Finimize Head of Research's @Reda_Farran's full research piece on bonds here: finimize.substack.com/p/bond…

🚨 The AI selloff could have an unexpected winner: Big Tech. As debt-heavy AI firms struggle with rising borrowing costs, cash-rich giants could emerge even stronger. So which AI stocks are bargains – and which are traps? 👀 finimize.com/content/the-ai-…

What you need to know about markets today 👇 1️⃣ AI tools uncovered and figured out how to exploit serious security flaws in PHP, the programming language powering much of the web, showing how AI can make cyberattacks more dangerous. But that same threat is fueling demand for cybersecurity – creating opportunities for firms protecting an increasingly AI-powered world. 2️⃣ Chinese stocks slipped into a bear market as weak consumer spending and doubts over AI investments rattled investors. The slowdown is also hurting European luxury brands like Hermès and LVMH – leaving them increasingly reliant on wealthy American shoppers to drive growth.

Very revealing stats.

What you need to know about markets today 👇 1️⃣ Meta beat sales expectations, easing investors’ worries about its huge AI spending plans. Its ad business offers clues that AI investment is paying off, while its assistant Muse could open up a new revenue stream – though neither opportunity is a sure bet. 2️⃣ France’s unrest and mounting debt troubles are rattling markets, while stubborn inflation is squeezing Europe and Britain. With borrowing costs climbing and stocks under pressure, government bonds are starting to look more attractive to investors seeking alternatives to AI-heavy markets.

For its seconds earnings seasons since IPO’ing in June @spacex has reported some excellent numbers – see what our head analyst @Reda_Farran had to say about it 👇👇 Want to know sooner? Sign up for Finimize's free daily newsletter (where this insight went first!): finimize.com/newsletter

Bill Ackman is wary of the risks AI presents – but he worries more about the US falling behind China or Russia in the race to build it. He compares the AI arms race to the race to build the first nuclear bomb, how we understood the physics of that weapon better than we understand the human brain AI is modelled on, and why we should prevent the next frontier of AI falling into the hands of a hostile power. @BillAckman @finimize

SpaceX’s Earnings Took Off Like A Rocket SpaceX blasted past expectations in every division last quarter. ▶ The company’s rockets division saw revenue grow 6% last quarter from a year earlier. ▶ Revenue from SpaceX’s satellite internet service, Starlink, jumped 69%, fueled by a near-doubling in subscribers. ▶ SpaceX’s AI division – now dubbed "Super Intelligence", home to its new data center rental business and the Grok chatbot – saw revenue surge almost tenfold. 🔺 That growth helped the company swing from a $1.1 billion loss in the same period a year ago to a $4.4 billion profit last quarter, trouncing analyst estimates. Investors cheered, initially sending SpaceX’s shares higher. Takeaways 1️⃣ The bigger picture: It pays to have access to cash. SpaceX has muscled its way into the neocloud business, building and renting out data center capacity to AI customers. This year, it struck deals with Anthropic, Google, and open-source startup Reflection AI worth a combined $28 billion in annual revenue. No surprise that its AI division overtook Starlink as SpaceX’s biggest moneymaker last quarter. But building data centers takes cash, and not everyone can borrow cheaply – just ask OG neocloud CoreWeave. Yields on its unsecured bonds have surged past 15%, signaling that investors worry about being paid back. Comparable SpaceX bonds yield just 7%. That borrowing advantage, combined with its $90 billion cash war chest, gives SpaceX considerable firepower to expand while rivals struggle to bankroll their ambitions. 2️⃣ For markets: Hold on to your hat... Over the next few days, lockup restrictions covering roughly 35% of SpaceX’s shares are set to expire. That means early investors and company insiders will be free to sell – and with many sitting on life-changing paper gains, they might be tempted to cash in at least part of their winnings. ⚠️ That potential wave of selling, combined with growing investor jitters around AI, could weigh on SpaceX’s shares in the short term. $SPCX #SpaceX #AI

What you need to know about markets today 👇 1️⃣ SpaceX’s AI revenue – boosted by its booming data center business – surged almost tenfold, helping power a $4.4 billion quarterly profit. But with lockups about to expire, a wave of shares held by company insiders and early investors could be about to hit the market. 2️⃣ Nvidia-backed Nscale is reportedly negotiating a $45 billion AI computing deal with Anthropic ahead of its planned IPO. But with hefty losses, unfinished data centers, and financing still uncertain, investors are questioning how much its enormous contracts are really worth.

.@BillAckman doesn’t believe in diversification for diversification’s sake. He thinks real returns come from knowing a handful of businesses better than anyone else does. Bill joined The Modern Investor, to discuss AI, Buffett, and more. Worth listening. piped.video/2kTVSQS2xKQ?is=qlMH…

Our analysts @Reda_Farran and Russell Burns unpack the growing stress in credit markets for AI companies – and plenty more – in our latest podcast episode.

🚨 The S&P 500 has a hidden vulnerability – and most investors don’t realise how big it is. Over 75% of its value depends on profits more than a decade away. With bond yields surging, that’s a problem. Here’s what could go wrong – and how to protect your portfolio 👇 finimize.com/content/three-q…

What you need to know about markets today 👇 1️⃣ China’s economy grew a better-than-expected 4.5% last quarter, powered by booming exports of AI-related hardware. But with consumer spending weak and property investment slumping, China is increasingly reliant on global AI demand – leaving it vulnerable if the spending boom slows. 2️⃣ Elon Musk pledged roughly $10.8 billion in SpaceX shares to American children, while Anthropic plans to put 5% of its stock into a public benefit fund. The moves come as Anthropic prepares for a potentially record-breaking IPO, with investors weighing its soaring valuation against slowing revenue growth.

What do you need to know for the investing week ahead? 📈 The Focus This Week: China’s Growth Earnings season kicks into high gear this week, with more companies – biggies, like Meta, Netflix, and Tesla – set to unveil their latest quarterly results. There’s plenty on the economic calendar too, including inflation figures from the UK and Japan, and Purchasing Managers’ Indexes from several major regions. But the biggest event could be China’s third-quarter growth figures. After all, the world’s second-biggest economy is a major engine of global growth – so any signs of trouble there could send ripples through markets everywhere. Read the full Weekly Brief on Finimize.com, or subscribe to our free newsletter to stay in the know. #investing #weekly #finance #financeweekly

New Episode of the Modern Investor Podcast Out Now! Why Smart Investors Still Make Bad Decisions w/ Alex Edmans Join Finimize CEO Carl Hazeley as he interviews Professor of Finance @aedmans on why even the most seemingly rational investors make irrational choices. 📺 Watch on YouTube: piped.video/watch?v=AS5PnKCJ… 🎧 Or Listen as a Podcast ep: open.spotify.com/episode/6Mt…

The IT sector accounts for half of global earnings growth this year. And if you thought that was impressive, just wait until 2027. According to Citigroup, tech's contribution to global earnings growth is expected to jump from 48% this year to a whopping 68% next year. That's despite overall earnings growth slowing from 35% to 16%. That kind of concentration is pretty unusual. Historically, the top-performing sector has accounted for around 40% of global earnings growth on average. Next year's forecast would be the second-highest concentration in three decades, beaten only by the energy sector's dominance during the 2022 energy crisis. The US looks particularly reliant on tech, with the sector expected to account for a staggering 78% of the country's earnings growth next year. But a market relying so heavily on a single sector and investment theme to keep it afloat is standing on shaky ground. Investors, beware... #Earnings #Stocks #AI

🔎 The Focus This Week: China’s Growth China’s economy grew by 4.5% last quarter, compared with 5% in the first and 4.3% in the second. That means growth over the past two quarters has been hovering around the lower end of the government’s 4.5% to 5% annual target. That explains why Beijing rolled out a flurry of stimulus measures in recent weeks, hoping to give the economy enough of a boost to hit the lower end of its full-year target. Those measures might do the trick in the short term. But they won't solve China's bigger problem: its consumers aren't spending nearly enough – leaving the economy increasingly reliant on exports to keep growing. Just look at the numbers. Over the past six months, retail sales have grown by an average of just 0.6% year over year, compared with more than 18% for exports. Now, while that export boom is helping keep China's economy afloat, it's creating headaches for the rest of the world. See, Chinese manufacturers aren't just churning out cheap toys and electronics anymore. They're increasingly making their mark in higher-value industries, from EVs and solar panels to robotics and advanced machinery. And thanks to their enormous scale, they can often produce those goods at prices that foreign rivals struggle to match. What's more, the Chinese government continues to give domestic manufacturers a helping hand through subsidies, cheap financing, and other incentives. That means China's export dominance isn't likely to fade anytime soon. And while that's good news for its own factories, it's less welcome elsewhere: cheaper Chinese goods are squeezing foreign manufacturers, putting jobs at risk, and stoking trade tensions. There’s a catch, though: China's export success could end up becoming its Achilles' heel. The US and Europe are already pushing back with tariffs and other trade barriers, and more countries could follow suit. If that happens, Chinese exporters could find themselves shut out of key markets, threatening the very engine that's keeping the economy running. That's why China's bigger challenge isn't simply hitting this year's growth target. It's finding a way to get its own consumers spending again, rather than relying on exports and repeated rounds of stimulus to do the heavy lifting. Until that happens, the country's economic troubles – and the trade tensions they're fueling – aren't going away. Read the full Finimize Weekly Brief – a recap of last week’s highlights and a preview of the key things to watch in the week ahead – here: finimize.substack.com/p/chin… #China @finimize

CoreWeave's Woes Could Be A Sign Of What's To Come CoreWeave has become the poster child for the debt-fueled AI spending boom – and perhaps the canary in the coal mine for the wider AI trade. The company pioneered the so-called “neocloud” business model. The playbook is simple: borrow heavily, issue shares, use the proceeds to build data centers, and rent them out to AI giants like OpenAI, Anthropic, and Microsoft. But with borrowing costs shooting higher, cracks are starting to show. CoreWeave has more than $50 billion in debt on its balance sheet, compared with a market value of less than $40 billion. Sure, it's sitting on $5.5 billion in cash. But it's also burning through money at a staggering pace. Free cash flow has averaged negative $5 billion over the past two quarters, and analysts expect a further $30 billion in cash outflows over the next four. That's nearly six times the cash CoreWeave has in the bank. In other words, the company will need to find a whole lot more money – whether by taking on more debt, selling shares, or issuing convertible bonds. And it's no stranger to tapping investors for cash: it's already raised capital ten times this year, averaging roughly once a month. Trouble is, with its shares and bonds both sliding, raising fresh capital is getting pricier by the day. Take CoreWeave's bonds maturing in 2032. When they were issued in June, they offered a yield of 9.6%. Today, that yield has climbed above 15%. That's firmly in distressed-debt territory. In fact, credit-default swaps – essentially insurance against a borrower going bust – suggest investors see a greater than 50% chance of CoreWeave defaulting within five years. But there's a more immediate headache. All else equal, CoreWeave would now have to pay roughly five percentage points more to borrow than it did just a few months ago. That's a roughly 50% jump in borrowing costs. And that's particularly painful when interest expenses are already swallowing a QUARTER of the company's revenue. Of course, CoreWeave could always raise money by issuing more shares instead. But with its stock price under pressure, it'd need to sell more of them to raise the same amount of cash. That means more dilution for existing shareholders. As if that weren't enough, competition is heating up too. Deep-pocketed players like SpaceX and Meta are muscling into the neocloud market, armed with stronger balance sheets and access to cheaper capital. Put it all together, and it's not hard to see why investors are getting nervous. And if CoreWeave's debt-fueled AI ambitions start to unravel, the big question is whether the rest of the AI trade could get caught in the fallout. Nvidia, which owns 10% of CoreWeave, might swoop in with a bailout. But whether CoreWeave defaults or gets rescued, neither outcome would exactly inspire confidence in the AI boom… #AI #CoreWeave Image credit: @HedgieMarkets

Wall Street's bull market turned four this week. And it’s got plenty to celebrate. Since bottoming out in October 2022, the S&P 500 has more than doubled, adding roughly $40 trillion in market value. It’s on track for its fourth straight year of double-digit gains – its longest, strongest winning streak since the late 1990s, just before the dot-com bubble burst. What’s unusual is that stocks have kept rallying even as borrowing costs have shot up. Normally, higher yields on relatively safe government bonds make riskier stocks less appealing. But this bull market has kept on charging ahead, thanks in large part to what’s happening beneath the surface. That’s today’s Insight: why this four-year-old bull market still has some fight left in it. Read or listen to the Insight here: finimize.com/content/sp-500-…