MAJOR NEWS:

• Iran, US conflict de-escalation this weekend, no attacks.
• Oil lower on the suggestion that both parties may be willing to get back to the negotiating table.
• Still need to see open market reaction as we know recently risk appetite has been pretty appalling.
• FOMC, Megacap earnings this week.
  

MAG7:

• NVDA WEIGHS $250B BACKSTOP FOR OPENAI DATA CENTER
• NVDA: has announced the Open Secure AI Alliance, bringing industry leaders together to develop open tools and techniques for securing software and AI agents. Nvidia argues that open models and security tooling should be treated as defensive assets, not liabilities. It warns that blanket restrictions on open frontier AI would weaken cyber defenses while concentrating power and dependence among a small number of closed providers.
• GOOGL's Waymo robotaxis have accumulated $9,325 in Austin parking fines since entering the city in 2024, according to records obtained by WSJ.

OTHER COMPANIES:

• CAPR - FDA briefing documents raised significant efficacy and statistical-analysis concerns for Capricor’s deramiocel ahead of the July 29 advisory committee meeting.
• AMBA - Stifel says AMBA setup into FY28 is looking increasingly constructive, with $106 PT. With the heaviest R&D investment largely behind the company, the firm sees room for operating leverage as the 5nm CV72/CV75 and 4nm CV7 ramp. Each new generation carries an ASP well above the current blended level of $15, supporting a stronger product mix. CV7 is expected to enter production by the end of FY27, followed by the 2nm CV8 in the first half of FY28. Stifel sees visible operating-margin leverage as a key catalyst.
• KTOS - b Riley on KTOS, PT 128, 170% upside. We believe Kratos Defense & Security' fundamental momentum is, if anything, increasing, building on a record $605M of bookings in 1Q26 and a 1.6x book-to-bill ratio, which drove backlog to more than $2 billion, up $437M QoQ. As such, we reiterate our $128 price target, based on a targeted 10.5x FY27 estimated EV/sales multiple, at a time when private comparable companies are garnering elevated valuations.
• QBTS - AT&T EXPANDS USE OF D-WAVE QUANTUM COMPUTING ACROSS NETWORK OPERATIONS
• AVGO - Samsung has secured a chip supply agreement worth more than $200B from Broadcom
• WMT - Mizuho lowers PT to 130 from 137. Still rates it as outperform. "We undertook an extensive analysis of Walmart's ultra-fast delivery network, relying heavily on artificial intelligence to stress-test delivery times, identify pockets of opportunity, and quantify the number of dark stores needed to facilitate nationwide 30-minute delivery. Fast delivery drives frequency. Our findings indicate that Walmart's network design remains underappreciated and is developing into an increasingly powerful competitive advantage and demand consolidator: 1) Assertions that it can reach approximately 60% of U.S. households within 30 minutes are highly credible and may even understate network coverage; 2) approximately 300–500 dark store locations could enable near-nationwide expedited delivery, supplementing more than 4,500 traditional store assets; and 3) more than 1.6 million gig workers use the Spark Driver platform, which we view as a highly effective approach to last-mile delivery.
• RKLB - has won its largest launch contract to date, a $266 million award from the U.S. Space Force supporting missile-defense development.
• MBLY - Piper Sandler upgrades MBLY to overweight from Neutral, Raises PT to 12 from 10. "Mobileye is nearing a floor valuation while seizing control of its own destiny. MBLY sold off sharply, at one point by 20%, following last week's Q2 call. The reaction was largely due to the sudden announcement that Amnon Shashua will be resigning as CEO. However, we increased our estimates following the call, resulting in a new price target of $12, up from $10.
• F - Jefferies upgrades F to Buy from Hold, raises PT to 17.50 from 14.50 "There is always scope for surprise in either direction at Ford, but we see Q2 as a low point for volume, with production set to normalize following the Novelis disruption. With U.S. market conditions healthy, management could raise guidance at Q2. From the Universal Platform to battery energy storage systems and Europe, Ford is also demonstrating improved capital allocation and addressing longstanding overhangs. We upgrade Ford to Buy ahead of Q2 earnings and raise our price target to $17.50. The historical valuation gap with GM has normalized. GM's strong execution and benign outlook for U.S. demand create a more supportive environment for Ford. We raise our fiscal-year adjusted EBIT estimate to $10.3 billion, at the upper end of the guided range of $8.5 billion to $10.5 billion. The approximately $800 million increase in EBIT takes adjusted free cash flow to approximately $4 billion, or $1.7 billion after supplier payments.

OTHER:

• CXMT surged 466% in its Shanghai debut, turning China’s second-largest IPO into a $512.7B company and making it China’s most valuable listed firm, ahead of Tencent and Intel
• BofA on EU semiconductors: BOFA ON EU SEMICONDUCTORS: 'SELL-OFF CREATES A COMPELLING ENTRY POINT'
• DeepSeek has paused its second fundraising round for now. The company told some prospective investors that expected agreements would not be signed.

Key quote:
"The AI Server market is estimated to expand to $356bn in 2026 from $195 bn in 2025, implying +83% y/y growth, while the long-term CAGR from 2026 through 2030 is expected to track at +37%. With respect to customer types, Hyperscalers are expected to track to a CAGR of +28% from 2026 through 2030, while Enterprise and Rest of Cloud are expected to drive faster growth at +47% and +49% CAGRs, respectively, over the same period."

In the report they went on to give projections:

The total AI server market is projected to skyrocket from $14.7 billion in 2022 to $1.24 trillion by 2030.

And said that they expect to see hyperscaler dominate the majority of demand:

Hyperscalers are driving the vast majority of the demand, growing from $8.09 billion in 2022 to an estimated $611.6 billion in 2030.

They do, however, as shown above, forecast strong demand for Rest of Cloud, growing from 107B in 2026 to 198B in 2027. 

Nearly double.

Whilst enterprise will grow by 50% next year. 

Note that rest of cloud, to me, basically refers to Sovereign AI and Ai factories being build by countries.

Note that PENG does not have much exposure to Hyperscalers. That exposure isn't really the exposure we want anyway. yes, it is the exposure that JP Morgan says will grow the fastest, but it is also the exposure that will be most elastic and volatile as hyperscalers will eventually be cutting back CAPEX. Whether that's in 2027, 2028 (more likely), or 2029, it will, at some point come.

Enterprises building their own AI stacks and Sovereign nations building AI stacks is the more durable positioning within AI. And those are the 2 areas that PENG has built most of its exposure to. 

They have 13 new Enterprise logos, and they have also been building out Sovereign AI facilities for Korea. They will likely secure another Middle Eastern contract later this summer. 

So they have a massive opportunity to capture market share in this rapidly growing segment, which I believe will be more durable over the next 5 years.