To The Moon

Big-Tech’s Performance

Weekly macro storyline: March FOMC: optimistic or pessimistic?

1. The core of the March FOMC meeting was to ease market pressures through technical tapering adjustments, while keeping interest rates high to curb inflation.Despite the rising risk of economic stagflation, the Fed is still trying to find a balance between "premature easing" and "excessive tightening".

2. The most over-expected move was a dramatic slowdown in tapering from April 1st.The Fed reduced the monthly redemption limit on Treasuries from $25 billion to $5 billion (an 80% reduction).The Fed stressed that the slowdown in tapering is not a shift in monetary policy, mainly in response to changes in the balance of the Treasury's cash account (TGA) and the debt ceiling, while optimizing the structure of the position (the future is dominated by Treasury bonds)

3. At the same time, the Federal Reserve significantly revised economic forecasts, showing "slowing growth + inflation stubborn" stagflation characteristics: 2025 expectations were revised down from 2.1% to 1.7%, 2025 PCE inflation was revised upward from 2.5% to 2.7%, and the unemployment rate rose slightly by 0.1% to 4.4%.

4. Once the resolution was announced, U.S. stocks and U.S. bonds instantly ushered in a wave of gains, while the U.S. dollar retreated along the way.However, , this is more like a short-covering "show", rather than the market for the Fed and Powell full of optimism.After all, the volume of the entire market is quite low, which clearly indicates that the big money is still on the sidelines, the strength of the rebound also seems to be weak.

5. Nick also said in his March 20 article that the next Fed rate cuts are steeply more difficult.Powell seems to be only immersed in the optimism brought about by the disregard for inflation, but blind to the risk of stagflation lurking in the economic forecasts, as if it were a non-existent "blind spot".

Big tech companies in the short term in the pullback after the shock, but the risk is not completely dissipated.

Through the close of trading on March 13, Big Tech has been lower across the board over the past week. $Apple(AAPL)$ -0.83%， $NVIDIA(NVDA)$ -7.97%， $Microsoft(MSFT)$ +1.11%， $Amazon.com(AMZN)$ -3.85%， $Alphabet(GOOG)$ +2.28%， $Meta Platforms, Inc.(META)$ -4.6%， $Tesla Motors(TSLA)$ -6.56%。

Big-Tech’s Key Strategy

Why Google Trading At Such A Low Valuation? $Alphabet(GOOGL)$

Acquisition of Wiz

Wiz is a cloud-native security technology company founded in 2020 that has achieved annual recurring revenue (ARR) of $100 million in just 18 months of existence, $350 million in revenue in 2023, $500 million in ARR in 2024, and is expected to top $1 billion in 2025; it is growing revenue at roughly twice the rate of Google's CSPs, and by bundling security services for enterprise customersthat it can boost the appeal of Google Cloud.Google plans to acquire it for $32 billion, which could of course face lengthy regulatory scrutiny, with the deal expected to close in 2026.

Currently, Google Cloud's market share is only 12%, trailing AWS's 30% and Azure's 21%.Wiz's multi-cloud security solution could make up for Google Cloud's shortcomings in the security needs of its enterprise customers, especially as the threat of data breaches and sophisticated attacks has surged with the popularity of generative AI

EU antitrust charges

In what could also be one of the consequences of the Trump administration's current bad blood with Europe, the EU is back to open its bloody mouth on US tech giants like Google, accusing it of two violations of the Digital Markets Act (DMA), the EU's landmark rules for curbing the power of big tech companies:

1. Restrictions on app developers (Google Play): Google prevents app developers from freely informing users about offers outside of the Google Play store, preventing them from directing consumers to potentially better offers in other channels.

2. Favoritism: Google favors its own vertical search services, such as Google Shopping, Google Hotels, and Google Flights, over competitors' services.

If found in violation of the DMA regulations, Google could face fines of up to 10% of its annual global sales.Google has been fined more than €8 billion by the EU in past antitrust cases.

Potential Split

The DOJ is asking Google to divest Chrome: arguing that Google has violated antitrust rules by controlling too much of the market and suppressing competition, and wants Google to divest itself of all interest in Chrome and its "continuing browser assets and related data," including transferring the operation of Chrome to a government-approved third-party that does not pose a threat to national security.

Also included is the previously targeted Android divestiture, in which the government will monitor and restrict how Google uses its search engine and artificial intelligence capabilities in Android.If these measures are ineffective, the DOJ may reconsider future options for forcing Google to divest from Android.

If Google loses the case, it could lead to one of the biggest corporate breakups in modern history, dramatically changing the internet search and browser landscape.

This is basically why Google has been trading at a very low valuation.Looking at forward P/E ratios for the next 12 months, GOOG has been trading at less than 20x PE since it entered its 25th year.

Big Tech Options Strategy

NVIDIA to 120 in one month?

The GTC conference was held as scheduled, showcasing full-stack ambitions from hardware iteration, software ecology to cross-industry collaboration, with a core strategy to redefine the AI competitive dimension through hardware innovation (GPUs/silicon photonics), ecological lock-in (open-source models), and an energy revolution (liquid-cooling/6G).What the market expected all showed up: the Blackwell Ultra GPU release (288GB HBM3e memory, FP4 arithmetic up to 15PFLOPS), Rubin architecture (2026), Feynman architecture (2028), Spectrum-X, and what was not expected was also the Quantum-X Silicon Photonics Switch, Autonomous Driving &General Motors on an L4-level full-stack AI system, and the Isaac Groot N1 robotics model.

As we mentioned last week, many investors' "bottoming orders" for NVDA were built in the 100-110 range, which is also consistent with the distribution of Sell PUT orders in the four weeks after March 21st.

Even Duan Yongping such a bull, in the previous limit of doom Sell PUT (110), but also directly into the stock, 116.78 to buy 100,000 shares, 24.2 to sell 1,000 a year later 120 CALL (covered call), which also means that he expects to be sideways for a year, if the time did not rise above 120, the cost of his position in 92.5 percent.The cost of his position is at 92.5.

This also reflects the current mindset of many investors: that NVDA will fluctuate because of the macro environment, industry changes, but also afraid of strong buyer power, just by Sell PUT can not pick up the positive stock.

From the NVDA April 17 open options, the most for Sell PUT actually in the position of 120, but Call and a large number of accumulated in the 130, and the maximum pain point is also in the 120, more than the current price.Suggests a mildly bullish trend for the month.

Big Tech Portfolio

The Magnificent Seven form a portfolio (the "TANMAMG" portfolio) that is equally weighted and reweighted quarterly.The backtest results are a far outperformer of the $S&P 500(.SPX)$ since 2015, with a total return of 2,094.3%, while the $SPDR S&P 500 ETF Trust(SPY)$ returned 227.8% over the same period, an excess return of 1,886.7%.

Big tech has pulled back so far this year, returning -14.28%, less than the SPY's -3.51%;

The portfolio's Sharpe ratio over the past year has retreated to 0.79, compared to 0.43 for the SPY and 0.83 for the portfolio's information ratio.

$Invesco QQQ(QQQ)$ $NASDAQ(.IXIC)$