Big-Tech’s Performance
Macro Headlines This Week:
Government Shutdown Kicks Off, But Non-Farm Payrolls Might Still Drop? As of midnight on October 1, the US federal government ground to a halt after Congress failed to pass a funding bill for the new fiscal year. A bunch of federal agencies are either partially or fully offline—think stats offices pausing data dumps (like jobs reports and inflation numbers), regulatory reviews dragging their feet, and government contracts/aid programs hitting pause. With the Fed's FOMC meeting looming at the end of October, this mess is seriously fogging up the policy outlook. That said, the Bureau of Labor Statistics (BLS) could still roll out September's jobs data since it's already in the bag.
Job Signals Looking Shaky, Yet Stocks Keep Grinding Higher? The ADP report flagged a drop of about 32,000 private sector jobs in September, pointing to a clear cooldown in the labor market. Layoffs eased a bit last month, but new hiring plans are playing it ultra-safe—the most conservative since 2009.
Pullback Warnings and That End-of-Month "Sell Window." The market's threading the needle between shutdown jitters and rate-cut dreams, still pouring love into tech growth names. Correlations between S&P 500 sectors and the index have sunk to all-time lows—historically, setups like this have led to 5-18% corrections. September was a beast for the tape (S&P 500 and Nasdaq both posting killer YTD gains), so yeah, some funds might be cashing out profits or dialing back positions just to be safe.
Big Tech flashed even sharper splits this week—NVDA rode the AI FOMO wave to fresh highs, but META got smacked for over 3%. As of the October 3 close, here's the one-week rundown: $Apple(AAPL)$ +0.1%, $Microsoft(MSFT)$ +1.72%, $NVIDIA(NVDA)$ +6.3%, $Amazon.com(AMZN)$ +1.95%, $Alphabet(GOOG)$ $Alphabet(GOOGL)$ -0.04%, $Meta Platforms, Inc.(META)$ -2.92%, $Tesla Motors(TSLA)$ +2.98%.
Big-Tech’s Key Strategy
Sora-2: What Fresh Opportunities Are We Talking, and Who's Gonna Get Nuked the Hardest?
OpenAI's Sora-2 launch (their souped-up AI video generator that went live on September 30) just yanked "video-grade AI creation" out of the lab and into everyday productivity land. It's gonna crank up per-user demands for storage and bandwidth like nobody's business. Short-term? Expect a turbo-boost in storage needs across the board, straight-up igniting sentiment in the memory space. Meta tanked on the announcement day, with investors fretting that they're getting lapped in video gen and delivery—meanwhile, storage stocks lit up with fresh inflows.
Quick hit on the winners: HDD heavyweights Seagate and Western Digital are the cycle's top dogs, flipping from "bargain-bin cyclical" to "monopoly premium" valuations—plenty of justification for juicier P/E multiples. On the semi side, $Micron Technology(MU)$ , $SK Hynix, Inc.(HXSCL)$ , and $Samsung Electronics Co., Ltd.(SSNLF)$ are kings of HBM and high-end DRAM, primed to feast on training and inference workloads. NAND's seeing enterprise SSD demand roar back to life. Don't sleep on the infra/cloud crew either—AWS, Google Cloud, and Azure will need to keep ballooning cold/object storage; edge caching and CDN plays get a lift from hyper-personalized video ad distribution.
We're staring down a legit, trackable "supercycle" in storage: Demand's exploding from AI content that's not just consumer fluff but massive-scale video/multi-variant creation. Supply's got built-in squeezes (HDD duopoly vibes, Flash/DRAM capacity shuffling elsewhere), propping up prices and margins. By 2026, supply-demand gaps go nuclear—storage (DRAM especially) hits full supercycle mode, with cycle metrics flipping from "short-term stall" to 2027's "peak-cycle" glory.
Sora-izing video platforms? Inevitable trend. But the house doesn't always win—Sora-2's dishing opps and landmines. Meta's 2% slide? Pure disruption panic. SaaS AI apps? Oof, they got wrecked after OpenAI teased some CRM video demos—related stocks just folded like cheap lawn chairs.
Sora-2 itself? This could be social media's next paradigm flip. Ex-Meta brass have mapped it out: Star era (all about fame), Big V era (distribution kings), UGC era (algo magic), and now AI+Everyone era (algo-driven recs for all). New eras always dimensionally smash the old guard. AI short-form vids as the gold standard? Bet on it—every platform's gonna chase that tail.
Big Tech Options Strategies
This Week's Spotlight: Google's CapEx Ramp-Up?
Gemini's burrowing deeper into Google's ecosystem guts, smashing through a trillion tokens processed monthly—doubled since April. Cloud user base? Up 28% month-over-month. Mega-deals (over $250M)? Doubled year-over-year. Sept MAUs for Gemini? Poised to crack 500M, with daily queries jumping 50% MoM. Heck, they're even beta-testing ads baked right into Gemini.
Google just greenlit a $50B+ AI war chest: $25B dumped into the PJM grid (PA, NJ, MD), $9B for a Virginia data center, $7B to pimp Iowa's cloud setup, and $9B for Oklahoma tech hubs. CapEx guidance? Bumped on Gemini's AI model frenzy and GCP demand surge. FY2026 projection: $111B (29% jump from 2025's $86B), with a 26% 5-year CAGR (2024-2029). Breakdown: Roughly 2/3 to servers, 1/3 to data centers and networking. It's all about AI adoption going parabolic—Gemini tokens leaped from 480T in April to 980T in June (straight double), cloud customers +28% MoM, backlog ballooning to $15.8B (+17% MoM).
Options-wise, GOOG's out-of-the-money calls are piling up big at the 260 strike (October expiry) and 290 (November)—massive open interest, but Delta/Gamma squeeze is tame for now. Market's not pricing this in fully yet.
Big Tech Portfolio
Slap together the Magnificent Seven into an equal-weight portfolio ("TANMAMG"), rebalance quarterly. Backtest since 2015? Total return clocks in at a ridiculous 3,016.78%—vs. $SPDR S&P 500 ETF Trust(SPY)$ 's measly 291.49% for an alpha pop of 2,725.29%. And it's still firing on all cylinders. $S&P 500(.SPX)$
YTD? Big Tech's returns are rewriting records at 21.48%, leaving SPY's 15.19% in the dust.
$Invesco QQQ(QQQ)$ $NASDAQ(.IXIC)$ $NASDAQ 100(NDX)$ $ProShares UltraPro QQQ(TQQQ)$ $ProShares UltraPro Short QQQ(SQQQ)$
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