Weekly Recap

This week, all major market indexes moved slightly higher, with the exception of the Dow, after a decently strong week. The Russell led the way, gaining roughly 1%, while the Nasdaq and S&P were each up around half a percent. The Dow was down about half a percent, held down by a big move lower late in the week by Cisco. Energy was the biggest mover this week, up almost 7%, while consumer discretionary was the main laggard, down about 1%.

We received an updated inflation reading for July this past week, with CPI coming in in line with expectations at 3.4%. This elevated reading above 3% is certainly leaving the door open for a rate hike at the end of the month.

We had plenty of big earnings movers this week. To start, Cisco dropped more than 7% despite what was actually a solid quarter. I called this one last week. CoreWeave and Nebius both surged more than 20% on strong demand for their AI infrastructure and compute products. CAVA also jumped roughly 14% on strong store growth and traffic. Lastly, like NBIS and CRWV, Super Micro Computer also jumped following a good quarter for its server systems. The AI trade was certainly in this week, based on earnings. Reddit also popped nearly 14% to end the week after it was announced that it will replace AvalonBay in the S&P 500 starting August 18th.

Hot Topic:

"The $500 B AI Infrastructure Investment"

Did you catch the biggest deal of the week, if not the year? NVIDIA is partnering with some of the biggest financial firms in the world. NVDA partnered with BlackRock, Apollo, Blackstone, Goldman Sachs, Brookfield, and KKR. Combined, they will invest up to $500 billion into building AI factories and data centers. For NVDA, they are putting up no money—just their brand, reputation, and their chips/equipment to go into these factories.

The business model here is seems to be changing...

Instead of an AI company saying, "I need $10 billion to build a data center and buy NVDA GPUs," the new model is closer to: "Build the AI factory, finance it with institutional capital, put Nvidia hardware inside it, and have an AI company or cloud provider pay for the compute through a long-term contract."

In theory, an AI company (e.g., META, GOOGL) can essentially say: "I will commit to using this compute capacity for 10–15 years." The infrastructure investor (BlackRock, Apollo, etc.) says: "Great. That long-term contracted revenue gives us enough visibility to finance the project." Then Nvidia sells the GPUs and equipment into the project.

Instead of buying cell towers or REITs, where you invest in these projects and potentially receive a steady fixed return over 15–20 years, you're now investing in data centers, equipment, and compute and renting that infrastructure to AI companies building models and applications, creating revenue and returns.

This is quite interesting when you think about what is happening. Ironically, people are saying that the largest company in the world, Nvidia, with a $5 trillion valuation, needing $500 billion in funding to build things out has a bubble-like feeling. I can see and understand that argument, but I still don't think people adequately understand the need for compute, the training of models, the investment in infrastructure required, and how much AI should change our lives and workflows.

Having used Claude Pro and other advanced AI software beyond the free resources of ChatGPT, I believe this technology is becoming a powerful tool. I am comfortable with trillions of dollars being invested into AI because I believe in the power of this technology, and I think we are still in the late early innings (3–4).



Trust the process!

Earnings to Watch:

• Monday: AeroVironment

• Tuesday: Home Depot & Toll Brothers

• Wednesday: TJX Companies, Lowe's, Target, Estee Lauder, & Viking Holdings

• Thursday: Walmart, Deere & Company, & Ross Stores

Defense company AVAV kicks off the week. The stock is up 30% over the past month but is still well off its highs. I expect a strong quarter. On Tuesday, Home Depot reports. My expectations are low, and the CEO just temporarily stepped away for medical leave, so it could be an interesting earnings call. I have higher expectations for Toll Brothers, and strong earnings could help the stock break out of its recent sideways movement.



On Wednesday, TJX reports, and I expect a strong quarter from the discount retailer. The stock has sold off from its highs, but it's one to keep an eye on. TGT is up nearly 100% from its lows, and I think the stock could sell off following earnings after such a strong run.

Lastly, Walmart is one I'm excited about. I think this stock should be back at $130. I also expect Deere to have a strong quarter, potentially the best of the week, after seeing other industrial companies like CAT and URI perform very well.

First Trust Cybersecurity ETF (CIBR) - Cybersecurity stocks have been on a tear over the last three months and, really, throughout the entire year. The ETF is up nearly 40% YTD, and you can see the returns of the top 10 holdings in the picture to the right. The top 10 holdings are up an average of 58%, led by two of the best in the sector, PANW and CRWD. The reason I want to highlight this is because a lot of traders I follow have been pointing out that politicians have been buying cybersecurity names, particularly PANW and CRWD. Cybersecurity has been, and continues to be, one of the best catalysts and trends in the market. With everything shifting to the cloud and AI, I think we need to protect all of that information and infrastructure. I wouldn't be surprised if we see some strict AI privacy legislation rolled out soon, along with some large government contracts going to companies like PANW and CRWD. You know my thoughts on politicians trading individual stocks, they have access to information that the average investor doesn't, and it's why I believe they shouldn't be able to trade individual stocks. But that's a conversation and a vote for another day. Either way, I believe everyone needs to consider having cybersecurity exposure just like they do with semiconductors.

Cava Group (CAVA) - A strong quarter sent this stock higher by more than 10%. The company saw same-store sales grow around 9%, well above Wall Street expectations of 7.4%. Store traffic grew 5%, and the company continues to open new restaurants, adding 17 during the quarter and remaining on pace to hit its goal of approximately 75 new locations for the year. CAVA now has 476 restaurants nationwide and is well on its way toward its long-term goal of 1,000+ locations. Revenue was up more than 31% for the quarter, while margins remained quite strong. The company also introduced new menu additions, including its first seafood item, a pomegranate-glazed salmon that was a hit. It is now preparing to roll out a roasted garlic shrimp as well. When you pair these offerings with staples like chicken, lamb, beef, falafel, and more, CAVA has a lot to offer consumers.

I continue to say that this is a better-tasting (and better-style) Chipotle that provides a healthy fast-food option. I think this name is getting ready to make a run back toward $90+. RBC came out post-earnings with a $95 price target and an Outperform rating.

CoreWeave (CRWV) - This stock jumped nearly 20% on Wednesday after reporting a fantastic quarter. The company generated a record-high $2.6 billion in revenue for the quarter, representing 112% year-over-year growth. It also increased its backlog to $104 billion, roughly 8x its estimated 2026 revenue. That $104 billion does not include the additional $25 billion in net new customer commitments added during the early weeks of Q3. The company continues to execute on its power strategy, with 1.5 gigawatts of active power and a goal of reaching 8 gigawatts by 2030. The CEO even said that its near-term capacity remains effectively sold out. Currently, I love companies that are showing large revenue backlogs. It provides strong visibility into future demand, and the fact that CoreWeave needs to continue building out capacity to meet existing demand, rather than building capacity and hoping customers come, should be a great sign. Now, CRWV still has a ton of debt, which worries me and other investors, but remember that much of that debt is being used to fund the explosive growth the company is experiencing. JPMorgan raised its price target on the stock this week to $120, while Mizuho raised its target to $115; both maintained a Neutral rating. Piper Sandler and Wells Fargo are more bullish on the company, with Overweight ratings and price targets of $153 and $160, respectively. This continues to be an interesting one to watch.

* Disclaimer - It's important to highlight that, on occasion, I may have existing positions in the stocks I highlight in my newsletter. This disclosure aims to be transparent about potential conflicts of interest. Additionally, any stocks identified in this section are for informational purposes only and nothing in newsletter should be construed as a recommendation to buy or sell any security. Although I strive for unbiased analysis, my ownership of certain stocks may influence those that I highlight. Rest assured, my commitment to providing well-researched insights remains unchanged. 

I think this may be one of, if not the most, important charts you will see this week, if not this year. It is also an important concept to understand within the semiconductor space.

There are two main markets here: the training market and the inference market. The easiest way to think about this is that the training market is teaching AI, while inference is using AI. Both require chips, but they have different workloads, economics, and chip requirements.

Training requires massive computing power and intensity, whereas inference generally does not require as much and can be optimized. Training specifically relies heavily on NVIDIA (mostly) and AMD GPUs, while inference can use GPUs, TPUs, and custom ASICs. ASIC stands for Application-Specific Integrated Circuit, which is a custom microchip designed to perform a specific task.

Training is essentially teaching the model and is extremely intensive in terms of computing power and energy. It lays the groundwork for everything that comes after. Inference then uses what the model has already learned to generate an answer or complete a task. Every time you ask ChatGPT a question, generate an image, use an AI coding tool, or have an AI system analyze something, the model is performing inference.

AI technology is still in the early stages where training seems to be the most important piece. Eventually, 5-10 years from now, the inference market should be significantly larger.

Now, let's talk about the effect this could have on the market and where the potential opportunities are. During the training phase, the players that seem like the best ideas to own are Nvidia (duh, see chart), AMD, and the energy equipment providers and producers (GEV, CAT, CEG, etc.).

From what I have read, the second leg of this AI buildout will be the companies best positioned for ASIC chips. The two leaders in ASICs are Broadcom and Marvell, both of which are names I like. They are leaders in custom chip design. Another company that should be a major benefiter from this trend is Taiwan Semiconductor because it manufactures the underlying chips that companies like AVGO and MRVL can then customize for their specific applications. I like and believe in all three of these players.

Lastly, I will add that the memory semiconductor players (MU, SNDK, SK Hynix) should remain extremely important at all stages of the AI chip market. Memory is a critical component of both training and inference, meaning these companies should be important players throughout the entire AI infrastructure buildout.

In Weekend Favorites, I share my thoughts on events I'm attending, the new series I'm planning to marathon, the movie I'm dying to see, restaurant craving to taste, trend that ticks me off, or the big game I won't miss. 

I have a lot to share from everyone's favorite section this week.

First, I finally tried Charro Steak (North) this week, and it was absolutely phenomenal. This place gives Fleming's a run for its money when it comes to steak. I had the unique carne asada skirt steak, which was incredible. It was one of the best steaks and freshest cuts of meat I've had. I got it with avocado and chimichurri, which was a great pairing. The sides were okay. The Brussels sprouts were crispy, exactly how I liked them, but they weren't as flavorful as some I've had elsewhere. The green chile mac and cheese was good, but no Fleming's mac and cheese. The lobster queso was an amazing appetizer, and I highly recommend it to anyone dining there. The second place I tried this past week was Block A downtown. Some of the work crew and I were invited to the soft launch. The vibe was great, the TV setup is awesome, and the interior is nice and clean. I can't wait to watch some Saturday college football there. We tried a few appetizers, and they were okay. The wings I heard are a must, but the real hit for me was the Detroit-style pizza, it was phenomenal. Crispy edges with a fluffy middle. I have honestly been craving another slice ever since last weekend. You have to check this place out. It's like Union Public House, but downtown.

My other favorite topic to share, outside of the latest restaurants, is my binge of the week. Three of my favorite shows are returning all at once! I have already watched the first three episodes of Reacher, arguably my favorite action TV show of all time. The fight scenes in this show are unmatched, and the plots are just as good. You have to watch this if you like action movies or shows. This may be the best season yet! It's on Prime, FYI. Second, we had the return of Apple TV+'s hit Ted Lasso, which is also releasing Season 4. The first two episodes were good, but not great. It is a bit of a cheesy show, especially now, but it's heartwarming, funny at times, and you know I love my soccer. I'm still very excited for this season! Lastly, today we got Season 3 of arguably the funniest show of all time: Shane Gillis's Tires. It returns today, Friday, and I will be binging as many episodes as I can this weekend. I am so excited to watch this and laugh all weekend. It's a great time to be a TV show fan!

To read more of Jake's Analysis on Seeking Alpha where he shares his thoughts, opinions, stock ratings, and price targets on different stocks and ETFs, use the link below!