To The Moon

Big-Tech’s Performance

This week was the last week of the first half of the year, and the broader market hovered near new highs with no surprises. NVIDIA's push to new highs came to an end and gave more inflows to other tech stocks. In addition to AI-related software growth stocks, MSFT, AMZN, and GOOGL among the big tech companies are making new highs, while META is also near a new high. As for TSLA, there is also a line breaking out of the uptrend that has been consolidating for more than 2 months.

The best performers over the past week through the close of trading on June 27 were $Tesla Motors(TSLA)$ +8.73%, $Amazon.com(AMZN)$ +6.31%, $Alphabet(GOOGL)$ $Alphabet(GOOG)$ +5.17%, $Meta Platforms, Inc.(META)$ +3.56%, $Apple(AAPL)$ +2.11%, $Microsoft(MSFT)$ +1.60% and $NVIDIA Corp(NVDA)$ -5.19%.

Big-Tech’s Key Strategy

Amazon's chances?

As soon as Nvidia pulled back, other tech stocks accordingly ushered in opportunities. We previously discussed Google and Meta, is typical of the application layer commercialization of the most direct beneficiary stocks, Tesla is because of the underperformance so far this year, but also gradually back into the focus of investor attention.

And Amazon, too, crossed the $2 trillion market capitalization this week.

While $Volkswagen AG(VLKAY)$ 's $5 billion participation in the $Rivian Automotive, Inc.(RIVN)$ partnership this week has benefited majority shareholder Amazon to some extent, we think that's just a cop-out. the real value of Amazon's investment is in its own business.

1. **Diversified business advantage. ** In addition to the e-commerce giant, Amazon is a leader in a number of fields such as cloud computing, artificial intelligence, etc. The diversification strategy not only diversifies the risk, but also withstands changes in the stock market cycle and creates multiple growth engines for the company.

2. **Significant margin improvement in recent quarters. **The company has made significant progress on margins recently, particularly in its North American business, which turned from loss to profit, and AWS, which improved its operating margin to 37.6%. This demonstrates continued profitability from scale effects.

3. **AI infrastructure leads the industry. **Continued competitive advantage in cloud computing and generative AI, with strong growth in the AWS business despite continued challenges from rivals such as Microsoft Azure.

4. **Emerging businesses leave opportunities for the future. **Amazon is actively laying out its satellite internet project Kuiper, with beta testing scheduled to start next year despite production delays. This project is expected to open up new growth space for the company.

5. **Financials are solid. **As of the most recent quarter, Amazon had $85 billion in net cash, well above $57.6 billion in debt. The strong balance sheet supports the company's continued investment and expansion.

Part of this week's money flow also came from feedback on the company's dominant position in the e-commerce space and the launch of new initiatives that have gained some traction against upstart rivals such as Temu ( $PDD Holdings Inc(PDD)$ ), Shein and others. Included:

• Reduction of transaction costs for selected commodities, in particular clothing items under $15;

• Reinforcing its logistical advantages, it will deliver more packages in the U.S. than $FedEx(FDX)$ and $United Parcel Service Inc(UPS)$ ;

• Open up its logistics and fulfillment services to non-Amazon sales channels to improve overall competitiveness.

Big-Tech Weekly Options Watcher

NVIDIA falls, Tesla rises

After the expiration of the Witching Day contract last Wednesday, NVDA open interest was reduced by a third. A number of investors found a new favorite this week in TSLA, which has been trading sideways for months with declining IVs, and in one fell swoop pushed TSLA's IV Percentile up to 80%.

Given the open interest at expiration on July 12 (two weeks later), investor long sentiment on TSLA is very strong, with midpoints all the way up to 200+, and if this trend continues, it could push the stock price even higher, and the formation of a new "Gamma Squeeze" can't be ruled out.

Big-Tech Portfolio

The Magnificent Seven form a portfolio (the "TANMAMG" portfolio) that is equally weighted and reweighted quarterly. The backtest results are far outperforming the S&P 500 since 2015, with a total return of 2,029%, while the $SPDR S&P 500 ETF Trust(SPY)$ returned 214.7% over the same period, before pulling back after a record high.

The broader market hit a new high this week and the portfolio's year-to-date return hit a new high of 34.6%, outpacing the SPY's 15.7%.

The portfolio's Sharpe ratio for the past year was 2.4, while the SPY was 2.0 and the portfolio's information ratio was 1.7