FRIDAY MARKET UPDATE

Welcome back to Profits & Insights.

The line between speculative finance and serious technology continues to blur. Trump Media surged 45% yesterday after announcing a merger with TAE Technologies, a nuclear fusion company.

This reframes a volatile social media stock as a potential play on America’s energy future. While fusion remains a "decades away" technology, the market is clearly hungry for exposure to next-generation power, especially as data centers consume more of the grid. For investors, this is a reminder that in this market, the narrative can change overnight - and liquidity follows the story.

In the broader market, stocks rose on cooler inflation data, but the rotation beneath the surface was telling.

  • 📈 | Launch Success: Rocket Lab jumped over 11% after a successful Space Force mission, proving that execution still matters in deep tech.
  • 📉 | Guidance Miss: Birkenstock tumbled 11% after issuing weak earnings forecasts, a sign that even premium consumer brands aren't immune to spending fatigue.
-Nathan Reed

MARKET SNAPSHOT

Heatmap
S&P 500 Stock Heatmap. Credit: Finviz
Market Movers

UPGRADES, EARNINGS AND ACTIVISTS

FactSet. The financial data provider fell after missing cash flow expectations, a rare stumble for a consistent compounder.

GE Vernova. The stock rose after a Jefferies upgrade, validating the "electrification of everything" thesis.

Lululemon. Activist pressure is building; Elliott Management has reportedly taken a $1B stake to push for leadership changes.

Micron Technology. Shares jumped 10% on a strong revenue forecast, signaling that the memory chip cycle is turning up.

Lennar. The homebuilder slipped on mixed results, highlighting the ongoing friction in the housing market despite lower rates.

For real-time data, I recommend monitoring Finviz.

Investment Deep Dive

IS SERVICENOW A VALUE PLAY?

Computer

The Setup

ServiceNow sold off recently on rumors of a large acquisition. The stock is down 27% year-to-date, a brutal performance for a premier software name. However, Bernstein argues this is an overreaction.

The Valuation Case

The analyst notes that ServiceNow is now "the cheapest large-cap software stock" relative to its growth and free cash flow potential. It trades at a discount to peers like Adobe and Salesforce, despite having a more robust organic growth profile.

The Contrarian View

The market hates uncertainty, and big M&A deals always bring execution risk. But if the core business remains strong - and management insists demand is accelerating - this pullback offers a rare entry point into a high-quality compounder at a discount. For patient capital, this looks like a dislocation worth exploiting.

WHAT ELSE IS MOVING MARKETS

Gold Forecast: Goldman Sachs sees gold hitting $4,900 by late 2026, driven by central bank buying.

Enterprise AI: Anthropic updated its Claude model for enterprise use, focusing on integrating directly into corporate workflows - the next battleground for AI adoption.

AI Revenue: The ChatGPT mobile app has crossed $3B in consumer spending, proving that people are willing to pay for premium AI access.

Loyalty Devaluation: American Airlines is removing mileage earning from basic economy tickets, a move to force customers into higher-margin fares.

Regulatory Fines: Instacart will pay $60M to settle FTC charges regarding deceptive fees.