The Week That Is

A deep dive on Amazon, Tesla and the extravagant spending of Taylor and Travis

There were a lot of big celebrations over the weekend, and Vijay Marolia [https://vijaymarolia.com] looked for fireworks beyond those celebrating America's big birthday. Marolia, the chief investment officer at Regal Point Capital [https://regalpointcapital.com], Amazon, celebrating its 32nd birthday and Tesla celebrating a big forthcoming manufacturing announcement about a key change to its business, so he digs in on each of those stocks using his "five-lens approach" to discuss whether the companies should be celebrated in investor portfolios. And while Vijay's invitation to the Taylor Swift-Travis Kelce wedding apparently was lost in the mail, he digs into the numbers of the extravaganza to discuss whether the couple spent "too much," and to show how their party might give ordinary investors and consumers the permission to spend more without feeling financial or emotional regrets.

Micron mints money, Nike is losing the game and A.I.'s impact on inflation

Micron Technology had another stellar quarter and looks poised for more of the same and while Vijay Marolia [https://vijaymarolia.com] continues to ride the stock — one he called out correctly as being a bargain when its stock price struggled despite great earnings numbers three months ago — he does see some potential troubles that could make the ride bumpy. Still, Marolia, the chief investment officer at Regal Point Capital [https://regalpointcapital.com], likes the looks of Micron, and he dislikes the looks of Nike, which is getting all sorts of World Cup attention but which he says could struggle when it reports earnings this week and beyond, facing smaller margins, particularly compared to rival adidas. Plus, Vijay looks at whether the A.I. revolution could have the unexpected consequence of triggering another wave of inflation.

The Fed chair debuts, Schwab moves to predictions and housing affordability worsens

Kevin Warsh, the new chairman of the Federal Reserve, made his debut last week, and took a hawkish stance, gave no dot plot or forecasting help, and held the central bank's statement to a terse 130 words; Vijay Marolia [https://vijaymarolia.com], chief investment officer at Regal Point Capital [https://regalpointcapital.com], says it's a good start, and a sign of better times ahead. He also discusses the news that Charles Schwab Corp. is planning to enter prediction markets, noting it will both speed up acceptance of this form of gambling while also making it more likely that prediction markets come under regulatory scrutiny soon. Plus, Marolia gives his take on why housing affordability issues go well beyond high interest rates and limited housing supply raising prices, noting that once consumers find a home they are still facing dramatically increased taxes and insurance costs, further exacerbating the problem.

In IPOs, bigger doesn't mean 'good,' plus a warning sign from AI's spending boom

SpaceX launched its stock with a record-breaking initial public offering last week, but the rush of money to the shares didn't change the mind of Vijay Marolia [https://vijaymarolia.com], chief investment officer at Regal Point Capital [https://regalpointcapital.com], who notes that the company's "total addressable market" may be the size of the entire GDP for the United States, but the issue is what the company is actually addressing and how much market it can capture. With the next big IPOs from Anthropic and OpenAI already in the pipeline, Vijay says it's easy to think 2026 is the "Year of the IPO," but it may be more the year when the venture capitalists opted to cash out, so he's urging caution. Another note of caution comes from recent statistics showing that hyperscalers have pledged nearly 100 percent of their incoming cash flow to capital expenditure projects; that level of spending from hot stocks is reminiscent of the telecom companies during the Internet boom, which lasted until the spending trend turned to more realistic, standard levels. While not calling it a bubble, he does worry about this particular similarity, in part because the market and economy have been driven higher due to the emphasis on future capital expenditure spending.

Broadcom's wild ride, the bummer in solid jobs report and Bitcoin's bid drop

Broadcom shares dropped 15% despite on the day the company announced it had solidly beaten earnings expectations, but Vijay Marolia [https://vijaymarolia.com], chief investment officer at Regal Point Capital, [https://regalpointcapital.com] says the problem was that management was punished for "sandbagging," the practice of understating expectations so that they are easy to beat; Broadcom held future AI-driven revenue projections steady, triggering Wall Street's reaction. Markets also reacted negatively to a solid jobs report last Friday, because the good news on jobs might mean bad news for a rate hike, something the market is still hoping to avoid, even if Marolia thinks it can weather the hike storm without significant damage. Plus, Vijay checks in on Bitcoin, which has lost about one-quarter of its value over the last five weeks, testing the faith of traders. While making the case that Bitcoin could drop further from here, he suggests this is a buying opportunity for long-term investors wanting to make a small, permanent allocation to the cryptocurrency.