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Weekly Newsletter
💪 Strong Earnings & Mixed Macro Data
📱 Apple May Launch First Foldable iPhone Next Week
📈 Earnings Tracker: Breadth Keeps Improving
💰 Key Takeaways From This Week’s Earnings
🤖 What’s Next For AI Trade?
QUOTE OF THE WEEK:
“Everyone knows what the levers you can pull to get the debt-to-GDP ratio in check. You can cut spending. You can raise taxes. Those are both politically unpalatable for both parties. So what are you left with? You can drive nominal GDP growth. So that seems to be the least politically costly policy. So if you can drive nominal GDP growth higher, you can correct the debt-to-GDP ratio. Naturally, you can improve living standards. You can drive corporate earnings. But you have to be a little more tolerant of inflation.” - Jacob Manoukian, JPMorgan Private Bank U.S. head of investment strategy
KEY US ECONOMIC EVENTS NEXT WEEK:
MARKET CLOSE:
WEEKLY MARKET WRAP:
Good Afternoon. The week ended roughly flat because the two big data prints pulled in opposite directions. ADP on Wednesday showed private hiring of just 38K, the slowest month of the year, which sparked a Wed-Thu rally on hopes the Fed would ease. NFP on Friday then came in at 162K vs expectations of 55K, flipping the narrative back to a possible September rate hike and pulling all three indexes lower. The two prints canceled each other out at the headline level. But the tech-cyclical split underneath told the real story. Nasdaq finished +0.40% on continued AI capex momentum while Dow finished -0.27% as cyclicals struggled under the weight of Warsh's hawkish Jackson Hole tilt and 30-year Treasury yields near 19-year highs. The flat surface hides real rotation.
Almost all major companies reported beats this week.
Below are the key things to note this week:Mixed Macro Data
August payrolls printed 162K vs 55K consensus — the largest upside surprise since April — with unemployment steady at 4.1% and wages re-accelerating to +0.30% m/m. The one softer data point came Tuesday: ISM Manufacturing cooled to 54.6 (vs 55.2 consensus) for a fourth straight monthly deceleration, the classic late-cycle divergence between labor market resilience and forward activity.For the week:
CNN's Fear & Greed Index now stands at 42 (Fear) out of 100, down 12 points from last week. Details here
The top five trending stocks on Reddit are SPY, Micron, NVIDIA, SanDisk, and Tesla. Read More
Liquidity:
Banking Reserves + ON RRP: Banking reserves remain at approximately $2.9 trillion. ON RRP balance remains immaterial.
Standing Repo Operations: The New York Fed’s standing repo operation (primarily reflecting SRF take-up) is $0.
Here is a summary of this week’s key economic releases:
Target Rate Probabilities for Sept 16th FOMC Meeting:
CURATED INSIGHTS & ANALYSIS:
What’s Next For AI Trade?
Every stage of the AI trade has been a realization, one after another. Chips came first, because nothing runs without them. Nvidia, Broadcom, and AMD carried that stage. Then we realized AI creates and uses enormous amounts of data, and all that data needs somewhere to live. Memory became the shortage. Micron and SK Hynix make the fast kind that feeds the chips, and now even ordinary storage from SanDisk and Seagate is running tight. Then we realized all of this needs electricity, and lots of it. GE Vernova's turbines are sold out for years, while Eaton and Vertiv build the power gear and cooling that keep the machines alive.
The newest realization is security. AI agents now do real work, and anything doing real work needs protection. That is Palo Alto, Zscaler, and CrowdStrike, with Datadog keeping an eye on what the agents actually do. More realizations are coming. AI needs buildings and land, which is Equinix and Digital Realty. Soon AI agents will buy software on their own, and companies like GitLab and MongoDB want to be the ones collecting that payment. And at some point, someone has to pay for all of this construction. Each time the story is the same: the world runs short of something, and whoever makes that scarce thing becomes the next chapter of the AI trade.
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Earnings Tracker:
Breadth is improving, but large caps still lead.
With 99% of the S&P 500 reported, the median constituent's GAAP net income rose 14.3% year over year on aggregate revenue growth of 14.7%, an 86% beat rate, and 70% of reporters improving on last year. S&P 500 Growth leads on every measure — a 27.1% median with 85% of reporters improving — while the Russell 3000's 17.2% median sits above the S&P's and runs 5.3 percentage points ahead of its own Q1 pace, the only universe clearly ahead of its prior-quarter trajectory. Its breadth is the weakest of the three, though, at 64%. Both large-cap universes tracked within a point of their Q1 pace, a difference too small to read as directional. The pattern that held all season: large caps continue to earn more growth than the broad market, but the broad market is improving faster against its own base — the rally's earnings foundation widening rather than rotating.Key takeaways from this week’s earnings:
AI equipment demand grew across every layer this weekBroadcom’s AI chip revenue rose 221% to $16.7 billion. Dell’s server and networking revenue rose 122%, Credo’s connectivity revenue rose about 115%, and HPE and NetApp both beat on AI server and storage demand. Six of the twelve companies here sell different parts of the same machine, and all six grew. The demand is broad rather than concentrated in one supplier.
Two companies put numbers on years that have not started
Broadcom raised its fiscal 2027 AI chip target to about $115 billion and pointed to roughly $230 billion of total revenue by fiscal 2028. Dell raised its fiscal 2027 revenue outlook to $192 billion from $167 billion. Companies do not normally publish figures that far out unless orders are already in hand, which suggests the visibility is contracted rather than forecast.
AI workloads are adding revenue at data software companies
MongoDB grew revenue 21% and said coding agents are signing up for its database directly. Snowflake grew 30% as AI workloads consumed more data. For these two, AI is currently increasing consumption of what they sell. That is the opposite of what the market feared a month ago, though two quarters is not yet a trend.
Security spending for AI agents is scaling faster than anything else these firms sell
Palo Alto reported that AI agent traffic across its network rose ninefold and that its AI security products passed $100 million in annual recurring revenue within four quarters. Zscaler’s comparable products grew about 50% in one quarter. Neither figure is large against company revenue yet, but both are growing from nothing in under two years.
One-time items are inflating reported profits again
Lululemon’s reported $2.92 included about $0.86 from tariff refunds, and Medtronic’s 13.7% organic growth included about 670 basis points from an extra week in the quarter. Walmart, Target, Ross, HP and Dollar General booked similar refunds in the prior fortnight. Comparing this quarter to last currently requires adjusting several headline numbers.
Athleisure is getting more competitive
Lululemon cut its full-year earnings guidance to $9.48–9.73 from $13.26 and missed on revenue. Three weeks ago, On Holding’s Americas growth slowed to 13% from 17%. Both sell premium activewear, and On has been taking share. This looks like competition inside one category rather than evidence about the wider high-end consumer, which has not reported this week.
FRONT PAGES:
Nvidia to Acquire Hugging Face for $12.9B
Nvidia agreed Thursday to acquire open-source AI platform Hugging Face for $12.93B, its second-largest deal after the $20B Groq acquisition last December. Hugging Face hosts 3M open-source models and 500K datasets used by 18M developers and 200K enterprises. Nvidia offered $500M in 2025 at a $7B valuation, and it was turned down. The current price is roughly 1.8x that mark. Close targeted for H1 2027. Nvidia now sits across chips, compute financing, and the developer platform for both open- and closed-model AI.Apple May Launch Folding Phone Next Week
Apple's Sep 9 "Surprise and Shine" event is expected to unveil its first foldable iPhone, likely branded the iPhone Ultra. Reports suggest a 5.5-inch display when closed and 7.8-inch when open, priced above $2,000, which would make it the most expensive iPhone ever. Samsung is reportedly making up to 8 million display panels for the launch. If it ships, this will be the first new iPhone form factor in over a decade and Apple's first new product category since Vision Pro in 2023. The event also marks the start of the John Ternus era at Apple, which began on Sept 1.Anthropic Signs $35B Cloud Deal With Lambda
Anthropic agreed Monday to spend $35B over six years with Nvidia-backed Lambda for 350MW of AI compute at Hut 8's Beacon Point campus in Nueces County, Texas. Nvidia holds the data-center lease, Lambda provides compute, Hut 8 develops the site. Anthropic has now signed $175B in cloud commitments in recent months, including $50B with Fluidstack, $45B with Nscale, and $45B with SpaceX. Nvidia sits simultaneously as landlord, chip supplier, and deal facilitator across the transaction.Uber Cuts 3,300 Jobs to Fund Robotaxi Push
Uber announced Wednesday it will eliminate 3,300 roles, approximately 10% of its global workforce, as CEO Dara Khosrowshahi flattens management layers and consolidates teams. Cuts free capital for expanding robotaxi partnerships and the autonomous ride-share buildout. Uber joins Meta, Microsoft, Alphabet, and Amazon on the 2026 tech-restructuring list, all trimming legacy headcount as capital rotates toward AI-driven products.Tesla Cybercab Launches in Austin
Tesla unveiled Cybercab, its purpose-built autonomous ride-share vehicle, in Austin on Wednesday. Wall Street analysts left with questions on per-mile economics, deployment timeline, and fleet-utilization math. Ties into Tesla's broader Robotaxi rollout, which launched in Austin in June 2025 and expanded to the Bay Area in early 2026. Musk has staked Tesla's forward valuation on autonomy execution rather than EV volume; the launch did not accompany hard financial disclosures.
EARNINGS UPDATE:
Broadcom. Record revenue $29.6B, up 86% and a beat; EPS $3.32 versus $3.22, a ninth straight beat. AI semiconductor revenue tripled to $16.7B, up 221%, and management raised its fiscal 2027 AI chip target to about $115B. But fourth-quarter revenue guidance of $34.8B came in just under the $35B expected, and shares fell about 3%. Free cash flow was 46% of revenue.
Dell Technologies. EPS was $7.04 versus $4.91, a 43% beat; revenue was $47.0B, up and well ahead. Server and networking revenue rose 122% to $10.5B, storage 26%, and PCs 20%. Dell raised its fiscal 2027 revenue outlook to $192B from $167B, roughly 70% growth. Shares jumped about 16%. The clearest evidence yet that AI spending reaches the whole system, not just the chip.
Credo Technology. EPS $1.20 versus $1.17; revenue $479M, up about 115% and a beat. Demand for its high-speed connectivity products tied to AI data centers stayed strong. Shares fell about 20%. Doubling revenue was not enough.
MongoDB. EPS $1.90 versus $1.61, an 18% beat; revenue $772M, up 21% and a beat, with an improved outlook. Coding agents are driving new database sign-ups. Shares fell about 13%. A beat, a raise, and a selloff.
Snowflake. EPS $0.62 versus $0.45, a 39% beat; revenue $1.55B, up 30% and a beat, as AI workloads lifted data-platform consumption. Shares jumped about 17%. Data platforms are being paid for the AI boom.
Palo Alto Networks. EPS $1.02 versus $0.98; revenue $3.41B, up 14% and a beat. Traffic from AI agents across its network rose ninefold, and its new AI security products passed $100M of annual recurring revenue in four quarters. Shares still fell about 9%. Fast growth in a new category, sold on the wider guide.
Zscaler. EPS $1.19 versus $1.09; revenue $898M, up 24% and a beat, with its security-for-AI products up about 50% from the prior quarter. Shares fell about 5%. Same story as its rival: strong numbers, tired stock.
Hewlett Packard Enterprise. EPS $1.11 versus $0.93, a 19% beat; revenue $12.2B, up 14% and a beat, on AI server demand. Shares rose about 5%. The server cycle is lifting everyone who builds them.
NetApp. EPS $2.58 versus $2.12, a 22% beat; revenue $2.03B, up and well ahead, as AI workloads drove storage demand. Shares rose about 3%. Storage is the quiet beneficiary of the buildout.
Guidewire Software. EPS $0.99 versus $0.93; revenue $411M, up 10% and a beat. Insurance software demand held up. Shares fell about 20%, the week’s worst reaction. A good quarter against an expensive stock.
Lululemon. Reported EPS $2.92 versus $1.79, but about $0.86 came from tariff refunds; on a core basis it was roughly $2.06, still a beat. Revenue of $2.42B missed, and full-year EPS guidance was cut to $9.48–9.73 from $13.26. Shares fell about 17%. The refund covered a quarter of the guidance exposed.
Medtronic. EPS $1.45 versus $1.39; revenue $9.76B, up and a beat, with organic growth of 13.7%. About 670 basis points of that came from an extra week in the quarter. Shares were roughly flat. A solid quarter, flattered by the calendar.
EARNINGS PREVIEW:
Date | Symbol | Name | Time |
8-Sep | CASY | Casey's General Stores | After Close |
8-Sep | GME | GameStop Corp | After Close |
8-Sep | TTAN | ServiceTitan Inc | After Close |
8-Sep | BRZE | Braze Inc | After Close |
9-Sep | CHWY | Chewy Inc | Before Open |
9-Sep | ASO | Academy Sports and Outdoors | Before Open |
9-Sep | SAIL | SailPoint Inc | After Close |
10-Sep | ORCL | Oracle Corporation | After Close |
10-Sep | ADBE | Adobe Inc | After Close |
10-Sep | RH | RH | After Close |
11-Sep | KR | The Kroger Co | Before Open |
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