Gene Inger's Daily Briefing (2nd Edition) - for November 3, 2025

Happy Saturday - this is just a 'heads-up' correction to last night's reference to the Dept. of War (formerly Defense Dept.) adding D-Wave to the 'Tradewinds' site. Well indeed they did. However it was exactly one year earlier. Someone sent me a link to that post, and I don't know if it was 'clever' or 'unintentional', that it was sure October 31, but 2024 not 2025. So it may have been a 'trick' on Halloween by someone, but a 'treat' is that Tradewinds did occur..last year.

I just wanted to thank a couple members for the 'heads-up' correction; and as you know I am sufficiently rushed and sometimes stressed, that I usually don't have time to properly proof; and in this case I did notice 'October 31st', and in no way would I consider that it was that date, but from a year earlier. Anyway this doesn't change anything, and I'm sure QBTS rallied yesterday for other reasons; since that 'repeat' of a year-earlier post apparently didn't occur on a chat-board (then sent to me), until after Friday's market closed anyway.

I've changed nothing in the Daily Briefing that follows, complete with the 'old' post about the Tradewinds availability. Perhaps D-Wave is or will make more progress with the U.S. Government; and with the 'Federal Shutdown' likely to end very soon (probably this coming week), maybe we'll see more unfolding.

Again just wanted to correct the error; enjoy the rest of your weekend!

Gene

P.S. after a flurry of interest in my work after several YouTube interviews; we had quite a few new members and some just opted for the one-time 'weekly' trial. Anyone who did NOT subscribe as a normal member after a single week trial and still receiving Briefings, should know that will cease now.

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'To win' - in the market next year, presumably this '4th Industrial Revolution' persists; it will likely be necessary for money managers to expand horizons into areas they are fearful of treading; but we have plowed since last year.

Of course I am primarily talking about 'Application AI' (not so much hardware AI); and talking about hybrid and Quantum Computing; as well as 'new-era' 'Defense' (and that is both hardware and software); more so than mega-caps and other relatively tired, or conversely overextended valuation, tickers.

Sure, some of the bloated big-caps may advance somewhat (I hope so as it might help the backdrop psychology); but on a relative basis the smaller-caps should thrive, as comparatively has already been the case in much of 2025.

I want to show the multi-year chart before we look at this year's S&P activity. Of course S&P's extended; but allowing corrections there's viable alternatives to conventional views of a late-cycle stage (also with a handful of component issues dominating; a 'real' equal-weighted S&P isn't quite so stretched, yet).

I must add that a majority of investors probably don't have the patience (as I've recognized from some feedback this year; even as our picks have done well for the most part; some extraordinarily so like Quantum and drones 'if' you got in when we did; not from chasing the upside, as is ongoing again).

If I need to reiterate my admonitions from early this year and last year; only a small (or appropriate depending on tolerance for risk) portion of portfolios may be appropriate (if at all) for the majority of investors.. and if very risk-averse or financially ill-advised to speculate, well they might focus on Indexes or ETF's.

As to the 'macro' picture, perhaps you found the above long-term S&P chart I shared from a peer interesting; as I don't focus on 'wave counts' but aware of them and if-anything more from the old Wyckoff rather than Elliott approach. I don't think any of it is sacrosanct, which is why I do NOT believe stocks move in a technical-only fashion 'vacuum'; and therefore aren't viewed absent most fundamentals. (This year we have several small tickers trying to increase their authorized shares, which has sometimes weighed-on price moves; however it doesn't always mean 'dilution'; so companies should explain purposes better.)

A few graphics with 'ticker' remarks follow; and then more about this market.

Market X-ray: many don't trust this market; and that's 'with cause'. Sure, the S&P is extended; the majority of S&P higher levels got achieved from 'multiple expansion' not 'profitability expansion' (ah hah); so yes that can be on a leash as we look into next year. And also NASDAQ 'should' be leading the market in this easing environment; plus of course the more targeted focus we have on new-era and specialized Defense stocks and similar.

We've had six consecutive monthly gains despite periodic volatility and jitters that arise for various reasons. And every time it's been based on tariffs or any counter-Trump stuff, it's been absorbed as anticipated.. not to endorse these various policies, but the responses both from Gov'ment and markets generally were 'as expected'. I also expect to see the 'shutdown' end very quickly now.



Coming-off the Fed Meeting, the Chairman emphasized rates might not drop in a trajectory most 'bulls' want; however a) they probably cut more often and not necessarily in December, and b) the stocks we're in generally are funded well 'now', so benefit whether or not the Fed cuts rates further soon. Actually most are far more dependent on Federal Contracts than the Federal Reserve.

Inflation is unlikely to gain a headway; and may actually slip; so data may well support further cuts, but that's not my point. Just looking at charts and interest rates is fine; but it's too-often used as short-cuts to actually studying holdings. I'm eager to see how markets respond to ER's and guidance in the new week especially in stocks I'll mention in a moment; and as most will have mediocre Q3 reports. If that's absorbed, based on outlooks, well that's what will matter.

Meanwhile.. aside very pleased with the Friday pattern (up-fade-up) .. we note a number of our speculative new-era tickers 'report and give guidance' during the coming week (Redwire Wednesday; D-Wave, Veritone, SoundHound, plus Aeye, which I almost forgot about..Thursday.. too many for this old guy).

Of all QBTS will be most watched as now CNBC and FoxBiz are following it; mostly a year or more after we started too. While earnings should be nothing much yet; the guidance will likely be strong; and certainly the 'news release' after Friday's Close affirms what I've said for a long time: D-Wave has product that can be used and is being used 'now' not years from now. (Editor: see note at top; my error...info. is correct but was posted Oct. 31, 2024, not 2025.)

“D-Wave is unique in that we're the only company that has a real-time cloud accessible quantum computer and quantum optimization applications in production today.” “These critical technological achievements in quantum computing can move the Department of Defense beyond research to using technology that could help provide solutions today to challenges facing DoD and its service branches.”

To become designated as “Awardable” on the Tradewinds marketplace, D-Wave worked with Clipper Defense and submitted a (classified) video that presents actual use cases (quantum optimization applications as supply chain optimization, transportation logistics etc.). All are DoD optimization problems.

D-Wave was recognized among what was a competitive field of applicants to Tradewinds Solutions Marketplace; demonstrating innovation, scalability, and potential impact on DoD missions. That's a key takeaway. So we hold it from a very low cost-basis; plus believe Nvidia did not mention it as noted; for a reason: of all Quantums, only D-Wave is a challenge to their hegemony.

P.S. Both Rigetti & D-Wave may move together as/if Gov'ment gets involved.


Bottom-line: this market is getting the 'benefit of the doubt' amid skeptics, and that degree of skepticism is indeed helping the bullish case. Seasonally we may indeed get the traditional upside; and 'rocktober' tactically may just have set-the-stage for the tailwinds that particularly help the smaller-caps.

This case for upside indeed would be helped by simply not seeing a macro disaster, which even the best of speculative growth stocks would be seriously challenged to hold together. That would be a scenario of 'sucking the oxygen' out of the market; but that is NOT the backdrop of what we have.. for now.

Prior highlights follow:

The 'mask' of distribution - has come off the market big-cap leadership, just ahead of Halloween; scaring lots of players who chased S&P or the NASDAQ mega-cap-led upside during 'rocktober'. It's hard to ascribe a bullish quality to the broad market; which has strained in disguise for quite some time. Now you'll get a sharp reprieve Friday; probably mostly on the AAPL & AMZN; with talk of shutdown ending soon; now that POTUS -and Bessent- coming back.

Plus of course you have crosscurrents dominating this time of year with many stocks trying to extend rebounds; but with long-ago holders often underwater, on anything they bought along the way (typically well before we nibbled once in awhile at the same issues when on defense in a few cases) ... with many of those underwater, you also get tax-loss selling, even if next year is promising.

And that leave open 'what' next year is going to be. While it's inappropriate to cheer-lead this market, and likewise not at all accurate to label everything as bullish or bearish; you clearly got (muttered about that before) into 'stretched' or super-extended levels for the Senior Indexes, excess valuation; seemingly surprising (to many) CapEx projections tempering earnings expectations for a year or two ahead; and that's part of a sobering the market's finally transiting.

Certainly news from South Korea didn't help matters (at least not in my view); although it bought time. That's why I term it more of a 'ceasefire' than big deal, regardless how the President might characterize it. Yes, 'Soybean' deal and a delay in China's 'rare-earth' export embargo (gives America time to 'source' a lot of it domestically or elsewhere); but what price was paid..allowing a more liberal allotment of semiconductor and chip sales by the U.S. 'to' China.

So to me it was more of a 'ceasefire' and status-quo maintenance than a sort of 'grand bargain', which by any reasonable interpretation this was not. Sure, it was 'cordial' (and I'd say slightly uptight just viewing the people's demeanor) and there's some degree of 'resigned' cooperation between the two economic powerhouses; but it was not really chummy; even though Trump plans a visit to China apparently next April.

But if anything this Senior Index market 'purge' leading into a re-accumulation; given just a bit of time we suspect. But must navigate tax-selling while it looks to the future. And that future is not entirely certain. We have a mixed market I have observed before; some don't like to hear that; but that's what it is. And is what it has been most of the year; with Quantum Computing the best sector at times; and even drones on-occasion. I have not flipped viewpoints on this; I just don't advocate chasing...and have said that many times. In fact a majority of the QBTS Warrants that I have will be exchanged for the 1.45xx shares of common (one Warrant plus 11.50 obtains 1.45 shares of common.. near parity so one reason for the 'conversion' would be to defer gains to a new tax year; and another expectation of further possible appreciation for QBTS in 2026).

If you happen to hold ONDS and/or Warrants in an IRA, ask your tax advisor; nothing I say about taxes, or any strategy for that matter, should be taken as advice on a personal basis to you. Also most of these stocks are not for the risk-averse, as I have gleaned in recent days that some who say they are very aggressive probably should not be, as they get enthused on rallies and then all kind of gloomy when an extended S&P finally corrects a bit (overdue too).

Now some tickers (Ondas & BBAI especially) are awaiting the belated end of the long Federal Shutdown; allowing more clarity as to contracts. That Ondas is on the 'green list' (and 'blue list' now or pending) is a plus; and their recent acquisitions (in my view) were genius in assembling the nuts & bolts for drone as well as more autonomous work (robots and landmine clearing for-instance; plus their wireless rail network everyone forgets about). Perhaps investors as have recently sold shares of ONDS forget that Ondas Capital provides funds for most deals (apparently) and doesn't require further diluting shareholders.

Or it can simply be high-price chasers that came-in closer to 10 or 11, rather than 1 or 2 or 3 and so on when we were aggressive on the buy-side. I really don't know but suspect this volatile stock is gearing-up to be a relevant player in the industry, and not merely 'another drone maker'. Speaking of, a couple of others we follow or are in have done well, and in even have had investment by Ondas (and no we didn't know in-advance nor did I introduce the principles of any of those companies; and only personally know one or two tickers well).

Market X-ray: will the market look-up for a rebound Friday? Scary to think of; but with so much sudden negativity; followed by Amazon making numbers and the freaking over Google and META probably easing; sure, why not. But it's a Friday and month-end. More interested in next week and the continuing earnings 'parade'. Amazon and Apple 'sort of' helped late Thursday; and just as we go into Friday; they should give a push to some sort of rebound effort; at the same time there remains no doubt of the S&P remain at high levels. As to Amazon describing their company as 'world's largest startup' when it comes to AI; that's amusing.. we'll watch that progress ... as job instability spikes.



It is entirely coincidental that some (covered) small tickers I've noted; seem to be getting together via investments recently (although they could have known I followed 'drone'; space, satellite, Infrared lens, quantum etc... again, I never connected any of these managements); and if I contributed ideas that's great of course; but I again I'm not aware of any specifics.

And although I've never met their staff, Redwire Space is a good example of sector cross-section plays; in this case of Edge (form of autonomy and/or AI compute) that is in potential rockets, satellites, drones and more plus.. RDW is an AE Industrial Partners (funded) company where the CEO serves as Chairman of the Board over at BigBear.ai .. so there is synergy for sure. Oh, we have a cost around 8 to get in RDW (current level or so) and there are a lot of holders in the 20's. Again I've mentioned before that overhead supply from holders 'before' I ever look at the ticker; could weigh on it with tax-sale pressures; unless they get a key contract next month (is that possible; sure; will they; I have no knowledge). That's why I used the term 'initial' investment; then the average can increase on dips within rallies if it does well. This is very similar to how we got into Ondas; initially light and then averaged up on dips. It may be appropriate for new members to contemplate that sooner than later.

So there are only so many companies that make non-Germanium IR lenses (of course LightPath is the play there); only so many mini-LED helmet and FPV (first person view) drone controls (KOPN is a leading player there); or so many US 'high-speed' electric 'drone' motors makers (Unusual Machines is a play there); and a couple more-dedicated drone plays like Draganfly (DPRO and UMAC have been volatile but higher this week).

My last hour 'X' update sort of summarized what's afoot:

Quantums; particularly QBTS, saw solid action in a weak market is welcomed and notable. Led by Chipolte (CMG) and META; with both showing consumer reticence on spending as well as excess bit-tech CapEx on 'legacy' classical computing, you have most stocks declining which has been eroding for days under what I called the 'mask' of a strong Senior Index.

QBTS for-instance (preferred Quantum ticker for a year) is strong as 'some' investors finally recognize the next-generation of computing delivers more bang for the buck vs. classical systems like NVDA. Perhaps that's a reason Jensen didn't invite D-Wave to another conference, if he views them as viable competition that he can't easily bring into his orbit. Shorts in D-Wave are nuts and suffering; they should not fight the next-gen compute even if it's volatile.

We'll see... also ONDS announced they are now on the 'Green' list for USA buys; giving them a leg-up for domestic orders...DPRO and UMAC also doing well with American expectations. I'll expand more in my Daily Briefing later; including what is a mini-deal (more like a 'ceasefire') with regard to China.

Bottom-line: so Apple and Amazon are significantly higher; not because of the China story (which is bullish for Apple for now anyway); and big CapEx by Amazon is not as skewed as it was for META (which I warned of well in-advance was treading in waters controlled by Jensen; not Zuck (he probably knows I hinted about that excess commitment).

Hopefully we have a year or two left in this 4th Industrial Revolution and this big market hiccup is digested; although I hope sobering for CapEx promises by certain big-cap executives who are losing sight of new-generation compute and how that makes what preceded look overly expensive and power-hungry. But that's my opinion only (I could be wrong!) as I am optimistic on Quantum; but not buying it at high levels (just holding for longer-term gains into 2026).

I think we get some general reprieve tomorrow helped by AAPL and AMZN setting the tone.. whether it's up early and then fades or up, fade and comes back into the weekend (not too common but anything feasible).. is debatable.

Also with stocks like RGTI 'and' QBTS up during a negative market; one has to ponder if something is coming upon President Trump's untriumphant return to Washington. As China Meeting was merely 'ok for now', he needs more as does the market... how about diving into 'starting the economy back-up' and a deal related to Quantum computing participation on the part of Government?

Enjoy the night.. the fluid dynamics of this market continue.. trick or treat...

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I appreciate investors increasingly following me @stockseer on 'X' (Twitter) for morning comments. (Tweet) 'X'-rays are market quick takes. And while all 'X' content remains complimentary, new ideas usually appear here initially.

Stay safe,

Gene

Gene Inger

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