Nvidia slashes customers. TSMC bets the farm. Oil is a fuse.

Transcript

Tom Global supply chains are tightening, missiles are flying near oil terminals, but the world's biggest chipmaker says the party is just getting started. For real, this tape is absolute madness today.

Marie It is Friday, July seventeenth, twenty twenty-six. You are listening to Investment Flash, London Edition. I am Marie, joined by Tom and Gerald, and we have a massive divergence to unpack before the open.

Tom Buddy, I am still processing that tanker strike near Iran. Futures for the S&P five hundred were down zero point two percent in thin trading, but that feels like a massive under-reaction given the geography.

Gerald Yeah look, the market is half-asleep on this because it happened in the overnight session, but the escalation is real. We are looking at a direct hit on an oil tanker near a major export terminal — that is not just noise, that is a physical supply threat.

Marie Not so fast — the muted reaction might just be because the S&P five hundred is sitting only one percent below its fifty-two-week high. There is simply no cushion left for a risk-off event, and investors are frozen like deer in the headlights.

Gerald Exactly. The thing is, if West Texas Intermediate crude oil holds that ninety-dollar support level, we are going to see some serious momentum in the United States Oil Fund. Tom, I know you were eyeing that yesterday.

Tom No way I am ignoring it now! The Oil Fund is already up nearly ten percent this week, but with direct strikes on infrastructure, this move has legs. It is like the supply side is finally catching up to the demand story we have been shouting about.

Marie Wait — wait a second, speaking of demand, did you see the emergency process for the American power grid? The largest operator in the US just sounded the alarm because of a supply shortfall.

Gerald Honestly, that is the real test for the AI boom. We have all been obsessed with finding the next chip, but the real bottleneck is turning out to be simple electricity.

Tom See, Marie, this is what I mean! The AI data-center demand is so massive it is literally breaking the power grid. That is the ultimate bullish signal for the infrastructure buildout.

Marie Look, I am going to push back here, Tom. If the grid is failing, that is an inflation risk, not just a growth story. The cost of energy is going to spike, which is why we are seeing the Utilities ETF become a major defensive play.

Gerald Fair enough, but it is also a disaster for bonds. If energy costs drive a fresh inflation pulse, the Long Treasury ETF is going to get hammered. It is already hovering just two percent above its fifty-two-week low.

Tom Right, but let’s talk about the king of the mountain. TSMC just raised their capital spending and said the AI boom will run for at least another three years. Three years, buddy!

Marie Hold on — hold on. TSMC is betting the farm, sure, but look at the valuation. They are trading at a forward price-to-earnings ratio of about nineteen, which actually looks cheap compared to the rest of the semi-space.

Gerald Yeah, look, it’s a solid number, and it’s pulling up the Europeans too. Goldman Sachs is out this morning saying the AI infrastructure buildout is going to lift ASML and Siemens next year. ASML is still eleven percent off its peak, so there is room to run there.

Tom One hundred percent.

Marie That's the whole story.

Gerald Spot on.

Marie But wait — I have to pivot to the ugly side of the chip story. South Korean authorities just curbed leveraged funds tracking chipmakers, and the South Korea ETF got absolutely smoked, down nearly five percent last session.

Tom Man, that Korean selloff was brutal. Samsung and SK Hynix are getting caught in a forced deleveraging cycle just as TSMC is trying to light a fire under the sector.

Gerald The thing is, regulatory crackdowns on leverage are usually a sign that the local market got too frothy. The South Korea ETF is down eleven percent for the week — that is a massive wipeout of sentiment.

Marie Exactly, and it gets worse for the big names. Two sources are saying Nvidia just halved its Asian customer white-list to comply with US controls. They are literally cutting off half their potential buyers in that region.

Tom For real? I mean, Nvidia is twelve percent off its high, but if they are losing that much revenue base, that sixteen-times forward price-to-earnings ratio might not be the bargain I thought it was.

Gerald To be fair, Tom, analysts revising price targets after the revenue has already vanished is basically a free retirement plan for some people. They are always the last to know.

Tom ha — fair enough, Gerald. I’ll take that hit.

Marie No but that is exactly my point — we are seeing a narrowing of the revenue pool for the biggest names while the costs of the hardware buildout are still exploding. Look at the helium supply chain! It is pivoting to the US, which is great for a company like Linde, but it creates another bottleneck for Asian manufacturers.

Gerald Alright, but let's look at the value play here. Micron Technology dropped five point six percent last session, but its forward price-to-earnings ratio is now five point seven. That is deeply discounted for a company in the middle of a memory shortage.

Tom Calling the bottom on memory chips again, Gerald? That is like the sixth bottom you have called this cycle.

Marie oh, that's brutal.

Gerald pff, okay, fair point. But the numbers don't lie, even if the timing does. Speaking of timing, we should look at the UK. Speculation that Shabana Mahmood might become the next Treasury chief is actually easing some of the political risk premium we have seen lately.

Marie I am going to push back there. The UK ETF is only four percent from its fifty-two-week high. How much more upside is there really, based on a rumor about a cabinet appointment?

Gerald Yeah look, it’s mostly sentiment-driven, but after the chaos of the last few years, 'boring and stable' is a massive upgrade for Sterling and UK equities. It’s a low bar, but they are clearing it.

Tom I’m more worried about the housing market. Did you guys see this new law targeting big institutional landlords? Invitation Homes is already seven percent off its high because of the regulatory overhang.

Marie See, THIS is what I mean about regulation being the silent killer. The Real Estate ETF is trading at a fifty-two-week high, but investors are completely ignoring the fact that the government is trying to evict Wall Street from the residential market.

Gerald It’s messy. If you reduce the capital available for big builds, you just end up with less supply, which is inflationary. It’s a policy feedback loop that nobody seems to have priced in yet.

Tom Wait, I have to mention the wild card. Trump Media is apparently going to sell high-speed access to Truth Social posts to trading firms. They are trying to monetize the market-moving power of the former President's feed.

Marie Oh come on. Selling faster access to a social media post? That is a speculative bet on a revenue stream that doesn't even have a price tag yet. The stock is still fifty-four percent below its high for a reason.

Gerald Honestly, I’d pay to have the feed delayed by an hour just for my own mental health. But for a high-frequency trader, I suppose every millisecond is a dollar.

Tom hah — yeah, yeah, I get it. But the stock is up twelve percent this week! People are playing the momentum, Gerald.

Marie Let’s get back to the macro reality. Diesel supplies are dropping sharply, and that is a fresh inflation pulse that could hit truckers and farmers. That feeds directly into core C P I.

Gerald The thing is, the Oil Fund is up seventy-three percent year to date, but it’s still twenty-three percent off its peak. If this diesel crunch tightens, the Energy Select ETF and even the inflation-protected Treasuries, ticker T-I-P, are going to be the places to hide.

Tom Right, and that brings us to the convergence today. We have the AI Capex Church — TSMC, Goldman, and the helium suppliers — saying the boom has years to run. But on the other side, we have Nvidia cutting customers and diesel threatening a rate-cut cycle.

Marie Exactly. The most original take we saw today from MarketWatch is that the Magnificent Seven problem isn't market concentration — it is that they are becoming too dominant in the real economy, which invites antitrust action. Investors are ignoring the political target on their backs.

Gerald Totally.

Tom That's it.

Gerald Nailed it. The market is pricing the destination of the AI revolution, but it’s completely ignoring the journey, which looks like it’s going to be full of supply chain potholes and regulatory roadblocks.

Marie And just a quick reminder, as always, none of this is investment advice. We are here to provide the signal, but you have to make your own calls.

Tom I’m still bullish on the hardware dip, though. If the Fed can look through the diesel noise and cut anyway, the recovery in tech is going to be V-shaped. I'm keeping my eyes on Micron at these levels.

Gerald Yeah look, just keep an eye on that ninety-dollar crude level. If that breaks to the upside, your tech recovery might get smothered by energy costs before it even starts.

Marie The tension between the hardware supply squeeze and the energy inflation risk is the whole game right now. If you're finding this useful, hit follow on Spotify or check out investment-flash dot com for the full digest with all the charts.

Tom Alright, we have to run. Great chatting with you both. Gerald, try not to short the entire world before breakfast.

Gerald hah — no promises, buddy. See you all later.

Marie We will be back for the New York Edition, later today at nine a.m. New York time. Have a great morning.