Shesa's Stock Market Weekend Updates - 6|26|26

Welcome to my weekend updates

Thanks to my WhatsApp group members who provided positives feedback for the 9th anniversary of the group! I will try to do my best for the group whatever I can. 

Last week the global tech selloff intensified early in the week, with sharp declines in chipmakers, memory stocks, and AI-related names. There were the same concerns over high data center/buildout costs, uncertain near-term AI revenue, and profit-taking after a strong run weighed on sentiment. The main trigger was a sharp sell-off in South Korea, where the Kospi index plunged nearly 10% (its steepest drop in months, briefly triggering a circuit breaker). These market concerns were nothing new. The investors wanted to take some profit after huge run on some technology AI related stocks. Micron (MU) had a blockbuster quarter but that stock was also beaten down on Friday. We are seeing sector rotation from AI related technology stocks to other broader market areas and into some small cap stocks. The important factor could be that the oil prices moved significantly lower to about $70 a barrel easing the inflation fear for the investors resulting in the broader rally other than technology stocks. Let's see the how did the stock indices performed last week:

S&P 500: Down -2.01%
Nasdaq : Down -4.64%
Dow : Up +0.57%

Key Economic Report Last Week
PCE: 4.1% YoY actual vs 4.1% expected (in line). Note: April PCE was 3.8%.
Core PCE (excluding Food and Energy): 3.4% YoY actual vs 3.4% expected (in line). 

Key Economic Report this Week
  • Thursday, July 2: Nonfarm Payrolls and Unemployment Rate (June). Markets expect to add about 115,000 jobs and unemployment rate holding at 4.3%.
  • Thursday, July 2: Consumer Sentiment
  • Friday, July 3, 2026: U.S. stock is closed for July 4th. 

    • Earnings Last week
    Micron (MU) had a blockbuster quarter shattering all expectations. It was simply spectacular! 

    • Revenue: $41.46B actual vs $35.85B expected (huge beat). up +346% YoY.
    • EPS: $25.11 actual vs $20.78 expected (huge beat), up +1215% YoY!
    • Gross Margin: 84.9% (record high).

    Q4 Guidance:
    • Revenue: $50B vs $43.58B expected (strong beat).
    • EPS: $31 vs $25.3 expected.

    My View: The company also said it's totally booked up to 2027 and they have better visibility into 2028. So, as I said, it’s no more a seasonal story. The results were simply fantastic. The most important thing is "it's still extremely under valued based on its forward earning of ONLY 7.39. With this kind of growth, the company deserves  at least 25 times forward earnings. The  Wall Street still think that memory is seasonal but that's no more the case in this AI era. In my view, this is one of the BEST tech stock in the market based on geothermal and valuations. Such pullbacks provide good opportunities. When a stock becomes very popular the elephants of Wall Street may already be looking for the next opportunity. Having said that, I think when the rotation is back to tech stocks, this stock should run. 

    Other News
    SpaceX (SPCX) would join the Nasdaq-100 index provided company meets the exchange’s requirements, index-tracking funds viz. QQQ can start buying shares after the market closes on July 6.

    Alan Greenspan, former chairman of the Fed, dies at age 100. He presided over the Federal Reserve for 19 years under four presidents, from Presidents Reagan to George W. Bush. His comment in 1996 about investors’ “irrational exuberance” initially shocked the markets, but the bubble didn’t burst until 2001.  

    Apple (AAPL) posts worst day in over a year after MacBook and iPad price hikes. Last week, CEO Tim Cook said price hikes were coming due to surging memory and storage costs. Apple has raised more than 20-30% cost in some cases. We will see how it would impact their revenue potential. 

    Oracle (ORCL) just wrapped up its worst week on Wall Street in 25 years as concerns continue to mount about the software company’s debt load and whether its bet-the-house investment on artificial intelligence will pay off.

    I sold my position for the Gold ETF (GLD). It will be removed from the Blog portfolio. Gold has been on downturn spiral. Silver (SLV), I am still holding for now.

    Stocks to watch 
    SPCX, MU, NVDA, DELL, TSLA, SOXL, DRAM, NOK, MRVL, INTC, IONQ, APLD, AMD, AAPL. 

    NOTE: The above are  not recommendations. 

    Thoughts about Future Market Directions
    Now oil prices have come down significantly in last couple of week to below $70 per barrel. This is one of the reason, why tech stocks are coming down and small cap as well as value stocks are going up. The reason, once oil prices come down, so also inflation is expected to come down and that’s helpful for the economy and other non-tech stocks. Over the weekend, U.S hit Iran's drone and military sites as Iran violated the cease fire agreement. So, we will  see how market reacts to that this week. Secondly, since investors are rotating money to non-tech stocks, some caution is warranted for the technology investors. 

    Have a good evening and good investing!

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