EOD recap - 20 Jul 26

US markets got off a strong start with the Neoclouds basket rallying strongly (soon you will be able to see what sectors are doing well on $IREN and $CIFR led the rally - $IREN announced a new 2.8B deal, bringing its YE ARR to over 4B. The rest of the neocloud basket enjoyed a rally as the world recognises that we are indeed compute constrained. In my sunday note, i wrote that "neo valuations are aat bottom of the range. If you dont believe in NBIS, consider doing a basket" - At this point, more neo names will start announcing deals. Doing a basket, you will be able to enjoy a more diversified exposure.
Memory tried to rally as well with $SNDK and $MU hitting session highs near 1460 and 900 respectively, however with SPX weakness - this dwindled into the close. Again i am looking for $SNDK near 1250s-1300s and $MU at 720s-780s as the region to add as outlined in the Weekly review done yesterday.
Memory pooling traded in lockstep with the memory sector with $PENG being the outlier on a hit piece by Barclays that applied a SOTP argument with a price target at $40. I think this analyst is clearly clueless. There are many posts on X about why that analyst is missing the mark - i will not reiterate those points here. The support for $PENG lies at about 42-45.
On $ORCL - S&P downgraded its debt to just a notch above junk. $ORCL has a balance sheet that looks terrible from the sheer amount of capex it committed towards building for OAI. At this point, the valuation of $ORCL becomes quite binary. Either you think that $OAI will be able to pay (or $ORCL will be able to find another customer if $OAI cant) or you think that its a bust. The support zone for $ORCL lies between 100-120 - i think there is good value in bidding this area.
Post OPEX, there is also much less gamma in the market - which will blunt the effects of delta hedging onto market moves. With the conflict in Iran simmering, again i emphasize that there is good value on bidding downside structures like P/flys in SPX
Enjoy the rest of the day!