degentrading
Former TradFi Options Market Maker, Delegate at Lido DAO
Hyperscalers Alphabet, Amazon, Meta and Microsoft look set for strong price gains as their valuations get validated, with Meta's repricing not yet complete. Yields have likely peaked, and heavy short positioning in Treasuries could soon trigger a squeeze that, with the Nasdaq 100 near all-time highs, fuels a breakout. Institutional surveys are the most bearish on record, and prime brokerage data show net and gross positioning at one-year lows. x.comÂ
Hyperscalers' forward P/E has contracted 20% even as estimates ramped, making it rare to see things get much worse. Rising GPU rents and new lows in availability make the AI fears a fade; hyperscalers should lead. The next two weeks will be gut-wrenching amid the OpenAI raise, Anthropic S-1, Fed, midterms and mutual-fund selling into year-end, but that is the time to buy. x.comÂ
The Magnificent Seven's growth, fortress balance sheets and central role in the AI buildout now come at multiples that finally make sense. They have barely bent when high-beta names lose 10% in a session; that resilience makes their valuations down here one of the better opportunities in this market. x.comÂ
Microsoft's position is the most crowded among the Magnificent Seven, and fund flows are against it as funds sell those stocks to reserve cash for Anthropic's IPO. It faded despite an excellent earnings report. x.comÂ
Alphabet's rapid cloud growth and diverse profit sources make it a long-term buy below 20x forward earnings. Cloud grew 103% this quarter, despite short-term fears about search and heavy spending. x.comÂ
Hedge funds went too lopsided short before Amazon, Microsoft and Alphabet's earnings, setting up an aggressive short-covering rally if they deliver this week, as expected. SPCX crushed and ANT's S-1 was quite good, leaving a potential two-week rally on a razor's edge. x.comÂ
Hyperscalers' accelerating growth risks raising peak-growth concerns, making Alphabet the first to short. SouthernValue95 says hyperscalers are growing at their fastest rate since Covid while Anthropic is decelerating sharply. x.comÂ
The Nasdaq 100 faces short-term downside because a failed push to a new high leaves crowded bullish sentiment vulnerable to a break below. Despite record institutional accumulation and a long-term bullish position, five months of chop, a failed ATH and an attempted loss of the bullish trend favor hedging rather than adding leverage. x.com x.comÂ
A ten-year low in forward P/E makes hyperscaler valuations look more than reasonable. Goldman Sachs' chart tracks Amazon, Alphabet, Meta, Microsoft and Oracle as a basket. x.comÂ
Amazon's weak retail growth has shaken the earlier buy case. Online-store sales rose just 2% year over year, and the retail numbers look so poor that it is no longer clear at what price the shares are a buy. x.com x.com x.comÂ
The Magnificent Seven are a great buy because the market is missing that their compute spending already earns a return. Alphabet, Amazon and Meta are the cheapest in years at about 20-25x forward earnings, as capex nearly doubled and Alphabet's buybacks fell from $15B a quarter to zero. Yet the group's revenue growth still beats the market. Compute either boosts their own products, as with Amazon and Meta ads, or can be rented out at higher prices. Steady buying this year should pay off in 2027. … Show more