Michael Burry warns Palantir could crash -99% to 1$.
The “Big Short” investor has re-entered OTM put options on Palantir, buying March 2027 puts with strikes in the low-to-mid $100s. Burry sees Palantir falling below $1 in the long run. Palantir just jumped nearly +40% after strong quarterly results. Source: Bull Theory
Wall Street is preparing to deploy $500 billion to help Nvidia’s customers buy Nvidia chips.
Jensen Huang calls compute “an investable asset.” But there’s another chart worth watching: Nvidia’s credit risk is rising. NVDA’s 5-year CDS has jumped nearly 6 basis points recently. More strikingly, the cost of insuring Nvidia’s debt has almost doubled since late May, rising from 41.6 bps to 77.5 bps—just below the July 29 record of 83.7 bps. At first glance, that seems counterintuitive. Nvidia could potentially unlock hundreds of billions of dollars of additional demand without putting that financing directly on its own balance sheet. That should be positive for Nvidia. But the CDS market may be highlighting the other side of the story: the AI boom is becoming increasingly dependent on leverage. More capital. More infrastructure. More financing. The demand is real—but so is the financial engineering supporting it. Source: Bloomberg, HolgerZ
Anthropic has struck a $9.1 billion deal with Riot Platforms, a Bitcoin miner that recently started selling AI data center capacity.
Riot shares surged +25% in after-hours trading after the news. Riot will supply 191 megawatts of computing from its Rockdale, Texas campus - enough to power roughly 143,000 homes. The contract runs 20 years, through June 2048. It can be extended twice, by five years each, pushing total sales as high as $16.1 billion. Source: Bull Theory
Microsoft $MSFT is planning a major ramp in its next-gen Maia 300 AI chips, with talks underway with TSMC to secure capacity for 300,000+ chips for 2027.
Microsoft plans to unveil Maia 300 as soon as September and ultimately wants capacity for 1M+ chips. The goal is to reduce reliance on Nvidia and win major Azure customers like Anthropic. Its current Maia 200 chips are already 30%-40% cheaper to operate than cutting-edge Nvidia chips for OpenAI and Microsoft models. Source: The Information, Wall St Engine
With 88% of companies reported, S&P 500 sales are up 15% over the last year, the highest growth rate since Q4 2021.
Source: Charlie Bilello
S&P 500 profit margins spiked to 16.9% in Q2, which is by far their highest level in history.
“Profit margins are probably the most mean-reverting series in finance, and if profit margins don't mean revert, then something has gone badly wrong with capitalism. If high profits don't attract competition, there's something wrong with the system.” - Jeremy Grantham Source: Charlie Bilello @charliebilello
European equities are regaining investor interest as strong earnings, falling oil prices and diversification away from volatile AI stocks improve the region’s appeal.
Earnings are accelerating: European companies are tracking 22% YoY Q2 earnings growth, the strongest since 2022, with broad strength across sectors. Banks are leading: The Stoxx Banks index is up 21% this year, versus 11.5% for the Stoxx Europe 600, supported by higher rates and strong trading revenues. Flows are returning: European ETFs recorded positive net inflows in July, while BlackRock saw $4.4bn flow into its European equity products. Lower oil helps: Oil below $90 and easing Middle East tensions have reduced fears of a major energy shock for Europe. Diversification appeal: July’s semiconductor sell-off reinforced Europe’s role as an “anti-AI” trade with less dependence on mega-cap technology. Fundamentals improving: Eurozone GDP grew a stronger-than-expected 0.4% in Q2, supporting the rotation. Source: FT
Berkshire Hathaway's massive cash pile declined for the first time in 4 years, meaning it was finally a net buyer of stocks.
Source: Barchart @Barchart
