Relief
Tesla plans a semiconductor factory, Amazon gears up to take on Starlink, and investors rotate out of the Mag 7.
U.S. markets added US$2T in Monday’s relief rally after Trump announced the U.S. and Iran had ‘productive discussions.’ Despite erasing some of those gains when Iranian officials denied those claims, the S&P 500 still ended the session higher – a much-needed result after four weeks in the red.
Crude oil pulled back sharply as the energy trade reset, leading to a flat close for LNG majors like Venture Global ($VG), which has rallied 124% YTD. Semiconductor players ASML ($ASML) and Arm ($ARM) saw stronger momentum, along with cruise liners like Royal Caribbean ($RCL).
Monday’s rally was a nice-to-have, but it wasn’t essential for a few firms with big news this week. Palantir ($PLTR) gained 6.9% after the Pentagon formalised its military intelligence platform Maven AI as a program of record.
Super Micro Computer ($SMCI) sold off after media reports alleging its founder diverted approximately US$2.5B of Nvidia ($NVDA) chips and servers to China. Investors rotated into less-headline-driven Dell ($DELL), pushing its YTD gains above 38%.
Tesla ($TSLA) shares also moved up after Elon Musk unveiled ‘Terafab’ last weekend with US$20B planned for the buildout. The semiconductor factory’s production goal is one terawatt of computing capacity per annum, a level Tesla claims would double current U.S. computing consumption.
Terafab will be jointly operated with SpaceX, which could raise up to US$50B in an IPO this year. But Starlink, SpaceX’s crown jewel, could soon have a more formidable competitor – Amazon’s ($AMZN) Leo.
Amazon is readying 200+ satellites for launch and claims Leo’s upload speeds will be 10 times faster than Starlink’s. The real differentiator? Security. Leo will route traffic from satellites directly into AWS infrastructure or private data centres without ever touching the public internet. Private network capability is a fundamentally different value proposition from raw speed alone.
Something else that looks fundamentally different right now is the U.S. market. Volatility was back on the cards by Tuesday, but the 100-day correlation between the S&P 500 Equal Weight index and the Mag 7 stocks has fallen to -0.27. In other words, data suggests big tech has officially decoupled from the wider market.
Geopolitical uncertainty will likely shape the narrative for the week ahead. But current market conditions suggest: as capital rotates into more nuanced sectors, it’s getting harder to argue that AI euphoria is doing the heavy lifting.
This is not financial advice nor a recommendation to invest in the securities listed. The information presented is for general information purposes only and intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.
Samy is a markets analyst at Stake, with seven years of experience in the world of investing, working across roles in private banking, venture capital and financial media. She has a Master’s degree in Finance and Data Analytics from The University of Sydney Business School.
