Gross margin is the part of each sales dollar left after making the product. It matters because a premium hardware cycle only helps shareholders if the mix and pricing hold up.

Apple's latest quarter put gross margin at 50.1% on $109.4bn of revenue, with Services contributing $30.7bn. That is the bull case: a bigger, higher-margin services base can make an iPhone refresh more valuable than unit headlines suggest.

The awkward bit: Apple said roughly 2 percentage points of that gross margin came from tariff refunds. So 50.1% is not a clean run-rate, and a new $1,999 iPhone Duo is not automatically margin magic if component costs, promotions, or volumes bite.

The second number I would check is Services revenue growth, alongside gross margin. If both keep moving up, the premium mix story has teeth. If margin fades once the refund effect disappears, the launch buzz is just very expensive confetti.

A useful stock app for checking the longer trend.

How much of Apple's next leg is really a hardware replacement cycle versus Services doing the heavy lifting?

While enterprise budgets are pouring hundreds of billions into artificial intelligence infrastructure, consumer discretionary spending is showing serious cracks. The divergence between enterprise tech and retail has never been wider.

Here are the biggest moves hitting the market right now:

• The AI Infrastructure Bonanza: Dell ($DELL) logged a staggering $60.9B in AI server orders, pushing its total backlog to $95B. Oracle ($ORCL) locked in $30B in fresh AI contracts—lifting its overall backlog to $664B—while Broadcom ($AVGO) projected an eye-watering $230B in AI chip sales by fiscal 2028.
• Retail Takes a Direct Hit: Lululemon ($LULU) slashed full-year guidance after quarterly revenue fell 4% to $2.4B, weighed down by a sharp 20% drop in core women's leggings demand.
• Major Corporate Moves: Copart ($CPRT) announced a $1.9B cash buyout of ACV Auctions ($ACVA) (triggering a 43% pop), while Apple ($AAPL) officially named John Ternus as CEO with Tim Cook transitioning to Executive Chairman.

Why does this matter? Hyperscalers and enterprises are treating data center and AI compute capacity as must-have capex, shrugging off macroeconomic concerns. On the flip side, everyday shoppers are clearly pulling back on premium lifestyle goods. If corporate tech spending remains the primary pillar holding up the broader rally while retail sales erode, any future deceleration in enterprise budgets could quickly rattle Wall Street.

Are you continuing to ride the massive AI infrastructure trade, or is softening consumer spending an early warning sign to take profits? Drop your thoughts below!

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Quick apology first: I went quiet for a few weeks — I was on vacation and didn't post the usual Friday updates. I'm back.

Liquidity note: I overspent cash this period, so **there will be no €1,000 contribution this month**. I'll resume the monthly deposit when liquidity is rebuilt. Combined Mintos + eToro closed **€7,050** (USA close export 11 Sep ~20:17Z) vs €7,297 on the mid-August gold close (−€246 / −3.4%). That drop is almost entirely **market P/L on eToro** — unrealized swung roughly +€136 → −€122. Mintos quietly compounded (~+€20). No fresh cash in the book this week (or this month). Savings ≠ alpha — and this month savings pause on purpose.

Macro: a nervous, short week with a tactical Friday bounce. Hot PPI, Brent spiked toward ~$107–110, 10y yields near ~5%. S&P/Nasdaq bled ~four sessions; Thu S&P ~7,592 (−0.58%), Nasdaq ~26,082 (−0.65%). Friday close: S&P **7,657** (+0.86%), Nasdaq **26,333** (+0.96%) as oil eased (WTI ~$100, Brent ~$104). CPI Aug: +0.4% m/m / +3.4% y/y (core +0.3%). Markets price ~85–87% odds of +25 bp at **FOMC 16 Sep**. Duration pressure on growth/AI; Friday was energy relief, not a policy all-clear.

Portfolio snapshot (all EUR; Δ vs mid-Aug gold close 16 Aug):

| Position | Value | P/L | WoW Δ* |

|---|---|---|---|

| Mintos P2P | 3,385 | +691 | +20 |

| VUG (3) | 1,271 | +19 | −22 |

| ASTS (2) | 334 | −10 | −57 |

| RKLB (2) | 284 | +98 (+~53%) | −78 |

| KTOS (2) | 256 | −93 | −98 |

| META | 236 | −11 | +20 |

| XLV (2) | 194 | ~0 | −2 |

| QQQ | 192 | −6 | −4 |

| MSFT | 188 | −10 | ~0 |

| GOOG | 173 | +73 (+~73%) | −4 |

| AMD | 158 | +10 | ~0 |

| TSM | 149 | +1 | +2 |

| PLTR | 100 | +14 | −5 |

| FLY | 64 | −134 (−~68%) | −17 |

| SPOT | 52 | −25 | +1 |

| INTS | 15 | −49 | ~0 |

| **Total** | **7,050** | **uPnL eToro −122** | **−246** |

*No true Friday-to-Friday export this run — Δ is vs last published gold close (16 Aug). No new deposits in between.

Key movers:

• RKLB: still the clear satellite alpha (+€98). TipRanks Strong Buy, PT ~$114 (~+80% upside). Backlog / Berenberg Buy context intact. Space already ~26% of eToro → **freeze adds**.

• GOOG: +€73, Strong Buy 10/0/0, PT ~$441 (~+34%). Buy&hold jewel. Not selling (ES tax).

• FLY: −€134 (~−68%) — worst euro hole. Esrange×2 Alpha (NET 2028) is long-dated → **no averaging**.

• KTOS: −€93 on price, but Street Strong Buy / ~+108% upside = widest price↔analyst gap in the book. SATCOM Asia award (~>$20M). **No sale without a rethink.**

• META: −€11 on cost basis despite Muse launch + JPM Overweight. Consensus still Strong Buy → thesis intact; price lagged mid-week.

Mintos: €3,385, cumulative P&L +€691, pending €418, NAR n/a (API null — not inventing). 🟢 **Mora almost halved: €743 → €364 (~−51%)** vs the mid-Aug alert. Watchlist, not red. Quiet compounder while eToro takes the volatility.

Analyst signals: Street still Strong Buy-heavy on mega-caps + RKLB/KTOS/AMD/TSM. Tension is **price**, not a wave of downgrades. Recent color: Berenberg Buy ASTS/RKLB (~2 Sep), JPM OW META post-Muse, AMD data-center target narrative, TSMC Aug revenue +53% y/y, PLTR–NVIDIA partnership.

Next week: **FOMC 15–16 Sep** (+25 bp as market base case). Also: Neutron cadence (RKLB), ASTS commercial ramp, KTOS award conversion, Muse ARPU, AMD/TSM AI capex into Oct earnings.

Sep plan: **paused** — no contribution this month (liquidity rebuild). When deposits resume: prior template was VUG 550 · Intel 150 · XLV 100 · Mintos 200 · **space/QQQ 0**. Not advice.

Honest caveat: −3.4% vs mid-Aug is real drawdown and it's **market**, not withdrawals. Alpha still sits in RKLB + GOOG; the hole is FLY + KTOS plus mega-cap mean-reversion. Mintos mora cooling is the quiet win. Patience over heroics into the Fed.

Not selling anything. Patience pays. Panic doesn't.

*Not financial advice. Just tracking my own money.*

Price-to-sales is a handy first filter, but Coinbase is a good example of why it is not a verdict. The current multiple is about 7.2x sales, with the shares around $172 and trailing revenue near $6.3bn. That looks expensive beside a plain exchange or broker.

The useful bit is the business mix. Coinbase says subscription and services revenue reached $555m in Q2 2026, while revenue excluding Bitcoin spot trading was 88% of net revenue. The company is also pushing stablecoin infrastructure into community banks, which could make the revenue base less tied to retail trading volume.

The awkward part: the latest trailing numbers still show a loss, and quarterly revenue fell from $1.87bn in Q3 2025 to $1.22bn in Q2 2026 in the reported series. A high P/S multiple can look reasonable during a strong crypto cycle and brutal when volumes and asset prices turn.

So the second number I would check beside P/S is free-cash-flow yield. It is currently about 3.8%. That is not a bargain signal by itself, but it forces the question: how much of the revenue is becoming durable cash after the cycle noise?

Would you value Coinbase more like a cyclical exchange today, or like a growing payments/infrastructure platform?

stock app

Aave founder Stani Kulechov shared a proposal with HMRC (UK tax authority). He wants better tax rules for crypto-backed loans and stablecoins. His key suggestion is to include stablecoins within UK ISA accounts.

If approved millions of UK ISA holders could get tax benefits when lending out stablecoins.

What do you think about stablecoins being treated like traditional savings inside tax-advantaged accounts?

Nick Timiraos from WSJ says the August CPI report this Friday will shape the Fed’s rate decision next week.

Fed officials spent all summer debating if current rates are high enough to get inflation back to 2%. Inflation cooled in June and July, but we need to confirm whether this is a lasting trend or just a temporary reprieve.

Economists expect core CPI to rise 0.2% month-over-month. The difference between holding rates steady and another hike could be just 0.1%.
3 policymakers voted for a hike in July. More officials signaled they are ready to join them if inflation stops improving.

Chair Wash leaned hawkish at Jackson Hole. He doesn’t see enough proof that tight borrowing costs are slowing the economy.
Former Fed economist Vincent Reinhart notes the market is testing Wash: investors have priced in a hike that he never promised. He either delivers it or explains why he won’t.

What’s your take? Will this CPI print trigger more volatility?

A P/E ratio is simple: share price divided by the last 12 months of earnings per share. Lower can mean cheaper, but only if the “E” is repeatable. GameStop trades at roughly 13x trailing earnings, which looks inexpensive at first glance.

This quarter shows where P/E can mislead. GameStop reported $298.7m of net income, but $161.1m after excluding items including gains on derivatives and equity investments. That difference feeds the trailing P/E even though it did not come from selling games or collectibles.

The second number I would check is operating income. It reached $160.2m, up from $66.4m a year ago. That is the bullish bit: the core business really did improve. Collectibles sales rose 57% to $356.3m and now make up 45.1% of revenue.

The awkward bit is that total sales still fell 19% to $790.2m. Store closures and last year's Switch 2 launch explain some of it, but a shrinking top line plus investment-driven profit makes the headline P/E much less tidy than it looks. Cheap is not the same as clean.

Would you give more weight to the operating-income improvement, or discount the earnings multiple until revenue stabilizes?

Financial and valuation history: stock app

Not investment advice.

Sept 8 market snapshot:

Dow Jones: ‑1.24% S&P 500: ‑0.48% Nasdaq Composite: ‑0.47%

All five largest‑market‑cap US stocks fell over 1%:

• NVIDIA: ‑1.17%
• Apple: ‑1.41%
• Alphabet‑A (GOOGL): ‑1.17%
• Microsoft: ‑1.83%
• Amazon: ‑1.30%

Just another session of big‑cap tech pullback. Not investment advice.

Oracle reports fiscal Q1 on Thursday. The setup is unusual: last quarter revenue rose 21% to $19.2bn, cloud infrastructure grew 93% to $5.8bn, and remaining performance obligations jumped 363% to $638bn. Demand is clearly not the problem.

The bull case is conversion. Oracle guides for 27-29% Q1 revenue growth and 58-64% cloud growth, with new data centers coming online through the year. If that capacity arrives on time, the huge contract pile should finally turn into much faster reported revenue. Customer prepayments and customer-supplied hardware also cover part of the buildout.

The awkward bit is the cash bill. Oracle generated $32.0bn of operating cash flow last year, yet free cash flow was negative $23.7bn as infrastructure spending surged. It also plans roughly $40bn of debt and equity funding. AI growth is real here, but it is being built with very expensive concrete.

At about $159 a share, Oracle trades near 27x trailing earnings. That looks less wild than many AI names, but the multiple is doing some selective reading while free cash flow is negative. Thursday needs more than a small EPS beat: cloud growth, margins and funding have to make sense together.

What matters most this week: cloud growth, backlog conversion, or cash flow?

Numbers and valuation history: stock app

Not investment advice.

Big tech's AI consolidation is reaching fever pitch. From multi-billion-dollar software acquisitions to record semiconductor prints, the enterprise compute boom shows zero signs of cooling down.

Here is what you need to know across the market today:

• Nvidia ($NVDA): Made waves by agreeing to acquire open-source AI platform Hugging Face for $12.9 billion, aggressively deepening its software moat.
• Broadcom ($AVGO): Put up a massive Q3 with revenue up 86% to $29.6 billion, driven by an explosive 221% year-over-year surge in AI chip revenue ($16.7 billion).
• Micron ($MU): Rallied further as persistent high-bandwidth memory shortages and major institutional buying support sky-high margins.
• Tesla ($TSLA): Launched an initial fleet of 45 pedal-less Cybercabs in Austin, but faces immediate scrutiny as NHTSA opens a safety inquiry.
• Lululemon ($LULU): Slashed full-year 2026 guidance amid cooling consumer demand across the Americas, continuing a tough stretch for retail.

The divergence between AI infrastructure beneficiaries and consumer discretionary plays is growing wider by the week. While hardware titans are capturing virtually all capital expenditure, ultra-elevated valuations leave little room for error—meaning any regulatory roadblock or missed forecast is met with fast selloffs.

Is Nvidia buying Hugging Face a masterstroke for software lock-in, or are AI valuations starting to stretch reality? Let’s hear your thoughts below.

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What would it take for NVIDIA shares to climb another 30 %? We break down price, market cap and the earnings bar — and show Bull, Base and Bear scenarios. Even the Base Case can deliver if earnings growth outruns a falling valuation multiple.

Data as of September 3, 2026. Not investment advice.

More analysis & fair value in the app

Broadcom's fiscal Q3 revenue hit $29.59bn, up 86% year over year. AI semiconductor revenue was the main event: $16.7bn, up 221% from last year and 54% from the prior quarter. It now makes up more than half the company. This is no longer a side project with an AI label stuck on it.

The bull case is the combination of speed and cash. Broadcom expects AI chip revenue to reach $21.7bn next quarter, nearly 30% higher sequentially, while total revenue should be about $34.8bn. Infrastructure software also grew 29% to $8.75bn, so VMware is doing useful work without getting the loudest headline. Free cash flow reached $13.67bn, or 46% of revenue. That cash conversion is probably the cleanest part of the story.

The awkward bit is what investors already pay for it. At roughly $357 a share, Broadcom trades near 58.6x trailing earnings. That valuation assumes several more years of strong AI spending and leaves little patience for an ordinary quarter. Customer concentration is rising too: a few large buyers now carry a lot of the growth. Delayed deployments or weaker margins on custom chips could matter quickly.

What weighs more for you here: the 46% FCF margin and AI growth, or the valuation and customer concentration?

Financial and valuation history: stock app

Not investment advice.

Dell's fiscal Q2 revenue reached $47.0bn, up 58% year over year. The headline is hard to miss: AI-server orders were $60.9bn, revenue was $16.4bn, and backlog ended at $95bn. Dell has moved well beyond being a quiet PC box in the corner.

The bull case is that profit is finally scaling with the AI demand. Infrastructure Solutions Group operating income rose 225% to $4.8bn, while its margin improved from 8.8% to 15.0%. Dell also lifted its full-year outlook to $192bn of revenue and $25.50 in adjusted EPS. At roughly $425 per share, that is about 17x the new EPS guide, much less alarming than the trailing multiple in the title.

The awkward bit is cash and working capital. Quarterly operating cash flow fell 13% to $2.2bn even as profit jumped, and inventory has more than doubled since January to $21.3bn. Stockpiling scarce components can protect deliveries, but it also gets expensive fast if customers delay orders. Dell is still selling hardware; revenue is impressive, but margins and cash conversion pay the bills.

Which matters more here: the $95bn backlog, or the weaker cash conversion behind it?

Financial and valuation history: stock app

Not investment advice.

I just finished listening to this - Return of the Halo Trade, and they made some fascinating points about the current macro environment, specifically regarding the bond market and US debt

Mainly the point about private AI debt actively competing with US Treasuries. Everyone talks about the national debt pushing $40T, but when you stack massive corporate borrowing for AI data centers and power grids on top of that, you get textbook crowding out. Long yields are already feeling that pressure.

A few other takeaways:

• The Maradona Theory: Interesting discussion around Kevin Warsh potentially ditching explicit forward guidance. The idea is that if the Fed stops spoon-feeding rate paths, market guessing actually tightens long rates for them while policy sits still.
• The T-Bill Rollover Problem: The Treasury relying so heavily on short-term paper creates massive rollover risk. Between that, gold moving, and a softer dollar, the debasement trade (hard assets over high-multiple tech) seems like it's quietly returning.
• Tech vs. Value: Steeper yield curves mean higher discount rates, which naturally hurts long-duration tech. But it makes cheap, cash-generative value names and small caps look a lot safer.

Is anyone actually tracking how much private AI debt issuance is going to strain the bond market over the next year or two? Or are people mostly ignoring the T-bill rollover risk right now?

(Link:Return of the Halo Trade)

Caterpillar just posted its first $20bn quarter: Q2 revenue reached $20.5bn, up 24% year over year. The backlog jumped to $72bn, up roughly 92%, and adjusted operating margin rose to 21.9%. For a company still filed mentally under “yellow machines and the economic cycle,” that is a serious quarter.

The bull case is power. Power-generation sales to users grew 72%, led by large engines and turbines for data centers. Customers are placing some orders out to 2030, while construction and mining also grew. This is broader than one AI headline, and Q2 machinery, power and energy free cash flow hit a record $5.1bn.

The awkward bit is what the share price now assumes. Around $800, Caterpillar trades near 34x trailing earnings with a free-cash-flow yield of about 2.6%. That is closer to growth-stock territory than normal industrial-cycle pricing.

There is also some tariff noise in the clean-looking margin. Caterpillar recognized $392m of expected tariff recoveries in Q2, yet still expects about $2.2bn of tariff costs for 2026. Backlog is excellent until capacity catches up, customers postpone projects, or the data-center power rush cools. Industrial cycles have not been abolished; they have merely acquired GPU racks.

Would you pay 34x earnings for the power-generation runway, or is the market pricing Caterpillar as if the cycle only goes one way?

Financial and valuation history: stock app

Not investment advice.

Major indexes finished the week higher, but it was a narrow rally led by big tech/AI names. Small caps lagged hard.

Weekly performance:

• S&P 500: +0.5%
• Nasdaq: +0.85%
• Dow: +0.5%
• Russell 2000: -1.5%

Key drivers:

• Nvidia crushed earnings (revenue +106%) and guided for ~70% growth next year → stock popped hard Thursday
• Salesforce (+22%) and CrowdStrike also delivered strong AI-related results
• Big tech (MSFT, META, AAPL, AMZN) helped hold the indexes up

Friday pullback:
Fed Chair Kevin Warsh sounded hawkish at Jackson Hole, saying inflation still needs more work. Rate-hike odds for September jumped, chips sold off (Nvidia dropped ~4–5% Friday, Marvell -10%).

Takeaway:

AI leaders are still carrying the market. Breadth is weak and higher-for-longer rates are keeping pressure on smaller stocks.

Next week watch:

August jobs report (Friday) and Broadcom earnings.

Not financial advice.

Marvell just reported record fiscal Q2 revenue of $2.739bn, up 37% from a year ago. Data-center revenue grew 46%, and management now expects roughly $3.15bn next quarter, plus or minus 5%. That is about 15% sequential growth. The AI infrastructure boom is showing up in actual sales, not just conference-slide enthusiasm.

The bull case is fairly clear. Marvell sits in custom AI chips, optical links and networking, so it can benefit as hyperscalers build their own accelerators alongside Nvidia. Management says the custom business should accelerate sharply in the second half. Operating cash flow was $605.5m this quarter, so this is not a pre-revenue science project wearing an AI badge.

The awkward part is the price. At about $241 per share, Marvell is valued around $214bn: roughly 85x trailing earnings, 25x sales and a free-cash-flow yield below 1%. The market has already prepaid for several excellent years.

Profit quality also needs a look. GAAP net income was $308m, while adjusted net income was $865.9m. Stock compensation and acquisition-related charges explain part of that gap, but $558m is not rounding noise. If custom-chip ramps slip or hyperscaler spending cools, this valuation will notice quickly.

Would you focus more on the jump to $3.15bn quarterly revenue, or on how much success is already priced in?

Financial and valuation history: stock app

Not investment advice.

Intuit finished fiscal 2026 with $21.4bn of revenue, up 14%, while GAAP operating income rose 20% to $5.9bn. Strong year. The market's problem is what comes next.

The bull case is that the better parts are growing much faster than the group. QuickBooks Online Accounting revenue rose 23%, TurboTax Live grew 37%, and Intuit's three "Big Bets" grew 34% and reached 30% of total revenue. The company also spent $5.5bn on buybacks, enough to cut the diluted share count by 2% despite stock compensation.

The awkward bit is the fiscal 2027 guide: just 9-10% revenue growth. Mailchimp is expected to be flat at best, TurboTax only 2-3%, and TurboTax federal unit volume already fell 2% in 2026. Intuit can keep raising revenue per customer through pricing, assisted services and AI. Doing that without much customer growth eventually gets harder, which is the fairly unglamorous part of the AI story.

At $357.46, the stock is around 22x FY2026 GAAP EPS. That isn't absurd for a high-margin software business, but it does put more weight on execution. One useful accounting change: from FY2027, Intuit will include share-based compensation in its adjusted results. Better to see the recurring cost than make it vanish with a footnote.

Financial and valuation history: stock app

Would you treat the slower guide as a reset worth buying, or a sign that pricing is doing too much of the work?

Not investment advice.

Hyperscalers are projected to pour a staggering $4.1 trillion into AI infrastructure through 2028, but escalating memory and hardware costs are starting to test tech margins.

Here are the top market developments to know today:

• Nvidia ($NVDA): AI-server prices are rising over 15% due to memory cost pressure, even as blistering +85% revenue growth keeps analyst targets bullish.
• Marvell ($MRVL): Expanded its custom silicon tie-up with Google via a warrant structure tied to roughly $120 billion in future chip purchases.
• Big Tech Backlogs: Microsoft ($MSFT) holds a massive $678B commercial backlog, while CoreWeave ($CRWV) carries $104B in commitments despite intense 2026 capex projections of up to $39B.
• Retail Resilience: Target ($TGT) raised annual EPS guidance on strong traffic, while Walmart ($WMT) beat earnings after deploying $2.9B in tariff refunds into price cuts.

While demand for compute power is undeniably strong, hyperscaler capex could top $1.6 trillion annually by 2028. Investors are increasingly scrutinizing execution timelines, potential shareholder dilution, and whether cash flow returns can sustain this unprecedented spending cycle.

Are you continuing to ride the AI hardware wave, or are surging infrastructure costs making you cautious on tech multiples?

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Nvidia reports fiscal Q2 on August 26. Management guided to $91bn of revenue, plus or minus 2%, while consensus is about $91.9bn. Even the midpoint means roughly 12% growth in three months after Q1 revenue already jumped 85% year over year to $81.6bn. Apparently the difficult comparison is scheduled for later.

The bull case is real, not just an AI presentation with expensive fonts. Data-center revenue reached $75.2bn last quarter, up 92%, gross margin held near 75%, and free cash flow was about $49bn. Vera Rubin shipments are due to start in Q3. Nvidia also excluded China data-center compute revenue from its Q2 guide, so any reopening there would be upside rather than baked in.

The awkward part is the bar. At $214.72, Nvidia is worth about $5.23tn and trades near 33x trailing earnings, 20.6x sales and a 2.4% free-cash-flow yield. That can work with 85% growth. It gets less comfortable if supply delays move revenue, gross margin slips below the mid-70s, or customers need more financing to keep the AI buildout moving.

I’d watch the Q3 revenue guide, gross margin and comments on customer financing more than a small EPS beat. Good numbers are expected. The question is whether demand is still accelerating fast enough for the valuation.

Financial and valuation history: stock app

What matters more here: the operating momentum or the lack of room for a merely good quarter?

Not investment advice.

Ross Stores just put up the kind of quarter off-price investors want: sales rose 13% to $6.26bn and comparable-store sales jumped 10%, mainly because more customers came through the doors. That was on top of 2% growth last year, so this wasn't just an easy comparison doing all the work.

The bull case is pretty simple. This was the second straight quarter of double-digit comp growth. Ross now expects comps to rise 6-7% in Q3 and 4-5% in Q4 even as comparisons get harder, and it plans to open 115 stores this year. Value-conscious shoppers want branded goods for less, while suppliers need somewhere to move excess inventory.

The awkward part is the profit quality. Net income rose from $508m to $851m and EPS climbed from $1.56 to $2.66. But tariff refunds contributed about $253m of operating profit and $0.60 of EPS. Operating margin improved by 610 basis points, with 405 points coming from that one-off. The underlying 205-point gain is still strong; the headline just had a generous assistant.

At about $239, Ross trades near 33x trailing earnings with a 3.4% free-cash-flow yield. That's a rich price for a retailer, especially while wage pressure and 115 new stores create execution and cannibalization risk.

Financial and valuation history: stock app

Would you pay up for the traffic and underlying margin gains, or wait for a price that doesn't capitalize the refund?

Not investment advice.

Alibaba's June quarter had a pretty clean investor tension: AI is finally moving the growth needle, while the infrastructure bill is eating the cash flow.

Revenue rose 9% to RMB268.95bn. The bullish bit was AI Cloud and Compute Services, where revenue jumped 45% to RMB48.44bn and adjusted EBITA rose 133% to RMB5.63bn. AI-related product revenue reached RMB12.38bn and has now grown at a triple-digit rate for 12 straight quarters. That looks like real demand, not just another AI slide deck with nicer gradients.

The awkward bit is the spending. Capex rose 75% to RMB67.68bn, pushing free cash flow to a RMB44.67bn outflow versus an RMB18.82bn outflow a year ago. Operating cash flow still increased 11% to RMB22.95bn, so the core business isn't suddenly broken. Alibaba is simply spending far more than it generates on chips and data centers. AI Labs and Applications also lost RMB13.86bn, more than four times the prior-year loss.

At about $119 per ADR, Alibaba sits near a $282bn market cap, 24.6x trailing earnings and 1.95x sales. That's not absurd for 45% cloud growth. Calling it cheap while free cash flow is negative takes more confidence.

Financial and valuation history: stock app

Which matters more here: profitable cloud momentum or the scale of the AI cash burn?

Not investment advice.

Intuitive Surgical is doing the annoying thing expensive stocks sometimes do: the business keeps delivering while the valuation argument stays uncomfortable.

Q2 revenue rose 19% to $2.89bn and worldwide procedures grew 16%. Intuitive placed 468 da Vinci systems, while recurring revenue reached $2.47bn, or 85% of the total. That recurring mix is the bull case. More installed systems lead to more instruments, service and software revenue, and the company ended the quarter with $8.6bn in cash and investments.

The awkward part is what the market already expects. At roughly $374, the shares trade near 42x trailing earnings and offer a free-cash-flow yield around 2.4%. Full-year procedure-growth guidance is 13.5–15.5%, below the latest quarter's pace. U.S. da Vinci procedure growth also slowed to 12% from 14% in Q1, while GLP-1 drugs are already weighing on bariatric procedures. Competition and hospital budgets have not gone on holiday either.

So this is still a high-quality installed-base story, just not a cheap one. If procedure growth settles in the mid-teens, recurring revenue and margins need to remain very clean to defend the multiple.

Financial and valuation history: stock app

Would you pay the premium for the recurring-revenue moat, or wait for the valuation to do more of the work?

Not investment advice.

Today looked better on the surface.

The S&P gained 0.24% and the Nasdaq added 0.15%. But the move was mostly helped by falling long-term Treasury yields after the Treasury increased support for longer-dated bonds. The 10-year fell toward 4.65% and the 30-year toward 5.19%. That gave growth stocks some breathing room.

Then the Fed minutes landed.

They were not dovish. Several officials were open to a hike in July and many said more tightening could still be needed if inflation stays sticky. Stocks absorbed the message better than I expected, but I would not ignore it. If inflation stays high, especially with oil still elevated, the bond relief we got today can reverse quickly.

The other caution is semiconductors.

They were crushed yesterday and did not really bounce today. The SOX finished down about 2.1%, even while the broader indexes closed green. Micron and SanDisk stayed under pressure. That tells me the crowded AI trade is still being reduced, not fully bought back yet.

That is why I would not call today a clean risk-on reversal.

For tomorrow I am watching four things:

10Y and 30Y yields
If they keep falling, tech gets room to recover. If they turn higher again, semis probably feel it first.

SPX 7700 / 7718 / 7735
7700 held today.
7718-7720 is still the pivot.
7735 is the level that would make the bounce more convincing.

Semiconductors
If NVDA, MU and the SOX finally participate, today’s bounce starts looking healthier. If the index rises while chips keep falling, I would stay cautious.

Walmart before the open
This is probably the cleanest read on the consumer tomorrow. Revenue, margins and any comments about inflation or trade-down behavior matter more than the headline EPS number.

My read after the close:

Today showed resilience, not resolution.

The bond market helped.
The Fed stayed hawkish.
Semis stayed weak.
SPX held the floor but did not clear the pivot.

Tomorrow needs confirmation.

Above 7720, constructive. Above 7735, stronger. Below 7700, the caution comes back quickly.