To The Moon

Big-Tech’s Performance

The impact of the delayed interest rate cut has made the earnings season tougher for growth stocks, with any indicators such as current quarter results, forward guidance, and industry competition worrying investors and potentially causing a selloff, and fewer losses overall.

On the contrary, the big technology companies are also more certain expectations, higher quality assets are favored by investors.

Through the close of trading on May 9, the best performers over the past week were $Meta Platforms, Inc.(META)$ +7.64%, which will rebound from its earnings plunge, followed by $Apple(AAPL)$ +6.67%, which strongly rebounded after earnings, then $Microsoft(MSFT)$ +3.64%, $NVIDIA Corp(NVDA)$ +3.41%, $Amazon.com(AMZN)$ +2.59%, $Alphabet(GOOGL)$ +2.00%, and $Tesla Motors(TSLA)$ -4.47%.

Big-Tech’s Key Strategy

How are big-companies betting on AI?

Hardware as a foundation, the first to enjoy the dividends in this wave of AI boom, but NVIDIA also understands the importance of the application level, so in the past two years invested in a number of companies, including AI search engine Perplexity, and the day before yesterday due to the earnings report exceeded the expectations of the soaring $SoundHound AI Inc(SOUN)$ and so on.

Looking at the financial results, when the margin growth rate of hardware has peaked, investing in a software company that can

In fact, not divided into investors have begun in the current position "position reduction" Nvidia, for example, in the $200 following the construction of a position, when followed by Soros sniper pounds overnight fame Stanley Druckenmiller, March has been 900 position to reduce the position. However, taking into account that he followed into a large number of Call, so it can be understood as a cycle of larger "rollover (Roll)" operation.

For other big tech companies, the "race" for AI has not stopped since 2023. Typical is META in the leveraged earnings report to add a full year of capital expenditure, a costless AI to the end of the posture.

All major tech companies have boosted their year-to-date capital spending expectations.

• Apple, which is relatively low on capex, prioritizes end-side AI as a better way to ensure security and privacy, with a focus on in-house chips to handle AI tasks in the cloud, the realization of which could take several generations;

• Meta has its own big open source model, Llama 3, and its focus is on platform user stickiness as well as optimization of its advertising business, and has been the fastest to cash out as evidenced in its first two quarters of earnings;

• Amazon's AI investment efforts are still more restrained because of the previous investment in AWS, the recovery of traditional cloud business spending itself can already provide support for AI arithmetic;

• Google also has its own big model, AI is more cautious, on the one hand, need to prevent the erosion of the AI entrance to the search service, on the other hand, also to synchronize the application of AI in search and advertising;

• Microsoft, on the other hand, is focusing more on software applications and the development of the convergence of cloud computing and AI, multimodal interaction technology, and in addition to having the strongest OpenAI in hand, it is also opening up its own AI robots.

Big-Tech Weekly Options Watcher

The much-anticipated NVDA earnings report is due on May 22nd, which is 2 weeks away, so the overall IV for NVDA is also currently high (IV Rank 77%).

Now look at the Call and Put for the week of May 24th expiration, there are currently more than 3,000 PUTs in the 700 position, and there is an annualized gain of nearly 9% for this position sold at $2.77 cash, which can be more than 60% if you add leverage, and it's a lot of investor's dreams to receive positive shares in this position.

And Call's large concentration of open positions is only in the 900-1000 range, dropping off a cliff after exceeding 1000, implying that a lot of investors still think that NVDA hitting the round number psychological barrier of 1000 will trigger quite a bit of selling.

Big-Tech Portfolio

The Magnificent Seven form a portfolio (the "TANMAMG" ) that is equally weighted and reweighted quarterly. The backtesting results are far outperforming the S&P 500 since 2015, with a total return of 1,753%, while the SPY has returned 199% over the same period.

Due to this week's pullback, year-to-date returns are lower at 17.15%, outpacing SPY's 7.37%.

The portfolio's Sharpe ratio for the past year is 2.8, while the SPY is 2.1 and the portfolio's information ratio is 2.1