Aug 5 MMC (Morning Market Commentary)

Post SPCX & AMD Earnings

Aug 5 Market Commentary

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Overnight markets are a Sea of Irish green with every Asia/EU index green (albeit most of them up .1-.3%) while SPY is up 2pts in pre-market action. SPCX and AMD posted earnings and while both beat, both are down. SPCX is down about -10.9% and AMD down -9.9%. With AMD traders wanted a blowout, which they didn’t get, and the overall move was within the IM (~$47+/-).

With SPCX, while they narrowed their loss from $1B to -$541M on the quarter, their capex increased 6x with $15B of the $18B in capex going to AI (grok). If capex (which has been under a microscope as of late) increased, yet grok is still at best #4 or #5 on the list (OpenAI/Claude/Copilot/Gemini all likely ahead), and much of the valuation comes from the AI potential, then I think this falls into the ‘capex is a problem for AI’ bucket.