To The Moon

Big-Tech’s Performance

Since no significant data, risk preferences diverged this week. Tech stocks traded with concerns, leading by Apple and NVIDIA.

As of the close on September 7th, the strongest performers in the past week were $Amazon.com(AMZN)$ of +2.07%, followed by $Meta Platforms, Inc.(META)$ with +0.97% and $Microsoft(MSFT)$ with +0.22%. $Alphabet(GOOG)$ $Alphabet(GOOGL)$ down -0.55%, $Tesla Motors(TSLA)$ -1.75%, $Apple(AAPL)$ -5.75%, and $NVIDIA Corp(NVDA)$ -6.36%, were all in negative territory.

Closed on Sep.7

Big-Tech’s Top Newsfeed

The strong sales of Huawei Mate 60, equipped with a 7nm chip, could impact iPhone sales.

Reports about the Chinese government ordering government agencies to stop using iPhones put pressure on Apple's stock price.

Apple TV+ and MLS Season Pass subscriptions saw increases due to Messi's arrival.

Amazon, Apple, Microsoft, Meta, Google, and ByteDance were included in the initial list of services under the EU Digital Markets Act.

Microsoft continues efforts to gain UK regulatory approval for the remaining obstacles to its acquisition of $Activision Blizzard(ATVI)$

Cloud and data security startup Rubrik plans an IPO later this year, aiming to raise $500-700 million, with Microsoft holding a stake.

Needham stated that Amazon, Google, and Microsoft are potential long-term beneficiaries and "leaders" in generative AI, while Apple lags behind.

Due to a failed settlement, the U.S. FTC plans to file an antitrust lawsuit against Amazon in September.

Tesla announced that the global Supercharger count has surpassed 50,000.

Tesla stated that production and delivery volumes will decrease in the third quarter due to factory upgrades and stoppages worldwide.

UBS released a teardown report on $Boyd Gaming(BYD)$ Diheibao electric car, with about 75% of parts being self-produced and an overall cost 15% lower than Tesla Model 3.

Jensen Huang sold approximately 89,100 shares of NVIDIA stock within three days to exercise options.

$Dell Technologies Inc.(DELL)$ reached a historic high, with Ming-Chi Kuo stating that the long tail effect and edge computing are key factors in the explosive growth of AI computing power, and Dell and ASUS may be undervalued beneficiaries.

$ARM Holdings Ltd(ARM)$ updated its IPO documents, pricing the stock between $47 and $51 per share, with Apple, Google, and NVIDIA are all investors.

Big-Tech’s Key insights

Will the market panic on Apple leading the biggest decline?

Since Apple's 4.8% drop on its earnings report day, overall volatility has increased significantly. Just last week, the market rallied on the announcement of the event date and high expectations for the Type C interface on the iPhone 15, leading to a surge in event-related speculation. This week, two major "negative" events in the Chinese market have put Apple in the spotlight.

One is the strong sales of the Huawei Mate 60 equipped with a 7nm chip, and the other is the report by the WSJ stating that the Chinese government has ordered government agencies to stop using iPhones.

Obviously, even without discussing geopolitics, the market is still concerned that Apple's market share in its largest incremental market may (significantly) decline. Analysts on the Street also call for calm, suggesting that even if government agencies cannot use iPhones, the impact should not be exaggerated.

In terms of event expectations:

1. The price increase of the iPhone 15 series will directly boost the company's performance.

2. Some Android users may switch to or return to Apple due to Type C

3. Apple has allocated a higher proportion of Pro and Pro Max models at higher prices, while equipping the Pro Max with a 5x zoom lens.

4. The new interface may bring increased demand for accessories.

In addition, Apple's revenue growth in the service sector in the past two quarters has also reached new highs, creating opportunities. Although the tax rate on the Apple App Store is still controversial at the moment.

In the short term, the longs and shorts’ battle for Apple will continue, and after the event, the direction may be further determined by the volume of new product orders.

Are there always shorts on NVIDIA?

A recent conspiracy theory questioning NVIDIA's financial fraud has put pressure on its stock price. Some people suspect that NVIDIA collaborated with its artificial intelligence startup Coreweave to boost Q2 revenue and artificially inflate the stock price.

Some conspiracy theorists believe that there is collusion between major companies like Microsoft, Amazon AWS, and large-scale model startup companies like Inflection to place suspicious orders to boost NVIDIA's revenue.

Although the conspiracy theory has not gained market support, concerns about NVIDIA still persist, including expanding profit margins, insider sales, stock buybacks, and high valuations.

Recently, the long and short game of NVIDIA has been very close, and in fact, investors' underlying logic is still concerned about the AI bubble bursting and dragging down the entire market.

When tech stocks take turns

This week's decline in Apple and NVIDIA has also sounded the alarm for tech stock investors. On the one hand, the retreat of heavyweight stocks has a significant impact on the market, and on the other hand, there's the question of how to balance one's asset portfolio.

This week, companies like Meta, Amazon, and $Netflix(NFLX)$ have shown relatively strong performance, and funds have also adjusted within the tech sector.

• Meta's short video platform Reel is showing good growth momentum, although it may not necessarily match up to Twitter's Threads in the long run.

• Amazon's collaboration with Shopify Inc(SHOP) and the potential for increased consumption after the back-to-school season could lead to more positive developments.

• Meanwhile, Netflix's vast content library is shining in the midst of a Hollywood writers' strike and $Walt Disney(DIS)$ Disney+'s slowing growth.

The Big-Tech Portfolio

We've combined the seven largest companies into a portfolio, which we call the "TANMAM" portfolio.

By rebalancing this portfolio with equal weights and adjusting the weights quarterly, the performance since 2015 has far exceeded that of the $SPDR S&P 500 ETF Trust(SPY)$ , with a total return of 1347.65%, compared to SPY's total return of 152.64% during the same period.

Since the beginning of the year, the total return of this portfolio is 91.3%, with a Sharpe ratio of 5.8, while SPY's total return during the same period is 17.2%.

In the past week, due to the retreat of heavyweight stocks, the portfolio's return was -1.9%, while SPY's return was -1.2%.