Macro Events & News
The past week was shortened due to the Thanksgiving holiday, resulting in lighter economic news. On Wednesday, GDP and PCE data were released, coming in as expected. However, markets initially reacted negatively, possibly due to concerns over the PCE figures, which may have reinforced fears that inflation will be persistent. These concerns were further heightened by ongoing discussions about potential tariffs, which could increase prices. Combined, these factors likely contributed to Wednesday’s market decline following the release of the Federal Reserve’s preferred inflation measure. After the Thursday holiday, the markets rebounded strongly. Both the Dow and S&P 500 closed near record highs on Friday, capping off a robust November performance and marking it as the best month so far this year. Small-cap stocks continued their notable resurgence, further fueling investor optimism.
Meanwhile, the 10-Year Treasury yield continued to descend dropping to 4.19%, and the VIX settled at 13.51 to close out the short week.
For the week, all major indexes ended higher: the Dow up 2.3%, the S&P 500 up 1.4%, and the Nasdaq up 1.3%.
Watchlist News
Alphabet (Nasdaq:GOOG) 2% ▲
Alphabet showed resilience, steadily recovering losses from the previous week. Despite ongoing rumors and reports about potential regulatory actions in the U.S. and the EU, investor sentiment remained stable, and the stock saw consistent upward momentum.
This appears to be an attractive entry point for a strong-performing stock, with solid support at the current price level. As mentioned last week, the decline was likely driven by panic selling in reaction to news of potential regulatory action. However, such actions are typically prolonged and are more likely to result in a settlement than significantly disrupt the company’s operations.
august bear notes
Dell Technologies (Nasdaq:DELL) 11% ▼
Dell reported mixed earnings last week. Revenue came in at $24.37 billion, missing expectations by 1%, while EPS of $2.15 exceeded consensus estimates by 4%. The company achieved a new high in AI server orders, reflecting strong momentum in that segment. However, PC sales continued to lag and are not expected to rebound until next year. Analyst opinions were mixed regarding upgrades and downgrades, but all maintained buy ratings.
Dell’s results were underwhelming despite record AI server orders and a reported $4.5 billion in order backlog. While the headline numbers are impressive, we’ve seen similar “mouth-watering” figures in the past, only to be let down by inconsistent execution. Additionally, the company’s commentary was deliberately vague, hinting at a lack of transparency regarding challenges which they attributed to the Blackwell product ramp-up.
Compounding these concerns is their misjudgment of the PC refresh cycle, which is now deferred to the next fiscal year. This misstep further erodes confidence in the management team’s ability to navigate key market dynamics. While the stock appears oversold, our conviction in this name has been reduced due to diminished confidence in the leadership.
august bear notes
Nvidia (Nasdaq:NVDA) 5% ▼
There wasn’t much direct news regarding NVIDIA this week, but Dell Technologies, a key system integration partner, reported earnings that highlighted growing AI demand. Dell’s underperformance stemmed from internal challenges, so the issues are unlikely to impact NVIDIA directly. NVIDIA’s stock, which had been steadily sold off since its earnings report, showed a strong recovery in the latter half of the week, closing at $138.
The recent selling pressure on NVIDIA seems to have eased, but a rapid surge to new highs is unlikely in the near term. While AI remains in its early stages with significant growth potential, the market may experience a temporary lull. That said, NVIDIA continues to dominate the space, bolstered by strategic partnerships with major players like Amazon to co-design cutting-edge chips.
Currently, NVIDIA faces no credible competitors, and any potential challengers would require substantial time and massive investments to pose a serious threat to its leadership.
august bear notes
Workday (WDAY) reported earnings last week, exceeding expectations with EPS of $1.89 (7% beat) and revenue of $2.16 billion (1% beat). However, the stock faced selling pressure following disappointing guidance, which included downward revisions for revenue and margins. Analysts broadly lowered their price targets after the earnings call, citing slowing growth and concerns over the company’s lack of execution on their key growth initiatives. The stock dropped over 12% immediately after the Wednesday earnings release but recovered some ground, ending the week down 7%.
Analyst concerns about Workday are well-founded, particularly as CEO Carl Eschenbach lacks a significant track record, leaving questions about his ability to navigate the macroeconomic challenges hindering the company’s growth initiatives. While the Workday platform remains highly regarded in the industry and has secured many large organizations through costly transitions, ensuring a steady stream of recurring subscription revenue, growth—especially in international markets—appears to be a persistent struggle.
The strong bounce after a steep selloff suggests some level of investor confidence, but caution is warranted. The company must demonstrate its ability to execute effectively, particularly since the revised guidance is conservative and should be achievable.
august bear notes
