To The Moon

📉 Institutional Macro Read: Reset, Not Rupture

I am watching mega-cap tech reprice from premium to proof, and the tape is confirming a regime transition, not a breakdown, across $AAPL, $AMZN, $AVGO, $GOOGL, $META, $MSFT, and $NVDA. Goldman Sachs highlights mega-cap tech at ~27x forward P/E, in the 59th percentile over the past decade. The 31% valuation premium versus the broader $SPX ranks in only the 24th percentile over 10 years, signalling that relative excess has already compressed meaningfully.

The PEG ratio near ~1.4x is approaching late-2022 trough levels, showing that growth is increasingly underwriting price rather than speculative premium. This reads like a controlled re-rating into a more defensible regime, with institutional flows rotating selectively into international equities while preserving core AI exposure.

📌 Core takeaway: multiples have cooled, narrative risk has declined, valuation excess has reset, and long-duration growth optionality remains intact.

💰 Cash Flow Reality: De-Rating Risk Exists, Asymmetry Improving

I am mindful that free cash flow multiples remain elevated, leaving room for incremental de-rating. What matters is the character of the move, and this is compression without panic. The risk profile is shifting away from bubble risk toward selective upside asymmetry, creating a healthier setup for structurally advantaged leaders like $MSFT, $GOOGL, and $NVDA.

Hyperscaler capex projections for 2026 now exceed $600B, up 36% year-over-year, with ~75% tied directly to AI infrastructure. That scale is why I see demand durability, not a short-cycle spike.

📊 Earnings Reaction Regime: Better Tape, Same Discipline

I am focused on price response to earnings, not just headlines, because that is where regime change becomes visible.

FactSet shows early Q4 reaction dynamics improving:

• Beats reaction improved from -0.4% to +0.3%, still below the +0.9% five-year average, but stabilising versus Q2 and Q3

• Misses remain punished, though downside reaction has eased to ~-2.9%, now roughly in line with the five-year average of -2.8%

• Q2 and Q3 saw historically severe downside punishment, with Bank of America citing the worst negative earnings reactions since 2000

• Early $SPX reporters show +17.9% YoY earnings growth on +7.8% revenue growth, with the Magnificent 7 expected at +16.9% profit growth on +16.6% revenue expansion

📌 Market signal: execution quality matters, credibility matters, and risk pricing is becoming more rational rather than emotionally driven.

⚙️ $NVDA: Capital Commitment, Range Compression, Gamma Coil

I am treating $NVDA’s additional ~$2B investment into CoreWeave as a balance-sheet signal on sustained AI data-centre expansion. CoreWeave equity surged ~12–13% on the announcement, alongside plans for ~5GW incremental capacity, reinforcing the hyperscale compute buildout narrative.

From a structure, flow, and positioning lens:

• $NVDA remains pinned between defined support and resistance, signalling near-term equilibrium

• Call-side gamma resistance clusters near ~$192–$195, while put-side support sits near ~$180, compressing spot price mid-range

• Positive GEX above price creates upside friction, while negative GEX below price provides downside buffering

📌 Translation: volatility is bottled, liquidity is tight, positioning is balanced, and expansion risk is building once flow pressure resolves.

🧪 $MSFT Maia 200: Hyperscalers Push Deeper Into Silicon

I am watching $MSFT move further up the AI value chain with Maia 200, targeting improved inference efficiency and lower token-generation costs. Management claims performance advantages over $AMZN Trainium and $GOOGL TPU, with deployments already live in Iowa and expanding into Arizona.

The chip reportedly delivers ~30% higher performance per dollar, built on TSMC’s 3nm process. The strategic implication is clear: hyperscalers want control over compute economics, margin structure, and long-term infrastructure independence.

📌 Strategic signal: AI capex is not slowing, it is evolving, diversifying, and expanding total compute TAM.

📈 Structural Synthesis: Reset Valuations, Expanding AI Demand

I am not seeing cycle exhaustion in mega-cap leadership. I am seeing valuations compress into defensible territory while AI infrastructure demand expands across $NVDA, $MSFT, $AMZN, and $GOOGL. Earnings reaction dynamics are stabilising, which supports re-accumulation rather than distribution.

📌 Strategic Bottom Line: Reset Multiples, Stronger Fundamental Floor

If mega-cap tech was once priced on premium, this phase looks priced on proof, tighter multiples, stronger fundamentals, and a widening AI infrastructure footprint.

📌 Final conviction

I am not seeing distribution.

I am seeing digestion, positioning reset, volatility compression, liquidity rotation, and the early foundation of the next structural leg higher.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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