The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:

The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.

All eyes on the Fed Chair press conference now at 2:30 PM ET. The link to watch is attached:

In my experience reading the tape, I have noted that when distribution occurs, particularly in a sell-off or a bear market, indices and stocks often open higher and then sell off during the day. We frequently close in the bottom 5% of the day’s range.

To use this information practically:

• if you are looking to reduce exposure, sell any "rips" at the open, as that is usually the best time to do so.

• If you are looking to buy the dip, it often makes sense to wait until the end of the day because we will likely end near the session lows.

• If a stock ends at its daily low on Friday, it may be worthwhile to leave room for a potential gap down on Monday.

While this is mostly anecdotal, the evidence supports it. Back testing shows approximately 35% to 40% of the time, we end in either the bottom 5% or the top 5% of the daily range. This is statistically significant.

To put this into practice, look at the price action of your own holdings today, as well as their behaviour throughout this week and last. You will se the pattern holds.

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Below are some examples from today including a stock like MU which has not been following the indices:

While this practical tip may seem like it only moves the needle a small amount, but such adjustments can add up to several percentage points of performance over a period of time.

Thank you for reading and see you for the next one!

• Mega-Cap Tech: 29.90%

• Emerging Markets & Cross-Border: 17.30%

• Biotech & Healthcare: 15.20%

• AI Infrastructure & Compute: 14.80%

• Cash: 11.50%

• Software: 7.00%

• Industrials & Other: 5.80%

• Crypto & Digital Assets: 5.20%

• Consumer Brands: 2.70%

There is also a cash position of around 10%.

Complete asset allocation in one image below, followed by a breakdown of current positions and commentary:

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Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll to here for my Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

Indices

Dow Jones Industrial Average declined -1.57% in the last week

S&P 500 declined -0.80% in the last week

Nasdaq Composite declined -0.66% in the last week

IWM declined -2.41% in the last week

Key upcoming economic events

Monday, September 14

• U.S. Treasury 3-Month and 6-Month Bill Auctions

Tuesday, September 15

• FOMC Meeting begins (two-day meeting, decision Wednesday)

• NY Empire State Manufacturing Index (September)

Wednesday, September 16

• FOMC Interest Rate Decision and Summary of Economic Projections (2:00PM ET)

• Fed Chair press conference (2:30 PM ET)

• Retail Sales (August)

• Import and Export Price Indexes (August)

• NAHB Housing Market Index (September)

• Business Inventories (July)

• Net Long-Term TIC Flows (July)

Thursday, September 17

• Housing Starts and Building Permits (August)

• Philadelphia Fed Manufacturing Index (September)

• Initial Weekly Jobless Claims

Friday, September 18

• Conference Board Leading Economic Index (August)

• U.S. Industrial Production & Capacity Utilisation (August):

• Fed Speaker: Scheduled remarks from Fed Governor Michelle Bowman.

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at $7656.98, 0.65% above the 50SMA and 6.90% above the 200SMA.

RSI 50.0

11.64% YTD

Distribution days in the last week: 2

Although the S&P 500 lost the 50 SMA mid-week, it closed out the week above it but below the 21 EMA. While it failed to close above the 21 EMA, this rally after a slightly hotter core CPI is constructive. However, the upcoming FOMC meeting is likely to be a major market-moving event to watch this week.

COMPQ

Currently trades at $26333.04, 1.10% above the 50SMA and 7.58% above the 200SMA.

RSI 51.82

13.33% YTD

Distribution days in the last week: 1

The Nasdaq remains above its key moving averages, including the 21 EMA, despite pulling back to the 50 SMA for the third consecutive week. Price held this 50 SMA support with a nice recovery due to a push higher on Friday, allowing the index to close above the 21 EMA.

BTC (currently Long)

Currently trades at $77,099.58, 8.34% above the 50SMA and 9.93% above the 200SMA.

RSI 54.56

-13.11% YTD

Bitcoin traded sideways around its 21 EMA all week, despite a strong push higher on Wednesday. While BTC holds above all its key moving averages, the $80k–$82k zone continues to act as heavy resistance, a crucial overhead level that bulls need to clear.

EEM

Currently trades at $67.84, 3.01% above the 50SMA and 9.84% above the 200SMA.

RSI 55.15

21.25% YTD

EEM held the 21 EMA as support again (see arrow) and pushed higher past the 5 EMA. Price is still comfortably sitting in an uptrend after the 21/50 MA cross I highlighted two weeks ago. Bulls will want to see the 21EMA level hold to see the uptrend continue.

GOLD (Long Physical)

Currently trades at $4348.10, 2.00% above the 50SMA and 4.00% below the 200SMA.

RSI 47.66

YTD +0.04%

Gold struggled to break above the 21 EMA this week after it was rejected at the underside of it’s 200 SMA last week (see arrow). Price continues to remain above the 50 SMA, but bulls will want to see price clear the 200SMA soon.

SOXX

Currently trades at $527.07, 0.84% below the 50SMA and 20.80% above the 200SMA.

RSI 51.37

68.21% YTD

SOXX continues to trade below its 50 SMA, which is acting as resistance, though it managed to close just above the 21 EMA. As I noted last week: “Bulls will want to see both the 21 EMA and the 50 SMA reclaimed to restore longer-term momentum.” Clearing the 21 EMA and securing a 5/21 EMA cross are constructive signs, but bulls will now want to see a decisive reclaim of the 50 SMA.

SKHY (Currently Long)

Currently trades at $190.07

RSI 62.89

13.13% YTD

As we noted last week: “Bulls will want to see IPO AVWAP continue to hold, the 178 resistance breached, and then a new ATH.” SKHY delivered exactly that this week, hitting a new ATH and running up to test 200, where it met resistance. We trimmed our position at 197 and 199, sending the alerts to all free and paid subscribers as it happened.

GOOGL (Currently Long)

Currently trades at $338.50, 2.44% below the 50SMA and 0.63% above the 200SMA.

RSI 46.91

7.62% YTD

Over the last 15 years, buying GOOGL on a reclaim of the 200-day simple moving average has produced an average 12-month forward return of roughly 32–35% (Source: Grok). It’s worth noting that Google closed the week back above the 200 SMA, and bulls will want to see that hold. The 50 SMA, currently at 346, is the next level to reclaim.

META (Currently Long)

Currently trades at $648.03, 7.84% above the 50SMA and 4.09% above the 200SMA.

RSI 67.18

-0.19% YTD

META reclaimed the 200 SMA this week on the back of releasing Muse, its new AI agent. The stock rallied into the mid-$660s before somewhat predictably finding resistance at the diagonal trendline that has served as resistance for many months now (see arrow). Bulls will want to see a breakout of that trendline and a close above it soon.

Conversely, some may prefer to trade short versus that level with a tight stop.

XBI

Currently trades at $156.20, 1.26% below the 50SMA and 14.76% above the 200SMA.

RSI 31.22

28.66% YTD

Last week I highlighted: “If price can stay above the 21 EMA, we can see a continuation of the rally. Otherwise, a selloff to the $158 support (50 SMA) is not out of the question.” . This week, we saw that play out as price fell below the 21 EMA and sold off beyond the $158 support level. Price closed the week below the 50 SMA, which is not constructive.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 39.2%

Breadth decreased significantly this week, with the percentage of stocks above the 50-day moving average now at 39.20% compared to 47.8% last week.

Notable portfolio changes in previous week (all updated live in subscriber channels):

• NOW — Removed cost basis at 148 for the +60% gain.

• CIFR — Exited cost basis at $19.23 for +28% gain, on round 6 trading this stock each time profitably.

IMPORTANT: To familiarise yourself with the notification process, please read the following post regarding the notification system.

• I have also included the link to the Live Updates thread on the Substack chat below, which is where I post all moves related to my investment account. Turn the notifications on and access via following link: Live Updates Thread

• Note that these updates are posted simultaneously on Discord as well.

Current Positions in Size Order with Cost Basis (Investment Account) as of September 14, 2026:

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They are highly relevant to the AI infrastructure boom. The buildout of AI data centres is pushing power demand increasingly higher. As the power requirements in a data centre increase, so does the need for managing it efficiently across the entire rack. Every watt lost in conversion is a watt that isn’t being used for compute, and it gets wasted twice due to the “double penalty” of data centre efficiency (once as lost electricity, and again in the cooling needed to balance the heat it created). Power semiconductors help ensure efficient conversion to make the most out of all the power flowing through data centres.

Beyond AI, these chips perform a similar function in electric vehicles and industrial applications, and right now, these two major demand sources are pulling the industry in different directions. Electric vehicles, the longtime largest end market, are still working through a 2019-2024 capacity overbuild and remain in a downturn. Meanwhile, AI data centres, moving towards a new 800VDC power delivery standard, are growing fast and running short on supply. NVIDIA is racing to lock down components across that AI power chain, building out the 800VDC standard itself and pulling 14 power semiconductor companies into its ecosystem, while suppliers race to expand capacity to meet the new orders. A handful of names are taking a different path, most notably Texas Instruments (TXN), which has raised prices three times in the past year while cutting its forward capex intensity from above 30 per cent of revenue to about 13 per cent.

The remainder of this post walks through the chain from the grid to the chip, sizes the demand behind it, shows where supply is constrained, and points out the associated risks. The companies listed in this post will get a closer look in a follow-up.

This post is for informational purposes only and does not constitute financial advice. Please conduct your own due diligence before purchasing any equities or assets discussed herein.

Power Semiconductors

Power semiconductors help control large amounts of electrical power. When electricity is delivered to the chip, it needs that electricity delivered at a specific voltage and current. The electricity that comes from a power source, such as a wall outlet or a battery is rarely the right amount of voltage and current. A power semiconductor is a chip that helps convert and regulate the electricity to the correct voltage and current, allowing the connected device to get the exact amount of power it needs. Power semiconductors are used in almost all modern electronics, including phone chargers, washing machines, industrial robotics, and electric vehicles.

Two Major Themes In The Industry:

The power semiconductors industry consists of two major themes:

• EV and Industrial - silicon carbide (SiC)

• Data Centers - Gallium Nitride (GaN) and SiC

The legacy side is EV traction and industrial equipment, running mostly on SiC and IGBT devices (an IGBT is an electronic switch for high voltages and large currents). Yole Group’s reported that the power SiC market is an overcapacity downturn, with utilisation around 50% for upstream SiC processes and 70% for device lines as of 2025.

Independent of that legacy business is the emergence of power delivery for data centers, which is supply constrained. GaN semiconductors are experiencing accelerating adoption, largely due to Nvidia’s 2025 initiative towards an 800-volt DC (800 VDC) rack architecture. This business did not start from scratch. The high voltage devices, the SiC supply base, and the DC conversion technology were all scaled first for electric vehicles, which the AI build is inheriting.

The reason the architecture is changing is power density. Modern AI data centers need way more power than they used to. A single server rack today draws over 100 kilowatts, and the next generation of racks is expected to need up to 600 kilowatts. The existing infrastructure is unable to handle the power conversion and distribution needs, and pushing that much electricity through a low voltage system wastes energy and requires heavy cabling just to manage it. As such, power semiconductor companies need to find methods to handle higher voltages and power levels more efficiently than what the current infrastructure is used to. This is where 800VDC is emerging to become the standard architecture for how power gets distributed through the data centre. Power semiconductor demand is built on providing the chips that help this architecture run.

The Four Stages

Power Semiconductors are primarily used in four stages inside the data centre.

Stage 1: Grid Entry

Utility power enters here, gets stepped down by transformers, and is switched between sources. The switch that matters for semiconductors is the static transfer switch, which selects between the utility feed and the backup diesel generator using thyristors instead of mechanical contacts, so it can transfer in milliseconds. It only changes sources during a utility disturbance, but its thyristors carry the load current continuously. In newer 800VDC builds, a solid-state transformer also sits at this stage and converts AC to 800V DC on every watt that comes in.

Stage 2: UPS (uninterruptible power supply)

The UPS stage sits right after grid entry and before the PSU, and it typically serves a whole row of racks or a section of the data center. This stage uses either MOSFET (Metal-Oxide-Semiconductor Field-Effect Transistor) or IGBT power semiconductor switches to convert incoming AC to DC and vice versa. This allows the servers to always receive a clean and stable supply of electricity, preventing voltage sags, surges, and electrical noise.

It also provides power during the event of a failure. the A diesel generator takes a few seconds to start up and reach full power before responding to a grid failure. The UPS uses a battery (attached to a DC source), to supply power so the servers do not lose power while the generator spins up.

Stage 3: PSU (Power Supply Unit)

Inside each individual server, there is a PSU. It takes the clean AC power from the UPS and converts it to a DC bus voltage for the motherboard. Historically, this main bus uses 12 volts, but it is being increased to 48 volts for high power data centers. The Voltage Regulator Modules (VRMs) on the motherboard then step down the volts further to the tiny voltages needed by the chips. This is done by MOSFETs in older designs and SiC or GaN devices in modern PSUs, because the newer materials waste less energy in the form of heat.

Stage 4: Point of Load (PoL) Conversion

This stage takes the PSU’s output voltage and steps it down one final time (usually to 1 volt) to the CPU or GPU. Given that the demand for a chip’s power can increase suddenly, the PoL conversion has to be done instantly and efficiently to keep the voltage stable. Otherwise, the chip could misbehave.

According to an IEEE survey of data-centre power delivery (Chen et al., 2023) article, there is an efficiency bottleneck in this stage of the chain, since even the best designed conversion mechanisms typically reach around 90% efficiency.

The AI Power Build

Industry Catalysts

The major catalyst for the industry is the increasing data centre power demand. According to Goldman Sachs Research (GS):

Demand across hyperscale, cloud, and AI is set to grow into 2027, while non-hyperscale/cloud demand remains relatively stagnant. Their analysts estimate current demand to be approximately 62 gigawatts (GW), composed of cloud workloads (58%), traditional workloads (29%), and AI workloads (13%). According to their projections, AI is expected to grow to 28% of the overall market by 2027, while cloud drops to 50% and traditional workloads fall to 21%. They also foresee increasing processing power requirements for modern AI workloads, highlighting a significant jump between 2026 and 2027.

GS forecasts that “data centre power demand will increase from 1%-2% of overall global power demand in 2023 to 3%-4% by the end of the decade. In the US, the weighting of power demand from data centres will increase even more, likely more than doubling by 2030 from 4% in 2023.”

The growth in AI is substantial for power semis. The majority of current demand comes from legacy business in automotive and industrial applications, which are sectors that have recently seen slowing growth. Surging demand from the AI and data centre sector is a new source of revenue from a fast-growing industry.

The growing demand for AI data centres shows up in the projected market size for 800VDC equipment. SemiAnalysis estimates that the market for power racks and sidecars (equipment that handles power conversion at the rack level) will peak around $11 billion in 2028, while the market for solid-state transformers (which handle the earlier medium-voltage-to-800VDC conversion step) will reach about $13 billion by 2030. Nvidia has responded by naming 14 silicon partners to its 800VDC ecosystem, and revenue is already showing up across those companies:

• Infineon’s fiscal 2026 AI data centre revenue is guided above €1.6 billion, more than doubling from over €700 million in fiscal 2025 and representing a more than 6x increase from €250 million in fiscal 2024.

• Analog Devices’ data centre business grew more than 100% YoY in its fiscal Q3 2026.

• Murata is spending ¥250 billion (US$1.56B) in fiscal 2026 capex, including ¥80 billion (~$499 million) specifically to expand server-grade MLCC capacity.

While these numbers signal bullish sentiment, and rightfully so, there is something to note about Murata’s expenditure on capacity expansion, which serves as a potential signal of an overarching constraint. Demand is currently outpacing supply across several areas of the power semis chain.

Industry Shortages

While the focus of this report is power semiconductors, it is worth analysing the entire power build chain. Citrini Research bundles capacitors, inductors, and power semiconductors into one basket, and that framing is relevant here as well. Capacitors and inductors are passive components, while power semiconductors are active chips, but they are part of the same circuit. A shortage or price increase in one directly affects the others, so it is worth discussing them as a whole.

The main shortage in this transition is in multilayer ceramic capacitors, or MLCCs, which store and release electrical energy using stacked layers of ceramic and metal. A single Nvidia GB200 server uses roughly 6,500 MLCCs, and the Rubin board is expected to need around 12,000.

Murata, Samsung Electro-Mechanics, and Taiyo Yuden control about 77% of global high-end MLCC capacity, and all three are running at 90-95% capacity as lead times have stretched to 20-24 weeks. Murata’s own guidance says capacity expansion over the next two years will slightly exceed 20%, but this will fall short of AI-driven demand growth.

Focusing on the power semiconductors, the shortage is concentrated in high-voltage capacity built for 800VDC. There exists a supply chain bottleneck for electrical components that can handle 800VDC, and the SiC manufacturing capacity sitting idle from the EV downturn cannot simply be redirected to 800V data centre parts because these need higher blocking voltages. This shortage is impacting prices as TXN, a company that makes the required electrical components, has raised prices for the third time in a year.

It is worth noting, though, that according to Citrini Research, TXN has seen a decrease in Forward CapEx Intensity, which suggests their approach is to avoid repeating the mistake many companies made with the EV cycle: building capacity for demand which then sat idle. TXN already spent heavily ahead of demand. Now, rather than start a new expansion for AI, it’s letting price absorb the shortage.

Risks & Uncertainties

The industry has not settled on a single voltage for data centre power. Nvidia is building out 800VDC, while Google, Meta, and Microsoft are building Mt Diablo, which allows either 800VDC or a bipolar 400VDC. The 400V path reuses the SiC devices already made in volume for electric vehicles, while the 800V path depends on higher-voltage devices that are still being made in volume. If the market leans toward 400V, it is possible that the excess EV supply is used and the component shortage eases sooner than expected. Currently, with 800VDC gaining traction, the shortage likely remains until capacity finishes ramping up.

Another major risk is the lack of diversified revenue sources for power semiconductor companies. Microsoft, Alphabet, Amazon, and Meta account for the bulk of the AI infrastructure spend for the data centre buildout, and materialised revenue must follow Nvidia’s buildout timeline. Despite bullish revenue guidance from the majority of power semiconductor companies, much of the basis for those projections is built on a successful rollout of the Rubin architecture (which uses an 800VDC power architecture). A slip in Nvidia’s execution would be worrisome for many major names in the power semiconductor industry.

Power Semiconductor Companies

Below is a list of some power semiconductor names worth watching. Some of these companies will be covered more in depth in future posts. For now, this is just a breakdown of where each one sits in the chain.

On Semiconductor (ON) - Stage 3 (PSU)
$74.38 (+31.18% YTD) · Market Cap $28.96B
onsemi converts grid power into stable, usable power for AI compute, minimizing energy loss and heat at each conversion stage using its SiC and GaN chips. This lets hyperscalers run more compute within the same power budget and reduces cooling needs.

STMicroelectronics (STM) — Stage 3 (PSU)
$52.24 (+90.87% YTD) · Market Cap $47.36B
STMicroelectronics operates as a mass producer of highly efficient power semiconductors, dominating the EV market with its SiC chips while aggressively scaling GaN tech for AI data centers. They have approx. ~33% global market share in the SiC power device market.

Navitas Semiconductor (NVTS) — Stage 3 (PSU)
$11.80 (+40.81% YTD) · Market Cap $3.08B
As another stage 3 producer, Navitas Semiconductor designs GaN and SiC chips. They are one of the smaller names here, and offer a lot of exposure to the 800VDC buildout. They were named as Nvidia’s GaN collaborator for the next gen rack architecture.

Texas Instruments (TXN) — Stage 4 (Point-of-Load)
$258.44 (+45.58% YTD) · Market Cap $236.08B
One of the largest analog chipmakers in the world, with products specifically targeting point-of-load conversion for 800V AI data center power. TXN makes the vital electrical plumbing that regulates, converts, monitors, and distributes electricity across hardware architecture like 800VDC.

Wolfspeed (WOLF) — Material supplier, used across Stages 2-3
$28.35 · Market Cap ~$1.50B
Wolfspeed grows pure silicon carbide crystals and slices them into wafers and substrates. They also manufacture SiC MOSFETs, and package multiple semiconductor chips together for heavy-duty usage.

Conclusion:

The demand for power semiconductors is clearly growing. The supply side is mixed, but it also points in a reasonable direction. Suppliers are increasing capacity, even if it’s not to the extent that is expected from companies, like TXN.

There are still open questions. The main one is which voltage standard the industry shifts towards. Right now, 800VDC is the likely standard, but that’s not settled. If it ends up being bipolar 400VDC, a portion of the existing EV supply can be reused, which would ease the shortage sooner. If it ends up being 800VDC, more of the demand requires capacity that is still being built.

For the companies with exposure to this industry, demand and volume are going up, and so is pricing, so the outlook remains bullish.

We will take a closer look at some of the companies listed in this post in a follow-up.

Thank you for reading and if you enjoyed this post, please leave a like and Restack.

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Sources

• Financial Data (Stock price, market cap, etc.) from Google Finance

• Goldman Sachs Research — data center power demand by workload type (hyperscale/cloud/AI GW breakdown) and share of global power demand

• SemiAnalysis — 800VDC equipment market sizing ($11B racks/sidecars by 2028, $13B solid-state transformers by 2030)

• Trendforce - MLCC numbers for Rubin and GB200 Boards

• Yole Group — power SiC market utilization and overcapacity data (2025)

• Citrini Research — Semi Memo: Supply Chain Inheritance

• Chen, Y., Shi, K., Chen, M., and Xu, D., “Data Center Power Supply Systems: From Grid Edge to Point-of-Load,” IEEE Journal of Emerging and Selected Topics in Power Electronics, Vol. 11, No. 3, June 2023

• Nvidia — 800VDC ecosystem partner announcement, October 2025 OCP Global Summit

• Earnings releases and investor materials: Infineon, onsemi, STMicroelectronics, Wolfspeed, Navitas Semiconductor, Texas Instruments, Murata Manufacturing

Format for what is covered in this Monthly Portfolio Update:

• Market Thoughts

• Indices Review

• Key Indicators

• SixSigmaCapital Performance: YTD and since Inception

• Featured Quote

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts

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Market thoughts:

Equity markets had a strong month in August, with the Dow, S&P 500, and Nasdaq Composite posting month-over-month returns of +1.3%, +2.6%, and +3.9%, respectively.

For the last several months, I have been writing in this letter:

“There tends to be a large drawdown in the S&P 500 within the 12 months preceding election day. I do not know whether it will be Fed-related, a policy shock by the White House, or an economic downturn that triggers the drawdown (or something else entirely), but I think it is very likely we will see one given the way markets are behaving”

YTD Market Recap:

Despite climbing a wall of worry for most of the past year, the broader indices finally fractured in March. The S&P 500 pulled back more than 9% peak-to-trough, and the Nasdaq fell 13%. However, since April, there was a historic rebound. From the March 30 lows through the end of May, the S&P 500 gained more than 1,300 points (over 15%), while the Nasdaq Composite surged 6,300 points from its bottom (an advance of more than 30%). The run in semiconductors and every layer of the tech supply chain was unlike anything I have ever witnessed, with the SOXX ETF peaking in mid-June at >110% above its March lows, leaving the sector at its most overbought level on record.

June and July were defined by significant market rotation. After suffering one of their worst months on record in June, the Mag 7 rebounded strongly in July. Simultaneously, the severely overbought AI infrastructure and semiconductor trades cooled off, while hyperscalers, energy, financials, and most other sectors demonstrated broad-based strength.

We capitalised on the hyperscaler rally to slightly reduce overall exposure. For GOOGL and AMZN, higher-cost lots were cleared out to let the house shares ride. The META position was trimmed in the $630 to $690 range, bringing the weighting down from 10% to a more comfortable ~7.5%. With MSFT, a position heavily averaged up into during the sell-off, profits were taken in the high $400s to low $500s. Concurrently, the recent Leopold AI dip provided a solid entry point to scoop up several beaten-down AI stocks. We give thanks for the cheap shares, many of which were flipped for quick gains.

August:

August was a fairly robust month for equity markets and the SSC portfolio. Highlights included Twist Biosciences (TWST) becoming a 6-bagger since initiating live on this page, the software rebound benefiting our MSFT and NOW holdings, the early-month AI infrastructure rebound (which we sold into), and the strong month-end rally across crypto.

One major event of note occurred during the week commencing August 24, when U.S. Treasury Secretary Scott Bessent doubled the purchase capacity for long-dated government bond buybacks. This was seen by some as a ‘mini QE,’ and since then, we have seen some interesting market reactions: the USD weakened, while metals, crypto, and critical minerals have, on the whole, caught a strong bid. BTC is up around 25% in the last month, and Ethereum is up around 30%.

The image below succinctly shows what else moved equity markets in August:

Looking ahead, I believe the recent U.S. economic data presents a complex backdrop for the Federal Reserve’s upcoming policy meeting and interest rate decisions.

• Divergent PMI Data: Manufacturing cooled to 54.6% (missing expectations alongside a noticeable slowdown in new orders), while the services sector accelerated to a robust 55.4%. Though both sectors remain in expansion territory, the service industry continues to face contracting employment metrics.

• Resilient Labor Market: Friday’s August Jobs Report shattered expectations, adding 162,000 jobs compared to the forecasted 55,000. Unemployment held in-line with estimates at 4.1%, and July’s figures were revised upward by 43,000 jobs, pushing that month into positive territory.

Taken together, this robust labor data and expanding service sector keep the pressure on the Fed to hold interest rates steady or even consider further hikes at the next FOMC meeting. Consequently, the upcoming CPI and PPI inflation prints will be critical in shaping the committee’s final rate decision.

The Federal Reserve is navigating a difficult position. While multiple economic indicators support a rate hike, the committee faces intense political pressure from the sitting president, who recently threatened, “Lower the rate, or I’ll stop trading with countries with which we have a deficit.”

Looking at the bigger picture, given current geopolitical tensions and anticipated pre-midterm volatility, I have been holding a larger cash position than usual, currently around 11%. However, I will be continuing to scale into a few out-of-favour positions that I expect to perform well in the coming months.

While I have been mostly in cash in my trading account recently, I thought there were some positive signs this past week. More actionable setups are forming, and the outcomes from a few trades were encouraging. Moving forward, I will be looking to increase exposure there and be more active if the market complies.

Finally, while we experienced a decent correction in March, it remains to be seen whether that was the “midterm election-year pullback” or if another is due later in the year. S&P 500 earnings estimates continue to be revised upward, with most companies beating expectations and raising guidance. Although this fundamental strength argues against a deep, index-level decline, should a further meaningful pullback materialise, I will certainly be looking to buy select equities.

Inflation:

CPI: The July 2026 CPI data is presented below:

• Headline CPI increased 3.4% YOY vs expectations of 3.4% YOY.

  • Headline CPI increased 0.1% MOM vs expectations of a 0.1% increase MOM

• Core CPI increased 2.5% YOY vs expectations of 2.5% YOY.

  • Core CPI increased 0.2% MOM vs expectations of a 0.2% MOM

PPI: The July 2026 PPI (final demand) data is presented below:

• Headline PPI increased 4.7% Y/Y vs expectations of 4.9% Y/Y

  • Headline PPI was unchanged (0.0%) M/M vs expectations of 0.2% M/M•

• Core PPI increased 4.2% Y/Y (in line with expectations)

  • Core PPI increased 0.2% MOM vs expectations of 0.3% M/M

Below I have included charts showing the trend for both CPI and PPI:

PCE: With regards to the PCE price (Fed’s preferred metric), July ‘26 data came in slightly warmer than expected on the headline and in line on core.

• Headline PCE increased 3.7% YOY vs expectations of 3.6% YOY.

  • Headline PCE increased 0.2% MOM vs expectations of 0.1% MOM.

• Core PCE increased 3.3% YOY vs expectations of 3.3% YOY.

  • Core PCE increased 0.2% MOM vs expectations of 0.2% MOM.

Core PCE has continue to prove notably sticky throughout the last year. The upcoming PCE reading will be important for the Fed’s decision making.

July 2026 FOMC Meeting

At the most recent FOMC meeting on July 28-29, 2026, the committee decided to hold interest rates steady as it navigates persistent inflation risks alongside continued economic expansion. The target range for the federal funds rate remains at 3.50% to 3.75%, where it has sat for five consecutive meetings.

Unlike the unanimous decisions seen previously, this vote was divided 9-3, marking notable hawkish dissent in Kevin Warsh’s second meeting as Fed Chair. Three regional Fed bank presidents (Beth M. Hammack, Neel Kashkari, and Lorie K. Logan) dissented in favour of an immediate 25-basis-point rate hike. Chair Warsh maintained a concise policy statement devoid of explicit forward guidance, reiterating in his press conference that the committee remains strictly data-dependent and advising markets to focus on pure price discovery, effectively to “play the ball, not the referee”.

The Committee reaffirmed its firm stance, stating unequivocally: “The Committee will deliver price stability”. While some recent data showed softer inflation, price pressures remain elevated relative to the 2% goal, partly compounded by Middle East conflict risks, energy price volatility, and AI-related infrastructure investment.

While no updated Summary of Economic Projections (SEP) was issued at this non-quarterly meeting, the divided vote underscored that an interest rate hike remains a live possibility. Markets continue to weigh the likelihood of further tightening, pricing in higher long-end Treasury yields, heading into the next scheduled decision on September 15-16, 2026. The 2 day September meeting will also include an updated Summary of Economic Projections.

Indices:

S&P 500

• Currently trades at $7,718.60 (12.54% YTD)

• It is 1.67% above the 50SMA.

• Trading at 23.61x trailing earnings and 21.22x forward earnings

Nasdaq Composite:

• Currently trades at $26,506.99 (14.08% YTD)

• It is 1.9% above the 50SMA.

• Trading at 34.29x trailing earnings and 25.25x forward earnings (per WSJ for the QQQ)

Key Indicators:

• 10 Year T-Note: 4.784. It has increased by 14.26% YTD

• British Pound vs USD: 1.351 and is up 0.45% YTD.

• CPC (Put to Call Ratio): 0.76. Note >1 can indicate Fear and >1.5 can be Extreme.

• VIX: 14.53. I have included a chart below showing the VIX over time and Nasdaq Comp underneath it: you can see that extreme readings have always been a buying opportunity in the medium term.

• NAAIM Exposure Index: 85.61 from 84.02 last month. Note it did get into the low 30’s in April 2025 (!)

• S&P 500 Percentage of Stocks Above the 50 Day Moving Average: 47.8% (<10 tend to be great buying opportunities)

• Fear and Greed Index (CNN): currently reads 42 which is in the ‘Fear’ zone. At the end of March it was 19 supposedly in the ‘Extreme Fear’ zone.

Consolidated Performance across Investment Account: YTD and since Inception of SixSigmaCapital (Equities only as of Sunday 6th September)

2023: +94%

2024: +61%

2025: +57%

2026: +18.27% (with trading account gains included it would be +25.07%)

TWR since Inception of SixSigmaCapital is thus +479.98% or just under a 5.8x of the portfolio. The CAGR is 61.13%

TWR +480% vs S&P 111.5%.

TWR of S&P 500 in the same period is +111.5% or a 2.115x return.

SixSigmaCapital has achieved a +368.5% outperformance in that time period. (My overall 8 year CAGR including numbers prior to SSC sits at around low 40%)

I remain pleased overall, as risk adjusted these results are very sound. Furthermore, all moves were disclosed in real time to paid subscribers.

Equity curve since switching to my current brokerage in the last few years is below:

SixSigmaCapital Trading Account:

At the start of the year, I opened a dedicated trading account for active strategies. It was initially ~10% the size of my primary investment account, though has grown somewhat since then (now around 15% the size of the main book). The account is managed with a trading mindset and consists mostly of common shares, though I have utilised select options strategies.

The past month was relatively uneventful for the trading account. I took the prior month's lessons to heart, focusing on not forcing trades and sizing smaller given that conditions were not ideal for swing trading. We gained a couple of percentage points on the month, preserving valuable mental capital to capitalise on opportunities heading into year-end.

Trading Account YTD: +68% YTD

If combined to the investment account, it would add 6.8% to the total performance.

Featured Quote:

“You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.” Charlie Munger

Current Positions in Size Order with Cost Basis (Investment Account) as of September 6, 2026:

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Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll to here for my Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

Subscribe now

Indices

Dow Jones Industrial Average declined -0.27% in the last week

S&P 500 advanced +0.09% in the last week

Nasdaq Composite advanced +0.40% in the last week

IWM advanced +0.09% in the last week

Key upcoming economic events

Monday, September 7

• Labor Day: U.S. markets and federal offices closed, no data releases scheduled

Tuesday, September 8

• NFIB Small Business Optimism Index (August)

• Consumer Credit (July)

• Census Bureau Quarterly Financial Report (Q2 2026, Manufacturing/Mining/Wholesale/Retail Trade Corporations)

Wednesday, September 9

• No major scheduled releases

Thursday, September 10

• Producer Price Index (PPI, August)

• Initial Weekly Jobless Claims

Friday, September 11

• Consumer Price Index (CPI, August)

• University of Michigan Consumer Sentiment, Preliminary (September)

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at $7,718.60, 1.67% above the 50SMA and 8.08% above the 200SMA.

RSI 55.32

12.54% YTD

Distribution days in the last week: 1

While the S&P 500 undercut the 21 EMA mid-week, it closed out the week above all key moving averages. This is constructive; however, the upcoming CPI report is likely to be a market-moving event to watch out for this week.

COMPQ

Currently trades at $26,506.99, 1.90% above the 50SMA and 8.64% above the 200SMA.

RSI 55.24

14.08% YTD

Distribution days in the last week: 0

The Nasdaq also remains above its key moving averages despite pulling back to the 50 SMA for the second consecutive week. The index recovered nicely with a push higher on Thursday and managed to close above the 21 EMA on Friday.

BTC (currently Long)

Currently trades at $79,963.63, 15.22% above the 50SMA and 14.64% above the 200SMA.

RSI 66.98

-9.88% YTD

Bitcoin consolidated nicely this week, closing with a small gain. While BTC remains above all key moving averages, the $82k mark is acting as resistance- a crucial level to the upside that bulls will want to see surpassed.

EEM

Currently trades at $68.70, 4.40% above the 50SMA and 11.80% above the 200SMA.

RSI 62.38

22.79% YTD

EEM broke above its August high to continue its uptrend, putting in a strong candle to close the week. Price held the 21EMA as support once more before pushing higher. Last week I highlighted that: “the 21EMA has now crossed above the 50SMA, a constructive signal for trend continuation.” This week saw exactly that as the trend remains positive.

GOLD (Long Physical)

Currently trades at $4,454.08, 4.53% above the 50SMA and 2.08% below the 200SMA.

RSI 52.30

2.47% YTD

Gold was rejected at the underside of it’s 200 SMA this (see arrow). While this week’s selloff has reversed from its lows, bulls will want to see price clear the 200SMA soon.

SOXX

Currently trades at $519.86, 3.43% below the 50SMA and 20.54% above the 200SMA.

RSI 48.95

65.90% YTD

SOXX continues to trade below its SMA 50, a level which has served as resistance, though it did close barely above the 21 EMA. Bulls will want to see both the 21EMA and the 50SMA reclaimed to restore longer-term momentum.

SKHY (Currently Long)

Currently trades at $177.18

RSI 60.98

5.35% YTD

SKHY has been holding its IPO-anchored VWAP (see arrows), trading in a tight range much like MU and SNDK did before their breakouts, and rallied into Friday's close. Tuesday's action will be worth watching to see whether this strength carries through toward the $178 resistance level. Bulls will want to see the IPO AVWAP continue to hold, a breakout above $178 resistance, and a push toward new all-time highs.

AMZN (Currently Long)

Currently trades at $258.51, 1.80% above the 50SMA and 8.11% above the 200SMA.

RSI 49.55

14.13% YTD

AMZN continued its pull back, this time to test the 50SMA day, which served as a support where it consolidated.. Bulls will want to see constructive momentum from here onward, with RSI breaking above 50. If price breaks below the 50SMA, we could see a selloff to pre-earnings gap fill.

COIN (Currently Long)

Currently trades at $184.64, 13.17% above the 50SMA and 4.21% below the 200SMA.

RSI 56.40

-21.94% YTD

COIN's rally last week ran almost exactly into the 200 SMA I flagged as a resistance (in last week’s report), rejecting there before reversing. Price has since traded in and around that level. Bulls will want to see the 200 SMA reclaimed on a more decisive attempt this time.

SPCX

Currently trades at $147.95, 8.80% above the 50SMA.

RSI 59.16

-8.08% YTD

SPCX closed almost exactly at the IPO AVWAP. Bulls will want to see this level flipped to support going forwards. For someone looking to trade this name, that can become a level to manage risk against (good above the IPO AVWAP, bad below)

XBI

Currently trades at $163.81, 3.62% above the 50SMA and 21.13% above the 200SMA.

RSI 55.15

34.93% YTD

XBI held the 21EMA after trading in and around that level this week. If price can stay above that level, we can see a continuation of the rally. Otherwise, a selloff to the $158 support (50SMA) is not out of the question.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 47.8%

Breadth decreased slightly again this week, with the percentage of stocks above the 50-day moving average now at 47.8% compared to 53.6% last week.

Notable portfolio changes in previous week (all updated live in subscriber channels):

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With the stock down approximately 37% and multiples more than halved, I am beginning to layer back in with staggered buys.

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This post summarises the process I use when looking to buy stocks near their lows. It details the lessons I have learned and the framework I use to consistently identify and execute entries at these levels.

I also recommend reviewing my other investment philosophy posts. When combined with the strategies shared here, they provide a more comprehensive view of how I approach the markets. Investment Philosophy Posts

As always if you enjoy the post ensure to like and re-stack if possible.

Initial Analysis and Catalyst Tracking

When a stock you are interested in begins to fall, watch it closely. Identify any upcoming catalysts, whether positive or negative. If there are none, it means you have time. Try to work out why it is dropping: is it company-specific or sector-specific? Is it being unjustly punished? Is it a temporary issue or a thesis-changing one? If the reason is not thesis-breaking, you can continue to the next steps and give the setup more consideration.

Fundamental Due Diligence

Ensure you do the fundamental work early on. I have written about the 4M’s framework before (link below); in short, you should know what the company does, what their advantages are, what management is like, and if they are trading at a margin of safety.

I recommend checking their filings and being familiar with all three financial statements. Listen to the earnings calls as well. If you are doing a DCF, use conservative estimates to identify what the stock is worth. This ensures that when the time comes, you know you are buying at a steep discount.

Layering in Technical Analysis

Don’t buy the dip too early; be patient. Ideally, you want to be one of the last ones to buy the dip. This is important as you can study previous price action and also wait for sellers to dry up. I recommend studying the charts over several time frames; daily and weekly charts are good places to start.

There are several approaches one can take here or even combining them

• Buying at the right side of the V

• Waiting for the 5 EMA to cross over the 20EMA

• Buying at long-standing support

• Waiting until it has started to base at least 5% above 52 week lows before initiating some pilot buys

• Buying on a waterfall decline (more risky set-up)

I think it would be good to put some examples below of what each of these looks like.

Buying at the “Right Side” of the V

This is a simple strategy: once you have identified a price you would like to pay, wait for the stock to stop declining. When it reverses back up to that level, you can initiate the trade. This is a higher probability entry and allows you to set your stop-loss at the recent low to protect your position.

Moving Averages cross-over

Waiting for the 5-period EMA to cross over the 20-period EMA is a simple strategy I use. The idea is to wait for confirmation of a possible trend change before committing any capital.

Below is a chart from my recent FLY trade. I was interested in the stock for a little while, but I was looking for an entry once the 5 EMA crossed above the 20 EMA and held there. I eventually entered the position on a re-test of the 20 EMA. This turned out to be a solid trade, resulting in a 35% to 36% gain in about six sessions.

Basing

Waiting for a stock to base a few percentage points (at least 5%) above the 52-week low is another strategy I like to use. The reason for this is simple: you want to see evidence that the stock is likely to hold previous lows and that a trend change is in play.

Back in 2023, I was interested in BABA. While the stock had bottomed at $55 per share the prior year, I purchased my entry between $68 and $70 in December 2023. At that point, the stock was basing, and there was a massive price-to-value dislocation with the shares trading at only 7x earnings. I later topped up the position by adding on re-tests of the 40-week SMA. I still hold those shares to this day.

Waterfall decline

UNH is an example of how I traded a “waterfall decline.” This is a riskier setup, but I managed it by combining the principles of buying late (less sellers) and topping up on the right side of the “V”. When the shares first fell in the middle of May, I put UNH on my radar but did not purchase shares. The huge sell volume that came in was enough to keep me away initially.

However, I completed my fundamental work and marked out 240 as a level I would consider buying from a valuation perspective. When the stock began to decline rapidly in August, I started buying. I purchased multiple lots between the 230s and the high 240s as the stock began to move back up. I eventually exited the position in the middle of October once the gap was filled.

Another example of buying a waterfall decline is when I nailed the April 7, 2025, bottom. I posted an in-depth analysis throughout the entire weekend prior to executing the trade on Monday at 4:00 AM ET. Analysis from April 6th

Sentiment

Tracking sentiment is another piece of the puzzle. While it is not an exact science, there are several specific ways I incorporate sentiment analysis into my process.

As mentioned previously, I do not recommend buying when the general public is “buying the dip.” Instead, look for entry points when those early buyers have become dejected and have finally given up. A major signal occurs when ridiculously low price targets begin to circulate or when “all-in” single-stock investors sell their positions out of frustration. Notable examples include the Tesla capitulation at $150 in April 2024 or when market consensus was that Google is an “AI loser.”

I also prefer to wait for analysts to downgrade their estimates and price targets. This process often de-risks the situation; once expectations have been lowered, the bar for the company to provide a positive surprise becomes much easier to clear.

Finally, if you have a social media following, you can use it to gauge the prevailing mood. For instance, I posted the tweet asking, “I bought UNH at 237, am I cooked?” The post received unusually high engagement, responses were overwhelmingly bearish, with some users even calling for prices below $100. As there was extreme pessimism, I felt it was a decent contrarian indicator. UNH sentiment post

Thank you for reading and see you for the next one!

Read more

Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll to here for my Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

Subscribe now

Indices

Dow Jones Industrial Average advanced +0.53% in the last week

S&P 500 advanced 0.49% in the last week

Nasdaq Composite advanced +0.85% in the last week

IWM declined 1.4% in the last week

Key upcoming economic events

Monday, August 31

• Chicago PMI (August)

• Dallas Fed Manufacturing Survey (August)

Tuesday, September 1

• S&P Global Final Manufacturing PMI

• ISM Manufacturing PMI (August)

• JOLTS Job Openings (July)

• Construction Spending M/M (July)

Wednesday, September 2

• ADP National Employment Report (August)

• Federal Reserve Beige Book

Thursday, September 3

• Initial Weekly Jobless Claims

• U.S. Trade Balance

• Revised Q2 Nonfarm Business Productivity

• S&P Global Services PMI

• ISM Services PMI

Friday, September 4

• August Jobs Report (Nonfarm Payrolls / Employment Situation) 8:30AM ET

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at $7,711.76, 1.77% above the 50SMA and 8.15% above the 200SMA.

RSI 56.33

12.65% YTD

Distribution days in the last week: 0

The S&P 500 continues to trade above key moving averages as it held above the 21-EMA this week. RSI in the mid-50s indicates that we are not over-extended, but there is constructive momentum. Price sits 1.34% off of ATH amidst rising bond yields.

COMPQ

Currently trades at $26,402.42, 1.71% above the 50SMA and 8.58% above the 200SMA.

RSI 54.17

13.60% YTD

Distribution days in the last week: 1

The Nasdaq also remains above key moving averages despite a pullback to the 50 SMA. Price recovered nicely and closed above the 21 EMA for the end of the week.

BTC (currently Long)

Currently trades at $78,134.45, 16.12% above the 50SMA and 12.63% above the 200SMA.

RSI 71.04

-9.95% YTD

After last week’s rally, BTC is consolidating as expected into a potential bull flag. Volume remains elevated, and so does RSI at 71.04. Price remains above and extended from all key moving averages.

EEM

Currently trades at $67.14, 1.80% above the 50SMA and 9.87% above the 200SMA.

RSI 55.17

22.34% YTD

EEM remains in an uptrend, closing above all key moving averages. Price held the 21EMA as support on Monday before pushing higher. The 21EMA has now crossed above the 50SMA, a constructive signal for trend continuation.

GOLD (Long Physical)

Currently trades at $4,454.08, 5.87% above the 50SMA and 1.38% below the 200SMA.

RSI 54.60

3.17% YTD

Gold has bounced well from its recent lows, reclaiming the 200-day for a few days; however, on Friday, it did violate the 200-day. A timely reclaim of the 200 SMA is what bulls will be looking for. To the downside, the next near-term support to watch is the 21 EMA at $4,422.21.

SOXX

Currently trades at $508.62, 7.54% below the 50SMA and 19.43% above the 200SMA.

RSI 43.14

66.80% YTD

SOXX remains below its 50-day SMA despite an attempt to breakout. It was rejected at the 21EMA (see arrow) despite positive earnings from NVDA. Bulls will want to see the 50SMA reclaimed to restore longer-term momentum.

AMZN (Currently Long)

Currently trades at $266.43, 5.87% above the 50SMA and 11.63% above the 200SMA.

RSI 55.85

15.43% YTD

AMZN pulled back to test the 21 day where it consolidated and then closed out the week above all key moving averages after a sharp bounce off of the 21-EMA. Bulls will want to see a breakout above the horizontal resistance near ATH, at ~$278.50.

COIN (Currently Long)

Currently trades at $178.64, 11.39% above the 50SMA and 8.56% below the 200SMA.

RSI 56.84

-21.0% YTD

COIN has rallied meaningfully from the recent lows; however, it remains below its 200 SMA, the resistance level flagged last week. Bulls will want to see that level reclaimed, and above that, the 213/214 resistance is the next area of interest (see chart). One strategy is to trim some into the resistance if you feel it is unlikely to be flipped.

SPCX

Currently trades at $141.50, 2.86% above the 50SMA. 200SMA isn’t available yet given the limited trading history since its June 12 IPO.

RSI 55.74

-5.67% YTD

SpaceX has started to show some strength of late, and a reclaim of the anchored VWAP from its June 12 IPO date would be strong evidence that buyers are back in control. Price did try to break above the anchored VWAP twice but failed (see arrows). The IPO AVWAP is a level one could look to play risk against.

XBI

Currently trades at $162.38, 3.83% above the 50SMA and 21.21% above the 200SMA.

RSI 53.95

33.17% YTD

XBI saw a pullback below the 5EMA after a rally to all time highs the previous week. The next support to the downside is 21EMA at $161.13. Holding that level will be crucial to see a continuation of this uptrend.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 53.6%

Breadth decreased slightly this week, with the percentage of stocks above the 50-day moving average now at 53.6% compared to 58.0% last week.

Notable portfolio changes in previous week (all updated live in subscriber channels):

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Layout:

Overview of QXO Inc

Bull and Bear Case

Management

Financials and Valuation

Chart

Current position and plans

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Overview of QXO Inc

QXO, Inc. is a building products distributor that trades on the NYSE. QXO buys roofing, waterproofing, siding, lumber, trusses, insulation, and related construction supplies in bulk and sells them to contractors, homebuilders, and other trade professionals. It operates as a B2B distribution business, as opposed to a traditional retailer.

QXO was relaunched in early 2024 with a $1 billion equity investment (~$900 million from Brad Jacobs) into SilverSun Technologies, a publicly traded ERP software company. SilverSun Technologies was then rebranded as QXO and repositioned as a consolidator and distributor of building products.

Jacobs, who is chairman and CEO, has applied the same business strategy of entering fragmented industries and buying smaller operators to consolidate them into a larger business multiple times. Through this specific process, he has turned his last three business ventures into multibillion-dollar companies. His plan for QXO remains the same, as he stated in a press release: “to become a preferred supplier serving the full project lifecycle of large, multisite developments and master-planned communities.”

QXO has explained its rationale for entering the building products industry: “We chose building products distribution because it fits our playbook perfectly and offers the right combination of size, growth, and acquisition opportunity... We also like the structure of the industry. There are attractive assets to buy, and the acquisition landscape is less crowded than it is in many other industries we’ve operated in. Most importantly, this is a sector where better execution matters. As we improve pricing, procurement, availability, service, technology, and inventory management at scale, we can unlock considerable value independent of market growth.”

Key Segments

QXO operates across three markets, each established through acquisitions:

• Roofing & Waterproofing (via Beacon Roofing Supply, $11B, closed April 2025): The merger established QXO as the largest publicly traded distributor of roofing, waterproofing, and complementary building products in North America.

• Lumber, Trusses & Gypsum (via Kodiak Building Partners, $2.25B, closed ~April 2026): added fabrication, assembly, and installation capability alongside core lumber/gypsum/trusses distribution, plus construction supplies. This acquisition expanded QXO’s addressable market to more than $200 billion.

• Insulation (via TopBuild Corp, ~$17B, closed July 1, 2026): Their latest acquisition of TopBuild Corp positions QXO as a leader in the following building product categories in North America:

  • #1 in insulation

  • #2 in roofing

  • #1 in waterproofing

  • #1 or #2 in the lumber and building materials sector, in key geographies served

Following the completion of the TopBuild acquisition on July 1, 2026, QXO became the second-largest publicly traded building products distributor in North America. Combined, the three businesses generate roughly $18.1 billion in revenue and $2.1 billion in adjusted EBITDA (2025A, pre-synergies). They operate from approximately 1,150 branches across all 50 U.S. states and seven Canadian provinces. Their current headcount stands at about 28,000 employees.

Strategic Rationale

Despite operating in the building materials industry, QXO has repeatedly highlighted the importance of technology as the backbone of its operations. Management believes that the implementation of technology and AI systems will play a significant role in moving from a collection of acquired businesses to a single, highly connected network. Its recent appointment of Ashwin Rao (former head of AI at Target) as Chief Artificial Intelligence Officer further reiterates this belief.

It aims to use technology to solve the gaps that exist in the distribution of building materials and products, particularly in ERP, warehouse management, CRM, pricing tools, route optimization, inventory, and eCommerce. By consolidating these fragmented sectors, QXO hopes to increase economies of scale while capitalizing on projected infrastructure spending increases over the coming years.

Bull case

Industry Tailwinds

A major tailwind for QXO is the underlying industry, which consists of an enormous, fragmented, and barely digitised building products market. Building products distribution generates roughly $800 billion in annual revenue across North America and Western Europe, spread across a mix of national, multi-regional, and local distributors, with a fragmented customer base.

The two categories that matter most for QXO over the next several years are housing and repair on one side, and the AI data centre buildout on the other.

The industry benefits from a housing shortage, as White House economists estimate the United States has a shortage of 10 million units (Bloomberg). Additionally, there are strong tailwinds for residential repair and re-roofing activity, as the average age of an existing single-family home in the U.S. is 42 to 44 years. In Massachusetts, Pennsylvania, and Ohio, the combined median home age is above 60 years (William Blair Thinking). In the non-residential space, the average age of a structure in the U.S. is 53 years old (Rothiams). On housing, the NAHB estimates single-family starts rising 5% to a 984,000-unit pace in 2027, up from a 940,000-unit pace in 2026. Meanwhile, remodelling activity, the spending category most relevant to Beacon’s roofing and waterproofing business and TopBuild’s insulation business, is forecast to grow another 2% in 2027 on top of 3% growth in 2026 (NAHB).

As for non-residential spending, the AIA Consensus Construction Forecast sits at 3.0% growth, with the majority of it driven by data centres.

McKinsey estimates about $800 billion of the $5.2 trillion spending on data centres (2030 Forecast) will fall toward the builder bucket. This includes land, materials, construction companies, etc. (McKinsey). While it is difficult to break down the exact figures regarding QXO’s role in the data centre buildout, Turner & Townsend puts the average global shell and core cost (the structural shell, which consists of roofing, waterproofing, and insulation) at $11.3 million per MW.

It is worth noting that Jacobs stated the acquisition of TopBuild will benefit QXO due to increased business from data centre development. As of April 2026, TopBuild only has single-digit percentage exposure to data centres, but it is a “fast-growing” segment of its revenue (SEC Filing Pursuant to Rule 425 under the Securities Act of 1933).

Business Model & Economies of Scale

Regarding its business model, QXO is a material distributor. It buys roofing, insulation, and building materials from suppliers and sells them to contractors and builders. It generates revenue without having to own factories or machinery to produce raw materials. It also does not operate any retail stores like Home Depot or Lowe’s.

Building products distribution is an industry where economies of scale offer key competitive advantages. Naturally, larger distributors have greater purchasing power, allowing them to pass on cost savings to customers. Despite the clear advantages, the building products distribution industry is highly fragmented, with over 7,000 distributors in North America and approximately 13,000 in Europe. This fragmentation presents an attractive opportunity for consolidation in the industry, and QXO has already taken advantage of it. Three acquisitions in about eighteen months have already taken combined revenue past $18 billion, as it targets $50 billion in annual revenue by the mid-2030s.

QXO and TopBuild buy from many of the same suppliers, such as Saint-Gobain, Johns Manville, and Owens Corning. Combined, they negotiate as one larger buyer instead of two smaller ones, which typically allows for better pricing. Sixteen of Kodiak’s top 20 vendors already overlap with Beacon’s, representing $5.3 billion of combined spending. As a result of these acquisitions and increasing scale, management expects $300 million of run-rate savings a year by 2030.

Brad Jacobs

Brad Jacobs has built and sold multiple companies from scratch, out of which three in unrelated industries (waste collection, equipment rental, and freight logistics) became multibillion-dollar businesses using the same formula each time. In each case, he used the same approach of finding a large, fragmented market with underinvested and technologically lagging operators. He then consolidated those fragments through mergers and acquisitions and let scale allow for pricing power and margin.

Combined, those three ventures alone represent roughly $90 billion in value today.

United Rentals: $65.83 billion

XPO: $22.53 billion

United Waste: sold for $2.5 billion in 1997.

A more in-depth analysis follows in the management section below, but in short, QXO is that same approach applied to a fourth industry. Jacobs has already invested $900 million of his own money alongside other shareholders, and his track record is impressive, to say the least. As such, a bet on QXO is also a bet on Jacobs himself.

Bear case

The risks for QXO stem from balance sheet concerns, dilution from repeated acquisitions, a well-capitalised competitor, and execution risk under a potentially complex market cycle.

Balance Sheet Concerns

After the TopBuild acquisition, leverage is elevated as QXO’s funded debt totals roughly $10.5 billion, of which $3.0 billion is in new unsecured notes carrying a BB- rating from S&P, below investment grade.

Another issue brought about by repeated acquisitions is share dilution. QXO issued 312.5 million new shares for TopBuild alone, on top of prior Beacon and Kodiak issuances. Shares outstanding now sit at roughly 1.04 billion, up from 725.4 million as of June 30, 2026. This puts downward pressure on the share price, as share dilution is generally not viewed fondly by investors.

Competition From the Largest Home Improvement Retailer

An external threat to its business exists in the form of a far larger and better-capitalized competitor, Home Depot, which outbid QXO for its acquisition of GMS. Along with GMS, it also acquired SRS, which positions Home Depot as a direct competitor in the building products distributor space. This is uncharted territory for Jacobs, as he has not had to compete with a company of Home Depot’s size in his previous ventures.

Execution Risk

QXO’s valuation also depends on flawless execution across three concurrent acquisitions. Beacon, Kodiak, and TopBuild were acquired within roughly fifteen months of each other. Q3 2026 will be the first opportunity to determine whether results resemble the $18 billion revenue and roughly $2 billion EBITDA story management has cited. Much of QXO’s current valuation reflects the outcome of this integration and the $300 million in targeted savings, rather than its current performance. There is execution risk here, which could be worrying if the company does not report earnings as expected.

QXO’s business also remains tied to housing and construction cycles to some extent. Most mortgage rate forecasts have 30-year fixed rates staying above 6% through 2027 (Reuters). A prolonged housing or non-residential construction slowdown would certainly add downward pressure to demand for roofing, insulation, and lumber. On top of that, QXO would be absorbing that pressure with a leveraged balance sheet.

Management

The Chairman & CEO of QXO, Brad Jacobs, has founded eight companies, growing each into billion-dollar-plus enterprises, six of which went public. He has an exceptional track record:

• United Rentals — founded 1997, Jacobs served as chairman for 10 years and CEO for six. United Rentals is the world’s largest equipment rental company.

• XPO Logistics — Since 2011 Jacobs along with other investors acquired and integrated approximately 500 companies and opened 250 greenfield locations, XPO is now positioned as a leader in freight and logistics providers.

• United Waste Systems — went public 1992 and sold to Waste Management for $2.5B in 1997. Earnings grew at ~55% CAGR during his tenure.

Matt Fassler, Chief Strategy Officer, served in the same role under Brad Jacobs at XPO from 2018 to 2022, where he oversaw the company’s strategy, capital structure, investor relations, and growth opportunities. He has direct and relevant experience in the exact position he is now performing at QXO.

Ken West will become President and COO effective September 1, 2026. Previously, he worked at Honeywell, where he most recently served as President and CEO of Honeywell Process Technology.

Its recent appointment of Ashwin Rao as Chief Artificial Intelligence Officer is significant, as he was previously head of AI at Target, where he led a team that developed models for pricing, merchandising, customer experience, supply chain, and logistics. It also appointed Val Liborski, who most recently served as CTO of Yahoo and as a product manager at Amazon Web Services. Their combined experience is significant, as technology and AI are a core part of QXO’s strategy to consolidate the fragmented sectors in building products distribution.

Financials and Valuation

Financials

At the time of writing, QXO has a Market Cap of $14.56B with Net Debt of $4.26B. The Debt to Equity ratio is 0.7.

Debt to TTM EBITDA sits at 20.7x on a trailing GAAP basis. (TTM EBITDA of $340.5M does not entirely include Kodiak or TopBuild. Kodiak has only been part of QXO for one of the four trailing quarters, and TopBuild closed on July 1st, after the TTM window ends)

Leverage (Gross Debt ÷ EBITDA) is at 5 using management’s $2.1B combined 2025A adjusted EBITDA.

All financials were taken from Fiscal AI’s website. You can access a free trial of the premium offering via the following link, no card required. Fiscal AI

TTM Performance:

Revenue TTM: $9.90B

Gross Profit TTM: $2.38B

Operating Income TTM: $(337.6)M

Consolidated Net Income TTM: $(511.7)M

Q2 2026 Highlights:

Revenue of $3.25B, up 70.3% YoY, including $595M from Kodiak

Adjusted EBITDA of $272M, up from $204M YoY

GAAP Net Loss of $(55)M, narrowing from $(59)M YoY

Gross Margin of 24.7%, up from 21.1% YoY

Six month operating cash flow is at $(146)M, and free cash flow is ~$(200)M, which was driven by Kodiak integration costs and working capital build. However, TTM free cash flow is positive at $141.2M.

The sales mix is shifting with the integration of Kodiak’s business. Complementary building products grew from 22.4% to 37.9% of net sales year-over-year, while residential and non-residential roofing both shrank as a share of the total (48.7% → 39.0% and 28.1% → 22.7%, respectively). Roofing is not shrinking in dollar terms, but rather revenue is more diversified with Kodiak’s contribution.

Management remains optimistic as they committed to more than doubling EBITDA and reaching $50 billion in revenue by 2030.

Valuation:

QXO trades at:

2.2x LTM EV/S and 1.2x NTM EV/S

64.1x LTM EV/EBITDA and 10.9x NTM EV/EBITDA

P/E LTM -15.4 and 28.9x NTM P/E

103.1x LTM P/FCF and 21.4x NTM P/FCF

This premium reflects the market pricing in Jacobs’ ability to efficiently deploy capital, given his track record at United Rentals and XPO. The wide gap between LTM and NTM multiples shows QXO’s valuation depends more on the successful integration of these businesses than its current performance.

Chart

Currently trades at $13.86, 7.58% below the 50SMA and 28.02% below the 200SMA.

RSI 45.58

-29.72% YTD

QXO remains in a clear downtrend, trading below all major moving averages, with the 50-day SMA sitting well below the 200-day SMA.

The stock found resistance at the overhead 21 EMA recently and prior to that the SMA 50 has served as resistance. Bulls would want the support in the low 13’s to hold and then for overhead moving averages to be reclaimed.

Final Thoughts

The bet is on Brad Jacobs to execute his proven M&A roll-up strategy in a fragmented industry, using technology to expand margins and capture resilient repair-and-remodel demand. Any acceleration in new home construction or a drop in interest rates would also serve as tailwinds.

Thank you for reading and if you enjoyed this post, please leave a like and Restack.

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References

Primary / Company Sources:

• QXO, Inc. Annual Report (Form 10-K), fiscal year 2025 — SEC EDGAR

• QXO to Buy Kodiak Building Partners for $2.25 Billion Press Release — QXO Investor Relations

• QXO Investor Q&A, July 9, 2026 — PDF

• QXO Investor Presentation, “QXO to Acquire TopBuild,” April 2026 — PDF

• QXO Reports Second Quarter 2026 Results (Earnings Release) — PDF

• TopBuild Corp, SEC Filing Pursuant to Rule 425 under the Securities Act of 1933 — SEC EDGAR

Secondary / Institutional Sources:

• Bloomberg, “Housing Shortage Is at Least 10 Million Homes, White House Says” — link

• William Blair, “Why the Roofing Industry Is the Next Frontier in Essential Services” — link

• Rothiams, “Growing Old: Six Risks of Aging Facilities” — link

• NAHB, “2026 Housing Outlook: Ongoing Challenges, Cautious Optimism and Incremental Gains” — link

• McKinsey, “The Cost of Compute: A $7 Trillion Race to Scale Data Centers” — link

• Turner & Townsend, “Data Centre Construction Cost Index 2025-2026” — link

• S&P Global Ratings, QXO credit rating action — link

• Reuters, “US Home Prices Crawl Higher, 30-Year Mortgage Rates Stick Near 6%” — link

Data:

• Fiscal.ai — financial statement data, TTM performance, valuation multiples, and technical/chart data throughout the Financials and Valuation and Chart sections

Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll to here for my Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

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Indices

Dow Jones Industrial Average declined 0.85% in the last week

S&P 500 declined 1.43% in the last week

Nasdaq Composite declined 2.05% in the last week

IWM declined 1.68% in the last week

Key upcoming economic events

Monday, August 24

• Chicago Fed National Activity Index (July)

Tuesday, August 25

• S&P/Case-Shiller Home Price Index (June)

• Richmond Fed Manufacturing Index (August)

• New Home Sales (July)

• Consumer Confidence (August)

Wednesday, August 26

• Personal Income and Spending / PCE Price Index (July)

• GDP (Q2, Second Estimate)

• Durable Goods Orders (July, Preliminary)

Thursday, August 27

• Weekly Jobless Claims

• Wholesale Inventories (July, Preliminary)

• Jackson Hole Economic Symposium begins

Friday, August 28

• Chicago PMI (August)

• University of Michigan Consumer Sentiment (Final, August)

• Fed Chair Kevin Warsh’s Jackson Hole keynote address, 10:00 a.m. ET

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at $7,674.37, 1.77% above the 50SMA and 8.15% above the 200SMA.

RSI 53.85

11.90% YTD

Distribution days in the last week: 1

The S&P 500 pulled back from recent highs this week and closed down 1.43% on the week despite a stronger finish on Friday. The pullback coincided with a spike in the 30-year Treasury yield to its highest level in nearly two decades, amid renewed US-Iran tensions. The index does remain above all key moving averages.

COMPQ

Currently trades at $26,180.46, 0.89% above the 50SMA and 8.00% above the 200SMA.

RSI 50.87

12.67% YTD

The Nasdaq Composite closed down for the week and failed to hold the 21 EMA. The next key moving average support is the 50-SMA at 25950.52.

Distribution days in the last week: 2

The Nasdaq Composite closed down for the week and failed to hold the 21 EMA. The next area of interest is the SMA 50 at 25950.52.

BTC (currently Long)

Currently trades at $77,267.34, 19.26% above the 50SMA and 12.14% above the 200SMA.

RSI 81.07

-12.82% YTD

The U.S. Department of the Treasury announced plans to double its long-term bond buybacks, weakening the dollar, with Bitcoin benefitting as an alternative asset.

Last week I had written:

Bulls will want to see a reclaim of those and then 200 SMA in the coming weeks, given that it has served as a strong resistance level.

Bitcoin broke back above both its 50- and 200-day moving averages after a prolonged downtrend, closing up nearly 20% from the week before. The move came as President Trump hosted crypto industry executives at the White House on Wednesday, calling on Congress to pass the Clarity Act. With this recent rally, BTC is in slightly overbought territory, with an RSI of 81.07

EEM

Currently trades at $67.12, 1.6% above the 50SMA and 10.4% above the 200SMA.

RSI 56.71

19.97% YTD

EEM remains in an uptrend and it continues to vastly outperform the SPX YTD, the gap has increased to almost 800bps. It closes above all key moving averages although the 21 EMA does remain below the SMA 50 as yet

GOLD (Long Physical)

Currently trades at $4,604.49, 10.29% above the 50SMA and 2.28% above the 200SMA.

RSI 70.50

8.49% YTD

In early June, Gold lost its 200-day moving average for the first time since its bull run began in late 2023 which is notable and it had not been able to come close to reclaiming it. However, last week gold broke out of a falling wedge pattern and started to consistently trade above its 21-day moving average, which had previously acted as resistance. It has now reclaimed the 200 day moving average (see arrows)

Gold is a beneficiary of a weakening US Dollar after the U.S. Treasury announced plans to at least double its long-term debt buybacks. This was a significant catalyst for gold as the price pushed higher, clearing the 200-day SMA and closing comfortably above all key moving averages.

SOXX

Currently trades at $520.05, 6.93% below the 50SMA and 23.68% above the 200SMA.

RSI 44.94

65.97% YTD

After printing a bullish 5/21 EMA cross on Tuesday, August 11, SOXX failed to hold that momentum as it was rejected at the overhead 50-day SMA. SOXX closed below both the 50-day SMA and 21-day EMA, printing a bearish 5/21 EMA cross on Wednesday, August 19 (see arrow). Bulls will want to see the overhead 50-day SMA (~558) reclaimed soon.

MU

Currently trades at $966.78, 0.18% above the 50SMA and 69.3% above the 200SMA.

RSI 54.34

206.7% YTD

MU traded down on the week, although it managed to close above the 50-day SMA. It held up relatively better than the broader semiconductor space, which is encouraging, but bulls will want to see more constructive price action, including a hold of the 50-day SMA at a minimum.

AMZN (Currently Long)

Currently trades at $258.63, 3.6% above the 50SMA and 8.5% above the 200SMA.

RSI 49.74

14.2% YTD

Last week I had written:

The 21-day EMA is near, and bulls will want to see it hold as support before the stock rallies back toward its highs. If it fails to hold, a gap fill to pre-earnings levels is not out of the question.

Amazon did continue to sell of this week and we lost the 21 EMA, so a gap fill to pre-earnings levels looks increasingly possible. The next level to hold is the SMA 50 at 249.73.

COIN (Currently Long)

Currently trades at $186.49, 17.65% above the 50SMA and 6.06% below the 200SMA.

RSI 66.96

-21.16% YTD

COIN had a big move up this week on significant volume. The overhead, descending 200-day SMA is likely to act as resistance (see arrows). Once surpassed, there is a horizontal level of interest at 214–215. I believe both of these are in play if the near-term bounce in crypto holds.

XBI

Currently trades at $165.73, 8.12% above the 50SMA and 25.06% above the 200SMA.

RSI 63.43

36.38% YTD

The XBI (S&P Biotech ETF) reached an all-time record closing high of $169.68 on August 19, 2026, driven by a massive sector rally following positive Phase 3 mRNA cancer vaccine trial results.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 58%

Breadth decreased significantly this week, with the percentage of stocks above the 50-day moving average now at 58.0%.

Notable portfolio changes in previous week (all updated live in subscriber channels):

Read more

• SPX: down 0.53%

• Nasdaq: down 0.78%

• Crude: up 3% to 87 (renewed US/Iran tensions)

Economic Data for Thursday the 20th:

• Initial Jobless Claims

• Philadelphia Fed Manufacturing Index (August)

• CB Leading Economic Index (July)

Read more

The stock is now up over 100% since that original pitch (once can read it above) and more than 90% against our cost basis.

My plans and commentary on the position:

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Layout:

Overview of Cerebras Systems Inc

Bull and Bear Case

Management

Financials and Valuation

Chart

Current position and plans

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Executive Summary

Cerebras Systems Inc. produces the fastest inference hardware available, and its wafer-scale architecture differs fundamentally from traditional GPUs. The core differentiation is speed, not cost or capacity. Bears argue that Cerebras’s Wafer-Scale Engine 3 (WSE-3) cannot reach the cost floor of a batched GPU, confining it to a premium, latency-sensitive niche rather than the broad inference market.

However, I largely agree with bulls like UBS analyst Tim Arcuri regarding an industry shift toward disaggregated inference, where prefill and decode run on separate, specialized hardware, expanding latency-sensitive solutions into mainstream inference workloads. I remain more cautious than Tim on two fronts: the total share of the decode TAM that Cerebras can capture, and the on-chip memory constraint, which I expect will bind more tightly as long-context reasoning models and agentic workflows become the primary AI use cases.

I would turn more constructive on evidence of revenue scaling beyond anchor customers, such as converting all tranches of the OpenAI agreement, accelerating the AWS rollout, and recovering gross margins in line with UBS’s optimistic projections. Conversely, I would downgrade my view if competing solutions from Nvidia or Groq capture greater decode market share, or if memory constraints limit adoption sooner than anticipated.

Rating: Buy

12 month Price Target: $260

Current Price: $218

Upside: 19%

I give Cerebras (NASDAQ: CBRS) a buy rating. I estimate 2029 revenue of approximately $10B in my base case and a price target of $260, against a UBS price target of $300.

Cerebras Systems Inc. (CBRS)

Cerebras builds AI compute systems around the WSE-3, the largest chip in production, comprising roughly 46,225 mm² of silicon, 4 trillion transistors, 900,000 cores, and 44 GB of on-chip SRAM on TSMC's 5nm process.

By integrating compute and memory on a single wafer, the design delivers 21 PB/s of on-chip bandwidth and single-stream decode roughly 10 to 20 times faster than a standard GPU rack. The chip ships in the CS-3 system, which costs an estimated $2M to $3M, draws roughly 23 kW, and requires proprietary liquid cooling and dedicated power delivery. The company generated $510M in revenue in 2025 and completed its IPO in May 2026. Its revenue base is anchored by a 750 MW, $20B-plus inference agreement with OpenAI and a disaggregated inference partnership with AWS, alongside a roster of enterprise customers.

Inference Economics

Transformer inference runs in two phases:

1. Prefill: Processes the prompt in parallel and is compute-bound.

2. Decode: Generates output one token at a time and is memory-bandwidth bound. Decode dictates latency, which is where Cerebras’s bandwidth advantage applies.

On GPUs, weight reads during decode are shared across batches, amortizing memory costs as batch sizes grow. Cost per token falls until the processor reaches its “balance batch” (where it becomes compute-bound), determined by the compute-to-memory bandwidth ratio ($F/BW$).

According to MatX CEO Reiner Pope, standard GPUs operate at an $F/BW$ ratio of ~300 and balance in the low thousands of sequences. By contrast, Cerebras dedicates far more silicon to bandwidth, operating at an $F/BW$ near 10–15 and balancing at just a few dozen sequences. Figures 1 and 2 illustrate the resulting cost impact.

Bull Case

The Moat Exists in Speed

Historically, wafer scale integration is very difficult to replicate given yield, packaging, high-density power delivery, thermal, and software-stack, and CBRS’s on-wafer interconnect gives it an advantage over peers such as Groq. That advantage is concentrated in single-model, low-concurrency, serving a premium tier of buyers.

The Total Addressable Market (TAM) is Large

Looking at the addressable-market analysis (See Figure 3 in Financials and Valuation), the revenue estimates (See Figure 8 in Financials and Valuation), and disaggregated build outs at Nvidia and AWS, the TAM is large. CBRS has a year end 2025 backlog of $24.6B, and adoption across Mistral, Perplexity, Cognition, Meta’s Llama API, and Notion which is positive for enterprise.

The TAM question is critical and hinges on two dynamics:

1. Inference Disaggregation: The industry is decoupling compute-bound prefill (on GPUs/custom ASICs) from memory-bound decode (on bandwidth-optimized silicon). For example, AWS pairs Trainium for prefill with CS-3 for decode via Amazon Bedrock. Early adoption by OpenAI and hyperscalers suggests disaggregation could define the future of inference architecture.

2. Shift to Agentic Workloads: Rising demand for reasoning and agentic workflows places a premium on token speed, expanding the fast-inference TAM and Cerebras’s target opportunity.

However, several hyperscalers rely on in-house silicon (Google TPUs, Microsoft Maia, Meta’s MTIA) and are unlikely to adopt Cerebras. Meanwhile, Nvidia and Groq will capture substantial decode share via existing moats and scale. This leaves an addressable market of roughly $30B–$50B for Cerebras.

Cerebras engineers estimate fast inference at ~5% of general inference TAM (~$60B), far more conservative than UBS’s $180B projection, yielding an addressable slice of $30B–$60B. Cerebras currently commands 1–5% of latency-sensitive inference; by my estimates, it must capture 16.7%–33.3% of this slice to achieve $10B in revenue by 2029.

CBRS CS-3 is Competitive Compared to Batched GPUs

When workloads demand ultra-low latency, GPUs must drop batch sizes, wiping out their throughput advantage and narrowing the gap to pure compute costs. While Figure 2 highlights a 2–5x cost penalty for a latency-optimized CS-3 compared to a throughput-optimized GPU, Cerebras becomes price-competitive when GPUs are locked into the same low-latency constraints (see Inference Economics in Financials and Valuation).

Applications of CBRS-Class Latency

Applications of CBRS-class latency are interactive assistants, voice, and real-time agents, sectors where I see a real and growing opportunity. Latency is important in interactive models, and where the bulk of enterprise and merchant revenue will flow for Cerebras.

Creation of Ultra Premium Tier to Capture Revenue for Price-Insensitive Buyers

For cost-insensitive buyers, pooling multiple Cerebras CS-3 systems enables support for larger parameter models without sacrificing low latency, establishing an ultra-premium tier for coding and general-purpose agents. This allows Cerebras to capture revenue across diverse buyer segments

Bear Case:

An Increasingly Competitive Market

The TAM is large but increasingly competitive, as disaggregated inference is adopted by both Nvidia and AWS. UBS projects fast inference at roughly $180B by 2030, a figure I agree with, but I believe the addressable slice for Cerebras is smaller at $30B to $50B once Nvidia’s installed base and decode-capable hyperscaler silicon are excluded, such as Google TPUs, Microsoft Maia, and Meta MTIA. Furthermore, the conversion of the OpenAI and AWS programs within this fast-inference niche is already priced in (see Figure 3)

On raw compute, GPUs are roughly 2.25x cheaper per sustained PFLOP-hour than the CS-3.

Memory Capacity: The Binding Constraint

The main reason my target sits below analyst estimates is the on-chip memory constraint, which I expect will cap Cerebras’s upside in the long-context, high-concurrency segment of the market.

During decode, the KV cache stores the attention state for every token in context. Its size is approximately batch size times context length times bytes per token ($B \times L \times b$). Unlike the weight read, which amortizes across a batch, the KV cache is unique to each sequence and never amortizes. Cerebras’s advantage holds only while the weights plus KV cache fit within its 44 GB of on-chip SRAM. Once memory overflows, the excess must be served from external memory with higher communication latency, causing the system to perform more like a standard GPU. However, a GPU carries far more base memory and efficiently directs overflow into DDR, flash, and disk storage. Figure 4 illustrates why on-chip capacity remains constrained: SRAM costs roughly two orders of magnitude more per gigabyte than HBM.

The 44 GB holds weights and cache together. For smaller models like the roughly 30B Codex-Spark model that’s fine, because weights at FP8 (a computation format to save memory) consume roughly 30 GB, leaving low-teens GB for the cache. But this does not work as well for larger models, Figure 5 shows the data at a concurrency of 32 sequences, consistent with CBRS's low-batch.

Recent algorithmic shifts directly address the KV cache bottleneck. Both grouped-query attention (4–8x reduction) and multi-head latent attention (10–40x reduction) drastically lower the per-token memory footprint. The specifics of what each does exactly is not relevant, except that this lower footprint expands the effective token capacity of a single wafer, enabling multi-million token contexts to run on-chip without hitting memory walls (Figure 6).

But KV cache compression does not change Cerebras’ competitive position. First, shrinking the memory per token is a one-time gain, but as context lengths grow larger and there are a higher frequency of queries from broader AI use this matters less. A 10x reduction provides just ~3 doublings of context headroom which exponential context growth will consume quickly. Second, the saving is not unique to Cerebras. A GPU reaps the exact same benefit, improving its decode performance proportionally more than the CS-3 (Figure 7).

The better solution is expanding capacity rather than compressing it by clustering multiple wafers. Cerebras’s compiler and Cluster Manager stitch several CS-3s into a single logical machine where a pod of four acts as a single chip with ~176 GB of SRAM, avoiding the more complex multi-GPU interconnects required by CUDA.

While clustering solves memory capacity, multi-system scaling raises hardware costs and introduces inter node communication that hurts cost efficiency, whereas GPUs can handle context growth locally up to their HBM limits. Also, pooled SRAM is not as fast. When one wafer requests data stored on another, it must reach across a system-to-system link that is slower than local on chip SRAM. The pod functions less like one massive memory pool and more like isolated islands of ultra fast memory connected by slow bridges (Figure 7).

A multi-GPU node holds roughly fifty times more KV in HBM than a CS-3, and two to three orders of magnitude more once cheaper tiers are included, at any per-token KV size. CBRS cannot tier without surrendering the bandwidth that is its competitive advantage, and its SRAM scale up advances slowly, from 44 GB on WSE-3 to only slightly more in later generations. The number of concurrent long-context sessions a CS-3 can serve is therefore a small fraction of a GPU node’s.

This defines the central tension in the hardware. The reasoning and agentic wave raises the value of token speed, which favors CBRS, and inflates the KV cache, which does not. As long as the memory wall has no straightforward solution and HBM capacity is not improving quickly enough, I would expect any advance to slightly favour tiered GPU systems more than CBRS, except for latency sensitive workflows, which is why I’m more pessimistic than the analysts.

• KV cache. approximately B x L x b, with b roughly 1.7 KB/token under dense attention. At B=2,000 and L=100,000 this is roughly 340 GB against 44 GB. Compression (Figure 6) lowers b by roughly 4 to 40x and moves the absolute ceiling to multi-million-token contexts; the relative gap (Figure 7) is unchanged, as a GPU node holds roughly 50x more KV in HBM and 450 to 900x+ with tiering.

Latency Advantage: Application by Application

The applications where Cerebras-class latency provides a definitive edge remain mixed.

First, in high-frequency and quantitative trading, industry feedback indicates that ultra-low latency requirements operate on timescales far below what any language-model silicon can reach. The Taalas HC1, for instance, hardwires model weights and architecture directly into the silicon to achieve over 16,000 tokens per second, roughly 8x faster than any Cerebras chip. Quantitative trading firms would likely favor hardwired solutions like Taalas, despite higher unit costs.

Second, as noted in the bull case, Cerebras boasts a backlog of roughly $24.6B with adoption across Mistral, Perplexity, Cognition, Meta’s Llama API, and Notion. However, a notable counterexample is the May 2026 Thinking Machines interaction model, a 276-billion-parameter mixture-of-experts activating only 12 billion parameters. By combining a low active parameter count with software optimization, it achieved a turn-taking latency of 0.40 seconds (versus 1.18 seconds for its nearest competitor) on Nvidia Blackwell GPUs without specialized silicon. This demonstrates that ultra-low latency can be achieved on general-purpose hardware, potentially narrowing Cerebras’s addressable market over time.

Lastly, in coding and agentic workflows, Cerebras hosts OpenAI’s Codex-Spark and Cognition’s SWE-1.6, both of which are well-regarded for high-tool-turn tasks. However, developer feedback and industry surveys point to a clear preference for higher reasoning capabilities over raw speed for complex execution. Furthermore, the market is shifting toward autonomous background agents that operate without a human on the critical path, making workloads batchable and inherently better suited to standard GPUs.

Other Risks:

• Merchant capture. My base case relies on OpenAI conversion. Competition from peers (SambaNova, d-Matrix, Etched, Tenstorrent, Taalas) and hyperscaler in-house silicon could limit share beyond the anchor customers.

• Memory capacity. The relative capacity gap versus tiered GPU systems survives KV compression (Figure 7), and could bind sooner than I assume as context and concurrency rise.

• Erosion of the latency advantage. Nvidia is raising scale-up domain size (8 to 72 to a planned 500-plus) and per-chip bandwidth (~8 to ~22 TB/s), lowering the GPU latency floor and making fast-enough cheaper for a widening set of workloads.

• Customer concentration and backloading:

  • Three customers individually represented 34%, 32% and 10% of second-quarter 2026 revenues,

  • OpenAI dependence: The OpenAI agreement is three 250 MW tranches, roughly 15% expected across 2026 and 2027, the remainder milestone based, with a working-capital loan of roughly $1B carrying repayment triggers and warrants vesting only above thresholds including a $40B market cap and full delivery.

• Supply-chain scaling. CBRS must scale nearly tenfold while relying on third parties, and a higher liquid-cooling flow requirement (~100 L/min against ~80 for a comparable Nvidia deployment) lowers available colocation sites.

• Geopolitical and regulatory. Reliance on TSMC and exposure to sensitive markets (G42, MBZUAI) create risk from export controls, sanctions, and tariffs.

Nik’s Outlook:

My base case assumes solid conversion of the OpenAI backlog, with the first two tranches ramping and the third partially contributing by 2029, alongside modest AWS expansion and steady merchant growth. My bull case models fuller OpenAI conversion and greater AWS upside, reaching consensus revenue. My bear case reflects OpenAI tranche slippage and minimal AWS contribution. Crucially, neither the base nor bull case relies on taking contested market share; upside is driven by converting contracted OpenAI and AWS backlog rather than displacing Nvidia or hyperscalers.

Revenue mix is the second headwind, weighing on margins rather than top-line growth. The bulk of contracted revenue comes from OpenAI, which UBS models primarily as cloud rather than hardware, with hardware layering in only around 2028 due to OpenAI’s lack of dedicated data center capacity. Cloud carries lower gross margins because Cerebras absorbs colocation, power, and cooling costs, explaining why near-term gross margin guidance was revised down from ~46% to ~37% as rented capacity bridges the ramp.

This cloud shift is structurally driven: the CS-3 demands proprietary liquid cooling (~100 L/min vs. ~80 L/min for a comparable Nvidia system) and specialized power delivery, making it difficult to deploy in standard customer facilities and easier to sell as hosted capacity. However, intense data centre colocation competition poses a structural constraint on long-term revenue, as securing large-scale capacity commitments will prove challenging for a company with limited cloud operating history.

Management

Cerebras was founded in 2015 by a team of five co-founders: Andrew Feldman, Gary Lauterbach, Michael James, Sean Lie, and Jean-Philippe Fricker. All of the founders previously worked together at SeaMicro, a company founded by Feldman and Lauterbach, which was then sold to AMD for $334 Million.

In 2015, the five co-founders founded Cerebras to pursue wafer-scale integration, a problem the semiconductor industry had largely written off due to chip yield constraints. They leveraged their experience building fabric-based computing systems at SeaMicro to develop software based redundancy to route around the yield loss that comes with manufacturing defects across an entire wafer. Over the years, they developed cooling and power systems, as well as custom manufacturing equipment capable of driving dozens of screws into the wafer simultaneously without cracking it.

Feldman has served as CEO since founding the company. Lauterbach and Lie serve as CTO and Fricker as Chief System Architect. James is Chief Architect for Advanced Technologies. All five have played a prominent role in leading Cerebras through three generations of growth for their Wafer-Scale Engine (WSE) processors, with a highly anticipated upcoming release for their fourth generation WSE-4.

Given that the team skews heavily toward the original founders who are serving in technical leadership roles, Cerebras has an experienced leadership group with impressive backgrounds and resumés. In addition to building SeaMicro which was acquired by AMD, Feldman and Lauterbach then spent several years running parts of AMD’s data center business. Feldman served as Corporate Vice President and General Manager, and Lauterbach was CTO of AMD’s data center server business.

Notably, Bob Komin joined as CFO in one of the company’s more recent executive additions. Previously he was CFO of Sunrun, and guided them through their IPO.

Financials and Valuation:

Financials

At the time of writing, CBRS has a Market Cap of $66.95B with Cash & Inv. of $7.92B and Debt of $1.49B. CBRS has Net Cash positive and a Debt to Equity ratio of 0.1.

TTM Performance:

Revenue TTM: $680.67 (M)

Gross Profit TTM: $237.1(M)

Operating Income TTM: ($552.48) (M)

Net Income TTM: ($512.35) (M)

Q2 2026 Highlights:

• Record Core Revenue: $209.9 million, representing 103% year-over-year growth.

• Cloud Services: Core cloud and other services revenue reached $127.7 million, up 287% year-over-year.

• Gross Margin: Core gross margin was 40.6%, with cloud services margins at 41.8%.

• Operating Leverage: Core operating margin improved by 2,600 basis points year-over-year to -16%.

• Strong Liquidity: The company ended the quarter with over $8.6 billion in cash, cash equivalents, and marketable securities

Valuation:

CBRS trades at:

• 67 LTM EV/S and 31x NTM EV/S.

• 5.4x Price to Book

• 154x NTM EV/EBITDA

Clearly this is not a stock with valuation support.

Revenue Estimates (Nik)

I estimate 2029 revenue of approximately $10B in my base case (Figure 8). Customer-level estimates use a revenue-per-megawatt figure of approximately $9.5M, implied by the OpenAI deployment trajectory, applied to converted capacity.

Valuation and Price Target

The higher-margin hardware path runs mainly through AWS, but that remains a 1,000-system pilot under an unsized framework whose material contribution UBS places closer to 2030. Meanwhile, cloud-heavy OpenAI revenue peaks near $7.1B in 2028 and drops toward $4.1B by 2030 as earlier tranches mature.

Because Cerebras’s cloud-delivery model carries higher capital intensity and lower gross margins than asset-light peers operating in the 60%-plus range, I do not model a return to the low-60s gross margin that consensus projects by 2028–2029. Instead, I reflect this margin pressure by discounting the 11.9x compute peer average to a 9.5x EV/Sales multiple on 2029E revenue. This remains above the 7.0x cloud average to credit Cerebras’s wafer-scale IP and category-leading growth (Figure 9).

The same $260 results from applying an 8.5x multiple to analyst’s $11.2B revenue which is possible given the shift to lower margin cloud. Figure 10 shows the price target across revenue and multiple assumptions.

At 9.5x EV/sales and current SP of $218, I believe the market is pricing in 8.28B in 2029 rev which is 19.13% upside.

Does the valuation compensate the buyer for the risks?

Fair value across a range of revenue and multiple assumptions (Figure 10), I believe places the current price in the bottom half of the reasonable range and the risk/reward as positive.

• Balance batch. B = (F/BW) x (N_total / N_active). A GPU at F/BW ~300 with a mixture-of-experts activating ~1/8 of parameters gives B* ~2,400; CBRS at F/BW ~10 to 15 balances at a few dozen.

• Revenue per MW. OpenAI revenue of $7.1B at approximately 750 MW implies $9.5M per MW-year, used to scale converted capacity to revenue in Figure 8.

Chart and Technicals

Currently trades at $218.98, 4.9% above the 50SMA

RSI 51.45

-29.6% YTD

CBRS is building its post-IPO base and has, for the most part, traded below its IPO AVWAP. This is relevant because it represents the aggregate cost basis of the entire public market since the stock began trading. The average investor remains underwater, and the IPO AVWAP has consistently served as dynamic resistance, repeatedly attracting sellers (see arrows).

Bulls will want to see that level reclaimed and flipped to support before gaining confidence in a sustained uptrend.

Current position and plans

SixSigmaCapital does not hold a position at the time of writing.

does also not currently hold a position and below are his final thoughts and plans for his position:

I believe that Cerebras does have a truly unique market position and demand is high for low latency disaggregated compute. Given this structural tailwind, I plan on deploying a small amount of capital into Cerebras stock in the near future. To buy at a more attractive valuation, I’m waiting for a compression in share price.

Thank you for reading and if you enjoyed this post, please leave a like and Restack.

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Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll to here for my Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

Subscribe now

Indices

Dow Jones Industrial Average declined 0.39% in the last week

S&P 500 advanced 0.48% in the last week

Nasdaq Composite advanced 0.43% in the last week

IWM advanced 1.31% in the last week

Key upcoming economic events

Monday, August 17

• NY Empire State Manufacturing Index (August)

• NAHB Housing Market Index (August)

• TIC Net Long-Term Transactions

Tuesday, August 18

• Building Permits (July)

Wednesday, August 19

• FOMC Meeting Minutes

Thursday, August 20

• Initial Jobless Claims

• Philadelphia Fed Manufacturing Index (August)

• CB Leading Economic Index (July)

Friday, August 21

• S&P Global Flash Manufacturing PMI (August)

• S&P Global Flash Services PMI (August)

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at 7,785.76, 3.64% above the 50SMA and 10.05% above the 200SMA.

RSI 65.90

13.52% YTD

Distribution days in the last week: 0

The S&P 500 closed above all key moving averages and achieved an all time high weekly close.

COMPQ

Currently trades at 26,729.16, 3.18% above the 50SMA and 10.55% above the 200SMA.

RSI 60.29

15.04% YTD

Distribution days in the last week: 0

The Nasdaq Composite closed up for the week and the next level above to watch will be the ATH at 27,190.

BTC (currently Long)

Currently trades at $63,090.62, 0.67% below the 50SMA and 9.06% below the 200SMA.

RSI 43.69

-28.91% YTD.

The U.S. Senate Banking Committee advanced the Digital Asset Market Clarity Act to the full Senate in a bipartisan 15–9 vote a few weeks ago. Whilst there had been some regulatory, a procedural vote is now scheduled for mid-September. This delay has likely reduced the bill’s chances of becoming law in 2026.

As of Saturday, August 15th at 23:36 BST, BTC is trading at 63,090. From a technical perspective, it is below all the near term moving averages. Bulls will want to see a reclaim of those and then 200 SMA in the coming weeks, given that it has served as a strong resistance level.

EEM

Currently trades at $66.61, 0.94% above the 50SMA and 10.14% above the 200SMA.

RSI 56.20

+18.44% YTD

EEM remains in an uptrend and whilst it continues to outperform the SPX YTD the gap has narrowed to around 480bps.

For the first time in four weeks EEM closed above the 50-day moving average. This is likely in part due to the bounce in TSMC, Samsung, and SK Hynix, which make up around 30% of the ETF.

GOLD (Long Physical)

Currently trades at $4,375.15, 5.28% above the 50SMA and 2.54% below the 200SMA.

RSI 63.13

+1.22% YTD

In early June, Gold lost its 200-day moving average for the first time since its bull run began in late 2023 which is notable and it has not been able to come close to reclaiming it.

Last week, gold broke out of a falling wedge pattern and has started to consistently trade above its 21-day moving average, which had previously acted as resistance. Bulls will want to see the 200-day moving average reclaimed next (see arrow).

SOXX

Currently trades at $550.42, 2.07% below the 50SMA and 32.67% above the 200SMA.

RSI 53.06

75.47% YTD

On July 6th, SOXX printed a bearish 5/21 EMA cross, signalling a near-term shift in momentum, and trended lower thereafter. However, this week on Tuesday the 11th, SOXX printed a bullish 5/21 EMA cross (see arrow) and has been trending upward.

Bulls will want to see the overhead 50-day SMA (~562) reclaimed this week.

MU

Currently trades at $971.66, 1.15% above the 50SMA and 75.89% above the 200SMA.

RSI 56.30

240.44% YTD

Last week I had written:

Whilst MU traded up this week, it once again found resistance at the 21-day moving average and closed below the 50-day for the fourth consecutive week. Bulls will want to see a reclaim of the 21-day moving average and a decisive weekly close back above the 50-day, sooner rather than later.

This week MU did close the week above the 50-day moving average for the first time since early July.

AMZN (Currently Long)

Currently trades at $262.65, 5.83% above the 50SMA and 10.50% above the 200SMA.

RSI 53.49

15.96% YTD

Amazon stock has been mostly range-bound over the past year. However, following a strong earnings print on July 30, the stock rallied and set a new high in early August. Since then, news of Bezos’s large share sale has curtailed the momentum. The 21-day EMA is near, and bulls will want to see it hold as support before the stock rallies back toward its highs. If it fails to hold, a gap fill to pre-earnings levels is not out of the question.

XBI

Currently trades at $157.41, 5.00% above the 50SMA and 19.97% above the 200SMA.

RSI 58.17

29.53% YTD

The XBI (S&P Biotech ETF) had been particularly overbought in late June and early July, but it gave a good opportunity on the 50-day SMA retest recently.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 70.4%

Breadth increased slightly this week, with the percentage of stocks above the 50-day moving average now at 70.4%.

Notable portfolio changes in previous week (all updated live in subscriber channels):

Read more

Read more

Full disclosure: I am currently long SE at 96.4/share.

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Overview

Sea Limited (SE) delivered a robust financial performance in the second quarter of 2026, characterised by strong top-line growth and disciplined operational execution.

They generated $7.8 billion in total GAAP revenue, representing a 48% year-on-year increase. This growth was primarily fuelled by the continued expansion of the Shopee e-commerce platform and the Monee financial services division.

Management successfully balanced aggressive user acquisition with improved unit economics, resulting in $917 million in adjusted EBITDA. The business is performing well due to structural improvements in logistics, the successful scaling of the Shopee VIP program, and the integration of advanced AI-driven risk models within the credit business, which have collectively enhanced operational efficiency and market penetration.

Second Quarter of Fiscal Year 2026 Financial Highlights

• Total Revenue: $7.8 billion, up 48% year-on-year.

• Consolidated Adjusted EBITDA: $917 million

• Net Income: $458.1M, up 10.6% YOY

• Shopee GMV: $38.3 billion, a 28% year-on-year increase.

• Shopee Adjusted EBITDA: $255.4M, up from $227.7M in Q2 2025

  • Adjusted EBITDA Margin (% of GMV): 0.7% up from 0.6% QOQ

• SeaMoney Revenue: $1.402 Billion up from $0.883 Billion in Q2 2025

• Monee Loan Book: $11.1 billion, up 62% year-on-year.

  • 90-day NPL Ratio (SeaMoney): Declined to 1.0% as of end of Q2 2026.

• SeaMoney Adjusted EBITDA: $288 Million, up from $255.3 Million in Q2 2025

  

• Garena Bookings: $764 million, reflecting 15% year-on-year growth.

• Garena Adjusted EBITDA: $430 Million, up from $368 Million in Q2 2025.

Financial Guidance and Outlook

Management remains confident in achieving its full-year financial objectives despite potential foreign exchange headwinds. Key highlights include:

• E-commerce Growth: Maintaining guidance for 25% year-on-year GMV growth in the e-commerce segment.

• Shopee Profitability: On track to reach $1 billion in adjusted EBITDA for the full year 2026.

• Operational Expansion: Continuing to scale fulfilment capabilities and expanding the standalone ShopeePay app into new markets, including Brazil, to deepen financial services integration.

Key Takeaways

Shopee:

• VIP Expansion: The loyalty program reached over 15 million members by the end of June, a 45% QOQ increase. VIP members contributed 24% of GMV in Asia. Furthermore, the VIP membership launched in Brazil in April and membership has already surpassed 1 Million.

• Logistics Efficiency: Shopee’s fulfillment order volumes grew over 20% quarter-on-quarter, with the company utilising a “CapEx-light” approach by renting rather than owning infrastructure.

• Content-Driven Commerce: Orders originating from live streaming and short-form video grew over 50% year-on-year, now accounting for more than 35% of physical goods orders in Southeast Asia.

Monee

• AI-Driven Credit Underwriting: Monee has implemented transformer-based architecture for credit risk models, similar to large language models, which has increased approval rates by approximately 10% while maintaining stable risk levels.

Garena

• Strategic Gaming Partnerships: Garena is diversifying its portfolio by licensing and publishing high-profile titles, including Palworld Online and Monster Hunter Outlanders, to expand beyond the Free Fire franchise

Final thoughts and my plans:

Sea Limited reported a strong quarter, in fact, it was its 5th consecutive quarter of revenue acceleration. Each segment was strong but I was particularly glad to see Shopee’s adjusted EBITDA margin inflecting upward again, and the strength of the VIP program proves that management’s investments are paying off. Lastly, regarding shareholder returns, management repurchased $416.8M worth of shares at an average cost of $88 in Q2. It was good to see the buyback authorisation being utilised.

I was a buyer of this name in the 70’s and 80’s and so it has been nice to see the +75% rebound. (Note all transactions get alerted on Substack and Discord simultaneously)

I plan to remain long, but I will cost-optimise some of my higher-cost shares as the stock continues to move up. The setup into the second half of the year looks strong, though continued execution is required and cost discipline will need to be maintained.

To end, I will leave you with remarks from CEO Forrest Li on the quarter:

“Our strong momentum from the first quarter has continued into the second. Our investments have enabled Shopee and Monee to continue to strengthen our market leadership while improving our user penetration. We will continue to invest prudently in serving more users and serving them better, broadening our foundation for profitable growth into the future.”

On Shopee:

“Shopee has delivered a strong first half of 2026. We again achieved new highs in GMV, gross order volume, and revenue in the second quarter. Our improving operational efficiency and growing scale have strengthened our unit economics. With this solid momentum, we are optimistic that Shopee will achieve the milestone of US$1 billion in adjusted EBITDA for the full year.”

On Monee:

“Monee also delivered another great quarter, with broad-based growth across our products and markets. The advances in our risk capabilities are compounding: each improvement helps us serve more users, serve them better, and reach further beyond Shopee. We are still at an early stage of growth. Only a fraction of the users across our ecosystem are using Monee’s financial products today, and credit penetration remains low across our markets. This gives us great confidence in Monee’s long-term growth and earnings potential.”

On Garena:

“Garena delivered another strong quarter across bookings and profitability. Free Fire anchored this strong performance, continuing to draw in over 100 million average daily active users. We continue to work towards diversifying our portfolio with two recently announced mobile games: Palworld Online and Monster Hunter Outlanders, both built on strong, globally recognized IP. We remain committed to delivering the high-quality experiences our players know us for.”

Thank you for reading and see you for the next one!

Format for what is covered in this weekly preview:

• A Look at the Indices

• Key Upcoming Economic Events

• Upcoming Earnings

• Charts

• Current Portfolio Holdings:

  • Sizing | Cost Basis | Timeframe | Planned Moves

• Closing Thoughts (Scroll here for my full Market Commentary)

I recommend checking out the most recent Monthly Portfolio and Performance Update below:

Subscribe now

Indices

Dow Jones advanced 1.78% in the last week

S&P 500 advanced 3.00% in the last week

Nasdaq Composite advanced 4.73% in the last week

IWM advanced 3.01% in the last week

Key upcoming economic events

Monday, August 10

• NY Fed 1-Year Inflation Expectations (July)

Tuesday, August 11

• NFIB Small Business Optimism Index (July)

Wednesday, August 12

• Consumer Price Index (July)

• Real Earnings (July)

• EIA Crude Oil Inventories

• Monthly U.S. Budget Statement (July)

Thursday, August 13

• Producer Price Index (July)

• Initial Jobless Claims

Friday, August 14

• Retail Sales (July)

• Import and Export Prices (July)

• Industrial Production (July)

• University of Michigan Consumer Sentiment (Prelim August)

• Business Inventories (June)

Upcoming Earnings

Below is the infographic by Earnings Whispers highlighting the schedule for this week:

Charts

SPX

Currently trades at 7,757.64, 3.51% above the 50SMA and 10.04% above the 200SMA.

RSI 66.32

13.11% YTD

Distribution days in the last week: 0

The S&P 500 closed the week comfortably above all key moving averages.

COMPQ

Currently trades at 26,690.62, 2.89% abovethe 50SMA and 10.79% above the 200SMA.

RSI 61.39

14.87% YTD

Distribution days in the last week: 0

The Nasdaq Composite closed above all key moving averages for the first time in several weeks.

BTC (currently Long)

Currently trades at $65,173.81, 2.85% above the 50SMA and 6.93% below the 200SMA.

RSI 56.06

-26.5% YTD.

The U.S. Senate Banking Committee advanced the Digital Asset Market Clarity Act to the full Senate in a bipartisan 15–9 vote a few weeks ago. Whilst there had been some regulatory, a procedural vote is now scheduled for mid-September. This delay has likely reduced the bill’s chances of becoming law in 2026.

As of Monday, August 10th at 01:16 BST, BTC is trading at 65,173. From a technical perspective, it is above the shorter-term moving averages but remains below the 200 SMA. Bulls will want to see a reclaim of the 200 SMA in the coming weeks, given that it has served as strong resistance.

EEM

Currently trades at $65.64, 1.00% below the 50SMA and 9.08% above the 200SMA

RSI 52.56

+17.32% YTD

EEM remains in an uptrend and whilst it continues to outperform the SPX YTD the gap has narrowed to around 400bps

For the third consecutive week, EEM closed comfortably below its 50-day moving average. This is likely due to the fact that TSMC, Samsung, and SK Hynix, which make up around 30% of the ETF, have been consolidating.

GOLD (Long Physical)

Currently trades at $4,340.72, 4.17% below the 50SMA and 3.15% below the 200SMA

RSI 65.05

+0.42% YTD

In early June, Gold lost its 200-day moving average for the first time since its bull run began in late 2023 which is notable and it has not been able to come close to reclaiming it.

The 21-day moving average has persistently been a resistance point for Gold; however, it was reclaimed this week as Gold broke out of a falling wedge pattern. Bulls will want to see the 200-day moving average reclaimed next.

SOXX

Currently trades at $543.27, 4.08% below the 50SMA and 32.95% above the 200SMA

RSI 51.2

73.38% YTD

On July 6th, SOXX printed a bearish 5/21 EMA cross, signalling a near-term momentum shift, and has been trending downward since.

However, this week SOXX traded strongly, and while it remains below the 50-day, it did close above the 21-day EMA, which had served as resistance. Bulls will want to see a 5/21 cross to the upside to confirm momentum.

MU

Currently trades at $877.57, 9.61% below the 50SMA and 64.07% above the 200SMA

RSI 47.14

178.38% YTD

Whilst MU traded up this week, it once again found resistance at the 21-day moving average and closed below the 50-day for the fourth consecutive week. Bulls will want to see a reclaim of the 21-day moving average and a decisive weekly close back above the 50-day, sooner rather than later.

AMZN (Currently Long)

Currently trades at $274.48, 10.9% above the 50SMA and 16.04% above the 200SMA

RSI 64.21

21.18% YTD

Amazon stock has been mostly range-bound for the last year. However, after a strong earnings print on July 30, the stock rallied and set a new high last week. This week, Bezos’s bulk selling is weighing on the stock, and it has retraced to just below the prior ATH. Once the selling is digested, bulls will want to see the stock rally to new highs.

XBI

Currently trades at $157.37, 6.77% above the 50SMA and 21.08% above the 200SMA

RSI 48.6

29.63% YTD

The XBI (S&P Biotech ETF) had been particularly overbought in late June and early July, but it gave a good opportunity on the 50-day SMA retest last week.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 66.4%

Breadth increased slightly this week, with the percentage of stocks above the 50-day moving average now at 66.4%.

Notable portfolio changes in previous week (all updated live in subscriber channels):

Read more