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Few developments stood out on this quarter:

• Google Cloud revenue more than doubled to $30.7 billion, while its operating margin rose to 36.2%, with a $561 billion backlog behind it.

• Capex reached $51.4 billion, up 114%, and free cash flow was negative for a second straight quarter.

• Google Search came in below estimates.

Below we will take a further look at the quarter.

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Overview

Google Cloud was the headline. Revenue rose 103% to $30.7 billion, led by Google Cloud Platform across enterprise AI infrastructure, AI solutions and core GCP, while operating margin widened to 36.2% from 23.7%. TPU system sales were also a meaningful contributor, so the Cloud line now includes hardware product revenue as well as cloud services. Google Cloud’s backlog was $561 billion, and management expects to recognise just over 55% of it over the next 24 months.

The core search business crucially came in below analyst estimates. Search and other revenue grew 12% to $63.35 billion even with the fastest query growth in five years (more on that below). YouTube ads grew 9% and Network 1%.

Alphabet operating income rose 30% to $40.6 billion, a 31.8% margin. EPS fell 26% to $2.12, but that came from investment marks (SpaceX) rather than the business, as covered below.

Key Financial Highlights

• Total Revenue: $127.6 billion, up 25% year-over-year (25% constant currency), the 13th straight quarter of double-digit growth.

  • Google Services: $96.3 billion, up 11%.

  • Google Cloud: $30.7 billion, up 103%.

  • Other Bets: $372 million, up 8%.

• Google Search & Other: $63.35 billion, up 12%.

• YouTube Ads: $11.2 billion, up 9%.

• Google Network: $7.5 billion, up 1%.

• Subscriptions, Platforms and Devices: $14.3 billion, up 11%.

• Google Cloud Backlog: $561 billion, with just over 55% expected to be recognised over the next 24 months.

• Operating Income: $40.6 billion, up 30%, a 31.8% operating margin (vs. 30.5% a year ago).

  • Google Services: $39.2 billion, up 17%, a 40.7% margin (vs. 38.5%).

  • Google Cloud: $11.1 billion, more than triple last year, a 36.2% margin (vs. 23.7%).

  • Other Bets: a $2.0 billion loss.

  • Alphabet-level activities (mainly shared AI R&D): a $7.7 billion loss, vs. $4.5 billion a year ago.

• Costs: R&D rose 36% to $20.6 billion. Other cost of revenues rose 32% YoY to $35.1 billion on TPU hardware costs, depreciation, content and infrastructure operations. Depreciation of property and equipment rose 49% to $8.4 billion.

• Net Income: $26.2 billion to common stockholders, down 25%, or $2.12 per diluted share, down 26%. Other income (expense) was negative $8.2 billion, including an $8.7 billion loss on equity securities worth $0.55 per share.

• Operating Cash Flow: $42.3 billion, down 13%, held back by the inventory build for TPU system sales and a $5.2 billion cash payment of the 2018 EC fine.

• Capital Expenditures: $51.4 billion, up 114%. Of the technical infrastructure investment, about 65% was servers and networking equipment (useful lives of six years) and 35% data centers (seven to 40 years).

• Free Cash Flow: negative $9.1 billion (vs. positive $24.5 billion a year ago). Trailing twelve months free cash flow was $19.7 billion, down 73%.

• Cash and Marketable Securities: $265.1 billion, including $90.4 billion of marketable equity securities, up from $126.8 billion at the end of 2025.

• Long-Term Debt: $125.1 billion, up from $46.5 billion at the end of 2025.

• Share Repurchases: none in the quarter or the year to date, vs. $11.5 billion in Q3 2025. The quarterly dividend is $0.22 per share, payable December 14.

• Inventory: $13.3 billion, up from $2.4 billion at the end of 2025.

• Headcount: 204,757, up 8%.

Key Takeaways

Operating Leverage, and Why EPS Fell:

Underneath the headline, the business did show operating leverage. Revenue grew 25% and operating income grew 30%, lifting operating margin to 31.8% from 30.5%. That came even as depreciation rose 49%, R&D rose 36%, and the shared AI research costs held at the Alphabet level climbed to $7.7 billion from $4.5 billion. Google Cloud did most of the work: its operating income rose by $7.5 billion, about 80% of the $9.3 billion increase in total operating income. Google Services margin also improved, to 40.7% from 38.5%, and G&A fell 17% as Alphabet lapped higher legal costs from a year ago.

So why did EPS fall 26%? Almost entirely below the operating line. Other income and expense swung from a $12.8 billion gain a year ago to an $8.2 billion loss, a $21.0 billion swing, driven by an $8.7 billion loss on equity securities, mainly the mark on Alphabet’s SpaceX investment. That loss took $0.55 off EPS, so EPS would have been about $2.67 without it. Last year’s quarter was flattered the other way by a $10.7 billion gain, which is why operating income, up 30%, is the cleaner read on how the business did.

Capex is Still Climbing:

Capex was $51.4 billion, up 114% and the third straight quarter of growth of about 100% or more. The 2026 guide of $195 billion to $205 billion is unchanged, implying roughly $63 billion to $73 billion in Q4, and management expects capex to “increase significantly” in 2027.

That spending took 121% of operating cash flow this quarter, against 49% a year ago, and depreciation is already up 49%. Beyond the balance sheet, the CFO cited $924 billion of future purchase commitments and $152 billion of pre-commencement leases and other obligations, though some carry pricing and volume flexibility.

How It Is Being Funded:

Alphabet has also been tapping the capital markets, even with $265 billion of cash and marketable securities. Long-term debt has risen to $125.1 billion from $46.5 billion at the end of 2025, it raised $12.4 billion through its at-the-market stock program this quarter, and buybacks have stopped, after $39.8 billion in the first nine months of last year.

Google Cloud:

Management says Cloud growth excluding TPU systems was “incredibly strong” but gave no number, so the 103% cannot yet be split. TPU systems work differently from cloud services: a signed contract goes into backlog, Alphabet builds inventory, and cash arrives on delivery, which is why inventory rose to $13.3 billion from $2.4 billion. Kurian said all of TPU system inventory is tied to signed contracts, and customers include Anthropic and Apple, with new partnerships through Oracle and Crux AI. Demand is not the constraint: Kurian said Alphabet could serve a lot more with more capacity, and the third-party capacity coming on in Q4 will weigh on Cloud margins in the near term.

Search: Faster Query Growth, Slower Revenue Growth:

Search and other revenue grew 12% to $63.35 billion, below analyst estimates of about $65 billion, even though Alphabet said year-over-year query growth was the fastest in five years. On the call, Philipp Schindler gave four reasons for the slowdown from Q2.

• FX was the biggest single factor.

• In retail, some APAC advertisers were hurt by the EU ending its de minimis exemption.

• Media and entertainment spend normalised after a World Cup-boosted Q2.

• AI Mode queries grew strongly but monetise at a lower rate for now, so more searches did not turn into revenue one for one.

YouTube ads were also a little light at $11.2 billion, up 9%, against estimates of about $11.4 billion, with brand the largest contributor and notable strength in living room viewing.

The CFO added that Search is lapping the acceleration that began in the third quarter of last year, which she put at about 3 points of growth this quarter, with a couple more points of that drag expected in Q4 alongside a slightly larger FX headwind. Most of these are timing, currency and comparison effects rather than a loss of demand, with AI Mode monetisation the one structural factor to watch. Management is scaling ads inside AI Overviews and AI Mode, including international markets and multi-turn ads in the US, and Schindler said ad experiments have shown promising results. The number I would most like to see is how much AI Mode’s lower monetisation cost in the quarter, which Google did not disclose.

Services:

Google Services operating income rose 17% to $39.2 billion, a 40.7% margin. The Gemini app reached one billion monthly users, and YouTube Music and Premium passed 150 million subscribers including trials.

Guidance

Alphabet gave qualitative guidance only, with one number:

• Capex: the 2026 range of $195 billion to $205 billion is unchanged. Capex is expected to increase significantly in 2027, with more detail on the Q4 call.

• Google Cloud: TPU system sales should continue to scale in Q4, followed by a meaningful revenue ramp in 2027. Cloud margins face near-term headwinds as third-party compute capacity ramps in Q4.

• Google Services: Search growth faces tougher comparisons in Q4 as it laps last year’s acceleration, and FX is expected to be a slightly larger headwind to revenue, mainly in Search and YouTube ads.

• Expenses: higher depreciation and data center operating costs such as energy will keep weighing on the P&L.

• Free cash flow: management expects strong operating cash flow but says the investment in technical infrastructure and the TPU system inventory build will keep pressure on free cash flow.

Current position and final thoughts

SixSigmaCapital is currently long GOOGL with a nominal cost basis in the low 100’s but more than 3x principal has been removed. I last trimmed shares at $372 in July and prior to that at 401 in May and have not added since in SixSigmaCapital portfolios.

The business remains in robust shape although there are some valid concerns notably Search, YT missing and the ongoing cash burn. Google Cloud more than doubled while its margin rose to 36.2%, Search is still growing double digits with the fastest query growth in five years, and the Gemini app has passed a billion users. Operating income grew faster than revenue even as depreciation and AI spending climbed, which is what you want to see in a heavy investment cycle.

The headline numbers do have some nuance: EPS fell because of investment marks, chiefly SpaceX, not because of the business, and the Search shortfall was impacted by FX, timing and the early economics of AI Mode.

What I am watching is cash. Capex exceeded operating cash flow, free cash flow has been negative for two quarters, and buybacks have given way to debt and equity raises. That is fine while Cloud grows like this, but I want to see the 2027 capex number on the Q4 call and how quickly TPU inventory turns back into cash.

I rate GOOGL as a Hold at current levels, unchanged from last quarter. For investors seeking a fresh entry point, waiting for a base to form or a pullback toward technical support (such as the $270-$275 level) would be prudent. For now, I will continue to monitor the story quarter by quarter.

Thank you for reading, leave a like and see you for the next one!

I am exiting my position in this company in accounts given the solid return in less than a year and risk reward is no longer there for me to hold.

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• Free cash flow fell 27% to $18.6 billion as cash paid for property and equipment doubled to $39.4 billion. Capex including finance leases rose a more modest 30%, to $45.2 billion.

• OpenAI accounted for $10.0 billion of revenue, roughly 11% of the total.

Below we will take a further look at the quarter.

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Overview

Microsoft Cloud revenue grew 30% to $63.9 billion. Azure was the primary driver, adding $10.8 billion in revenue year over year, with growth across all workloads.

Microsoft 365 commercial cloud revenue rose 17%, helped by higher revenue per user as customers moved to Copilot, E5, and E7 plans. Meanwhile, paid seats grew a modest 5%.

Commercial remaining performance obligation (RPO) reached $677 billion, up 73% from a year ago, with a weighted average duration of about 2.3 years.

The quarter was also the first reported under Microsoft’s new segment structure: Results are now split into Agents and Infra (applications, agents, the multi-model system, and Azure infrastructure) and Devices and Consumer, with prior periods recast.

The two segments moved in opposite directions: Agents and Infra revenue grew 25%, while Devices and Consumer fell 3%, dragged down by a 22% drop in Windows OEM and devices revenue.

Headline earnings were helped by OpenAI. Microsoft booked a $272 million net gain on its OpenAI investment this quarter, compared to a $4.1 billion loss in the same quarter last year. That is why GAAP EPS of $4.92 was up 32%, while EPS excluding the OpenAI impact was $4.89, up 18% from $4.13.

Key Financial Highlights

• Total Revenue: $92.3 billion, up 19% year-over-year.

  • Agents and Infra: $76.8 billion, up 25%.

  • Devices and Consumer: $15.5 billion, down 3%.

• Microsoft Cloud Revenue: $63.9 billion, up 30%.

• Azure Revenue: up 48%.

• Microsoft 365 Commercial Cloud Revenue: up 17%, with commercial seats up 5%.

• Microsoft 365 Consumer Cloud Revenue: up 17%.

• Industry Solutions Cloud Revenue: up 10%.

• Search and Advertising (ex-TAC): up 12%.

• Xbox Content and Services: down 2%.

• Windows OEM and Devices: down 22%.

• Commercial RPO: $677 billion, up 73% year-over-year.

• Gross Profit: $62.6 billion, a 67.8% gross margin (vs. 69.0% a year ago). Microsoft Cloud gross margin was 66%, down from 68% a year ago and up from 65% last quarter.

• Operating Income: $45.9 billion, up 21%, a 49.8% operating margin (vs. 48.9% a year ago).

• Net Income: $36.6 billion or $4.92 per diluted share, up 32%. Excluding OpenAI, EPS was $4.89, up 18%.

• Cash and Short-Term Investments: $64.5 billion, down from $76.8 billion at the end of June.

• Debt: $35.5 billion (current and long-term), down from $40.3 billion at the end of June. Finance lease liabilities of a further $71.0 billion are not included.

• Operating Cash Flow: $58.0 billion, up 29%.

• Capital Expenditures (including finance leases): $45.2 billion, up 30%, with roughly three-quarters going to short-lived assets, mainly CPUs and GPUs.”

• Cash Paid for Property and Equipment: $39.4 billion, up 103% from $19.4 billion a year ago.

• Free Cash Flow: $18.6 billion, down 27% (vs. $25.7 billion a year ago).

• Headcount: down 2% year over year.

Key Takeaways

Azure Keeps Accelerating, With Some Margin Cost:

Azure grew 48%, up from 43% last quarter. Microsoft attributes it to demand across the platform, with continued growth across all workloads.

The cost is visible in the margin. Microsoft Cloud gross margin fell to 66%, which Microsoft attributes to Azure making up a larger portion, partly offset by product-level improvements. Total company gross margin slipped about 1.2 points to 67.8%. Operating margin still rose, because operating expenses grew only 6% against 19% revenue growth.

On backlog, commercial RPO of $677 billion is up 73% year over year, but is roughly flat against the $678 billion reported in June. About 30% of it is expected to be recognised over the next 12 months.

The Spending Ramp:

Net property and equipment rose by about $34 billion in a single quarter, to $346.8 billion. On top of that, Microsoft recognised $7.4 billion of finance leases during the quarter, against $11.1 billion a year ago.

Leases that have been signed but not yet started (mostly datacenters), total $364.6 billion, commencing between fiscal 2027 and fiscal 2034.

Operating cash flow grew 29%, but cash paid for property and equipment grew 103%, so it took 68% of operating cash flow this quarter, against 43% a year ago. Microsoft says cash paid grew faster than capex because of payment timing and fewer finance leases. Its capex including finance leases rose 30% to $45.2 billion.

Cash and short-term investments fell $12.3 billion over the quarter. This is partly because Microsoft repaid $4.9 billion of debt.

OpenAI:

Microsoft holds an equity method investment that represents about 24% of OpenAI on an as-converted basis. It and has funded $12.0 billion of its $13.0 billion commitment.

OpenAI is also a customer. Revenue from commercial arrangements with OpenAI, including revenue-sharing payments, was $10.0 billion this quarter. This accounts for about 11% of Microsoft’s total revenue. Receivables from OpenAI rose to $7.2 billion from $6.0 billion in June. Microsoft does not say how much of the $677 billion RPO relates to OpenAI.

Devices and Consumer:

Windows OEM and devices revenue fell $1.0 billion, or 22%. Microsoft points to the benefit of Windows 10 end of support in the prior year, inventory drawdowns at OEM and channel partners, and weaker PC demand.

Xbox hardware fell 14% on lower console volumes, while search and advertising excluding traffic acquisition costs grew 12%, led by LinkedIn, Edge and Bing.

The segment’s operating income still rose 2%, helped by lower amortisation of Activision Blizzard intangibles.

Capital Returns:

The board declared a quarterly dividend of $0.98 per share, up about 8% from $0.91, payable December 10 to holders of record on November 19.

Buybacks were smaller than a year ago at $2.9 billion against $4.0 billion, and $37.7 billion remains on the $60 billion authorisation.

In total, Microsoft returned $10.2 billion to shareholders in dividends and repurchases.

Guidance

For the second quarter of fiscal 2027, Microsoft expects total revenue of $96.0 billion to $97.1 billion, growth of 18% to 19%, with FX having no meaningful impact. Operating margins should be down slightly year over year.

• Agents and Infra: revenue of $80.1 billion to $80.7 billion, growth of 24% to 25%.

  • Azure: growth of 49% to 50% in constant currency. Some third-party GPU capacity contracts have slipped into the second half. Customer demand continues to exceed available supply.

  • Microsoft 365 Commercial Cloud: about 19% growth in constant currency, with revenue growth expected to accelerate through the year.

  • Microsoft 365 Consumer Cloud: growth in the low teens.

  • Productivity and Server Licensing: a decline in the mid to high single digits.

  • Industry Solutions Cloud: growth in the mid to high single digits.

  • Frontier and Support Services: growth in the low to mid single digits.

  • Microsoft Cloud gross margin: roughly 65%, down year over year on the mix shift to Azure.

  • Commercial bookings: will again be affected by large Azure commitments signed in the prior year.

• Devices and Consumer: revenue of $15.9 billion to $16.4 billion.

  • Search and advertising (ex-TAC): growth in the low double digits.

  • Xbox content and services: growth in the mid to high single digits, the strongest quarter of the year. Xbox hardware is expected to decline.

  • Windows OEM and devices: a decline in the mid-30s, with elevated inventory, weak PC demand and a prior-year Windows 10 comparison.

• Costs: COGS of $32.7 billion to $32.9 billion (up 26% to 27%) and operating expenses of $18.5 billion to $18.6 billion (up 9%). Both include an estimate for the recently announced employee voluntary exit offer.

• Other income and expense: roughly negative $300 million excluding OpenAI. Effective tax rate of about 20%.

• Capex: over $50 billion in Q2, and about $170 billion for calendar 2026 because of the third-party capacity delays. Capex should accelerate in the second half of the fiscal year.

• Free cash flow: Microsoft expects to stay free cash flow positive in fiscal 2027. Hood also said Microsoft “will access additional sources of funding when we believe it is attractive to do so”. On the call she added that it has not yet tapped the debt markets.

Current position and final thoughts

is currently long MSFT, with a cost basis of $241. We have owned it for many years, but we have been trimming shares in the mid-$500s, especially the ones acquired in 2026 in the $360–$370 range.

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The business remains strong. Azure is growing faster, margins held up, and the backlog is large and long-dated.

A few things to pick at are the cost of getting there and how concentrated the demand is. Free cash flow fell 27% in a quarter where operating cash flow grew 29%, because cash paid for property and equipment doubled, and Microsoft’s own capex measure is still growing 30%. Microsoft Cloud gross margin is two points lower than a year ago as Azure grows, commercial bookings fell 12%, commercial RPO was flat against June, and OpenAI is now roughly 11% of revenue while also being a 24% investee. With $364.6 billion of datacenter leases still to commence, I would like to see free cash flow stabilise before the spending gets bigger.

We rate MSFT as a Hold at current levels. For investors seeking a fresh entry point, waiting for a pullback toward technical support such as the SMA 50 would be prudent.

Thank you for reading, leave a like and see you for the next one!

• Operating profit hit a record for the sixth consecutive quarter, at KRW 83.33 trillion (~$62.6 billion).

• Shareholder returns stepped up materially, with a KRW 14 trillion (~$10.5 billion) third-quarter dividend and approximately KRW 10 trillion (~$7.5 billion) in share buybacks and cancellations.

Below we will take a further look at the quarter.

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Overview

DRAM bit shipments grew approximately 10% quarter over quarter while average selling prices climbed at a high-20% rate, and NAND prices rose at a mid-20% rate despite a slight decline in bit shipments. DRAM now makes up 75% of revenue, with NAND at 24%. Management attributed the margin expansion to rising prices and increased sales of high-value-added products, which more than offset a decline in exchange rates.

On the product side, SK hynix expects HBM4 to surpass HBM3E in both HBM shipment and revenue share in the fourth quarter, with the M15X fab on track to reach full capacity by the end of 2026. Notably, negotiations for 2027 HBM supply have already been finalised.

Headline net profit was weighed down by a KRW 32.63 trillion (~$24.5 billion) non-operating loss, driven by KRW 11.63 trillion (~$8.7 billion) foreign exchange loss from the fall in exchange rates and a KRW 22.92 trillion (~$17.2 billion) investment asset-related loss.

As a result, net profit came in at KRW 39.78 trillion (~$29.9 billion), down 58% quarter over quarter against a second quarter that included large investment gains, but still up 216% year over year.

Key Financial Highlights

• Revenue: KRW 104.62 trillion (~$78.6 billion), up 32% quarter-over-quarter and 328% year-over-year.

  • DRAM: 75% of revenue. Bit shipments up approximately 10% QoQ, with ASPs up a high-20% rate.

  • NAND: 24% of revenue. Bit shipments slightly down QoQ, with ASPs up a mid-20% rate.

• Gross Profit: KRW 89.65 trillion (~$67.3 billion), an 86% gross margin (vs. 57% a year ago).

• Operating Profit: KRW 83.33 trillion (~$62.6 billion), a record 80% operating margin, up 632% year-over-year and the sixth consecutive record quarter.

• EBITDA: KRW 87.68 trillion (~$65.9 billion), an 84% EBITDA margin.

• Net Profit: KRW 39.78 trillion (~$29.9 billion) or KRW 54,454 (~$40.90) per diluted share (up from KRW 12.60 trillion YOY), after the KRW 32.63 trillion non-operating loss.

• Cash: KRW 114.46 trillion (~$86.0 billion), up from KRW 87.96 trillion last quarter and KRW 27.85 trillion a year ago.

• Debt: KRW 15.80 trillion (~$11.9 billion), down from KRW 24.08 trillion a year ago, leaving a net debt-to-equity ratio of −32% (i.e. a net cash position).

• Operating Cash Flow: KRW 54.78 trillion (~$41.1 billion), against KRW 12.67 trillion (~$9.5 billion) of property, plant and equipment purchases.

Key Takeaways

Shareholder Returns:

This was the part of the release I was watching most closely, and SK hynix delivered on both fronts. The board declared a third-quarter dividend of approximately KRW 14 trillion (~$10.5 billion), or KRW 20,000 (~$15.02) per share, made up of a KRW 10,000 earnings-based dividend and a KRW 10,000 special dividend funded largely by realised gains on its Kioxia investment. The record date is November 30, with payment expected in December.

Alongside the dividend, the company will acquire and cancel approximately KRW 10 trillion (~$7.5 billion) of shares for shareholder return, and confirmed buybacks will continue each quarter, with the scale set by the board based on the share price, market conditions and cash flow. For the full year, SK hynix plans to return approximately KRW 100 trillion (~$75.1 billion): at least KRW 30 trillion (~$22.5 billion) in cash dividends and at least KRW 60 trillion (~$45.1 billion) in share acquisitions and cancellations.

• The dividend is good to see, but we would have preferred buybacks, so it is encouraging that buybacks make up the larger share of the full-year plan.

• One thing to note: total share acquisition for the quarter was approved at KRW 20 trillion (~$15.0 billion), but roughly half of that is set aside for executive and employee compensation and is not counted as shareholder return.

Long-Term Agreements:

• LTAs have now been signed with 14 key customers, including major global CSPs, on a standard five-year term, with extensions under discussion with some customers.

• Pricing sits within customer-agreed ranges that reflect market conditions, and the contracts include safeguards such as deposits. SK hynix has secured LTA volumes covering over 50% of total capacity for both 2027 and 2028, which gives considerably more visibility into earnings than a memory company has typically had.

HBM and Product Roadmap:

• With 2027 HBM negotiations finalised, management expects the profitability gap between HBM and conventional DRAM to narrow meaningfully.

• In DRAM, the company is rapidly increasing the share of 1cnm server products, including DDR5 and LPDDR5 SOCAMM for AI servers. In NAND, 321-layer products are set to exceed 50% of domestic capacity in Q4, with high-density eSSD supply expanding for KV cache tiering.

Market Outlook and CapEx:

SK hynix expects memory demand to outpace supply through 2030, with supply growth constrained by leading-edge process complexity and fab construction lead times. Citing market research estimates, it expects global CSP capex to grow over 60% in 2027. To meet that demand, 2027 capex is expected to increase significantly compared with 2026, covering advanced node equipment, the Y1 fab ramp-up and infrastructure investment in Korea and overseas.

Guidance

• For the fourth quarter of 2026, SK hynix expects DRAM bit shipments to grow by a mid-20% rate quarter over quarter, driven by the expansion of 1cnm and the M15X ramp-up.

• Fourth-quarter NAND bit shipments are expected to grow by a mid-single-digit rate quarter over quarter (including Solidigm), driven by increased sales of 321-layer eSSDs.

• For 2027, the company expects DRAM demand bit growth of mid-20% year over year and NAND demand bit growth in the high teens.

• 2027 capex is expected to increase significantly compared with 2026.

Current position and final thoughts:

SixSigmaCapital has a long position with a $131 nominal average cost, with the original cost basis fully recovered.

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This was an outstanding quarter. Record margins, a cash balance of over KRW 114 trillion (~$86.0 billion), and LTAs locking in over half of capacity for 2027 and 2028 point to a much more durable earnings base than memory has historically offered, and the step-up in shareholder returns shows management is willing to share that with shareholders.

A few things to keep an eye on are the size of the 2027 capex budget, the share of buybacks directed to employee compensation, and how quickly HBM’s profitability premium over conventional DRAM narrows.

Thank you for reading, leave a like and see you for the next one!

Instead of opening a maps app to check traffic, a messaging app to alert a friend they are running late, and a calendar to push back a meeting, a user simply tells their phone what they want, and the agent handles all three tasks on their behalf.

For this to occur seamlessly, a significant portion of the processing must happen on the device itself. Qualcomm chips power roughly half of the premium Android phones sold this year, according to Counterpoint Research, along with a growing number of Windows laptops, smart glasses, and cars. Any application of agentic AI within those devices will likely rely on Qualcomm hardware.

The company’s data center segment has been just as busy. In June, Meta signed an agreement for Qualcomm to supply CPUs for its next-generation server fleet. In September, Amazon signed a deal for Qualcomm to build custom AI inference chips for AWS.

Despite these developments, Qualcomm’s stock sits at roughly $173 at the time of writing, almost exactly where it was a year ago.

Krypton Research, which first wrote about Qualcomm in a post titled The Next Semiconductor Giant , believes the market still views Qualcomm merely as “the company in your phone.”

Their view is that AI inference is running into a memory wall and that Qualcomm has designed an innovative workaround that the market has not yet priced in.

Building on this point, looking at Qualcomm through a singular lens, whether its data center business or its phone hardware segment, overlooks why agentic AI is so vital to the company.

An agent lives in two places at once. It interacts with the user on a device while doing most of its heavy lifting in a data center. Qualcomm is one of the few companies supplying chips for both environments.

In this post, and take a closer look at how Qualcomm fits into the agentic AI buildout, the victories it has already secured, and what still needs to go right.

Layout

• Overview

• Qualcomm in the Agentic AI Era

• Getting Around the Memory Wall

• Custom Chips and Connectivity

• Where the Agent Meets the User

• The Software Layer

• Risks

• Thesis

• Conclusion

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.

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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 in-depth Monthly Portfolio and Performance Update below (the new post will also be published within the next day).

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Indices

Dow Jones Industrial Average advanced +0.41% in the last week

S&P 500 declined -0.47% in the last week

Nasdaq Composite declined -0.71% in the last week

IWM advanced +1.96% in the last week

Key upcoming economic events

Monday, October 26

• Chicago Fed National Activity Index (September)

• Dallas Fed Manufacturing Survey (October)

Tuesday, October 27

• FOMC meeting begins (two-day meeting)

• Durable Goods Orders, advance (September)

• New Home Sales (September)

• Case-Shiller and FHFA Home Price Indexes (August)

• Conference Board Consumer Confidence (October)

Wednesday, October 28

• FOMC interest rate decision, followed by press conference

• MBA Mortgage Applications

• Advance Goods Trade Balance and Retail and Wholesale Inventories (September)

• BLS Metropolitan Area Employment and Unemployment (September)

• Housing Vacancies and Homeownership (Q3)

• BLS Business Employment Dynamics (Q1)

Thursday, October 29

• GDP, advance estimate (Q3)

• Personal Income and Outlays, including PCE Price Index (September)

• Initial and Continuing Jobless Claims

• Fed H.4.1 balance sheet release

Friday, October 30

• Employment Cost Index (Q3)

• Chicago PMI (October)

Upcoming Earnings

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

Charts

SPX

Currently trades at $7,623.68, 0.99% below the 50SMA and 4.56% above the 200SMA.

RSI 42.15

11.16% YTD

Distribution days in the last week: 1

The S&P 500 closed the week below both the 21-day EMA ($7,713.05) and the 50-day SMA ($7,699.64). Bulls will want to see those levels reclaimed soon. To the downside, the 200-day SMA ($7,291.31) is the next major support and coincides with the late July lows.

COMPQ

Currently trades at $25,955.34, 2.42% below the 50SMA and 3.85% above the 200SMA.

RSI 38.01

11.70% YTD

Distribution days in the last week: 1

Nasdaq Composite closed the week below both the 21-day EMA ($26,656.45) and the 50-day SMA ($26,599.01). Bulls will want to see the 50-day reclaimed sooner rather than later, whereas to the downside, the 200-day ($24,991.99) is the next major moving average support.

BTC (currently Long)

Currently trades at $80,707, 1.35% below the 50SMA and 10.7% above the 200SMA.

RSI 44.04

-9% YTD

As of Sunday October 24 at 00:34AM BST, BTC is trading at $80,707. It has broken below the confluence of MA’s at the 82k mark (See arrow). Bulls will want to see the 50SMA and $83K reclaimed. The $80K support level is in focus, with the 200SMA (~$72.9K) further below.

EEM

Currently trades at $62.01, 6.78% below the 50SMA and 2.48% below the 200SMA.

RSI 32.31

10.83% YTD

EEM closed the week below all of its key moving averages, with the 21EMA ($64.89) below the 50SMA ($66.52) indicating a bearish cross. Bulls will want to see the 200-day reclaimed as a start.

EWZ (Currently Long via IBZL)

Currently trades at $42.59, 10.74% above the 50SMA and 15.12% above the 200SMA.

RSI 61.85

33.53% YTD

EWZ held the April highs (see horizontal line) yet again, with Friday’s bounce off the level (see arrows) coming on volume well above its 50-day average. EWZ closed the week above all key moving averages. Bulls will want to see a push back toward the early October highs near $44, before any hope for continuation on a breakout.

GOLD (Long Physical)

Currently trades at $3,994.60, 7.13% below the 50SMA and 11.48% below the 200SMA.

RSI 33.40

-7.59% YTD

Gold broke below the $4,100-$4,150 support level flagged last week and sold off to the $3950-4,000 zone which marked the June and July lows (see arrows). Bulls will want to see Gold find support there because those levels have served as support since late 2-2025.

SOXX

Currently trades at $478.20, 10.19% below the 50SMA and 1.39% above the 200SMA.

RSI 31.97

52.71% YTD

SOXX tested its 200-day SMA ($471.62) after another leg lower on Thursday on above-average volume. Friday’s price action was somewhat constructive as the 200 day held as support (for now?). Bulls will want to see the 200-day hold because there is not much support below.

GOOGL (Currently Long)

Currently trades at $320.21, 6.61% below the 50SMA and 6.09% below the 200SMA.

RSI 31.30

1.80% YTD

GOOGL lost the 200-day SMA this week, a level that held as support on multiple tests since July (see up arrows). GOOGL closed the week at below all of its key moving averages. Bulls will want to see the 200-day ($340.99) reclaimed, followed by a break above the descending trendline (see top arrow). Earnings this week could serve as a catalyst.

META (Currently Long)

Currently trades at $642.62, 3.16% below the 50SMA and 1.74% above the 200SMA.

RSI 35.76

-0.94% YTD

META sold off sharply on Thursday following earnings, losing the $710-$715 level, its 21-day EMA ($701.42) and the 50-day SMA ($663.58). Price also fell below the descending trendline (see arrows).

META now sits right above the 200-day SMA ($631.66). Bulls will want to see the overhead moving averages reclaimed and those looking for a fresh entry may want to apply the “three-day rule” post earnings.

MSFT (Currently Long)

Currently trades at $524.51, 3.18% above the 50SMA and 20.48% above the 200SMA.

RSI 52.63

11.61% YTD

Since MSFT rejected the $550 level (blue horizontal line) last week, the stock has consolidated. Friday’s low coincided with support at $516 (black horizontal line), as price managed to close just at the 21EMA ($524.21). Earnings are this week, and should there be a post-earnings dip, the 50-day SMA ($508.35) is an area of interest.

XBI

Currently trades at $149.54, 4.91% below the 50SMA and 6.21% above the 200SMA.

RSI 45.15

23.18% YTD

XBI attempted to breakout (see trendline) early this week but was rejected again (see arrow). The $154 resistance level converges with that trendline. Price closed the week below its 21EMA ($151.89) and 50SMA, with the 200SMA ($140.80) the next major moving average support below. Bulls need to reclaim the 21EMA and $154 and break the trendline to restore the uptrend.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 58.80%

Breadth increased decently again this week, with the percentage of stocks above the 50-day moving average now at 58.80% compared to 45.40% last week.

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

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• Free cash flow turned negative for the first time since 2012.

• Meta announced a new class of non-voting shares.

Below we will take a further look at the quarter.

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Overview:

Ad impressions rose 10% while the average price per ad climbed 14%, and Family Daily Active People (DAP) reached 3.64 billion, up 3% year over year. On the earnings call, CFO Susan Li highlighted that partnership ads surpassed a $15 billion annual run rate, noting that the 59% surge in “Other revenue” was powered largely by WhatsApp paid messaging and subscriptions.

The quarter also marked the debut of Muse and Muse Wonder, which Mark Zuckerberg characterised as Meta’s first frontier model. He noted that over 10 million users across the U.S. and Canada set up Muse personal agents within roughly six weeks, with approximately 25% engaging with the tool daily. Global rollout remains paused due to heavy compute requirements, with Zuckerberg citing compute capacity as “one of the limiting factors over the next year.”

Headline profitability was distorted by a $9.89 billion charge stemming from Meta’s August settlement framework with 52 U.S. state attorneys general regarding youth mental health litigation, which outlines potential payments of up to roughly $18.59 billion. Backing out this charge, operating income came in at $22.88 billion (up 11% year over year), while diluted EPS stood at $7.40.

Key Financial Highlights

• Total Revenue: $64.6 billion, up 26% year-over-year (26% constant currency).

  • Family of Apps Ad Revenue: $63.1 billion, up 26% year-over-year (26% constant currency).

  • Reality Labs Revenue: $443 million, down 6% year-over-year.

  • Family of Apps Other Revenue: $1.1 billion, up 59% year-over-year, driven primarily by WhatsApp paid messaging and subscriptions.

• Ad Impressions: Increased 10% year-over-year.

• Average Price Per Ad: Increased 14% year-over-year.

• Family Daily Active People: 3.64 billion, up 3% year-over-year.

• Headcount – Headcount was 66,775 as of September 30, 2026, a decrease of 15% year-over-year.

• Operating Income: $13.0 billion, a 20% operating margin. Excluding the legal charge, $22.9 billion, a 35% operating margin (vs. 40% a year ago).

• Net Income: $9.9 billion or $3.83 per share (up from $2.7 billion YOY, which included a one-time $15.93 billion tax charge). Excluding this quarter’s legal charge, EPS would have been $7.40, vs. $7.25 in Q3 2025 excluding that tax charge.

• Cash and Marketable Securities: $82.45 billion.

• Long-Term Debt: $80.9 billion, up from $58.7 billion at the end of 2025.

• Capital Expenditures: $34.9 billion including principal payments on finance leases, up ~80% year-over-year.

• Free Cash Flow: Negative $2.1 billion, the first negative quarter since 2012 (vs. $10.6 billion in Q3 2025).

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Key Takeaways

Muse Ecosystem Momentum:

Muse has reached over 10 million users in the U.S. and Canada in just six weeks . The product is seeing strong early retention, with 25% of users engaging daily .

Strategic Shift to Agentic Commerce:

• Shopping is the primary use case for Muse, with over 25% of users engaging in commerce activities .

• Meta is actively building a “Personal Agent Protocol” to standardise how AI agents interact with businesses, moving away from human-like navigation toward authenticated, structured API interactions .

Operational Efficiency:

• While Muse is currently compute-intensive, Meta expects to improve cost efficiency by more than 10x over the next year.

• The company is also transitioning its internal content understanding models to the Muse family, which has reduced per-unit processing costs by over 80% .

Capital Structure Update:

Meta’s board approved the creation of publicly listed, non-voting Class C capital stock, structured effectively as a two-for-one stock split scheduled for January 19, 2027. Under the plan, holders of existing Class A and Class B shares will receive one Class C share for each share owned. This will adjust trading prices proportionally while leaving current voting power entirely unchanged, closely mirroring the recapitalisation Alphabet executed in 2014. As part of the move, Meta signed a Founder Alignment Agreement with Mark Zuckerberg governing his future sales of the new shares.

Strategically, the move provides Meta with a non-dilutive equity currency for employee compensation, strategic acquisitions, and potential capital raising. While CFO Susan Li noted that Meta has no immediate financing plans to announce, the timing is telling. In the context of negative free cash flow, paused share repurchases, and an escalating AI infrastructure build-out, Class C stock gives management the flexibility to issue equity and fund capital expenditures without eroding Zuckerberg’s voting control.

Reality Labs Outlook:

The company is narrowing its focus in Reality Labs, with operating losses expected to decline to approximately $15 billion in 2027 as investment is reallocated toward AI priorities

Guidance

• For the fourth quarter of 2026, Meta expects total revenue to be in the range of $73 billion to $76 billion, with foreign currency anticipated to be an approximately 1% headwind to year-over-year growth. This is ~24% YOY growth at the midpoint.

• Full-year 2026 total expenses are now projected to be between $175 billion and $179 billion, raised to include the $9.9 billion legal charge. Excluding that charge, Meta still expects 2026 operating income to be above 2025.

  • Reality Labs’ operating losses are expected to decline to $18-19 billion.

  • Capital expenditures for 2026, including principal payments on finance leases, are forecast to be in the range of $135 billion to $145 billion, narrowed from $130-145 billion. For reference, January’s guide was $115-135 billion.

  • The fourth quarter tax rate is expected to be 15%-17%.

• For 2027, Meta isn’t providing a revenue outlook yet, but expects to continue investing aggressively in both the core business and AI, and believes it is positioned to sustain strong revenue growth throughout 2027. Reality Labs losses are expected to narrow to around $15 billion.

Current position and final thoughts:

I am currently long META, which represents a ~6% position with a cost basis in the mid-500s. On the run-up, I reduced the position by around 30%, with the last trims executed at 765 on October 13.

All transactions shared live here: Portfolio live Updates

The business remains strong and Q4 is likely to be another strong quarter.

A few things to pick at are the first FCF-negative quarter in years, alongside the overhang of a potential capital raise. Capex has outrun operating cash flow, buybacks have halted, long-term debt is up $22 billion this year, and the board has created a share class with capital raising listed first among its intended uses. Muse’s early numbers are encouraging, but I would like to see a clearer path to monetisation before Meta lays out its 2027 budget.

I rate META as a Hold at current levels. For investors seeking a fresh entry point, waiting for a pullback toward technical support (such as the 50-day moving average near 661) would be prudent. For now, I will continue to monitor the story quarter by quarter.

Thank you for reading, leave a like and see you for the next one!

However, the selling has not hit everything “AI” related. Over the last week, Eli Lilly rose almost 10% and made a new high, all while chip stocks (SMH) fell 5.0%. In fact, Eli Lilly is up 40% over the last six months.

In this post, myself and and take a look at Eli Lilly, the preeminent artificial intelligence company in healthcare, and its role in the ecosystem.

This is the second post in our series. Part one explored where AI is already delivering results across the lab, clinic, and hospital, along with the guardrails slowing its adoption, where the technology is heading, and the four focus areas we will examine going forward.

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.

Layout:

Overview of Eli Lilly

Business Model

How the Market Prices LLY

What Comes After Tirzepatide?

What the Market May Be Missing

Risks

Financials and Valuation

Investment Thesis

Current Position and Plans

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Overview of Eli Lilly

Eli Lilly is a 150-year-old drugmaker based in Indianapolis with roughly 50,000 employees, developing treatments across cardiometabolic health, oncology, immunology, and neuroscience. Powered by its blockbuster diabetes and obesity medicines, Mounjaro and Zepbound, Lilly became the first healthcare company to cross a $1 trillion market valuation on November 21, 2025. Today, it is roughly the size of Johnson & Johnson and AbbVie combined, yet it continues to grow at a pace rarely seen at that scale. After surging 45% to $65.2 billion in 2025, revenue jumped another 48% to $23.0 billion in Q2 2026, prompting management on August 5 to raise full-year revenue guidance to between $85 billion and $87 billion.

Behind that commercial success, Lilly has quietly become one of the largest AI spenders in medicine. After becoming Isomorphic Labs’ first pharma partner in January 2024, Lilly accelerated its push in early 2026 by launching a five-year, $1 billion co-innovation lab with NVIDIA in January. They switched on LillyPod, the pharmaceutical industry’s most powerful supercomputer, in February. They paid Insilico Medicine $115 million upfront for AI-discovered drug candidates in March. Lilly also signed a deal worth up to $2.25 billion with Profluent for AI-designed gene-editing enzymes in April.

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https://substack.com/chat/group/15e96f4f-f5a4-476c-9c63-3267db89b521

I am exiting my position in this company given the solid return in less than a year and risk reward no longer as skewed to the upside.

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https://substack.com/chat/group/15e96f4f-f5a4-476c-9c63-3267db89b521

I am exiting my position in this company given the slow down in the core business, estimates being revised down and to consolidate the book

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As always, this is not financial advice and I may or may not hold positions in these names; however, I do provide live updates in the respective channels as always (Trades on Discord only, Investment Accounts on both Substack and Discord).

Weekly Trading Ideas Cheat Sheet Below:

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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 in-depth Monthly Portfolio and Performance Update below (the new post will also be published within the next day).

For all readers a reminder that a premium subscription includes:

• Live Portfolio updates (All Buys and Sells) in Subscriber only Channels

• Favourite set-up Ideas, Market Memos plus Full archive

• Monthly in depth portfolio & performance updates

• Annual Tier: Discord access for live trading account updates and AMAs.

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Before getting into the post, here is last Sunday's commentary, which is worth a read if you missed it, especially given what transpired this week:

Managing risk is essential right now given the broader macro backdrop: yields at climbing at one of the fastest paces in recent memory (see chart), bond market jitters, elevated crude and energy costs, persistent geopolitical tensions, supply chain friction, and approaching midterms.

The 10-year yield is now above 5.24%, near its highest level in over two decades, and Brent crude has been hovering around $100.

With this backdrop in mind, a few recent portfolio adjustments:

Trimmed some high-CapEx +/-debt-heavy names: Exited CIFR at $19, CRWV into strength at $116, $110, $101, and $92, and continued trading around a core position in names like CRDO (exited on 2nd October)

Rotated into equal-weight exposure: In response to narrow market breadth whereby only 20% of stocks were holding above their 50-day moving averages, I parked some cash in RSP around $209.

Trimmed megacaps: Megacaps have held up well thanks to their balance sheets, but crowded positioning is becoming a notable risk (see attached chart). I’ve taken some profits off the table to right-size exposure.

Building a cash cushion: Holding cash and ultra-short equivalents makes sense here, whether via SGOV or 2-year Treasuries. I plan to maintain a 5–10% cash allocation to stay nimble and opportunistic.

The Fed isn’t offering much relief either. The minutes from the September meeting, released on Wednesday, showed the committee unanimously backed the 25bp hike to 3.75%–4.00%, and that most officials see another hike as likely by year-end. That makes Wednesday’s CPI print the key event next week, as it is the last major inflation reading before the October 27–28 FOMC meeting. Q3 earnings season also kicks off on Tuesday, with the big banks reporting”

Be sure to check out my attached article, which may be helpful in navigating this environment:

Indices

Dow Jones Industrial Average advanced +0.67% in the last week

S&P 500 declined -1.95% in the last week

Nasdaq Composite declined -4.48% in the last week

IWM declined -3.05% in the last week

Key upcoming economic events

Monday, October 19

• NAHB Housing Market Index (October)

• 13-Week and 26-Week Treasury bill auctions

Tuesday, October 20

• Housing Starts and Building Permits (September)

• Pending Home Sales Index (September)

• BLS State Employment and Unemployment (September)

• 6-Week Treasury bill auction

Wednesday, October 21

• MBA Mortgage Applications

• EIA Weekly Petroleum Status Report

• BLS Usual Weekly Earnings (Q3)

• 20-Year Treasury Bond auction (~$13B reopening)

• 17-Week Treasury bill auction

Thursday, October 22

• Initial and Continuing Jobless Claims

• Conference Board Leading Economic Index (September)

• EIA Natural Gas Storage

• Kansas City Fed Manufacturing Survey (October)

• 5-Year TIPS auction

• 4-Week and 8-Week Treasury bill auctions

• Fed H.4.1 balance sheet release

Friday, October 23

• S&P Global Flash US PMIs: Manufacturing, Services and Composite (October)

• University of Michigan Consumer Sentiment, final (October), including inflation expectations

Upcoming Earnings

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

Charts

SPX

Currently trades at $7,659.44, 0.61% below the 50SMA and 5.34% above the 200SMA.

RSI 44.12

11.68% YTD

Distribution days in the last week: 2

The S&P 500 dropped 1.95% this week to close below its 50-day SMA, accompanied by two distribution days. Given Friday's bearish engulfing candle, caution remains advised while price action holds beneath the 50-day line.

COMPQ

Currently trades at $26,140.03, 1.84% below the 50SMA and 4.90% above the 200SMA.

RSI 37.25

12.50% YTD

Distribution days in the last week: 2

The Nasdaq Composite fell 4.48% this week, closing below both the 21- and 50-day moving averages. There were two distribution days on above-average volume (see arrows at the bottom of the image). Caution is warranted. Bulls will want to see the 50-day reclaimed sooner rather than later, whereas to the downside, a retest of the 200-day is not out of the question on further weakness.

BTC (currently Long)

Currently trades at $81,625.60, 0.37% above the 50SMA and 12.70% above the 200SMA.

RSI 46.72

-6.68% YTD

As of Saturday October 17 at 7:54 am, BTC fell back below the $82-83K level (horizontal blue line, the May high) and was rejected there again (see top arrow). Price has drifted back down to the 50SMA (~$81.3K) which has acted as support this week. Bulls will want to see the 50SMA to hold and $83K reclaimed. A close below the 50SMA would put the $80K support level into focus, with the 200SMA further below.

EEM

Currently trades at $62.85, 5.96% below the 50SMA and 0.90% below the 200SMA.

RSI 31.98

12.33% YTD

EEM sold off on above-average volume this week and closed below its 200-day moving average for the first time since April 2025, a notable technical breakdown. Bulls will want to see the 200-day reclaimed sooner rather than later.

Given EEM's heavy weighting in TSMC, SK Hynix, and Samsung, a rebound in those will be important for the ETF to mount a recovery.

EWZ (Currently Long via IBZL)

Currently trades at $41.83, 11.06% above the 50SMA and 13.85% above the 200SMA.

RSI 61.67

31.14% YTD

EWZ spent the week consolidating after its post-election gap, retesting the April highs (see horizontal line). The level has held so far on Thursday and Friday. Price remains well above its key moving averages.

GOLD (Long Physical)

Currently trades at $4,166.04, 3.79% below the 50SMA and 7.85% below the 200SMA.

RSI 45.26

-3.63% YTD

Gold continued to trade below its 21EMA for another week, rejecting it twice. Price remains below the 50SMA, with the 200SMA above it, converging with the January descending trendline. Bulls need to reclaim the 21EMA and 50SMA first, with the $4,100–$4,150 support level to defend.

SOXX

Currently trades at $493.39, 8.15% below the 50SMA and 5.60% above the 200SMA.

RSI 30.65

57.56% YTD

The SOXX ETF sold off 12% over the past week on cascading volume. Notably, there were four distribution days, raising clear flags for the sector. To the downside, a test of the 200-day moving average looks probable, which also coincides with the July low (see chart).

GOOGL (Currently Long)

Currently trades at $340.59, 1.13% below the 50SMA and 0.01% above the 200SMA.

RSI 44.47

8.28% YTD

GOOGL was rejected at the overhead trendline again. The stock closed below both the 21- and 50-day moving averages, landing right on the 200-day. Bulls will want to see that level hold, followed by a clean break above the trendline.

META (Currently Long)

Currently trades at $709.33, 8.30% above the 50SMA and 12.40% above the 200SMA.

RSI 50.26

9.34% YTD

META lost the $710-$715 support level flagged last week (horizontal line) and its 21-day EMA ($717.89) during Friday's selloff, closing at $709.33 below the range held since the September gap higher. The descending trendline, which converges with the 50-day SMA, is the next key area to watch for a retest.

MSFT (Currently Long)

Currently trades at $529.05, 4.69% above the 50SMA and 21.89% above the 200SMA.

RSI 57.36

12.57% YTD

MSFT ran into its 2025 highs near $550 (see horizontal line) early in the week, briefly breaking out intraday before reversing. Price is now below its 5-day EMA ($534.04) but remains above all major moving averages, including the 21-day EMA ($521.76), which has cushioned pullbacks since August. Bulls will want to see the 21-day EMA hold on this dip, accompanied by another attempt at the $550 level. A close below the 21-day EMA would break the short-term uptrend.

XBI

Currently trades at $144.32, 8.64% below the 50SMA and 3.02% above the 200SMA.

RSI 35.91

18.88% YTD

The failure of the $154 level flagged last week played out. This week, that level acted as resistance before price sold off at the end of this week. Price is now below its 5EMA, 21EMA ($152.42) and 50SMA ($157.96), with the 200SMA ($140.08) the next major moving average support below. Bulls need to reclaim the 21EMA and $154 to restore the uptrend.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 45.40%

Breadth increased decently again this week, with the percentage of stocks above the 50-day moving average now at 45.40% compared to 36.40% last week.

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

• No notable portfolio changes this week.

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

Current Positions in Size Order with Cost Basis (Investment Account) as of October 16, 2026:

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I’ve updated my notification process slightly so subscribers can better monitor my portfolio changes in real time.

To recap, the notification system is as follows:

• Any time I start a new position or completely exit an existing one, I send an email to ensure you receive a direct notification, in addition to posting on Substack and Discord.

• For other adjustments, such as trims or additions to current positions, I document those in the Live Updates thread in the Subscriber Chat on Substack and in the Live Updates channel on Discord but no email.

This has been the process since May 2025, with the Live Updates thread pinned at the top of the Subscriber Chat. However, I know that thread can sometimes be difficult to find. Because of that, I have opened a dedicated channel to log all future transactions called “Portfolio Updates” (see image below):

Link:

Starting Friday, October 16, 2026, this will be the central home for all main portfolio updates, which I will also continue to post simultaneously to Discord.

This should be a meaningful improvement in accessibility for everyone.

TL;DR:

• The notification process for my Investment Account will stay the same, except that I’ve opened a dedicated channel/room for it.

• Any opportunistic trades in my Trading Account will continue to be posted exclusively on Discord (currently available only for Annual Members).

Many thanks,

SixSigmaCapital

A lot has changed in a year, with the XBI up nearly 40%, yet the opportunity across healthcare and life sciences remains somewhat compelling.

In April, Anthropic bought Coefficient Bio, a small drug discovery startup, for $400 million. In June it hired John Jumper, who shared the 2024 Nobel Prize in Chemistry for AlphaFold, away from Google DeepMind. In August, Merck (MRK) and Moderna (MRNA) reported the first positive Phase 3 result for a personalized mRNA cancer vaccine designed with the help of an algorithm. A few weeks before that, Tempus AI (TEM) agreed to buy Personalis (PSNL), which is the company that sequences the tumours it’s built from.

Zooming out, medicine faces two big problems. First, developing new medicines is slow and expensive: Deloitte estimates the average new drug cost ~$2.7 billion to take from discovery to launch in 2025, with clinical trials alone taking over 100 months to complete. Second, physician burnout remains high (42% in 2025, per the AMA), driving strong clinical demand for AI automation.

AI is starting to tackle both sides: life sciences, where treatments are created in the lab, and healthcare, inside clinics and hospitals. Currently, most attention centres on the latter, largely because it has been easier to integrate. Tools like AI scribes that draft clinical notes are useful, but they are quickly becoming commodities. We believe the bigger opportunity lies in biology, where AI is beginning to design molecules and medicines, and where the majority of designs still have to be synthesised, sequenced, and tested in a wet lab.

This is the first post in our series. Together with , we explore where AI is already delivering results across the lab, the clinic, and the hospital, the guardrails slowing its adoption, where the technology is heading, and four focus areas we will examine going forward.

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.

Layout:

Preface

AI in the Lab

• What DeepMind Built

• The AI Companies Move In

• Faster Clinical Trials

AI in the Clinic

AI in the hospital

The Guardrails

The Horizon

Conclusion

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AI in the Lab

For decades, finding a new drug mostly came down to trial and error. Scientists would screen huge libraries of chemical compounds, hoping a few would stick to the disease target, and then spend years refining the ones that did. AI is helping change that by making the process more efficient. Models can now predict what a disease protein looks like in 3D and draft brand new molecules on a computer before anything gets made, which could cut years off early discovery. The bigger leap, which came out of a games lab in London, was AI that could understand biology itself.

What DeepMind Built:

It could be argued that no company has done more to push AI into biology than Google’s DeepMind. Demis Hassabis co-founded it in London in 2010, and Google bought it in 2014. It became famous in March 2016 when its AlphaGo program beat Lee Sedol, one of the best Go players in the world. Around the same time, it started working on healthcare directly, with mixed results. A DeepMind app built for London’s Royal Free hospital led the UK’s data regulator to rule in 2017 that the hospital had broken data protection law by sharing 1.6 million patient records.

The research side, however, did much better. In 2018, a model built with Moorfields Eye Hospital matched expert doctors at recommending the right referral for more than 50 eye diseases. In 2019, a model built with the US Department of Veterans Affairs predicted acute kidney injury up to 48 hours before it happened. Google then moved DeepMind’s health team into Google Health in 2018/2019. Two years later, a joint model cut both missed cancers and false alarms in breast cancer screening.

AlphaFold is what took DeepMind to the next level. Working out a protein’s 3D shape from its sequence had been one of biology’s hardest problems for about 50 years, since shape determines what a protein does and how a drug can bind to it. In November 2020, AlphaFold 2 effectively solved it at the CASP14 competition. DeepMind then gave the predictions away, and the AlphaFold database it runs with EMBL’s European Bioinformatics Institute now holds more than 200 million structures, covering nearly every known protein. Hassabis and John Jumper shared the 2024 Nobel Prize in Chemistry for it.

Since then, DeepMind has kept moving from protein shapes toward actual medicines:

• Isomorphic Labs (2021) - Spun out to turn the science into drugs. In January 2024 it signed deals with Eli Lilly and Novartis worth up to ~$3 billion. On top of that, it raised $600 million in March 2025 and another $2.1 billion in May 2026. In February 2026 it unveiled IsoDDE, a proprietary drug design engine. Hassabis has said its first clinical trials should start by the end of 2026, about a year later than he originally hoped.

• AlphaMissense (2023) - Classified 89% of 71 million possible single-letter protein changes as likely harmful or harmless, which helps doctors interpret genetic tests.

• AlphaFold 3 (May 2024) - Built with Isomorphic, it predicts how proteins interact with DNA, RNA and drug molecules, not just their shape.

• AlphaProteo (September 2024) - Designs brand new proteins that bind to a chosen target.

• AMIE and the AI co-scientist (2025) - AMIE, a diagnostic chatbot, outperformed primary care physicians in simulated consultations in a Nature paper, and Google’s AI co-scientist proposed drug repurposing candidates for liver fibrosis that held up in lab tests.

• AlphaGenome (2025) - Predicts how changes in DNA affect the way genes are switched on and off, with its peer-reviewed paper published in Nature in January 2026.

While DeepMind was leading the space initially, more companies started to compete. A clear sign of that is when John Jumper left DeepMind for Anthropic in June 2026. Based on that, one can infer that the big AI labs see biology as one of their next major markets.

The AI Companies Move In:

In October 2025, Anthropic launched Claude for Life Sciences, connecting Claude to standard industry tools like Benchling and 10x Genomics, with drugmakers such as Sanofi, Novo Nordisk, and AstraZeneca among its users. In April 2026, it acquired Coefficient Bio, an eight-month-old drug discovery startup founded by former Genentech scientists, for $400 million, followed in June by the marquee hire of AlphaFold lead John Jumper. Then, on August 18, Anthropic revealed that Claude had designed protein binders against 15 targets; Twist Bioscience synthesized and tested 1,260 of those designs in under three weeks, successfully confirming binders for 14 of the 15. Between Anthropic's momentum, Google's Isomorphic Labs, and Eli Lilly building what it calls the most powerful drugmaker supercomputer alongside Nvidia, the race in computational biology is rapidly escalating.

One way to approach this is to focus on the companies that make and measure biology, rather than the ones designing the drugs. AI makes designing a molecule cheap, but every design still has to be physically made, sequenced and tested. The more designs AI produces, the more lab work there is to do. Twist’s revenue grew 23% to a record $118.4 million last quarter, and its CEO said more and more groups are “leveraging AI as their first antibody discovery screen.”

Bruker’s instruments can measure more than 10,000 proteins from a single tissue sample, and its spatial biology platform is being used to train biology foundation models, including Noetik’s on more than 3,500 patient samples. The genetic data side matters too. The Regeneron Genetics Center has sequenced roughly 3 million exomes, which is in line with the data AI models need to find new drug targets.

Faster Clinical Trials:

AI is also starting to accelerate clinical trials, which account for much of that time and expense. One of the biggest bottlenecks is identifying qualifying patients, a process that historically requires staff to review medical records manually. In a randomised trial at Mass General Brigham, published in JAMA in 2025, 4,476 patients were evaluated for a heart failure study using either manual chart review or an AI screening tool. The AI arm yielded nearly twice as many enrolments (35 versus 19), with the lead author noting such tools could nearly halve the time required to recruit a trial.

It is still early days, however. The most comprehensive analysis to date, published by BCG researchers in Drug Discovery Today (2024), found that AI-discovered molecules advanced through Phase I trials 80% to 90% of the time, compared to roughly 40% to 65% historically. In Phase II, however, their success rate stood around 40%, aligning closely with industry averages. No AI-discovered drug has secured regulatory approval yet; the furthest along, Insilico Medicine’s rentosertib, only entered Phase III in July 2026.

AI in the Clinic

AI in medicine is a lot older than most people think. Here’s a quick history overview:

• Computerised EKG interpretation came out of the US Veterans Administration and the NIH in the 1960s, and it’s still printed on EKGs today because a doctor can check it in seconds.

• In the 1970s, Stanford’s MYCIN recommended antibiotics about as well as Stanford’s own faculty, but it was never used routinely, since doctors had to type every detail in by hand.

• Mammography CAD spread quickly once Medicare started paying for it in 2001, even though a 2015 study of 625,625 mammograms found it didn’t improve accuracy.

• After MD Anderson spent $62 million on IBM’s Watson, an internal audit in 2016 found it wasn’t being used on patients at all.

Today, AI is already part of the job. The American Medical Association’s March 2026 survey found that 81% of US physicians now use AI in their practice, more than double the 38% reported in 2023. Meanwhile, the FDA’s list of authorized AI-enabled medical devices reached 1,614 by the end of June 2026, with roughly three-quarters concentrated in radiology.

Medical imaging remains the most mature clinical application to date, far outperforming legacy CAD systems. Crucially, newer tools can flag subtle, early-stage tumours that human readers easily miss. In Sweden’s MASAI trial of approximately 106,000 women, AI-supported mammography detected 29% more cancers while reducing radiologists’ screen-reading workload by 44%. Final results published in The Lancet (January 2026) also demonstrated a 12% drop in interval cancers between screenings. On the commercial side, GE HealthCare (GEHC) leads the FDA’s authorized roster with 134 devices, followed by Siemens Healthineers (SHL) at 101 and Philips (PHG) at 62.

Beyond diagnostics, AI is also moving treatment away from one-size-fits-all regimens toward individualised care. Tempus, for instance, sequences patient tumours and cross-references them against one of the world’s largest clinical and molecular databases to help oncologists select targeted therapies.

Recent progress in personalised mRNA demonstrates where this convergence is heading. On August 19, 2026, Merck and Moderna announced that intismeran met its primary endpoint in a Phase 3 trial of 1,137 patients with resected, high-risk melanoma. Each patient’s tumour is sequenced, an algorithm selects up to 34 neoantigens for the immune system to target, and those instructions are synthesized into a custom mRNA vaccine administered alongside Keytruda. Adding the personalized vaccine significantly improved recurrence-free survival compared to Keytruda alone, although detailed figures remain pending. Personalis has provided the clinical tumour sequencing for the program since the Phase 2b trial.

AI in the Hospital

Unsurprisingly, the fastest-adopted hospital tool has been the AI scribe, which drafts notes during visits so doctors can focus on patients. With documentation tied directly to billing, US scribe spending led healthcare AI in 2025 at ~$600 million (Menlo Ventures). Still, it is low-hanging fruit. A major April 2026 JAMA study found scribes saved just 16 minutes of charting a day and added only ~$167 a month per clinician. Because Epic integrates scribes natively and Doximity (DOCS) gives one away for free, enduring value will likely sit with workflow owners like Microsoft (MSFT), Oracle (ORCL), and Epic, rather than standalone startups.

Behind the scenes, hospitals are using AI for operations. A Johns Hopkins command centre built with GE HealthCare forecasts patient volumes, opening the equivalent of 16 extra beds a day without new staff or wings.

Prior authorisation is next: US insurers covering 257 million people pledged that 80% of electronic requests will resolve in real time by 2027, while Medicare’s six-state WISeR pilot has tested AI-assisted approvals since January 2026.

The Guardrails

Healthcare cannot “move fast and break things” the way consumer tech does. Doctors are clearly open to AI, but in the same AMA survey, 88% said robust safety and efficacy validation was critical for broader adoption, and 86% said the same about data privacy. In no particular order, the main challenges are:

• No guessing allowed: Medical AI cannot afford hallucinations. In October 2024, the AP reported that OpenAI’s Whisper (the speech recognition model behind Nabla’s scribe used by over 30,000 clinicians) sometimes invented sentences no one had spoken, including made-up treatments. On top of that, doctors need clear explainability: they must see why a model made a recommendation before acting on it.

• Avoiding bias: A 2019 study in Science revealed that a widely used triage algorithm relied on past healthcare spending as a proxy for illness. Because less money had historically been spent on Black patients, the model rated them as healthier than equally sick white patients. Correcting that bias would have increased the share of Black patients flagged for extra care from 17.7% to 46.5%. Similarly, an algorithm trained mostly on large urban academic centers often falters when applied to rural populations.

• Privacy and liability: Health records are among the most sensitive personal data that exists. As the UK’s Royal Free case proved, sharing patient data carelessly can breach privacy laws even when intentions are good. Legal liability remains another gray area. The Federation of State Medical Boards stated in 2024 that physicians remain ultimately responsible for their care decisions, regardless of AI input. Unsurprisingly, clear liability frameworks topped doctors’ wish-list for regulators in the AMA survey.

The Horizon

Over the next three to five years, the bigger change will likely be multimodal AI that reviews everything at once: lab results, scans, genetic tests, and clinical notes, acting as a co-pilot for the entire care team. Early versions are already here. In June 2025, Microsoft released a preprint showing its MAI-DxO system correctly diagnosed about 85% of 304 complex New England Journal of Medicine case challenges, compared with 20% for experienced physicians. However, those physicians were barred from consulting colleagues, textbooks, or AI tools. In January 2026, OpenAI launched ChatGPT Health and Anthropic released Claude for Healthcare, both of which allow patients to connect their own medical records.

What these tools have in common is that they are only as good as their underlying data. An algorithm cannot interpret a genetic panel, a tumour sequence, or a protein readout until someone physically generates it in a lab. Consequently, the more clinicians lean on AI, the more wet-lab testing must happen upstream before any real progress can occur.

What We’ll Cover Next

Each of these themes deserves a deeper dive. Here are a few questions we plan to dig into:

• AI-Designed Drugs: Key players include Isomorphic Labs (Alphabet, GOOGL), Eli Lilly, Nvidia, Recursion Pharmaceuticals (RXRX), and Insilico Medicine. The central question is whether AI-designed molecules can improve Phase II success rates, where most drugs fail, and who captures the economics when they do. Isomorphic’s first clinical trials and rentosertib’s Phase III readout are the next major checkpoints.

• mRNA and Personalised Cancer Vaccines: Looking at Merck, Moderna, Tempus, and Personalis, we will examine the full intismeran dataset, the regulatory pathway, and what it actually takes to manufacture a bespoke medicine for every individual patient at commercial scale.

• The Lab Behind the Models: Focusing on Twist Bioscience, Bruker, Danaher (DHR), Agilent (A) Illumina (ILMN) and others, the core question is how much incremental demand AI-driven biology creates for DNA synthesis, sequencing, and proteomics, and which toolmakers are best positioned to capture it.

• Genomics and Gene Editing: Covering Regeneron (REGN), Amgen (AMGN), Vertex (VRTX), CRISPR Therapeutics (CRSP), Intellia (NTLA), Beam Therapeutics (BEAM), and Prime Medicine (PRME). On the data side, pharma giants like Amgen (via deCODE Genetics) and Regeneron are racing to mine massive human genetic databases, with Regeneron partner Truveta aiming to sequence up to 10 million patients. On the therapeutic side, following the landmark approval of Vertex and CRISPR Therapeutics’ Casgevy, pure-play biotechs like Intellia, Beam, and Prime are advancing next-generation modalities such as in vivo delivery, base editing, and prime editing. We will explore who controls the most valuable genomic datasets for target discovery, how AI is beginning to design novel gene editors, and which platforms are best positioned for commercial scale.

Conclusion

In years past, much of the conversation around AI in healthcare may have been focused on things like saving doctors time on paperwork. That has happened. Scribes caught on so quickly that they are already widely adopted across hospitals and clinics.

The harder and more valuable frontier is biology. DeepMind spent a decade proving AI can model proteins and DNA, Anthropic and Google are now racing to turn those insights into medicines, and the intismeran readout shows what an algorithm-designed treatment can achieve in a late-stage trial. AI-designed drugs still have to prove themselves in Phase II and clear the FDA, but every candidate must be synthesized and tested along the way, which is where the revenue is showing up first.

Because of healthcare’s necessary guardrails, AI integration will likely take longer to play out here than in most industries. For now, we believe the companies that synthesize, sequence, and measure biology, alongside those that own the underlying genetic data, offer the cleanest way to play the theme. We will take a closer look at each of these areas over the next few write-ups.

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

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As always, this is not financial advice and I may or may not hold positions in these names; however, I do provide live updates in the respective channels as always (Trades on Discord only, Investment Accounts on both Substack and Discord).

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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 in-depth Monthly Portfolio and Performance Update below (the new post will also be published within the next day).

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Indices

Dow Jones Industrial Average advanced +0.93% in the last week

S&P 500 advanced +1.15% in the last week

Nasdaq Composite advanced +0.64% in the last week

IWM declined -0.92% in the last week

Key upcoming economic events

Monday, October 12

• Columbus Day: U.S. bond market closed, stock market open

• Cleveland Fed President Beth Hammack speaks at the NABE Annual Meeting

Tuesday, October 13

• Fed Governor Christopher Waller speaks on AI at the Bloomberg New Economy Forum

• NFIB Small Business Optimism Index (September)

Wednesday, October 14

• Fed Vice Chair Michelle Bowman speaks on regulation and supervision

• Consumer Price Index (September)

• Fed Beige Book

Thursday, October 15

• Producer Price Index (September)

• Initial Weekly Jobless Claims

• Retail Sales (September)

• Empire State Manufacturing Survey (October)

• Philadelphia Fed Manufacturing Index (October)

• Manufacturing and Trade: Inventories and Sales (August)

Friday, October 16

• Industrial Production and Capacity Utilization (September)

• Import and Export Price Indexes (September)

Upcoming Earnings

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

Charts

SPX

Currently trades at $7,811.54, 1.49% above the 50SMA and 7.74% above the 200SMA.

RSI 59.93

13.90% YTD

Distribution days in the last week: 1

The S&P 500 built on last week’s 50-day SMA test, pushing to new all-time highs early in the week. A shallow mid-week pullback held well above the 21EMA, and price closed the week above all of its key moving averages.

COMPQ

Currently trades at $27,366.17, 3.02% above the 50SMA and 10.18% above the 200SMA.

RSI 60.26

17.78% YTD

Distribution days in the last week: 1

The Nasdaq Composite pulled back from a fresh all-time high early in the week to retest its prior highs from June (see horizontal line). It dipped just below that level on Thursday before reclaiming it on Friday, closing the week above all of its key moving averages.

BTC (currently Long)

Currently trades at $83,086.80, 2.81% above the 50SMA and 15.52% above the 200SMA.

RSI 52.12

-5.20% YTD

BTC was rejected once again near the $87K–$88K level early in the week and sold off through the $81K–$83K zone, before finding support at the 50-day SMA (see bottom arrow). Price has since recovered to the $83K level (horizontal blue line), which marked the May high, but sits just below its 5 and 21 EMAs. Bulls want to see $83K reclaimed and held, with the 50-day SMA (~$80.8K) the level that needs to hold below.

EEM

Currently trades at $66.80, 0.11% below the 50SMA and 5.76% above the 200SMA.

RSI 47.73

19.39% YTD

EEM rejected the $69 level again early in the week and fell beneath its 50 SMA on Thursday. Friday’s bounce brought price back to $66.80, just under the 50 SMA and the 21EMA. Bulls will want to see the 50 SMA reclaimed, while a decisive break above $69–70 remains the trigger for the next leg higher.

EWZ (Currently Long via IBZL)

Currently trades at $43.54, 17.56% above the 50SMA and 19.41% above the 200SMA.

RSI 76.17

36.50% YTD

EWZ gapped up >15% on Monday 5th in response to the results of the first round of the Brazilian presidential election. This fuelled optimism about a potential shift in economic policy, and hence, Brazilian equities are rallying. The gap took price well clear of the April highs (see horizontal line) and all of its key moving averages.

We are already positioned from much lower, but a potential entry/add level could be on a retest to the 21-EMA or 50-SMA.

GOLD (Long Physical)

Currently trades at $4,193.09, 3.11% below the 50SMA and 7.39% below the 200SMA.

RSI 45.64

-3.00% YTD

Gold slipped back into the $4,100–$4,150 support zone this week, where buyers stepped in again, with Friday’s 1.45% bounce taking price back to $4,193. Price remains below both its 21-day EMA ($4,227) and 50-day SMA ($4,328), with the 200-day SMA overhead at $4,528.

Bulls need to reclaim the 21-day EMA and 50-day SMA first, followed by the 200-day SMA and the January descending trendline as major resistance.

SOXX

Currently trades at $559.40, 4.14% above the 50SMA and 21.15% above the 200SMA.

RSI 51.70

78.64% YTD

SOXX was unable to breakout of the $600 mark and gave back around 5% this week, pulling back to test its 21EMA ($559.97) (see arrow). Price remains comfortably above the 50-day SMA ($537.15) and 200-day SMA. Bulls want to see the 21EMA hold as support for another attempt at $600 toward the highs of ~$650.

SKHY (Currently Long)

Currently trades at $169.03, 0.80% below the 50SMA.

RSI 42.56

0.61% YTD

SKHY fell below all of its key moving averages this week losing the EMA 21 and SMA 50. The IPO AVWAP now becomes the next level of interest below (black line). Bulls would want to see that hold, and the 50-day SMA flipped back to support.

GOOGL (Currently Long)

Currently trades at $351.66, 1.60% above the 50SMA and 3.53% above the 200SMA.

RSI 56.39

11.80% YTD

GOOGL reclaimed the 50-day SMA this week, as flagged last week, and is now trading above all of its key moving averages. The 5EMA has also crossed above the 21EMA, which is generally bullish. Above, bulls would like to see a breakout above the descending trendline from the May high (see arrow), which could open the door to a rally into all time highs past $400–$410.

META (Currently Long)

Currently trades at $718.67, 12.40% above the 50SMA and 14.22% above the 200SMA.

RSI 56.84

10.78% YTD

META continued to pull back this week, and is now approaching its 21EMA ($706.84) (see arrow), while holding just above the $710–$715 level flagged last week. Below that, we are watching the descending trendline it broke above in September, for a re-test. That level is now around $660.

MSFT (Currently Long)

Currently trades at $535.07, 6.97% above the 50SMA and 23.66% above the 200SMA.

RSI 67.52

13.85% YTD

MSFT continues to trend higher above all of its moving averages, closing at new YTD highs on Friday. It is now approaching the 540s, which served as resistance back in 2025 (see horizontal line). Bulls would like to see a decisive break above that level, while the 21EMA continues to act as support on pullbacks.

CRDO

Currently trades at $216.55, 3.19% above the 50SMA and 20.84% above the 200SMA.

RSI 56.98

51.20% YTD

CRDO spent the week consolidating just above its 50-SMA, with dips toward the level finding support (see arrows), a sign it is flipping from resistance to support as bulls wanted to see last week. Price remains above all of its key moving averages, with a rally to the 250 the next level to claim.

DRAM

Currently trades at $57.19, 0.16% below the 50SMA.

RSI 44.80

106.02% YTD

DRAM was rejected at the $62 level once again early in the week, a level it has struggled with since mid-July, and pulled back to close at $57.19, right on its 50-SMA ($57.28). It also lost the 21-EMA, which had been holding as support. We need the 50-SMA to hold here, with a decisive close above $62 still the trigger for a move toward the June highs.

CRWV (Currently Long)

Currently trades at $82.08, 7.18% below the 50SMA and 11.35% below the 200SMA.

RSI 43.71

3.48% YTD

CRWV was rejected at the 200-day SMA ($92.59) again this week (see latest downward arrows). The selling took price back below both its 21EMA ($86.57) and 50-day SMA ($88.43), which had been supportive last week. Bulls need to reclaim the 21EMA and 50-day SMA first, with the mid-September lows near $80, the next support below. A decisive close above the 200-day SMA remains what would potentially open the door to the $110–$115 level.

XBI

Currently trades at $153.77, 2.83% below the 50SMA and 10.24% above the 200SMA.

RSI 46.18

26.66% YTD

XBI lost the $154 support level flagged last week, dipping below $150 midweek, before a 3% rally on Friday on above-average volume took price right back up to that level. Friday’s push stalled just beneath the 21EMA (see arrow), and the descending trendline remains intact. Bulls need to reclaim $154 and the 21EMA, then the 50SMA and the trendline, to restore the uptrend. Failure here would turn $154 into resistance.

S&P 500 Percentage of Stocks Above the 50 Day Moving Average: Currently 36.40%

Breadth increased decently this week, with the percentage of stocks above the 50-day moving average now at 36.40% compared to 25.00% last week.

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

• TWST: Exited the last of my TWST position for a > 6x bagger since last October.

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