of the long-term growth opportunities ahead for GF in this end- market.

Sam Franklin, Q2-26 Earning Call

Demand is no longer the question. GlobalFoundries is expanding capacity because customers are asking for more, not because management is hoping demand will arrive.

The challenge is that AI represents only ~16% of total revenues. Communications infrastructure and data centers are accelerating rapidly, but automotive and mobile remain much larger segments and continue to weigh on overall growth.

Management confirmed they’ll continue to expand capacity for SiPho, boosted by a $300M award from the U.S. Department of Commerce, and are planning to increase prices.

With respect to pricing, we’re encouraged by the improving industry dynamics as well as the evolving mix of our business towards highly accretive technologies. In addition to these positive mix shifts, in the second quarter, we implemented pricing increases in partnership with our customers across several technology corridors. Following the satisfactory conclusion of these customer conversations, we expect the pricing adjustments to be reflected in revenue commencing in 2027. The magnitude of these pricing increases varies by end market and technology and contemplates the differentiated value we provide, the ongoing supply and demand dynamics, and the inflationary absorption across our industry in recent years.

Sam Franklin, Q2-26 Earning Call

The pricing discussion may be even more important. Growing demand is translating into pricing power, which should support both revenue growth and margins over the medium term.

Quantum also received attention with the new $375M U.S. grant. It’s a positive but not something I’d include in an investment thesis. Great upside if it works, impossible to model today.

Investing-wise,

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Tower Semiconductor

No position | Could buy on opportunities

TSEM is showing the same dynamics: accelerating demand and capacity expansion, without the drag from legacy businesses. As a pure AI foundry, its results reflect the strength of demand for both compute and power semi.

The company reached a $2B run-rate, secured prepayments for 2027 capacity driven by NPO demand, guided for faster acceleration into 2028 and is expanding all of its fabs to meet that demand.

Silicon photonics revenue itself increased by over 60% quarter-over-quarter and over 270% year-over-year, hitting a Q2 annualized run rate of over $680 million, targeting a $1 billion run rate in Q4 2026 as the previously announced capacity expansion continues to be qualified.

During this quarter, we experienced increased demand from existing customers and also saw very strong new customer acquisitions across our power portfolio. This momentum is primarily driven by growth sectors where power density and thermal efficiency are mission critical.

Russell Ellwanger, Q2-26 Earning Call

Hard not to be bullish.

Investing-wise,

Batteries On Fire

Fluence

Sold at $17 for a -12% loss | No plans on buying

We’ll use Fluence as a practical lesson on one of the most important investing principles: respect the market.

Fundamentally, everything looked fine. Backlog continued to grow, with a record $1.44B intake, including the $850M order from the first MSA signed a few weeks ago to supply one hyperscaler with behind-the-meter battery systems.

That order confirmed my original bull thesis. Yet the stock still fell 30% after earnings.

We should have seen it coming, even without knowing why. The stock had been warning us for weeks. It lost its W50, broke every meaningful support and never reclaimed them. That kind of persistent weakness usually means one thing: someone knows something we don’t.

Millions of participants interact in the market every day, and liquidity itself carries information. We didn’t know why the stock was weak. We only needed to know that the people moving the most money weren’t buying - they were selling.

Eventually, we found out why.

The company missed revenue expectations and lowered guidance due to execution issues, with production delays at two new manufacturing facilities.

Q3’26 revenue $90 million below expectations due to production delays at two new contract manufacturing facilities:

• Three-month delay in ramp of Houston enclosure facility, now initial production

• Initial quality issues from international facility, projects now reworked and being shipped

Fluence Q2-26 Slide Deck

The thesis was never simply that hyperscalers needed energy. It was that they needed it today. Bloom Energy is being rewarded because it overdelivers, today. Fluence did not and the market immediately repriced that execution risk.

The market is often excessive. It rewards companies that consistently overdeliver and punishes those that disappoint because it assumes those trends will continue.

I’ve been criticized for selling while “the thesis hadn’t changed”. I disagree. The thesis had changed, we just didn’t know it yet. The market did.

That’s why I respect price action.

SolarEdge

Sold at $42 for a 23.5% gain | No plans on buying

This is a different story from Fluence, I believe the market is overreacting.

We already knew H2-26 would be weaker because management guided for it last quarter. The surprise wasn’t the direction, it was that the core business deteriorated more than expected.

Meanwhile, development of the SST platform for 800VDC AI data centers continues as planned, but commercialization is still years away.

We remain focused on our next planned milestones, getting to a working system in our lab by the end of this year, followed by pilot installations in 2027 and volume shipments in 2028.

Just like Fluence, price action warned us before earnings. The stock lost its W50, failed to reclaim its previous breakout level and was rejected every time it tried to recover its daily averages.

I’ll keep following the company closely, but I won’t do anything until the market starts confirming the story again.

The Biggest AI Winner

Akamai

Core position in Substack portfolio | Bought at $110 on 28/07/26 | +22%

Momentum continues to build.

Cloud computing and cyber keep gaining traction. It isn’t translating into accelerating growth just yet, but management slightly raised guidanceand shared positive comments fo FY27 as demand continues to strengthen.

A few weeks ago, the market sold the stock on higher CapEx and it bought the exact same story today. Clear shift in perception as CapEx is tied to accelerating demand, just like for Google or Micosoft which becomes extremely attractive for investors.

Customers that added or significantly expanded their WAF usage in Q2 included one of the world's leading commerce sites, one of the world's leading automakers, and one of the world's largest banks in a $14 million upgrade to have Akamai secure all of their applications.

As a result, all of our GPU capacity is completely sold out. Therefore, driven by the $600 million new customer win we announced today and a very robust pipeline, we expect to invest up to $500 million in CapEx to replenish and expand our GPU capacity.

Tom Leighton, Q2-26 Earning Call

AI is a clear tailwind for both Akamai’s cloud and security businesses, and we’re finally starting to see it with customer wins and higher guidance.

Investing-wise,

The SaaS Renewal

Palantir

Sold ~$170 for a ~500% gain in late 2025 | Could buy on opportunities

We could spend pages on the numbers, but there isn’t much to say. Palantir keeps doing what it has done for years: accelerating revenue, expanding margins and proving that AI can be transformed into a valuable product. Fundamentals are simply outstanding.

I sold ~$170 because the stock was extended and valuation left no room for error - although there was no error yet.

Ironically, Palantir is one of the best examples of what value investing actually is. Many investors define value as buying companies trading at low multiples.

The market doesn’t; it prices future cash generation.

When a company continues to accelerate revenue, expand margins and prove product-market fit, high multiples are justified because the market is pricing future cash flows and success, not today’s earnings and failure. Like Fluence versus Bloom, the market prices continuity.

Back to earnings, the most valuable takeaway from this quarter wasn’t the numbers but the confirmation of where enterprise AI is heading. Commercial demand continues to explode, with AIP revenue growing 149% YoY and full-year guidance raised to 135%.

Why? Because enterprises don’t simply want AI. They want AI that solves problems, and that’s what Palantir delivers. Many companies are still experimenting with direct LLM usage, paying for tokens for no meaningful value. Palantir takes those models and turns them into operational software that improves workflows, decision-making and productivity.

That’s why I believe AI SaaS will become one of the biggest winners of this cycle. Just as they optimized business software over the last two decades, AI SaaS will optimize how enterprises actually use foundation models.

Palantir understood that before almost anyone else.

In contrast, enterprises that are not using Palantir are seeing their token meters spinning endlessly just to get slop without any correlation to value. This token model may be working for the labs, but it is not working for anyone else.

On our side of the chasm, what enterprises demand is AI sovereignty, owning the operational definition of the data, logic, actions, and security of their enterprise.

We already learned that different AI workloads require different hardware, specially optimized for them. I see no reason why software will be any different.

Foundation models provide intelligence. AI SaaS provides optimization. That’s where enterprise value is created.

The assumption that the frontier is actually the best performing is just not borne out in practice. Within 24 hours of bringing Nemotron Ultra into our stacks, we found five production tasks where a standard Nemotron Ultra model without post-training beat frontier models. This underscores that a handful of common benchmarks can be gamed.

The reality is that the market has created far more intelligence than it has converted into value.

Investing wise,

Zeta

Sold at $22.25 for a 17.1% gain | Could buy on opportunities

Zeta confirmed my original thesis that AI SaaS should produce clear winners in the short term: companies selling proprietary data and those using AI to optimize business workflows. Broader AI services for consumers will take longer to mature.

Zeta sits firmly in the first category, delivered another double beat, raised guidance and confirmed that demand for its data platform continues to accelerate.

The initial sell-off after earnings was due to incorrect numbers published by financial media, triggering algos selling for no reasons. The stock recovered, as it should have as management highlighted growing adoption of the platform and confirmed that its partnership with Palantir already resulted in “multiple agreements for combined sales”.

That reinforces my broader AI SaaS thesis.

Investing-wise,

In conclusion,

This earnings season reinforced one message above all else: follow the winners. AI hardware continues to lead both fundamentally and technically.

Arista confirmed demand for pluggables remains strong while preparing for NPOs. Tower Semiconductor and GlobalFoundries confirmed accelerating SiPho demand and capacity expansion. Astera reinforced that optimization remains one of the biggest bottlenecks for AI infrastructure. Nothing points to a slowdown before at least next year.

We’re also starting to see a second wave emerge: AI SaaS. Palantir continues to prove that enterprises don’t just want AI - and fail using LLMs; they want AI that creates measurable value. Zeta confirmed the same trend through accelerating demand for high-quality data access.

On the other hand, energy reminded us that a good thesis isn’t enough. Execution matters. Both Fluence and SolarEdge showed that the market has very little patience for delays, even when the long-term opportunity remains intact.

That’s why I continue to focus on strength.

Follow the sectors where fundamentals, execution and price action all point in the same direction.

Today, that’s AI hardware first.
AI SaaS is starting to join.

Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.

Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.

We finally have some answers on what happened, I’ll go over them today. The positive is this drawdown allowed us to identify strength and weakness in the market, and we now can focus only on the former for the rest of the year.

I’ve learned a lot over the last weeks; some things were well done, others weren’t… Looking at my portfolio, there was more wrong than good, and while some could argue that this sell-off wasn’t organic - as in it makes it acceptable to have such a drawdown, I won’t; the “why” doesn’t matter. Manipulation is always present, whether you see it or not. Complaining about something you can’t change is a waste of energy, and using it as an excuse is hypocritical.

What isn’t a waste of energy is improving, so that you can perform during this kind of inorganic sell-offs.

Portfolio, Gift & Lessons

My portfolio is now up “only” 21.7% YTD. I should be happy; being up after such a drawdown while holding growth names with leverage is something. But going from +195% to +21.7% in two months is unacceptable.

I knew the breather was coming and still had such poor risk and margin management that I almost gave up all my performance. I also shared content I’m not satisfied with. And I won't hold on to a paid subscription while not being satisfied with my content and performance.

For these reasons, I extend all current paid sub by two months. If I don’t perform according to the standard I set for myself, you guys have no reason to pay for it.

Some things were well done and I hope useful. I cut lots of weak names, which ended up falling much lower - despite lots of criticism, and still trade largely below my selling price. I found great opportunities at great prices, notably with Amazon, and shared great entry prices for Founding Members’ on Nebius (~$155) while holding on names like Arista, Soitec, and Silicom which were clearly strong.

Everything wasn’t a disaster. My portfolio is still green, the stock-picking portfolio is up 46.42% YTD; strong, considering most of the social media sphere, but having my own performance below it means I did something really wrong.

The year isn’t over, but I hold myself to a higher standard.

As for the learnings, I already shared a few of them. This kind of drawdown won’t happen every year as manipulation to this extent requires specific conditions. But harsher rules on how and when to scale margin are now in place, with much stricter risk control. Margin scales only on clear uptrends, not before.

Overall, things could have been worse. They have been for many. I haven’t done perfectly, not even well, but enough to stay alive and remain green YTD. I now have a great watchlist of strong assets, an improved system, and an even stronger resolve to make a killing.

These weren’t easy weeks. But chances are we’ve seen the worst.

Leopold’s Degenerate Gambling

Talking about staying alive, here’s one who got a margin call and lost all of his clients’ money - despite what you can read around.

I will only go briefly over the story and market’s mechanism; what happened briefly, and why it impacted us so harshly. If you want a punchier and more detailed version - also more complex, Irrational’s your guy.

Leopold - the social-media-praised and famous AI investor, was on 4×1 margin and got a bank call on Wednesday as his assets no longer covered his margin requirement. Before that happened, he tried its best to cover himself and sold his assets to reduce margin, crushing prices until the inevitable happened. Citadel ended up buying what was left on his book at a great discount when he had no other solution but to get out; this is why the market bounced on Thursday and Friday.

That’s the overall story. But the speculation goes further.

Leopold’s problem was that he let in some people he probably shouldn’t have. Those had regular and unrestricted views of his assets and margin levels and saw the risks he was taking.

A logical assumption would be that most of the drawdown we saw was an organized attempt to trigger Leopold’s margin call: shorting, selling, and no buying. This dip was too violent to be organic, with no bounces at all or extremely small ones as Leopold kept selling while others kept putting pressure on his positions. When he finally blew up, Citadel got a great discount, closed its shorts alongside everyone else, the market ripped again. Some of that sell-off was organic, but the violence of it probably came from this mechanism.

Wall Street isn’t for the weak.

This could be the scenario of a movie - might be one day: the fallen prodigy. Even if this is only speculation, make no mistake, this is how Wall Street works. If one can make billions and destroy two or three others on the way, he’ll do with a large smile on his face. People at Citadel must be drinking some pretty expensive champagne this weekend.

I’ll send my script to Netflix; what matters is that this explains the violence of the late drawdown and why no bounce held at all despite positive news (col CPI/PPI, no rate hikes, great earnings…). The only thing that matters in the market is liquidity. Narrative second. Fundamentals only third.

And liquidity was focused on destroying Leopold.

Bottom or Bubble?

Talking about market mechanisms, chances are we’ve seen the bottom. This doesn’t mean we’re back in an uptrend, but means we’re good to buy again. And I believe the next few days will be key to the rest of our year’s performance.

Most of the selling pressure is behind us. Leopold has nothing left to sell, Citadel is now holding the chips and might - should, sell some, but not everything considering Leopold’s portfolio quality and latest earnings. The portfolio might be a bit outdated, as he had to sell some holdings, but its quality is undeniable.

At this point, I see two major liquidity pressure points left:

• Citadel and traders offloading some positions on pumps, which could put some pressure on these names - and the global growth market.

• Retails and funds now buying back great fundamentals on great earnings and a healthy environment - except for Iran, cleared of most leverage and risk now that valuations have taken a large dump.

I’d expect the second to be the strongest, but I’d also expect the first to give buyers a a hard time short term.

We should be moving from a downtrend to a fight between sellers and buyers - a range. I struggle to see sellers being stronger now considering the environment, but we shouldn’t rule it out. And I struggle to see buyers overwhelming sellers right away, but that is more likely than the contrary.

My expectation remains a range, as it has for weeks. But I am now more confident about the outcome direction of that range - higher, and its length - few weeks.

We are going to see a bubble, but this isn’t it. A bubble is built on endless optimism, and blowing up a leveraged fund by selling amazing earnings showing clear ROI from AI, revenue acceleration, and margin expansion isn’t really what endless optimism looks like.

Factually, yes, the AI build-out will slow down, models will evolve, and DeepSeek- or Kimi-like improvements to models and inference will reduce compute needs, and we will find a balance. Nothing points to it being found yet; everything points to the contrary, and the market is clearly not overly optimistic here.

Not every company is cheap, even today. But most fundamentals are improving so fast that it’s impossible to know what tomorrow will bring, especially considering the technological transformation we’re going through. And as the market isn’t pricing endless optimism here, I don’t understand why anyone would call this a bubble. I call it a perfect environment to focus on strength and hope for this bubble to form, for real.

The rest of this write-up will go over my current portfolio, stock picks, and how I’d play each name now that we have more clarity. I will also go over my curated watchlist now that we can clearly identify strength and weakness, and again detail how I’d play each name from here. Some extremely attractive risk reward are showing up on the market on very healthy companies.

This is the time to refocus, forget about the last few weeks, and get ready for the next.

Read more

If you listen to calls, this is what transpires; not only that demand for compute remains supply-constrained, but that AI is delivering ROI. Google showed this, in terms of raw compute/intelligence renting but also in terms of usage, with coding or advertising as the most impacted use cases for now, with many more to come.

The conclusion is straightforward for a business owner.

Spending generated CapEx and new AI usage emerge as capacity and pricing evolve. So they want more, to make more. Math is easy; you buy something at $10,000, have it refunded in ~3 years for a lifetime of ~6; half of its lifetime is pure profit. Why stop?

My original thesis shared ~a year ago was about optimization as a go-to for compute and energy. This is what continues to transpire today with continuous need for both while the market prices skepticism.

This week’s earnings review should confirm that we don’t need that much skepticism, and go over leaders’ price action with actionable insights on how to play a potential bounce coming in the next months.

AI Has ROI

Let’s start with Meta,

I’ve been very bullish and continue to be, although I had to close my position as the stock lost its support and fell further post earnings, despite a great print, confirming my bull case and my assumption on why the market doesn’t like this stock.

Meta confirmed AI is the source of their financial and business improvements, but had no specific “AI ROI and revenues” line on its statement with no announcement on compute rental, which continues to make that spending look inefficient - even though it isn’t.

The opportunity in front of us is massive. First, we are now at a point where our investments in AI are accelerating every major part of our core business. They're improving the experience for people using our apps, driving better performance for advertisers, and helping our teams build new experiences and ship faster.

Increase in both advertising efficiency and pricing is due to AI, combined with increased spent time apps.

This is where compute goes, and it shows in Meta's revenues and margins which continue to be healthy considering the company's size, with margins falling due to two one-time expenses, which made the quarter look "bad" with a 6% impact on operating margins.

Q2 total expenses were $42 billion, up 55% compared to last year, and included $2.4 billion in charges related to legal proceedings and $1.2 billion in severance expenses in connection with the May 2026 headcount reduction.

We’d still have a decrease due to higher depreciation/costs, which the market would still dislike, but these levels remain really healthy.

The real battle for Meta remains perception; they need to show that their CapEx does more than “just improve” their core business. They need to show ROI, and confirmed during the call that they will rent compute/intelligence directly to third parties, but did not share any details except to say that we’d hear more about it soon.

This is the catalyst - or so I believe. We’ll talk about Microsoft and Amazon, but when seeing these companies’ results, after Google’s, it is clear that renting AI compute generates ROI and the market is starting to reward it. I see no reason why Meta doing the same wouldn’t trigger stock demand.

We've built our API. We're rolling out business agents. We're getting a lot of offers for compute at a significant premium over what we paid for it, and we have more coding and productivity tools on our roadmap as well.

This is also why management contracted a $14B joint venture with BlackRock for a 1GW AI data center in Texas, owned at 80%/20% by BlackRock and operated by Meta. More plans for more compute - with some clear financial engineering as this will stay out of Meta’s balance sheet due to the structure.

So we are starting to see a few things:

1. Hyperscalers are using more financial engineering; leverage is starting to increase for the entire economy.

2. Banks and external investors are starting to put skin in the game, with BlackRock here committing cash and raising debt, after Google’s $10B raise from Berkshire.

3. No slowdown in buildouts, and institutions are ready to push harder; still financed “healthily” for now with reasonable debt, FCF spending, or dilution, but we start to see an industry raising risks.

Risk which delivers growth and ROI is good risk - Amazon confirms this; issues start when the balance shifts.

The question left isn’t “does compute have ROI?” but “does AI have ROI?”. This won’t be answered by hyperscalers, but by SaaS, as they are the ones consuming tokens to deliver services. Considering the amount of tokens they’re using, I’d imagine they see ROI from it but we are yet to see the real numbers.

Investing wise,

The Compute Kings

Google delivered impressive results last week; this week is about Amazon and Microsoft. You should start by Andy’s laïus on CapEx and ROI, as he kinda treated Wall Street’s analysts like kids and explained them how investing for a company’s future worked.

And the numbers prove him right, as the company continues to accelerate, driven by its cloud/AI/AI cloud business.

Note that Amazon received two one-time inflows - one regarding tariffs refunds for $1.8B combined, so operating margins should be ~12.8%, still extremely healthy.

I’ll start with AWS, which is booming right now, and I’ll share the numbers, what we think is going on, and why we’re enthusiastic about the ROIC equation, even with heavy CapEx the next few years.

First, the numbers. Revenue growth of 36.7% year-over-year, accelerating for the fifth straight quarter, our fastest growth in 18 quarters back when AWS was less than half its current revenue size. We added over $4.6 billion in revenue quarter-over-quarter, about 80% more than our largest increase ever. Our backlog stands at $496 billion, growing triple digits year-over-year.

AWS is now a $169B annualized revenue run rate business, which, for perspective, would place it 24th on the Fortune 500 list if it was a standalone company. Our chips business now has an annual revenue run rate of over $25 billion, growing triple-digit percentages year-over-year. Our AI revenue run rate climbed significantly QoQ, and is now also over $25 billion, growing triple-digit percentages YoY.

Revenue growth continues to accelerate, margins to expand, and advertising - due to AI, is also accelerating. Clear AI ROI from rental to usage, and Andy explains why the cycle is far from over, despite Wall Street skepticism.

In addition to leading model building and inference services, customers need easier ways to build, run, and leverage agents. For example, even after you've built an agent, you have a lot of muck to worry about. A production agent needs somewhere secure to run, memory so it holds context, an identity so it can act on a user's behalf, tools and data to connect to, and a way to watch what it's doing once real traffic hits. Stitching all that together reliably is hard, and it's stalled many production deployments.

Amazon will increase its CapEx once more this year and probably for the years to come, stating that demand for 2028 is “striking”. Will the market hold, and will this convert into real revenues by then? I do not know, but I don’t really need to. Those are bullish signs and the market should continue to price optimism, not because we are in a bubble and investors are stupidly bullish, but because data is bullish with no end in sight for concrete ROI. That’s all we need to know short term.

Regarding current position,

Microsoft is more of the same. I could go over each number with QoQ comparisons, but the conclusion would be the same: more demand, increasing margins, clear cash generation a few years after CapEx cycle with longer lifespan for their hardware.

Once again, the only question left is: does AI have ROI?

I still don’t have an answer to that and still don’t need one yet. What I need to do is gauge the market’s optimism, have a tight risk management, and be involved on the verticals it likes, while leaving behind the rest.

I had a position on Microsoft but it hit my stop loss. Thesis was on point, but timing was wrong; it happens sometimes. The demand zone was clear, and I marked it a few times already.

Now, one position stopped doesn’t mean we shouldn’t try again when conditions get better, and they now are. The stock hasn’t pushed above its current high; these last two days were a great sign, but I’d expect the market to give the best opportunities in the weeks to come, not just yet.

In MSFT’s case, this would be a retest of daily averages, with anything below $450 being great value, depending on how aggressive you want to be, with the W50 sitting at $430.

This stock hasn’t been the strongest these last months, but as the market is rewarding compute lately and with clear ROI from CapEx, Microsoft - almost a cloud pure-play, could become a leader in the next months.

In brief,

The takeaway is extremely simple. Compute demand is through the roof, supply limited for some time according to every major compute provider, delivering ROI, and they are all looking to build more. Not really bearish…

Now that we know that, the logical sector to benefit the most from this is AI hardware.

Silicom Is Cheap

I am not one to write overly confident bullish articles, nor to be cocky. But it becomes hard not to be when it comes to Silicom.

Double-beat with expanding operating margins, raised FY26 guidance from ~$82.5M to $94M - a 14% increase from last quarter, guiding Q3-26 to 66% YoY growth, and non-GAAP profitability H2-26 - earlier than I or management expected.

This trajectory was our exact bull case, coming from increasing demand for optimized networking solutions or inference, but also classic networking which requires to be upgraded in an AI world.

Management expected to win between 7 & 9 designs this year and won 7 in six months. The pace of demand from new and current clients, for new and current designs is accelerating, mainly for AI.

Why? Because there are no alternatives to FPGAs to improve networking connectivity. Because adaptability is key in today’s hardware world as everything changes so fast. Because constructor lock-in is a drag in many situations which require optimization.

if you're doing an ASIC, you are locked down for many years, and if you're doing it on FPGA, you actually can update all the time, and as models progress over time, you can actually take all the new goodies that you have and all the industry that is doing smart things every day and put it into your FPGA and actually run models quicker and better than what you did yesterday.

Seeking to move away from vendor lock-in, the customer decided to replace its existing proprietary switches from an incumbent industry leader with Silicom's open white label switching solutions.

each successful win opens the door to the next, with satisfied customers coming back to us for additional products and additional use cases.

This is Silicom’s timing of opportunity, exactly as expected.

On the AI inference deal, We knew Silicom was in discussion for two products (an AI-NIC solution and an FPGA-based solution already in PoC). The question on my last write-up was about which of those converted to the design win and production orders announced last month.

Additionally, we successfully customized an AI-NIC solution to meet the customer's specific needs, delivered the first unit to the customer evaluation, and are preparing for initial deliveries of this customized product per purchase order received from the customer, a leading AI-Inference ASIC and infrastructure vendor.

It seems the production order comes from the AI-NIC solution, not the ongoing PoC for the FPGA product. This order is expected to generate between $3M & $4M for 2026, with 2027 “much higher” while the “multi-thousand units” potential FPGA order hasn’t yet been confirmed. It might never be, as the PoC could be unsuccessful, but would be net additive if it were, while management could be in discussion for at least one more (new?) AI inference product.

In parallel, we are expanding our AI-Inference product portfolio, and based on orders secured, we are now developing a completely new bespoke inference-specific solution.

This comment could also be about the FPGA solution, so I’ll keep my expectations low and assume the AI-NIC solution sold to an ASIC manufacturer was converted into a production order, while the FPGA-based solution is still ongoing PoC. This situation is already extremely positive as selling NICs to an ASIC manufacturer largely confirms my bull case and the importance of NICs for inference already.

I also want to note Silicom implication in Quantum cryptography, which will require specific hardware for which they’re already in discussion with clients. This is another vertical that will drive growth in the future, although AI remains the #1 opportunity.

Increased revenues, increased demand, involved in AI inference, improved margins, profitability expected in the next quarters. The market prices stock based on potential future cash generation, which comes from accelerating growth, expanding margins, or both. Silicom is combining both, just like Lattice - which I already took as an example. The market rewarded its stock with an optimistic 30x sales.

Today, I believe Silicom’s only bear case at this price - besides black swans, is visibility. For a stock to rise, others need to buy it. For others to buy it, they need to know it. How does that happen?

• Social media awareness.

• Analysts’ coverage.

So far, only a handful on X talk about this name and one analyst covers it with a $60 price target shared before earnings - probably going to raise it after such a print.

As for investing,

Axt Inc

Great earnings as well and a 64% performance in two days… Just like Soitec, AXT is one of the best photonics play as they make the wafers for lasers; a key player very high in the supply chain, which confirmed the same kind of trend:

Continuous growth acceleration and margin expansion with massive demand, above current supply, which justifies expansions, while less than a handful of companies capable of selling comparable wafers.

The company signed a contract with Coherent, another fundamental confirmation, and shared that Chinese demand was accelerating which is great as it comes with less geopolitical tension - AXT and its producers are located in China and need permits to export outside of China.

One of the best photonics plays on the market, with an extremely interesting price action.

Bloom Energy

Stock price follows future potential cash generation, which can happen two ways: increased revenues or expanded margins. Just like SIlicom, Bloom does both at the same time and confirmed the trend was strong and for longer.

Energy was and remains the main AI bottleneck, and both storage and behind-the-meter generators are the new go-to solutions for the years ahead.

New customers are arriving at a faster pace than ever. Landing a mega customer used to take us years, a moat that protected the incumbents. Now, the proven success of our technology, coupled with an increasingly urgent need for efficient, clean, and reliable power, has collapsed the time from first engagement to first order. Because we can book, ship, and convert orders to revenue inside the same fiscal year, that demand shows up in results now, while also adding to and diversifying our backlog. Notably, just this year, several customers who had alternative solutions in place abandoned them and came to Bloom.

I see Bloom exactly like I see AXT: extremely interesting company and price action.

There are no questions of what Bloom is, and can become.

Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.

Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.

I will detail Google’s earnings and what they mean for others, Soitec’s momentum and catalysts, ServiceNow as a proxy for SaaS and AI demand, and some comments on TXN and STMicroelectronics for power and analog semis.

The AI King

Incredible earnings, this quarter was a confirmation of all layers of the AI bull case. The market’s bear case for quarters was always ROI. Google answered.

Continuous acceleration for a company with $100B+ quarterly revenues, margin expansion - stabilization QoQ at healthy levels, and increase in operating cash flow, net revenues and EBITDA.

Whichever metric you use to measure AI’s impact on the business, you have only one possible answer: a positive one.

Be mindful of net income as it includes their P&L, rocketing after SpaceX IPO; that’s not cash generation, just mark‑to‑market P&L they include in their statement – and EPS which also came with a massive beat kind of “forged” by that.

Still, a remarkable quarter with AI impacting all of their verticals.

Most segments’ revenues are stabilizing, but stabilizing multi‑billion‑dollar revenue streams at double‑digit growth for years isn’t a small feat, and AI is the reason for this stable growth.

Next, the Gemini app, which now has 950 million monthly active users with daily active users tripling in the last year.

Those who adopt our AI-powered campaigns like AI Max or Performance Max, see an average of 15% more conversions or value on Search at a similar ROAS. AAA Auto Club Enterprises used AI Max to personalize creative assets and capture growth from increasingly detailed insurance searches. This led to a 17% improvement in conversion volume and an 11% decrease in cost per lead.

To attract high-value shoppers across North America and Europe, outdoor brand Arc'teryx used Demand Gen to achieve a 70% better return on their ad spend compared to other paid channels.

Kate Spade reached Gen Z through a first-of-its-kind YouTube creator campaign and partnered with creators Ellie Thumann and Hannah Meloche. By leveraging multiple format videos on YouTube, the brand drove a 3.25% brand lift in purchase intent.

I won’t go over all the quotes; you get the gist. AI also powers internal work:

As just one example, a team in Chrome is now on track to accelerate delivery by 8x , compressing a two-year timeline into three months through model-driven refactoring.

This confirms most bull cases as it shows real AI demand and valuable use‑cases for companies around the world.

The beast is Google Cloud, which closed with a record ~$514B backlog for which 50% are to be realized in the next two years, with strong growth and operating margins expanding from 20.7% to 35.6% YoY.

Rapid - and unperfect, math would suggest a ~65% YoY growth for the vertical NTM with ~$45B of operating income with today’s margin. Backlog isn’t perfectly regular so that' won’t be exactly the case, but it gives you an idea of the potential and what GCP has become, again thanks to AI. These aren’t “ifs”, but real numbers behind the AI infrastructure story and CapEx.

The market was doubtful on ROI; that should answer…

Management also confirmed what we knew: they are supply‑constrained, said they’ll use third parties to meet demand waiting for their own infra. This is extremely bullish for Microsoft, Amazon, Nebius, CoreWeave, Oracle, xAI & co as it means one of them will have a juicy contract, but also that demand for their product continues to increase.

We’ll see rental contracts in the coming months.

Demand for our models is translating to strong token usage across developers and enterprise customers, and we continue to be supply constrained, a sign of momentum and rapid adoption.

Sundar Pichai, Google CEO, Q2-26 Earning Call

Now, where market gets spooked, despite the numbers and obvious trend.

Google confirmed AI has a meaningful ROI across all its verticals: improved internal workflows, improved advertising revenues, time spent on apps, massive demand for direct compute and TPUs. What AI touches, AI enhances and it comes with higher revenues, margins and cash generation.

Google wants more compute, which means more spending. This quarter was Google’s first‑ever negative FCF; they increased their CapEx guidance to ~$200B and expect even more in 2027.

Finally, we expect the free cash flow will remain under pressure, driven by our investments in technical infrastructure, which enables us to capitalize on the AI opportunity and continue to drive attractive returns.

…we continue to expect our CapEx to increase significantly in 2027 and will provide more details at a later date.

The market was worried about ROI. It had an answer. Now it is worried about CapEx funding methods as it comes with negative FCF and dilution, even if spent on AI, a technology with back tested ROI.

I’m not sure what this means for Google’s stock in the short term; what I know is that it isn’t cheap and is extended, so I wouldn’t buy here. But I’d hold tight onto my shares if I were a shareholder and would increase my position on key supports.

Because man… What. A. Quarter.

As for my personal favorite,

The bottom line is crystal clear: AI delivers concrete ROI and we need more compute. That comes with more spending hence more cash generation for hardware names which remain the strongest names on the market lately.

Soitec’s Cherry on Top

Management felt generous yesterday.

Before turning to the quarter, let me briefly explain why we decided to bring forward today's communication. Since the start of the second quarter, customer demand for Photonic SOI has accelerated faster than expected. At the same time, the action plan I set out to increase our Photonic SOI production output has started to deliver positive results. These developments gave us materially greater visibility on the pace of our Photonic SOI ramp. Consistent with our commitment of transparency, rigor, and timely communication, we choose to update you ahead of schedule.

They had great news to share, so they couldn’t wait. Weird, but why not.

The thesis is playing out exactly as expected. While everyone fights to be involved in the next “winner” hardware, I believe the higher you are on the supply chain, the better. You can hardly be higher than Soitec, the company selling the wafer for any optical scale-up, from pluggable to XPOs.

Most of the revenue we see right now, and most of our revenue for FY27 will be on pluggable and partly NPO as well, probably starting. We still see co-package optic ramping up at the end of the year on the scale-out. Especially on the switching racks on the scale-out.

Photonics-SOI technology has already demonstrated its ability to address different scale-up configurations, such as pluggable transceivers, Near-Package Optics (NPO) and Co-Packaged Optics (CPO).

As long as optics scales, Soitec will. And optics is set to scale for years.

This visibility is underpinned by accelerating adoption across AI data centers, expanding multi-year customer commitments to secure capacity with cash deposits, a strong signal of engagement to securing long-term supply with Soitec. Further volumes are under active discussion.

So, without surprises, revenues are up 23% YoY compared to a 15% guidance, with Photonics‑SOI as the main growth driver, up ~100% YoY, with Q3‑26 expected to come in at 30%+ due to photonics demand.

Since the start of Q2’27, the Group has seen further acceleration in customer demand for Photonics-SOI, as well as the satisfactory results of the action plan initiated to increase its production output.

Assuming no material disruption in the AI market, Photonics-SOI FY27 revenue is expected to more than double the slightly above $100m generated in FY26.

Numbers still looks weak sequentially, but this is because of scaling. We are still early and management hasn’t fully reprioritized its production lines, so sequential growth seems low – even if well above guidance. The acceleration will start now as the thesis is now confirmed.

**Precision: their FY26 closed last quarter, today is qualified as Q1-27 so they are indeed guiding to $200M+ photonics related revenues for the next four quarters.

The other verticals are healthy enough with a small bounce in automotive - driven by new tech in cars, and expected stability through the year, while the smartphone market remains filled with inventory for core products and healthy demand for new technologies, slowly scaling. Both should be stable at best, not perfect but good enough.

Management shared last quarter that they could rapidly and cheaply refocus their fabs to meet growing photonics demand. They confirmed today that their Singapore fab is ready for Photonics‑SOI high‑volume manufacturing with a first customer confirmed. This was supposed to be done by year‑end but they accelerated to meet aggressive demand. Both of their Photonics‑SOI fabs can be expanded to meet accelerating demand if needed. Management is clear that they will work to meet demand, which comes in high volume and at better margins.

This quarter is the confirmation of our original thesis which was based on maybes. These maybes are now confirmed fundamentally, and we’ll need to see them in the numbers over the next quarters.

The stock pushed on potential until now. Today’s confirmations should be enough to justify more push as the market prices success, not just potential, boosted by cash generation improvements. We just have to wait for this now.

As to how I intend to manage my position,

SaaS Fight Back

ServiceNow confirmed what we knew: demand for AI services is real. Just like with software, companies capable of bundling a service into an optimized and affordable workflow will have customers.

The quarter beat expectations and guidance, with interesting but mixed data. This isn’t the inflection point SaaS bulls are waiting for, but it gives us clear signs that AI isn’t going to disrupt them out of existence. I think we can safely say the bottom is in for the sector, even fundamentally.

On the numbers, revenues are accelerating at the expense of margins - part of it due to a more expensive acquisition than expected, but there’s also an impact from AI token costs.

Revenue growth is still strong considering the “AI will kill SaaS” narrative, which we should bury by now. This quarter proves that idea wrong.

RPO and current RPO – to be recognized in the next 12 months, have stable growth on a large base, which is impressive - like for Google. If AI and LLMs were replacing SaaS, this growth would already have collapsed: demand is for AI-enhanced services.

We can note though that cRPO is growing faster than total RPO; looks like enterprises are taking one‑year subscriptions to see what happens, without committing long term too soon. With 98% retention for the quarter, we can assume most of them will renew, but that depends on confirmed AI value‑added.

AI demand is clearly the source of that demand.

The number of customers with agentic AI in production has increased 9x over the last nine months, a leading indicator for the future consumption opportunity.

ServiceNow AI continued to outperform expectations in Q2, with ACV crossing over $1 billion and net new ACV growth accelerating sequentially, growing over 40% quarter-over-quarter.

Deals including five or more ServiceNow AI products grew 5.5x YoY, which drove a tripling of million-dollar-plus deals.

The percentage of renewal customers purchasing agentic AI for the first time doubled quarter-over-quarter and year-over-year. Customers that weren’t already on the AI journey are signing up fast.

Interesting quotes which show in the numbers: more high‑paying customers, proving that average contract value is increasing, which usually comes with AI services.

There’s a lot of good in this quarter. The best is that it proves AI services demand, and shows that companies aren’t using LLMs to replace SaaS, as the market once feared – sometimes still fears. This was obvious, but now we have data.

Are customers going to build their own? I've yet to meet a customer who would even consider it. The best tech leaders know it will cost 5x to 10x to build an agent versus run one on ServiceNow.

What it doesn’t prove is long‑term commitments. It proves interest, maybe curiosity, and gives signs of where demand is headed, but doesn’t confirm with long‑term acceleration. This looks like what the market needs to bottom SaaS names – and I believe they have, but not enough to start a new uptrend, even on optimism.

I could be wrong and we could see re-ratings on optimism alone, but it seems early to me, given the signals.

On the contrary, it isn’t early for cyber‑security SaaS especially after OpenAI’s LLM model attack this week. ServiceNow is integrated within cyber companies, so this could indirectly be a catalyst for the company. But for non‑cyber‑focused SaaS, this still looks like early innings.

Great signals, two quarters in a row.

The Power is Out

We had both Texas Instruments and STM earnings, both were excellent. Yet, TXN is down ~5% and STM ~17% while beating expectations, with no guidance raise.

Demand for any kind of product related to power or data‑center hardware is growing both sequentially and YoY, and both companies are talking about rising demand.

During the quarter, demand increased further with strong bookings and book-to-bill close to 2 overall. We were well above one in whole end markets and significantly above 2 in communication equipment, computer and peripheral, mostly driven by optical connectivity, including silicon photonics. We saw improved visibility and signs of tight supply in several product categories.

STMicroelectronics Q2-26 Earning Call

STM raised its guidance for data centers and expects data‑center revenues above $1B by FY26 and well above $2B by FY27, with improved margins, strong traction in photonics with multiple design wins, and strong interest in solar and battery storage.

Both calls are bullish for my investment thesis: increased photonics demand means more photonics hardware, and strong interest for BESS and analog is the thesis for data‑center expansions. But the market is fading good news, just as it has for some time now, and this isn’t really bullish… Especially after these earnings.

All these names will become great opportunities in time. For now, fundamentals are improving everywhere, but narrative remains the driver #1 of stock prices and it isn’t really optimistic right now.

Patience.

Market Overview

Everything is being sold pre‑market. Google is down ~5%, Meta ~3% and Amazon ~2.5% as well. Power semis are all down, SaaS is flat… only Soitec is still up ~20%, but I wouldn’t be surprised to see that fade if the U.S. market opens red.

I won’t try to predict the market’s reactions. But earnings were good, great in many cases – and that was already true last week with TSM AEHR ASML or SMCI, but the market doesn’t care. Tensions in the Middle East might not be helping, oil is rising again; it’s hard to know exactly what and why. What we do know is that good news aren’t bought, and until they are, we shouldn’t be too aggressive.

All these names have a long way ahead of them and are great opportunities, but their stocks still need time. Consolidation – despite great earnings, remains my base case.

Slow and steady during tough market environments.
No reason to increase risk here.

Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.

Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.

This is something.

There’s lot of anger lately on social medias as moods follow volatility. These emotions are what make investing difficult, they force us to take rash decisions; but their real source is frustration. Large drawdowns make us doubt ourselves, our stock picking, strategy, execution… They happen because we did something wrong. What matters today is to define objectively what.

I’d also invite you to look back. We all gave back a lot of returns but most of our YTD should still be green, at levels reasonable investors would call excellent. My portfolio is still up 47% YTD and the stock‑picking portfolio is up 55.59% YTD.

We are only in July, there is strength in this market, room to find performance, and my system has already improved a lot this year. I know the next ones will be better. These are great times to learn and improve, not to cry over losses and give up. No one said this would be easy.

Now,

This market is sending tough signals. Late‑bull‑market vibes, crypto‑like swings... As I’ve said many times, we aren’t early and we should all acknowledge this.

The S&P isn’t in an awful spot. We’ve seen some distribution with rising volume on flat price action and lost supports, but we are still holding the D50 and the expansion we had in early June needed to breath a bit.

More worrying are the QQQ and SMH (the semi ETF), which both lost their D50 on higher volume; buyers weren’t strong enough to step up at those prices, and who can blame them when most analysts look at 2027 and 2028 expectations to value them… Buyers need some time there while strength is moving to other verticals.

This isn’t the only ETF taking a break. Most of the YTD winners are struggling: clean energy, power semis, space, robotics… Many are now sitting on their W50 and this feels like a make‑or‑break moment for them.

We’ve seen that good news – cold PPI & CPI plus with excellent hardware earnings, didn’t end up in green candles. That says a lot about risk appetite, and fits well with these names losing key trendlines.

But I wouldn’t be too bearish either. It does feel like a make‑or‑break moment but we’ve had lots of them over the last two years, and even if these were to break, some other sectors look much better. We’ll get into those, their leaders, what I expect from them, and the different pockets of strength and weakness.

Some notes on Kimi,

This is a DeepSeek‑like moment. K3 is the latest open‑source Chinese model which, on benchmarks, is slightly below the latest U.S. models.

Another Chinese models trained with less compute which competes with the most advanced western ones. This shouldn’t impact the market as we know since Deepseek that training can be optimized; the real narrative now is inference, which is why most of the returns have shifted from GPUs to networking as the needs are to meet massive compute demand as efficiently as possible, not train models.

This confirms that models are now raining, just like Nebius predicted, and aren’t the most important part of AI anymore, just like Karp said more than two years ago; what matters is the intelligence built on top of them. This is the current need for enterprises alongside speed and cost.

What we need today is optimized compute, energy and that layer of intelligence to meet current needs; we’re far from it but the market already anticipated parts of it, pricing success for speculative assets, which makes returns unlikely to happen where most look at.

Weakness & Strength

My focus this year was on a handful of sectors: mainly AI hardware, energy and space. Today, strength is shifting into healthcare and software, which is the logical next step of the AI trade.

But I wouldn’t throw the others away.

Space,

is the weakest sector. I exited entirely. I’m aware of the fundamentals and bull case, but as a concentrated investor I can’t hold weakness. My biggest worry is that even leaders like Rocket Lab are struggling. In this situation, the only question worth asking is.

Why didn’t buyers step up on improving fundamentals and a perfect trend retest?

There are millions of possible answers; one of them being “we are in July, investors are on holiday, we’ll go higher later”. But I have to play probabilities. So the valuable question is different, because the why rarely matters in the market, what matters is how to leverage the signals in front of you.

The data says fundamentals are improving (Iridium acquisition, accelerating launch schedules, growing revenues & more), and yet, it wasn’t enough for buyers to step up and defend a trend that hadn’t been lost in two years. So the question is.

Is it worth taking the risk of buying a broken downtrends?

This could be a fluke. I actually believe it is and that space stocks will make new highs before year‑end. But opinion is just a beautiful name for bias and I don’t invest on bias. I invest on signals, data, and probabilities.

Today, space isn’t giving the signals I need to be heavily involved. Bulls aren’t buying on key trends so I’d rather be somewhere else.

Photonics,

Photonics is showing more strength with leaders holding supports. We’ll talk about Soitec but I have other names to illustrate my point - Applied Opto, GlobalFoundries, Coherent… GlobalFoundries here as an example.

We all have different books, so we should treat signals differently. I learnt after buying space names a few weeks ago, that this kind of violent drawdown has to be treated carefully: a W50 retest can still fail and burn you. GlobalFoundries looks much better than Rocket Lab. Here you’d get a great price for an asset involved at the top of the photonics supply chain, received governmental grants from quantum, in a tight environment with massive demand and limited supply as confirmed by TSM.

If I had to play probabilities, I’d play them here, with a tight risk management.

AI Hardware names,

AI hardware names are a beast of their own. Yes, they are down a lot, but most were so extended that even these ~30% drawdowns haven’t brought them back to key supports. Many great accumulation areas on the sector, nothing else.

I have no more comment. These names are extremely strong, fundamentally and in price action.

Software,

slowly becoming my favorite hunting ground. I have a very long watchlist and most charts look like they’re in the early innings of bull trends after a massive beat‑down these last months.

The realization that models are only one part of the equation and that the intelligence and data layer built on top is the real value‑added will create winners with returns comparable to photonics names this year.

The companies that can provide real value at affordable cost will change the world.

It starts with cyber‑security and continues with data owners/companies that leverage data to provide those services, and will slowly expand to any kind of service, from B2C to more passive uses of AI.

Most cyber charts look like Qualys: the market suddenly realized AI was a tailwind and bought every cyber name, hard. There’s nothing actionable here for me, but I flagged those names weeks ago; some of you hopefully got some returns.

I’ll need to be patient to get setups I can buy – I already found one this week, but I know many will come over the next months.

In brief,

Outside of space, most sectors and names I follow are still in uptrends, with leaders still leading and bulls stepping up where they should, which is why I wouldn’t panic.

I’d still be cautious and treat retests with tight risk management. My base case from here is consolidation, exactly like we had at the end of 2025, with a bounce from here as a possibility and a bear market my less likely scenario.

I’ll illustrate my base case with Nebius.

50% drawdowns are to be expected in growth names. What matters is that bulls step up where they should, just like they did back then. W50 were bought and held. As long as bulls step up on trends, there isn’t much to do but accumulate strong assets, with strict risk management.

What you see today on Nebius specifically is comparable.

If we consolidate like we did back then and see a few W50 retests, accumulation it is. If we bounce and push higher during earnings season, then great. But if bulls do not step up on the W50, we’ll be better off somewhere else. Consolidation can go on for months without being an issue, losing supports is an issue.

Do not exclude any scenario. Have your base case, expect the worst, and know in advance how you’ll behave in each.

My Portfolio & Positions

I made a lot of changes over the last few weeks, because I made a lot of mistakes. Just like any of us. But I learn from those; mistakes I used to make two years ago weren’t repeated, so I know I won’t repeat the ones I made these last two months.

Today, I own five positions: Silicom, Soitec, Meta, SolarEdge and UiPath, at 70% margin.

On Friday, I sold Tempus, ARKG and Arista, after selling Fluence, Intuitive Machines and AST SpaceMobile earlier. I already detailed the why for the last three, but not for the first three as those were done Friday post‑market, so let me go over them.

Tempus lost its W21 on Friday. That’s weakness; small, but in today’s market it has to be punished. I didn’t do this a month ago and it cost me a lot, so I adapt and factor the environment into how I manage positions.

This isn’t a bad chart and the healthcare thesis remains strong. But I have a better thesis elsewhere and needed liquidity. This was also the reason to close ARKG: I needed cash for my latest position.

I still consider Arista one of the best AI hardware stock on the market. Fundamentals are perfect, management is perfect, narrative is perfect, chart is perfect, behavior is perfect… I don’t think you can ask for a better name.

The reason for selling was the same. As a concentrated investor, I need to concentrate. I could keep a foot in Arista and build a 30‑stock portfolio, post screenshots of my 2% positions up 100% and brag on social media. But that’s not why I’m here. I’m here to increase my net worth, and that doesn’t happen with 2% stakes in 50 great stocks. It happens with 30% stakes in one.

As I said, I’ve received a lot of criticism lately on my new positions and sales. I don’t do it because I enjoy paying transaction fees, but because I try to find the best proxy for net‑worth increase, that requires concentration, which requires decisions – including cutting clear winners to buy what I see as higher potential.

Arista is a clear winner. But have you seen UiPath?

My Positions

I already went through the fundamentals a few months ago; I had the wrong timing then but the narrative hasn’t changed since, it improved, and timing is better. I’ve rarely seen such volume on any stock, and that justifies rotating liquidity into it.

Something is happening in this stock. I have no idea what exactly, but there is a lot of buying – shares and options, and the market bought it during one of the most violent downtrend of momentum driven stocks. I’ll be in as long as supports hold.

Soitec had an interesting week, closing positive – like many photonics names, with buyers stepping up heavily on its W50.

The stock is down 50% from its yearly high and my first trim, and 17% since I refilled my shares. I’m still satisfied with how I managed this position and am being patient, as I expect a Nebius‑like consolidation. It became my smallest position not because of a lack of conviction, just drawdown and patience before buying more. Environment is tight and I’d rather see strength before increasing the position, for now the stock is being rejected at every daily average retest.

The fundamentals are unchanged and unrelated to CPO delays; SOI wafers are needed for any kind of optical connectivity and are under massive demand. It’s just a matter of liquidity allocation and patience. I’ll gladly make it my largest position again once it reclaims its daily averages, and I’d cut the position if it were to lose its support.

Silicom is somehow uncorrelated to its sector, to my great pleasure. It’s also cheap considering latest news and demand for its hardware.

There is only one possible interpretation for a stock behaving better than its sector: that buyers are stepping up in size. The market sees something and buys it, while selling the rest of its sector.

I see the same thing.

Meta chose my best‑case scenario: it gave us a breakout retest and closed its gap. From my thesis write‑up:

We had our ~$640 retest, it was bought, and now we wait to see what happens. I still consider Meta the best AI name on the market here.

Lastly,

I talked about Bitcoin and Ethereum with alerts for Founding Members and trade plans in articles. Both behaved well these last weeks and I’m still holding both. I didn’t include them in the portfolio above because they are a different pocket of liquidity – just like I don’t include my bank account as cash.

If I had to choose between crypto and stocks, I’d buy stocks. But I don’t have to. And seeing Ethereum’s chart, knowing no one is positioned… I might buy it even before some stocks.

We still need confirmation of an uptrend – clear higher highs and larger volume, we aren’t there just yet… But considering the crash on some sectors, seeing crypto hold daily averages for weeks with higher highs is interesting. I’m positioned on margin and getting paid in funding. You rarely get paid to be leveraged in crypto; the few times I’ve seen this were moments before big pushes. Invalidation happens if we lose those daily averages.

It might not push higher today, nor this week, but I’d keep a close eye on cryptos over the next weeks and months.

As usual,

I will share every transaction in the chat with Founding Members, whether purchases or sales, whether controversial or not. We’ve had many interesting conversations over the last few weeks; great advice, questions and interactions.

A lot of value added.

A few last words,

Again, the last few weeks were draining. That’s what we signed up for.

I’ve expected a bounce for a few days now and Friday might have been the first sign of it. I expect it to be just a bounce for weak names and would use to cut them, not to reinforce a “I knew it, we’re so back” bias. There’s always a bull run somewhere; there’s no point holding weakness and hoping for the least probable scenario while you can concentrate on the best ones; names that were green over the last weeks should over perform in the event of a bounce, and continue higher later on.

We are entering the heart of earnings season. I expect everything to point in the same direction: more hardware, more capex, more spending, and software slowly proving that AI is a tailwind. Nothing different fundamentally. The real signal will be how the market reacts to the news in each sector.

No selling on bad news is bullish.
Selling on good news is bearish.

Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.

Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.

Liquidity is exiting a few key sectors (semi, power semi, photonics, space and data center buildouts) toward new ones (healthcare, SaaS, consumers & the Mag7, on which I am positioned).

This is why the S&P 500 is still flat and close to its ATH while most portfolios have been smashed. Liquidity is rotating, not leaving, which is bullish for longer-timeframe trends, but harsh on those over-exposed to falling sectors.

The fundamentals remain strong; returns are just rotating.
And I wouldn't expect this to change soon…

Rotation usually lasts a few months. It’s hard to anticipate the timing; the last one lasted from ~Nov’25 to March’26. This one started early June, so we’re a good month in and it’s been particularly violent, with many names already down ~50% and close to their W50. If we look at key ETFs, the VanEck semiconductor one for example, it’s losing its D50 today, so I wouldn’t expect this correction to stop tomorrow.

It can always happen, with a large V-shaped recovery, but considering the latest news and the market’s reaction… I’ll put my money somewhere else, because I’m seeing signs I don’t like much.

Before starting,

I’d like to re-introduce some core concepts in investing. Fundamentals are one thing, price action is another. You only make money when price goes up, and price does not go up just on fundamentals - far from it.

The most important in the market is optimism - and context.

You don’t want to buy and hold the best fundamentals; you want to buy and hold a stock with growing optimism within a bearish or neutral context. Take photonics, which ripped for months and delivered massive returns. Those returns weren’t based on concrete earnings, but on optimism for their future potential. Great news kept coming, but most of them are down 50% over the last month while fundamentals are better today than they were six months ago.

Context.

If you bought the improving fundamentals, your portfolio got destroyed. Those don’t necessarily convert into returns - not if you buy blindly without taking context and price action into consideration.

That said, we can continue.

TSM, ASML, AEHR & IBM Earnings

Let’s start with IBM, which triggered a “sell-off” on SaaS names with one sentence, which can be summarized by “our clients reduced their software spending to increase hardware spending.”

In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases. This dynamic impacted client buying patterns. While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization. In addition, clients were distracted with rapidly-evolving, industry-wide cybersecurity concerns in the quarter.

The stock was punished with a -25%, in line with the market’s recent violence.

The three others delivered a masterclass. They all sit at the top of the AI hardware supply chain: ASML with its lithography hardware, TSM as the largest and most advanced semi fab, and AEHR one of the leaders in semi testing.

All of them beat the market’s expectations, and the bottom line is the same for all: companies need much, much more hardware and are ready to pay the price for it. You can read detailed reviews, take accounting classes, go point by point or whatever; the conclusion will always be the same.

More hardware. No clue when demand will slow.

Strong end market demand this year has motivated our customers to aggressively add capacity on their leading-edge nodes.

Customer demand remains very strong, with visibility now extending several years into the future.

ASML Earning Call

Given the continued strong structural demand from our customers, including the newly emerging agentic AI market, we have decided to raise our full year 2026 capital budget.

If you asking about the AIs CAGR, let me give you not a number, but its stronger and stronger. We dont give you the number today because it continue to increase, so we dont know how to answer this question. Stronger than what we said before.

TSM Earning Call

So we had four tech earnings, and the overall conclusion was that their clients needed more hardware and were slowing down on software. Their cash was rotating. And yet, if we look at the market, what happened this week?

Sofware stable/up.
Hardware down.

Because context matters. Once again, we only make money if our stocks go up, not just by looking at fundamentals. The market isn’t fading AI hardware or disbelieving those earnings and comments; we simply don’t have buyers left at these prices, and as price falls, holders turn into sellers while buyers are too scared to step up early. They’ll step up - just not yet. Doom spiral for now.

When bad news triggers no reaction, you're close to a bottom.
When good news triggers selling, you shouldn't push your luck.

From here,

There’s no saying what will happen, but as usual we have to play probabilities, which aren’t favorable for a return of the uptrend in weak sectors. Those could bounce, but a real uptrend? I don’t believe it, yet.

So I’m doing what the market is telling me to do: selling weakness, buying strength.

I closed four positions today, names I still believe in but that showed weakness. And I put it all into one stock. A SaaS company I’ve followed for a while now. Fundamentals are stronger than when I first found it, valuation is much lower, and price action looks like textbook accumulation with extremely bullish option flow.

It has everything I look for, and I’ll go through the full breakdown: what I sold and why, the name I bought, why I’m building it into one of my largest positions, and what will make me increase it even more.

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Everyone knows the story, from memory to networking to “optimization plays”, and has a list of proxies to ride it. Most of the sector is fully priced and the risk/reward isn’t that interesting.

All, but one.

Silicom is the only AI hardware name I could find that nobody was talking about. The stock is up ~150% since I shared my first thesis in March, and yet, we’re still very far from where it should trade.

Back in March, the thesis was simple: the bottleneck moved from raw compute to networking. Inference overtook training, GPUs became powerful enough but sat idle, waiting on data because of copper’s physical limits. Photonics is the long‑term fix, but we’re years away from industrial scale while the industry needs a solution today. That near‑term solution comes from customizable hardware - FPGAs, SmartNICs and more. Configurable, low‑latency silicon that can be tuned to any workload.

Silicom was - still is, the overlooked pure‑play: a vendor‑agnostic SmartNIC assembler for low‑latency niches (cybersecurity, algo trading, defense, telecom…). Hyperscalers started approaching them to test whether that hardware could handle AI inference, and initial Proofs of Concept (PoCs) followed.

We were looking at a ~$100M cap, ~1x EV/sales, ~50% of the market cap in net cash, double‑digit growth guidance, and the inference opportunity as a free call option on top. Since then, the story changed enough that my old base case became a bear case. The last few weeks erased that bear case and forced a new one:

What used to be my March bull case.

In this write‑up, I’ll walk through what’s changed since my first thesis:

• The AI infrastructure situation - CPO delays & the emerging memory crunch.

• The unexpected strength of Silicom’s core business and FPGA ecosystem.

• The details of the AI inference deal(s) and what I expect from them.

• What comes next for Silicom across AI inference and its other verticals.

• Future catalysts, stock price action, and how I plan to size the position.

Wealth is made by sizing on our best ideas.
Silicom is one of mine.

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Summer’s starting and comes with stocks swinging double digits up and down on no volume and for no reason. Funds are slowing down, algos are off, the semester’s closed, and founders are enjoying their AI gains - or their losses, whether in Saint-Tropez or Saint Barth.

Which leaves us, the bored retail crowd, with volatility spikes and frustration.

So our first task is simple; it’s the same one that makes money in every chop: manage your emotions, stay patient, cut losers, weakness, buy only into strength. Low volume doesn’t excuse weakness, a great stock will be bought at key support even in a low liquidity environment. That discipline is what separates a frustrating summer from a profitable one.

And inside these messy weeks, real opportunities appear.
One in particular has my full attention.

A company I’ve followed for years, one of my favorites, finally getting the catalyst I’ve waited for. The kind of setup that deserves a repricing and triple-digit returns. I shared it live in the chat this week, where I post every purchase with detailed alerts, the highest-value part of this Substack.

Today’s write-up is built around it: why it’s waking up, why the catalyst is real, and exactly how I’m playing it, with my buying targets. I’ll also cover an oversold sector, and one asset nobody’s watching that could outperform for the rest of the year.

Summer’s here. I’m not in Saint-Tropez; I’m here, hunting the best returns, ready to build a massive position if this name behaves like I expect.

The market doesn’t hand out setups like this often.

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Most investing content is built on looking so certain that readers assume you know better. No one knows better. Every investor is constantly learning, and that’s what I’ve decided to build my Substack around: constant improvement, out loud.

Building a framework that works, publicly.

So I share the diagnostics, the successes and mistakes, to strengthen a system that’s performing well, but isn’t yet perfect. This is what today is about: the last month, the mistakes I made, and the measures I’m putting in place so they don’t repeat. I’ve identified two clearly.

To talk numbers: my portfolio was up ~160% YTD at the top in May. It’s up ~60% today. That is NOT normal, it shouldn’t have happened. A 60% YTD is still a massive outperformance over the S&P ~8%, and it should be seen as an excellent year - which it is. But the subject here isn’t the returns. It’s the process that let me give back so much in such a short timeframe.

I’ve diagnosed my own mistakes before - notably overtrading, which I’ve corrected; I haven’t done it since. That one was about me, today is about improving the system itself, to protect my net worth in riskier environments like today’s.

More Wars, More Fear

A quick word on what’s been happening.

Two main reasons for the violent sell-off in risk these last weeks. First, AI hardware was extended and took most of the drawdown while most were heavily invested. Second, the framing changed: few of us expected the Iran/US conflict to start again while peace frameworks were already on the table. And yet, here we are.

You know how this works. Black one day, white the next. But the risk is different now; the market is extended, so investors aren’t in the state of mind they were six months ago. They’ve made tons of profit and intend to keep it. We’re in a “better to sell first than last” environment, where risk isn’t a short-term opportunity but a place to pull profits from and wait.

So how do you avoid giving back a year’s gains in a month?

Below, I break down where I went wrong; the two specific mistakes that cost me most - including the one I estimate cost me half of my drawdown, plus the rules I’m putting in place so they do not repeat and how I’m managing my book as the market shifts.

Let’s get into what I’ll do differently, and what I’m doing now.

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Market psychology 101.

Those trades are now crowded. Everyone and their grandmother knows the current bottlenecks and the best proxies for return. The market is a place of probabilities, and you want to store your money in the assets with the highest potential. Those are rarely crowded places.

We are exactly where we were in September last year for neoclouds.

GPUs and compute were the obvious trade; we could never have enough, and the market priced them to perfection, until the trade got crowded, everyone understood the thesis, and latecomers got punished. Fast forward to today: only the greatest names bounced - Google and Nebius, while the lesser ones didn’t - CoreWeave and Oracle.

Being late on a right thesis is just as good as being wrong.

I'll use Nebius as an example to illustrate what I expect. Everyone here knows the company inside out, so I'll focus on market mechanisms.

The stock topped early October ‘25, shortly after the game-changer deal with Microsoft, in an atmosphere of stupid bullishness. Everyone talked about the name, everyone wanted to buy, and price targets were in the four digits. The trade was crowded.

Then the correction came, violent, down 50% in a month. It retested its W50 rapidly and went through months of consolidation, never losing that W50, before breaking out again.

This is what I expect for photonics.

Violent retests - where we are now. Weeks of consolidation. And breakouts later, for the best assets only - which are only a handful. Meanwhile, liquidity will rotate to the sectors we talked about, just like it went to energy/industrials at the end of 2025.

Chances are you’ll do fine if you hold great assets and accept the volatility — but you’d better have a strong stomach, and accept cutting those positions if they go south. The market won’t be forgiving on diamond hands holding the wrong bottlenecks.

Last week’s article went over this rotation and the pockets of strength on the market.

• Catching the space retest, with Planet Labs up 20.7% and ASTS up 15% since.

• Looking at Amazon with a 4.5% bounce.

• SaaS names like Qualys, Zeta and Tenable up 20%, 9%, 27% respectively in a week.

• Looking at healthcare, which performed well - especially Abivax, which received the confirmation expected the day after my article and shot up 50% in a week.

The breather is in AI hardware - including power hardware. It feels violent because the sector is overcrowded, so everyone talks about it. But other sectors are behaving really well, and we were positioned for it; the portfolio is down less than 1% this week despite a violent pullback in key sectors.

So the real question now is how to manage this retest.

Below, I break down exactly which names I’d buy, why I’m going as high up the supply chain as possible, and the one signal I need to see before I deploy the cash I’m still holding. I’ll also walk you through my book; what I’m accumulating and why, what’s on the chopping block, and the single name I’m about to size up.

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But today isn’t about tech. It’s about an unloved, underestimated, disregarded sector.
Undercrowded, with a massive AI tailwind.

Who Buys Healthcare?

That’s a great question. If you did, you probably underperformed these last months. But things are changing.

First, the market is heated. I said yesterday it was time to slow down, to let breathers happen and prices deflate for this year’s winners. They ran a lot and now need a minute. No reason to sell those positions, but plenty of reasons to look elsewhere.

Second, artificial intelligence is becoming so powerful that governments now have to control the public release of new models - whether it is normal in a democracy or not. And one industry will thrive from having such a data-processing tool: research. Healthcare R&D, of course.

If you haven’t seen “The Thinking Game” and are curious about the early years of AI and the people who built it, go watch it. It tells the story of DeepMind’s founding founder, and how they worked for two decades to build what we have today - getting bought by Google along the way. They tried many things, but eventually found the two best subjects to test AI.

1. Chess - and later as it got too easy, Go.

2. Protein folding - when Go got too easy.

I’ll let AI explain protein folding, as I’m not a biologist - rest assured you don’t need to be one to make money.

Protein folding is how a chain of amino acids becomes a working 3D protein. It works because the chain naturally bends, twists, and packs into the shape that is most stable in its environment. That final shape matters because a protein’s function depends on its structure. If folding goes wrong, the protein may misfunction or clump together.

It is a major AI training problem because predicting the final 3D shape from the amino-acid sequence is extremely complex. The challenge comes from the huge number of possible shapes and interactions.

AI is meant to process massive amounts of data and propose solutions at a speed unthinkable less than a decade ago. Protein folding was solved and Deepmind’s team received a Nobel Prize in Chemistry for the latest version of their model. The benefits for healthcare are hard to quantify… but “game changer” about covers it.

So the real question is: what is AI’s limit in healthcare?

Hard to say. For most sectors, the bottleneck is the lack of specific data. That’s never been the case here, where the issue was enough compute to process it. That’s why healthcare should see a transformation like never before in the years to come.

But we know this doesn’t necessarily translate into market gains, because liquidity flows to the highest potential, not the best fundamentals. For years it’s been AI hardware and infrastructure, but the market is waking up to the rest. This last earnings season showed SaaS names weren’t as endangered and could generate cash from AI, and their stocks started to react.

But… isn’t healthcare even more impacted by AI?

Market Mechanisms

I’ll repeat things I’ve written many times - sorry to those reading it for the 100th time, but they matter.

You don’t need to be an IT engineer to invest in Nvidia. You don’t need to be an astrophysicist to invest in SpaceX. You don’t need to be a microbiologist to invest in healthcare research. The only thing you need is to understand why the market would get excited about it.

And the market is always excited about one thing: unlimited potential.

You know the common denominator of Micron, Nvidia, Palantir, Coherent or Nebius? The market couldn’t - and still can’t, anticipate their market size, revenues or future margins, because demand for a disruptive technology is impossible to anticipate.

The market would rather push stocks to “stupid” valuations, not because investors believe Palantir “deserves” 200x sales, but because they’d rather assume it earns it than miss out. If someone told you “this is the next Google,” would you care about the price you paid? No. You’d buy. Because you’d rather buy expensive than miss out.

Bubbles aren’t born of stupidity. They’re born of the impossibility to anticipate.

Now back to healthcare and AI. What’s the market for a company that cures a type of cancer? Degenerative diseases? Auto-immune ones? Or, less morbidly, menopausal symptoms, hair loss, and countless other “comfort” treatments?

I’m not necessarily one of those who believe humans will cure every disease on earth thanks to AI, but I am one of those who believe AI will accelerate research, not just in time and expenses, but in outcomes.

And that creates a situation where anticipating revenues, margins and market size becomes extremely complex for the market. A situation where investors are almost forced to create a bubble, because they’d rather be in it than out of it.

A 2025 study reported that using the AI system Transpara as a second reader in breast screening increased sensitivity by 8.4% and found more interval and future-detected tumors.

Another concrete case is clinical workflow automation: Chelsea and Westminster NHS Trust began piloting AI-generated discharge summaries for clinician review to speed patient throughput and reduce admin burden.

Palantir Foundry pilot: the trust reported a 28% reduction in an inpatient waiting list, theatre utilization improvement from 73% to 86%, and longer booking lead times (from ~6 to ~17 days) after using Palantir’s Foundry to unify scheduling, rostering, and waiting‑list data for operational decisions.

For drug discovery, the clearest real-world signal is that AI-designed or AI-optimized therapeutics had progressed into human trials by 2025–2026, showing that AI is already moving candidates into the clinic rather than staying in the lab.

In the rest of this article, I’ll cover the sector-wide breakout I’m seeing across 50+ charts, the proxy I’m using to play it with the least risk, and four de-risked names I’d actually buy. Plus the real risks (this is still biotech), my exact buys, and the portfolio changes I made this afternoon.

An entire sector is waking up after years asleep.

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Why such a difference between my content’s portfolio and my own? Because I have been overtrading, and I am sure many of you also have.

Volatility and noise are the worst combination, they trigger your emotions and reduce your focus; nothing matters anymore but to make up the loss of the last day or week, and doing so ends up making even bigger losses. Mistakes, on mistakes, on mistakes, until your spirit - and portfolio, breaks.

This is a classic pattern in investing and we are all guilty of it. The good thing is that we can work on fixing it and while my own mistakes were made earlier this year, this last week has been great. I stuck to my system.

Reviewing last month’s plan, most was spot on - getting rid of space names before the SpaceX IPO and trimming core hardware names like Soitec. There was one mistake: believing in SaaS. Those gave a pretty violent retest this month and went on to chase traders stop losses. The core thesis behind those names is the right one, but we have to give time for price action to develop - some are interesting today.

Short term, I see profit taking on AI hardware, a healthy leg up on energy and SaaS. I intend to play this by trading SaaS names - already started with Elastic and Oracle, hold energy names, and accumulate hardware when they reach my buying targets - which Founding Members have access to.

On the index, the important data is that buyers stepped up at the D50, once again, on both the S&P and Nasdaq.

But this isn’t a beautiful candle, the wick went to test that W21 and wicks have the bad habit of being retested. And evening was sold. The most important time of the market is the last hour, when buyers and sellers fight to decide the value of an asset before the market closes. When sellers overwhelm buyers for days in a row, the consensus is overall bearish, it means the market isn’t ready to bid higher just yet. Daily timeframes are really short, not what I use to make decisions, but it is worth noting.

So far, we are holding key supports, but without any fireworks. I wouldn’t be surprised if we were to start some choppy months with more pain in extended sectors.

Anticipation is Everything

The markets always focuses on the next wider narrative. For months, it has been the war in Iran but rapidly moved to the coming resolution, as both countries proved over the weeks that the conflict wouldn’t be long. So the market anticipated its conclusion, anticipated oil prices going back down and supply chain reopening. Because it had to happen, soon.

Now, it has. So the market focuses on the next narrative, inflation - as expected. The market always anticipates, you can’t buy the news, the market prices in anticipation. Inflation is expected, so the market prices it, now.

The Fed didn’t help with a hawkish tone and the removal of key forward data - which were mostly bullshit but the market used them as a support for projections. And BoFA added another layer with a note the market read as “inflation will kill us all” while it was more like “be mindful of the potential inflation”. So let’s start by putting some color on that.

What BoFA said is that they expect three rate hikes this year, for a total of 75bps. No one can predict this, but this is their view and they have every right to share it. But instead of panicking, let’s focus on what we know, can control, and our system.

1. Interest rates aren’t as important as they used to be. They create panic and hurt some businesses, but with the constant and accelerating fiscal deficit, higher rates are only taming slightly liquidity inflows, not stopping it.

2. Investing is about liquidity rotation; money goes to the highest potential returns. With higher interest rates, where are those? Not real estate, not cash, defensives or gold and silver, as both are falling after a massive speculative run. Meanwhile, private companies are developing the most deflationary technology ever created. So, where are the highest potential returns?

3. We have a system. We don’t know, we can’t know how the market will react. We buy strength and cut weakness; we don’t need to anticipate the market’s volatility spikes. If our stocks are weak, we sell. Strength, we buy. The in-between doesn’t matter.

To me, there is nothing else to it. I can comment but can’t anticipate. What I can do is manage my book, and I do so by following my convictions and price action.

Micron Earnings

There isn’t much to comment on, Micron is the new Nvidia; memory is the new GPU, and we already know and said many times that this trend of personalized hardware won’t slow down any time soon so more memory means more connectivity, more GPUs, more bandwidth…

The market focused on GPUs, focuses on memory, and will focus on another vertical tomorrow because eventually, they all matter and all grow in volume - and prices, eventually becoming the next chokepoint. No one can accurately forecast where this is going just yet, which means the market will continue to price in the best case scenario as it would rather create a bubble than miss out.

So this quarter was what anyone could have expected: a banger quarter with the confirmation of everything we’ve heard for months. I am not sure why anyone was surprised to be honest while every hardware management told us this would happen.

The quarter was amazing and the market responded to it, without much fireworks after such a run and anticipation, but it didn’t sell the news so it means it still can be surprised - which is a good thing as expectations were sky high.

Those stocks are going much higher, it’s just hard in terms of risk management to size a position here, and yet I could bet that most of those who bought on Friday will outperform the market by next month. But I won’t, because it doesn’t fit my system.

Overall Appreciation

Fundamentals are as strong, but the market is giving us some signals.

The next weeks will be different from the last. This isn’t a time to accelerate, but to slow down. It actually was a time to slow down the moment I shared this article about how close we were to the breather, but I - and probably you, didn’t. I saw that the market was starting to shift against my trades but kept going, thinking the next one was the good one.

The reminder of this article will look at strength and weakness pockets, review my own positions, watchlist and my short/medium term plan especially when it comes to liquidity rotation and inflows - as I still have some cash left.

I remain a buyer but keep in mind that some sectors might be starting their struggles, which could go on all summer after amazing performances this year. Some trades are crowded, and crowded by the wrong population while some other names, not less important, are completely deserted. Those are the ones I’ll be buying.

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What many investors forget is that stocks down 40% in a few days or weeks are often still up double digits year-to-date, and triple digits over the last year. Uptrends aren’t up only, especially on growth and narrative names. They’re a continuity of higher highs and higher lows, which can be stomach-wrenching enough to make you give up if you bought at the wrong time.

This article goes over a sector with exactly those characteristics: darlings turned into stinky socks from one week to the next, that few want to buy now that they’re down 40% in a month, while still up 100%+ over the last year.

I’ll cover the sector, the best setups, fundamentals, and my personal buys.

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You don’t need a lot of positions to make a killing. You only need to go heavy on a handful, and hold them until your thesis plays out or invalidates. Those who held Nebius, Silicom, Soitec and others were rewarded for doing nothing but buying at the right time. It’s that simple.

Today, I bought a new one.

A stock I’ve had on my radar for months, and written about already. It took weeks and patience for the breakout and the retest to happen, but we’re finally there. I opened a large position this morning, as I always do for core positions, and sent an alert to paid subscribers just after. The rest of this article covers why: the company, its narrative, its fundamentals, and how I plan to trade the name.

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I’m closing the Founding Member promotion after 147 of you chose to trust me for the months ahead. I thought 50 would be a successful launch, but we are once again in the #10 best sellers… This is way above anything I’d hoped. The best way to express my gratitude is to work twice as hard at making it worth your investment, so I will. My goal isn’t to simply share trades with entries and exits, but to improve the way we think about the markets, build investing systems that work for us, learn to make money by ourselves.

We’re here to learn together.

A few words on the structure moving forward. Nothing changes for free and premium subscribers. The first keeps access to the macro and fundamental/narrative portion of each write-up; premium keeps access to all current formats, including the detailed investment strategies and targets.

Founding Members have access to the chat where I share comments and alerts on swing/core positions, to my buying list updated and shared every weekend. They now also get dedicated write-ups for the swing plays, which used to be in the chat but were impractical. And I’m working on giving Founding Members daily access to my screener data through a website, so they can run their own research on the same base I do. Not ready to share it yet, but it’s coming.

I’ll use this write-up to quickly share my view, which is fairly positive. The S&P 500 and Nasdaq both bounced perfectly on their D50 - key medium-term trend, and reclaimed their D21 during the week, on volume. Buyers stepped up big, and we apparently keep buying the dip regardless of macro. Infinite optimism.

Still, I’d remain cautious. This week is K. Warsh’s first FOMC, and we know inflation is back, confirmed by the latest CPI and PPI prints. The market is pricing no hike, which seems right: inflation comes from softening past tariffs and oil pressure that looks close to resolution; though I’ll believe that when traffic is fully restored through the Strait, not before. The keynote will matter.

So caution, volatility should be strong but could go both ways. The U.S. market and the AI trade remain the best place for returns and therefore the best place for spare cash. That’s why it’s been ripping for so long. Don’t call the bubble until we have clear signs of it, and no, one highly anticipated IPO isn’t it. Not yet.

Now, the Founding Member swing plans.

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Today is the last day of the launch promotion, the final chance to become a Founding Member at $350/year, fixed. From tomorrow, this subscription will be $500/year.

Founding Members get the full write-ups, Substack chat with market updates and real-time buying alerts and my personal buy-target spreadsheet. Plus new content next week: my favorite swing setups, built on price action and option flow.

Everything is built around one system which combines stock picking and liquidity attribution and has outperformed for two years straight, publicly.

The alert portfolio, started April 7th and based on Substack’s chat alerts, is up 64.54%.

The core equal-weighted portfolio, built on my write-up theses and buy targets, is up 102.57% YTD.

The value here is quantifiable and verifiable. Not every trade is a win, but over time, the system generates alpha. I’m not here to play guru, tell you what to do, or show fake numbers. I’m here to share the journey honestly - my failures and my wins, both essential to learning the most important skill there is: how to make money with money. I don’t have all the answers. No one does; anyone saying otherwise is lying.

This is the last 24 hours at $350. The discount won’t be offered again.

Whether you join today or not, nothing changes; the content keeps coming, I stay available and I am extremely grateful for your time, trust and attention. We’re all after the same thing: not just returns, but the skill behind them.

The grind never stops.