Time is running out, the fantastic season of corporate results has given the market a strong boost. AI (at least for now) has stronger real support than many expected. In this sense, we would like to highlight how technology companies from another “era” such as HP, Dell, Qualcomm, Texas Instruments, have flown this last month. The reason is that AI cannot live alone with the Cloud and needs hardware and physical memories. In the last year we have already seen the rebirth of hard drives such as Sandisk and Western Digital with stratospheric stock market performance. Now it is the turn of computer manufacturers and chip manufacturers of those considered to have lower added value. From a technological point of view, the times we are living in are exciting and continue to surprise us with new winners and losers.
But the market cannot live forever with its back to reality, we have been waiting for months for a peace agreement that does not come and a liberation of the Hormuz crossing that does but does not. The increase in freight and the reduction in supplies does not involve AI or geopolitics, if there is demand and supply is reduced, prices rise. This is taught on the first day of class in any economics school in the world. The United States is comfortably above 3% and Europe is beginning to move away from 2%. Powell’s replacement, Mr. Warsh, even if he wants to, cannot lower rates under these conditions and his boss needs to refinance a huge amount of debt in the coming months. November is approaching and we believe that Mr. Trump has a serious problem for the mid-term elections. The Iranians have a catastrophic economic situation, but they continue to endure. Rationality demands an imminent agreement, but we fear that the biggest impediment to reaching an agreement is that no one wants to appear as the loser.
This June the interesting news is going to come directly from space, SpaceX’s IPO is going to be the largest in history and the company is going to have a market value close to 2 trillion USD, above Meta and behind Alphabet (on the first day). These gigantic flows are going to move the market a lot so that this IPO can be digested, the demand is being brutal and even many ETFs have already obtained participations in the company’s pre-IPO. For the second half of the year, the exits of OpenAI and Anthropic are expected, which, without reaching the volumes of SpaceX, will also be very strong, in turn they will be able to generate important dislocations in the market to be absorbed by the more institutional buyers. Fasten seat belts.