To The Moon

Big-Tech’s Performance

Weekly macro storyline: Powell work with Trump?

1. Although Powell did not pay much attention to Trump, but Trump is repeatedly shouted Powell to cut interest rates.This week's CPI data was unexpectedly lower than expected, the super core services CPI is back to the mid-23 year level, and housing data is generally delayed, and from the industry data in the previous months, the probability of future downward movement is greater.Although the Fed mainly looks at PCE, overall inflation is trending downward, and inflation is currently an important bridge between Powell and Trump (both want to drop).

2. But inflation now has tariffs as a variable, and Powell is not willing to take "depends on the data" this kind of rhetoric to deal with the market (because the tariffs are going to push up inflation he would rather raise interest rates).Trump's goal is to reduce the deficit, which will necessarily require a rate cut (the benefits of a rate cut far outweigh the DOGE), but Powell point "obsession", more worried about the tariffs brought about by a serious recession, and we all know that he does not like to be very direct.

3. Monday's pullback also reflects the market's current concerns, both in the face of Trump's uncertainty, and in turn can not get comfort from Powell (the Fed is currently in a period of silence), whether the March FOMC meeting will show dovish in the tariffs uncertainty, but also the more volatile U.S. stock market is the key point of view.

On the big tech side, in addition to Tesla's concentration of "Musk risks" mentioned last week, Apple's shares have also pulled back considerably, although it may be possible that the tariffs and other uncertainties will be a factor in the market's decision to move to the next trading session.

By the close of trading on March 13, big tech companies were lower across the board over the past week.Among them $Apple(AAPL)$ -0.83%, $NVIDIA(NVDA)$ -7.97%, $Microsoft(MSFT)$ +1.11%, $Amazon.com(AMZN)$ -3.85%, $Alphabet(GOOG)$ $Alphabet(GOOG)$ +2.28%, $Meta Platforms, Inc.(META)$ -4.6% and $Tesla Motors(TSLA)$ -6.56%.

Big-Tech’s Key Strategy

Rotation rather than panic, Big Tech in valuation convergence?

With the re-adjustment of AI positions, investors (major institutions) began to change risk positions, overlaid on the quantitative, CTA, even made NVDA began to appear a single day plummet 8% of the Great Escape.

But this week's selloff was not a "panic selloff".From the past sample, the short-term rebound will occur, mainly on the extreme market "mean reversion" (mean reversion), the medium and long term still continue to be driven by fundamentals.

In terms of valuation, both market capitalization-weighted and equal-weighted, the current S&P 500 valuation is higher than the pre-epidemic level, Forward P/E (22.4x) is 7% lower than the peak and 7 points higher than the historical median (since 1985), while earnings growth expectations (12.4%) are lower than historical levels.

The nature of the 2025 pullback is capital rotation, with a sell-off in highly valued sectors, and a 10.1% decline in the forward P/E ratio of the best performers (top 20%) in 2024, while the P/E ratio of the worst performers has risen by 7%, with 3/4 of the constituents now below index valuation levels.

Meanwhile, the essence of the conversion is a shift in earnings growth momentum: the growth rate of Mag 7 has slowed, and its EPS growth in 2024 is significantly ahead of the curve, but slows in 2025, while other sectors are expected to close the gap in the second half of the year, with energy, industrials, and other sectors experiencing weak earnings in 2023-2024, but are expected to return to growth across the board in Q3 of 2025, driving the valuation convergence with the broader tech sector.

Surprises at NVIDIA's GTC conference nex week?

1. Blackwell architecture upgrade: B300 (arithmetic power increased by about 50% compared to B200, while the modular design adapts to diverse scenarios) and GB300 chip (TDP increased to 1.4kW), is expected to be equipped with 12-Hi HBM3E memory, which provides a maximum of 288GB capacity and 8TB/s bandwidth, to meet the demand for high-density computing, although it needs to be accompanied by a high-efficiency heat dissipation solution..

2. CPO switch technology upgrade: mass production of Quantum 3400 and Spectrum 5 (switching capacity up to 204.8T, four 51.2T chips with 16 x 3.2T optical engines integrated on a single chip) switches and roadmap release of Spectrum 6 are expected in the second half of 2025.

3. NVL288 rack-level interconnect architecture, the new architecture improves heat dissipation through structural improvements.

Is DeepSeek abating demand, or increasing it (with both arithmetic capacity and efficiency upgrades)?

NVIDIA's arithmetic leap is not just about card upgrades, but architecture iteration, energy efficiency optimization, high-speed interconnections, ecological enhancements, industry penetration, and the ecosystem as a whole, including the CUDA platform ecological moat, Grace CPU co-computing, efficient interconnections between NVLink and SerDes technologies, and reduced energy consumption per unit of arithmetic, among others.

January's Blackwell revenue is said to have exceeded 11B, meaning that it could even reach 33B in a single quarter. although it may squeeze out some of the share of the H-card at the same time, the scale effect will have a very direct impact on margin improvement when it comes up.

Big Tech Options Strategy

Where can Tesla stabilize?

The selloff from TSLA to the entire Mag7 all selloff is an extended snapshot of market sentiment, as can be seen in the $Cboe Volatility Index(VIX)$ which has seen a flat rise in VIX lift during this round of declines rather than a sudden burst of volume, so the market sees it as risky, but not extreme.And TSLA, as the easiest position for shorts to congregate at the moment, could be the weathervane.

As we mentioned last week, there was a large order of PUT betting in advance at 235 (when the stock was trading at 300-350), and this part of the large order was quite profitable, and it has not been closed until this week's two big drops, so we can't rule out a further Roll to a lower position.In addition, there are two new sets of forward bearish spreads at 150 and 145.

So next week's triple witching day could be a fishy (option killing) day.Looking at TSLA's open options (3.21), it's surprising that 300 Calls, 200s and even 160 PUTs are quite large positions and traded, while the biggest pain point is at 255, with a pretty wide range swing.Sell side is probably the best bet.

Big Tech Options Strategy

The Magnificent Seven form a portfolio (the "TANMAMG" portfolio) that is equally weighted and reweighted quarterly.The backtest results are far outperforming $S&P 500(.SPX)$ ince 2015, with a total return of 2,078%, while $SPDR S&P 500 ETF Trust(SPY)$ has returned 220% over the same period, an excess return of 1,859%.

Big Tech has pulled back so far this year, returning -14.9%, less than the SPY's -5.91%;

The portfolio's Sharpe Ratio over the past year has retreated to 0.89, compared to 0.32 for the SPY, and the portfolio's Information Ratio of 1.09.

$Invesco QQQ(QQQ)$ $NASDAQ(.IXIC)$ $ProShares UltraPro QQQ(TQQQ)$ $ProShares UltraPro Short QQQ(SQQQ)$