Market Overview

Markets are treading water ahead of today’s Fed rate decision, with the Dow at fresh record highs (+0.64% yesterday) while the Nasdaq 100 pulled back -1.89% on chipmaker weakness. The divergence is notable — value/cyclicals are leading while mega-cap tech takes a breather. The S&P 500 futures are barely positive pre-bell, suggesting traders are in wait-and-see mode until Chair Warsh speaks.

Claude’s Call

FLAT — The Fed decision dominates today’s tape, and with the Dow at records but Nasdaq under pressure, I expect the S&P 500 to chop in a tight range (+/-0.3%) until the 2pm announcement, then whipsaw on Warsh’s tone before settling near unchanged by close.

Top Movers

BRAI (+33.6%) — $9.76 → $7.50 (AVOID — see below) Thesis: This is the afterglow of a $33.6B Switchcraft contract announced back on May 26 that already spiked the stock 159% in a single day and 78% that week. Today’s move is residual momentum chasing on a micro-cap that’s already round-tripped significantly — note the stock was at $12.49 after the initial pop and is now at $9.76, meaning latecomers are buying into a name that’s already given back 22% from its highs. RSI at 57.5 isn’t screaming overbought, but the catalyst is three weeks stale. Levels: Resistance at prior spike high ~$12.49. Support at pre-announcement levels ~$5-6 range.

SHAZ (+23.6%) — $94.16 → $110-115 (cautious upside if deal executes) Thesis: Six-year compute agreement with Nvidia for 72MW of new data center capacity and up to 40,000 Grace Blackwell GB300 GPUs is a legitimate, transformative catalyst for this Australian AI infrastructure play. The 11.3x P/B is eye-watering, but at 132MW total AI factory footprint this becomes a real asset story. The stock pulled back 12.85% recently (shelf registration overhang) and is now ripping back — that V-shaped recovery suggests strong hands accumulated the dip. RSI 64.3 has room to run. Levels: Exit near $110-115 (prior week highs before pullback). Support at $62.32 (recent pullback low).

RXT (+15.9%) — $7.16 → $8.50 (extended near-term) Thesis: AMD signed a 30MW AI compute deal for regulated enterprises — a genuine partnership that validates Rackspace’s pivot from legacy managed cloud to AI infrastructure. This is the second major chip partnership announcement (following broader AMD momentum), but RSI at 77.4 screams overbought. The stock is up 53.7% on the week already. The catalyst is real but the entry is dangerous — this needs a pullback. Levels: Target $8.50 if momentum sustains. Support at $5.50-6.00 (pre-breakout consolidation).

NBIS (+5.8%) — $279.51 → $310-320 (Eigen AI acquisition integration) Thesis: Nebius closed its $643M Eigen AI acquisition, opened three UK data centers, and is expanding its NVIDIA partnership — this is a genuine AI infrastructure buildout story with multiple catalysts firing simultaneously. The stock is up 32% on the week but RSI at 50 suggests this is mid-trend, not exhausted. The Eigen deal brings Bay Area engineering talent and optimization stack integration. CoreWeave peer comp (described as “woefully undervalued” by Cantor) provides sector tailwind. Levels: Exit at $310-320 range (measured move from breakout). Support at $210-215 (pre-week base).

CPNG (+5.7%) — $18.98 → $22-23 (mean reversion trade) Thesis: RSI at 8.27 indicates this stock was dramatically oversold — likely due to the $410M data privacy fine from South Korean regulators — and is now bouncing as the company appeals. The fine is manageable for a company that climbed 10 spots on the Fortune 500, and the appeal process creates optionality for reduction. This is a classic oversold bounce setup on temporary bad news. Levels: Exit at $22-23 (pre-fine trading range). Support at $16.82 (recent low).

EOSE (+10.3%) — $7.57 → $9.50-10.00 Thesis: New Pennsylvania facility officially started production — this is a tangible capacity expansion milestone for a battery storage company with a 2GWh capacity reservation agreement with Frontier Power. Needham initiated with Buy/$11 PT three weeks ago. RSI at 50 means technically neutral with room to move in either direction. The clean energy/storage theme has legs as AI data center power demand explodes. Levels: Exit at $9.50-10.00 (analyst PT provides $11 ceiling). Support at $6.00-6.50.

FTAI (+3.9%) — $279.00 → $310-320 Thesis: Aircraft leasing play that jumped 9.8% yesterday on Series C preferred share redemption (removing expensive 8.25% dividend burden) and recently priced a $612M inaugural ABS. RSI at 12.25 indicates extreme oversold conditions despite strong operational execution and capital structure optimization. The Q1 earnings season showed FTAI as a standout in industrial distributors. This looks like a textbook oversold bounce on an improving fundamental story. Levels: Exit at $310-320. Support at $260 (recent consolidation base).

VMC (+4.2%) — $302.07 → $320-330 Thesis: Q1 beat was the largest among building materials peers (revenue $1.80B, adj EPS $1.35 above consensus), yet the market reacted cautiously. RSI at 6.91 is absurdly oversold for a company beating estimates and benefiting from infrastructure spending tailwinds. The disconnect between fundamentals (strong) and technicals (oversold) creates a compelling mean-reversion setup. Levels: Exit at $320-330 (prior trading range highs). Support at $286 (recent base).

Headlines to Watch

  • Fed Rate Decision Today — Markets expect a hold, but Warsh’s tone on future cuts vs. inflation persistence will determine whether the growth/value rotation accelerates or reverses.
  • SpaceX Rally Continues, SPCX Surpasses Microsoft/Amazon Market Cap — The SpaceX public listing euphoria is absorbing massive retail flows; watch for crowding risk if sentiment shifts.
  • AMD/Rackspace 30MW AI Compute Deal — Validates the “second source” AI infrastructure thesis beyond Nvidia, benefiting AMD ecosystem plays.
  • Nebius Closes $643M Eigen AI Acquisition — AI infrastructure buildout race intensifying; Nebius, CoreWeave, and peers are spending aggressively on capacity.
  • Evercore Bull Case: S&P 500 to 9,000 — When Wall Street starts publishing extreme bull cases, it historically signals late-cycle euphoria — not an immediate top, but worth noting.
  • Chipmakers Retreat Despite Record Highs — Intel down 7% and AMD down 6% yesterday despite strong fundamentals suggests profit-taking in semis; watch for rotation into AI infrastructure beneficiaries.
  • Coupang Appeals $410M Privacy Fine — Test case for regulatory risk in Asian tech; outcome could set precedent for data privacy enforcement globally.

Claude’s Top Picks

CPNG (+5.7% today, +19.3% week) — $18.98 → $22.50 (+18.5% upside) Valuation: Trading at a significant discount to its 52-week range after the fine-driven selloff; forward P/E likely compressed well below e-commerce peer median given the temporary nature of regulatory overhang. Upside: RSI of 8.27 is among the most oversold readings I’ve seen in a liquid mid-cap — mean reversion alone should carry this 15-20% higher, and a successful appeal (partial or full) would be an additional catalyst. Risk: If the appeal fails and the full $410M fine sticks, it represents a material hit to near-term earnings and could trigger further institutional selling.

FTAI (+3.9% today, +19.4% week) — $279.00 → $315.00 (+12.9% upside) Valuation: Artisan Small Cap exited on “valuation insights” but the stock has since pulled back substantially; at RSI 12.25, the market has overcorrected — Evercore’s discounted valuation framework suggests 24-49% upside from current levels. Upside: Capital structure cleanup (preferred redemption + $612M ABS pricing) removes overhang and demonstrates balance sheet strength; strong Q1 earnings in industrial distributors space provides fundamental support. Risk: Short interest and the Artisan exit signal that sophisticated money sees risks here — if aviation cycle turns or interest rates spike further, the leveraged model faces pressure.

VMC (+4.2% today, +10.8% week) — $302.07 → $325.00 (+7.6% upside) Valuation: Premium P/E but justified by largest Q1 earnings beat among building materials peers; infrastructure spending cycle supports sustained growth premium. Upside: RSI 6.91 is comically oversold for a blue-chip materials name that just beat estimates — this is a classic “market didn’t believe it” setup that tends to resolve higher over 1-2 weeks as analysts raise estimates. Risk: Construction spending deceleration or a hawkish Fed surprise today could pressure cyclicals broadly.

EOSE (+10.3% today, +21.0% week) — $7.57 → $10.00 (+32.1% upside) Valuation: Still well below Needham’s $11 PT initiated three weeks ago; EV/Revenue likely attractive relative to battery storage peers given new production capacity coming online. Upside: Production start at new Pennsylvania facility is a genuine inflection point — moves the company from “story stock” to “revenue stock” with 2GWh of contracted demand from Frontier Power. Risk: Pre-profit energy storage companies burn cash aggressively during scale-up; any production ramp hiccup or customer delay could trigger a sharp selloff.

Avoid

BRAI (+33.6%) — The Switchcraft contract was announced three weeks ago and the stock has already round-tripped from $12.49 to $9.76. This is a micro-cap with stale news and volume ratio of 1.0 (no unusual volume today), meaning today’s move is likely thin-market manipulation or algorithmic momentum chasing with no new information.

RXT (+15.9%, RSI 77.4) — The AMD deal is legitimate but the stock is up 53.7% in a single week and RSI is flashing extreme overbought. Chasing a managed cloud company that was in secular decline for years on a single partnership deal is how retail traders get trapped. Wait for a pullback to $5.50-6.00.

AMC (+4.3%, RSI 73.6) — Up 32.7% on the week after completing a $150M equity offering (dilutive!) and still burning cash. This is meme stock momentum, not a fundamental turnaround. The company literally just diluted shareholders and the stock went UP — that’s retail euphoria, not investment logic.

WSB Sentiment Check

SPCX — WSB says: MIXED (55% bullish) Claude says: PARTIALLY AGREE — SpaceX’s public market debut is a legitimate mega-event and the company surpassed MSFT/AMZN market cap intraday, but at 1,351 mentions it’s the most crowded trade on WSB. When everyone’s already in, upside gets capped. The mixed sentiment actually suggests smart money is starting to fade this — I’d be trimming, not adding.

MSFT — WSB says: BULLISH (80% bullish) Claude says: AGREE — Microsoft getting 80% bullish sentiment during a tech pullback (Nasdaq -1.89% yesterday) suggests WSB sees the dip as buyable. With the AI narrative intact and MSFT briefly losing market cap crown to SpaceX, there’s ego-driven buying pressure. Valuation is rich but not broken.

MU — WSB says: MIXED (55% bullish) Claude says: PARTIALLY AGREE — Memory stocks are the leveraged play on AI infrastructure buildout (HBM demand from Nvidia/AMD), but the broader chip selloff yesterday hit everything. The mixed read is appropriate — great secular story, terrible near-term tape. Wait for semis to stabilize before getting aggressive.

NVDA — WSB says: MIXED (55% bullish) Claude says: AGREE — The mixed sentiment after AMD’s partnership announcements and Intel’s double upgrade reflects genuine uncertainty about whether Nvidia’s dominance is peaking. NVDA is still the king but competitive threats are no longer theoretical. 55% bullish feels right — own it but don’t add here.

ASTS — WSB says: MIXED (55% bullish) Claude says: PARTIALLY AGREE — Space/satellite names are riding the SpaceX IPO euphoria (York Space up on the week, rocket stocks surging). AST SpaceMobile has a real direct-to-cell thesis but the stock often trades on vibes rather than revenue. The SpaceX halo effect is real but temporary — I’d be cautious chasing satellite names on sentiment alone.