June CPI Comes In Low, Bank Earnings Kick Off, and IBM Drags Down Software

June CPI Comes In Low, Bank Earnings Kick Off, and IBM Drags Down Software

June CPI came in surprisingly low this morning, with the month over month down 0.4% and year over year at 3.5%, a nice cooldown from the US-Iran war energy highs as gas prices came off. Bank earnings are kicking off with JPMorgan reporting a record revenue beat, though the stock is roughly flat, and Wells Fargo, Bank of America, and Goldman Sachs all reporting. I will have a deep dive on the banks on Substack later today. The bigger mover is IBM, which put out weak preliminary Q2 numbers and crashed hard, dragging the whole software space down with it. ZeroHedge is running the SaaS apocalypse headline again, but when you actually read IBM's explanation, clients shifted their June CapEx toward servers, storage, and memory to lock in supply before price increases, delaying mainframe and software deals rather than canceling them. Palantir and AppLovin initially sold off in pre-market on the back of that IBM software headline and the broader AI disruption fear, and I explain why that story has nothing to do with either name, and why AppLovin is not even a SaaS company. My take on software is the same as always: pick your fighters. I do not like the IGV as a play. I think Palantir and AppLovin are not disrupted by the AI story, and I am honest that I am not sure about the legacy names like Salesforce, Adobe, and Workday. I also cover Morgan Stanley raising its 2027 and 2028 hyperscaler CapEx estimates, why that spend running five times free cash flow means buybacks are not coming back anytime soon, and why I still think best of breed financials like JPMorgan, BlackRock, Goldman Sachs, Chubb, and Travelers are undervalued but worth waiting for on a pullback. Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore. Subscribe to Rigatoni Capital on Substack: https://rigatonicapital.substack.com [https://rigatonicapital.substack.com] Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions. #investing #stocks #finance #wallstreet #stockmarket #investor #wealth #money #financialfreedom #passiveincome #dividends #compounding #longterminvesting #buyandhold #valueinvesting #portfoliomanagement #bitcoin #crypto #macro #Nasdaq #SPY #QQQ #SP500 #IBM #SaaS #AIDisruption #SoftwareStocks #IGV #Palantir #PLTR #AppLovin #APP #BankEarnings #JPMorgan #JPM #GoldmanSachs #GS #BlackRock #Hyperscalers #CPI #stockanalysis #marketwatch #RigatoniCapital $JPM $GS $BLK $IBM $PLTR $APP $QQQ $IGV $TRV

Citadel's Ken Griffin Says Long Term Investors Will Have the Advantage Going Forward

Ken Griffin was interviewed last week and made a point that lines up with everything I talk about here: as alternative data and AI make each quarter more transparent, the edge shifts away from guessing whether a company beats this quarter and toward those who can envision which companies will create transformative products over the next 10 years. That is the kind of long term vision Rigatoni Capital is built on. I also get into the frontier lab problem flooding my feed this weekend, the token cost and pricing revolt with the Palo Alto CEO going on CNBC, the IP theft fight between OpenAI, Elon, and Apple, and why all of it makes Palantir and Alex Karp look more right than they did two weeks ago. Full disclosure, I own Palantir. I cover the SK Hynix Nasdaq debut and the leverage coming out of the KOSPI, why I am still not worried about memory, the Strait of Hormuz situation and what it means for oil and the Fed, and Griffin's point that most of the AI driving corporate earnings is really machine learning, optimization, and digitization. Big bank earnings kick off this week and that is what I am most excited about. Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore. Subscribe to Rigatoni Capital on Substack: https://rigatonicapital.substack.com [https://rigatonicapital.substack.com] Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions. #investing #stocks #finance #wallstreet #stockmarket #investor #wealth #money #financialfreedom #passiveincome #dividends #compounding #longterminvesting #buyandhold #valueinvesting #portfoliomanagement #bitcoin #crypto #macro #Nasdaq #SPY #QQQ #SP500 #KenGriffin #Citadel #Palantir #PLTR #FrontierLabs #Anthropic #OpenAI #PaloAlto #PANW #SKHynix #Semiconductors #StraitofHormuz #stockanalysis #marketwatch #RigatoniCapital $QQQ $PLTR $PANW $MU $TRV $SKHY

Why 2028 Free Cash Flow is the Only Hyperscaler Story That Matters

The biggest news yesterday was Meta unveiling its first paid AI model, Muse Spark 1.1, an agentic coding platform that puts them in direct competition with Anthropic and OpenAI. Meta has an advantage here because they own the hardware and the data centers, but the broader read is that frontier models keep getting commoditized and it is a nonstop barrage of competition. My take is that all of it comes down to one chart and one question: does the AI CapEx translate into surging free cash flow by 2028? The consensus from Apollo says the four hyperscalers, Google, Meta, Microsoft, and Amazon, get their free cash flow back to 2023 and 2024 levels by 2028 once the data center build-out tapers, with Amazon and Google leading the way. That is the whole game plan. The bears argue the build-out never ends because you always need the next GPU and the next memory cycle, which turns these into heavy asset companies. I am excited for earnings this month to get a read on it. I also cover the Starbucks story on building its own AI software in-house and cutting Microsoft and IBM spend, the strongest El Niño in 75 years and what it means for food inflation, why Walmart lowering prices is a fake headline, and Netflix exploring live TV and bundles as viewership slips. Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore. Subscribe to Rigatoni Capital on Substack: https://rigatonicapital.substack.com [https://rigatonicapital.substack.com] Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions. #investing #stocks #finance #wallstreet #stockmarket #investor #wealth #money #financialfreedom #passiveincome #dividends #compounding #longterminvesting #buyandhold #valueinvesting #portfoliomanagement #bitcoin #crypto #macro #Nasdaq #SPY #QQQ #SP500 #Hyperscalers #FreeCashFlow #Meta #META #AICapEx #Amazon #AMZN #Google #GOOGL #Microsoft #MSFT #Starbucks #SKHynix #Netflix #NFLX #stockanalysis #marketwatch #RigatoniCapital $QQQ $META $AMZN $GOOGL $MSFT $SBUX $SKHY $NFLX

Tech Bounces Back: Is this a Rotation or Just Consolidation?

Tech and semiconductors bounced this morning, which has everyone asking whether the great rotation is real. Caitlin McCabe at the Wall Street Journal is pointing to equal weight beating market cap weighted year to date as proof, but the gap is small and I think it is too soon to call a new long term regime. My take is that we are really just consolidating. The Nasdaq 100 is sitting right where it was in late May, and once you look back you will probably see the market did nothing for a few weeks in the middle of July while everyone is distracted by the World Cup. I also cover the China news allowing capped purchases of Nvidia H200 chips and why it is more of a trade deal headline than a real change to Nvidia's chip sales, Broadcom's new $30 billion Apple deal, why data center construction growth is slowing due to execution bottlenecks rather than fading demand, and my honest take on Netflix and why it deserves to trade where it is until the quality of content improves. Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore. Subscribe to Rigatoni Capital on Substack: https://rigatonicapital.substack.com [https://rigatonicapital.substack.com] Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions. #investing #stocks #finance #wallstreet #stockmarket #investor #wealth #money #financialfreedom #passiveincome #dividends #compounding #longterminvesting #buyandhold #valueinvesting #portfoliomanagement #bitcoin #crypto #macro #Nasdaq #SPY #QQQ #SP500 #GreatRotation #Semiconductors #Nvidia #NVDA #Broadcom #AVGO #Micron #China #Apple #AAPL #Netflix #NFLX #DataCenters #stockanalysis #marketwatch #RigatoniCapital $QQQ $NVDA $AVGO $CASY $NFLX $AAPL

Sell the Chips, Buy the Hyperscalers: Is Morgan Stanley's Rotation Call Real?

Morgan Stanley's Mike Wilson is telling clients to get out of chip stocks and rotate into the hyperscalers. This morning I walk through whether this rotation is real or just too soon to call. Semis are getting whacked today with Micron, AMD, Broadcom, and Nvidia all selling off, and even Caterpillar and Lam Research are getting hit after their huge runs. Meanwhile financials, transports, healthcare, and biotech are hitting all time highs, with names like Travelers Insurance, Union Pacific, and Eli Lilly ripping. Wilson thinks semis just need a breather and it is the hyperscalers turn to lead. My take is the same as always: it is too soon to proclaim this is the trade for the rest of the year, and the best way to play it is to just own the QQQ so you do not have to pick the leaders. I also cover the SpaceX Nasdaq 100 inclusion and why the free float cap means you will not be as exposed as the headlines suggest, a Palantir price target of $341 built on 2028 free cash flow estimates, and why I still find the SpaceX story boring compared to names like GE Aerospace and TransDigm. Rigatoni Capital is a daily morning podcast for long term, buy and hold investors. This is not a show for short term traders or people looking for quick wins. Every morning I go through the most important headlines in finance, markets, and macro, and call out fake narratives in the financial media so you know what actually deserves your attention and what to ignore. Subscribe to Rigatoni Capital on Substack: https://rigatonicapital.substack.com [https://rigatonicapital.substack.com] Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions. #investing #stocks #finance #wallstreet #stockmarket #investor #wealth #money #financialfreedom #passiveincome #dividends #compounding #longterminvesting #buyandhold #valueinvesting #portfoliomanagement #bitcoin #crypto #macro #Nasdaq #SPY #QQQ #SP500 #MikeWilson #MorganStanley #Hyperscalers #Semiconductors #Micron #Nvidia #NVDA #Broadcom #AVGO #Caterpillar #CAT #LamResearch #LRCX #SpaceX #Palantir #PLTR #stockanalysis #marketwatch #RigatoniCapital $QQQ $NVDA $AVGO $CAT $LRCX $MSFT $AMZN $META $PLTR