AI server boom confirmed; oil supply scare is real.

Transcript

Tom Buddy, Dell Technologies just posted a quarter that makes you want to redo your entire sector allocation — thirty percent premarket surge, AI server orders absolutely screaming. It's going to be a massive session.

Marie It's Friday May twenty-ninth, New York Edition. I'm Marie, with Tom and Gerald. And we're off to the races because the AI infrastructure trade just got the loudest confirmation yet.

Tom Dell raised full-year guidance — seventeen-ninety earnings per share on up to one-sixty-nine billion revenue. That's AI capex hitting the bottom line, buddy. The stock is three percent from the high, forward P-E eighteen point four. This is a buy.

Marie Tom, yesterday we said semis were pricing utopia. Dell's thirty percent premarket move makes that take look conservative. No way did I think we'd see a number like that so soon.

Gerald Marie, he's practically typing the earnings call transcript himself. But yeah — look mate, eighteen times forward is actually reasonable for a server story. Value and momentum locking arms. That's rare.

Marie Hold on — you're calling a stock up thirty percent 'value'? I'm going to push back. This is momentum recognizing a structural shift in enterprise spending. The P-E is just the setup, not the driver.

Gerald Alright, fair enough. Let me rephrase: for once, the multiple isn't absurd. It's not Snowflake at ninety-two times. So I'll take it.

Tom Exactly — and HPE right behind, up two point seven, Super Micro eight percent. The whole AI server complex is running. HPE at fourteen times forward, what's not to like?

Gerald Yeah, no doubt.

Marie That's it.

Gerald Not everything is AI, though. American Eagle got crushed — eleven percent on weak comps. Down thirty-two percent year to date. The consumer is flashing yellow.

Marie And SentinelOne plunged seventeen percent on its own revenue guide. The enterprise IT world is splitting: AI-exposed names get a pass, anything else gets penalized. Okta and NetApp both popped twelve percent, though — cloud security and data infrastructure are still riding the wave.

Tom NetApp at fifteen times forward, still one percent from its high. That's a quiet buy. But let's talk memory chips — WSJ says they're more valuable than oil now. Micron up twenty-one percent this week, eight point eight times forward earnings. Is that cheap or what?

Gerald More valuable than oil? I can't put memory chips in my car. But the multiple is single digits, so I'm listening. Honestly, if the cycle stabilizes, it's a steal.

Marie Tom, calling the bottom on memory chips again — that's six bottoms this cycle. No, but seriously, the history is boom and bust. That eight point eight multiple might be a value trap if AI capex moderates even slightly. The bear case is timing.

Tom Ha — fair enough. You're not wrong, I've been early before.

Gerald But this time it's different, right Tom?

Tom I'm not saying that... okay maybe I am.

Marie The WSJ's point is that long-term contracts could stabilize the sector. That's new.

Gerald Yeah, and if demand data holds, Micron's multiple is a floor. But that's the big 'if'.

Tom SMH is up five point six percent on the week, two percent from all-time high. Hot money is rotating from crypto and gold into memory and AI infrastructure.

Marie That rotation is exactly what we flagged yesterday — crypto pricing Armageddon. And now CoinDesk is tracking it. These aren't separate markets; it's the same fast money chasing the next narrative.

Gerald Money has no memory. But seriously, gold is down one percent this week, drifting lower. If you're holding GLD as a hedge, it's not working.

Tom So memory is the highest-conviction AI play right now. Micron at eight point eight times — if demand data holds, that's a floor, not a ceiling.

Gerald Tom, you just said 'if demand data holds.' That's the whole risk. I'll say it: memory is either the cheapest part of AI or the market's way of saying cycles die hard.

Marie Right. But the tape is telling us to ride it. And speaking of cycles, oil: Chevron CEO warns prices will jump over summer. Thirteen million barrels a day idled in the Strait of Hormuz. US Oil Fund down eight point three percent this week, fifteen percent below its high. That's a tactical entry.

Gerald Tom, take a breath. Oil is a binary trade — any Iran peace proposal and supply fears evaporate. Bank of America spells out two scenarios, and the bullish one needs the blockade to persist.

Marie But the market isn't pricing the supply shock at all! XLE is off three point seven percent this week. If the CEO of Chevron is warning, someone's paying attention. The pullback is the setup.

Tom Exactly. Buy USO on this dip, maybe calls ahead of summer. Just don't marry it.

Gerald Only Tom can suggest options on an oil fund and call it casual.

Marie Ha — fair enough.

Marie Snowflake! Up thirty-six percent after earnings. FT says the software apocalypse is over. That AI pivot is real, and the stock's still fifteen percent below its high despite a forty-four point five percent weekly surge.

Tom Momentum is back, buddy. If this is the template, Salesforce at thirty-six percent below its high and down thirty point five percent year to date could rerating massively.

Gerald Snowflake at ninety-two times forward P-E — if that's the apocalypse ending, I'd hate to see the beginning. Look, the narrative is gaining traction, but ninety-two times is a lot of hope.

Marie And hope isn't a strategy. But if CRM can emulate Snowflake, it's a deep-value recovery play. So we're watching.

Gerald Meanwhile, the EU is drafting a law to force chipmakers to override contracts during crises. That's a direct threat to pricing power. SOXX is near all-time highs, but this risk isn't priced in at all.

Marie TSMC with European exposure could be a target — fully priced without this. SOXX is a sell, TSM too. But Intel, with European fabs, might actually benefit from forced local supply. Up two percent on the week, still nine percent below high. That's a contrarian buy.

Tom Gerald, Intel finally gets a bull case from regulation. That's rich.

Gerald Honestly, if the EU forces chip supply locally, their fabs become a safety net. But it's a big 'if.' Still, I'll take the trade.

Tom Quick hits: Blue Origin rocket explosion delays Amazon's satellite plans. AST SpaceMobile down fifteen percent premarket. That's a sell. UFO space ETF will probably give back gains.

Marie And Amazon itself, up only two point one percent, faces a setback against Starlink. Not a good look.

Tom US government reportedly investing in drones. Wall Street likes Unusual Machines and Motorola Solutions. UMAC has doubled in the past year, up one hundred percent this week alone. That's pure speculative momentum.

Gerald Motorola is the steadier play — twenty-two point three forward P-E, up two point eight percent on the week. But UMAC's tiny float could go anywhere with Pentagon funding.

Tom It's basically a meme stock with a Pentagon angle.

Gerald Careful, you'll summon the retail crowd.

Tom Ha, exactly. Now AkzoNobel—Axalta deal: FT says it's uncompelling. AKZOY jumped five percent to a fifty-two-week high last session, so some optimism is priced. Now it's vulnerable. Sell both.

Marie Axalta flat on the week, down eight point five percent year to date. Less to lose, but if the deal fails, it could still revalue down.

Gerald China biotech: Innovent Biologics signs a ten point five billion dollar deal with Pfizer. Huge validation. Innovent will likely rally. Pfizer gets a pipeline boost, but the market's ignoring it—flat on the week, nine point two times forward. I'd hold PFE, but don't chase.

Tom In crypto, Stellar jumped ten and a half percent while NEAR and Bitcoin Cash dropped over twelve. Low liquidity altcoin moves. I'd buy XLM for momentum, sell the weak ones, but it's a trade.

Marie Alright, let's step back. The convergence today is clear: AI infrastructure demand is the macro force. Dell, Micron, HPE—all confirming.

Tom Our view: the cleanest expression is long AI hardware—Dell, HPE, Micron—with a hedge on the consumer, short American Eagle, while using oil pullbacks to add exposure via USO calls.

Gerald Wait — the consumer. That's the missing link. American Eagle down eleven percent, Gap cut guidance. If the consumer cracks, eventually cloud demand feels it. But no one's connecting that.

Marie Exactly — the market is splitting consumer and enterprise into separate universes. They may collide sooner than we think.

Tom Exactly.

Gerald One hundred percent.

Marie So we're bullish AI hardware, but hedged. The bear case is timing: memory cycles, crowded trades, binary oil risk. But the tape says run with it.

Marie As always, none of this is investment advice. We're just connecting the dots.

Tom We're back with the Weekend Edition, tomorrow morning at ten a.m. London time. We'll expand on these themes and bring you the longer view.

Gerald If you're just finding us, hit follow on Spotify — or check investmentflash.com for the full digest with charts and sources. See you tomorrow.

Marie Good weekend, everyone.