Read the Tape

Thematic momentum is clearly back on the tape, signaling a prime environment for increasing exposure. Investor appetite has rotated away from July’s defensive megacap safe havens toward high-beta AI hardware, software, and neocloud infrastructure. As capital redistribution beneath the surface, major benchmark indices remained relatively flat over the past week.

S&P drivers last week

S&P Drivers & Megacap Consolidation

Megacap tech leaders like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), which enjoyed sharp post-earnings runs in late July, experienced considerable pullbacks last week. Meanwhile, popular growth names delivering blowout earnings and raised guidance saw decisive follow-through rather than sell-the-news reactions:

• Palantir (PLTR): Surged +29% on results day after delivering a blowout Q2 double-beat and raise, posting record revenue of $1.94B (+93% y-o-y) and USD0.41 EPS, fueled by a 149% YoY surge in U.S. commercial AIP (Artificial Intelligence Platform) adoption.
• Nebius Group (NBIS): Rallied +34% post-earnings on 454% y-o-y revenue growth, securing four $1B+ AI cloud contracts with significant customer prepayments and expanding adjusted EBITDA margins to 41%.
• CoreWeave (CRWV): Gained +19% on earnings day and held firm, posting revenue of USD2.58B (+112% y-o-y), meaningful margin leverage, and a contracted backlog exceeding USD104bn amid relentless compute demand.

Results days for the above stocks once again offered good entry points.

Big techs are retreating after post-earnings run

August Market Regime: Classic Risk-On Expansion

Current tape action reflects three hallmark characteristics of a healthy risk-on expansion:

• Sustained follow-through on earnings beat-and-raise prints.
• Broad proliferation of technical base breakouts across diverse sectors.
• Capital rotating out of concentrated megacaps into Capital rotating from concentrated megacaps into a wide range of higher-beta names.

This setup mirrors the early April regime, expanding beyond core AI hardware into a wider array of actionable themes:

• Cybersecurity & Enterprise Software: Benefiting from enterprise budget unlocks and resilient recurring ARR.
• Biotech & Life Sciences: Seeing renewed speculative volume and base breakouts.
• Drones & Autonomous Systems: Gaining momentum from defense procurement awards and updated federal airspace frameworks.
• Quantum Computing: Attracting thematic inflows on breakthrough benchmarks and national security funding catalysts.
• Autonomous Driving: Gaining traction alongside regulatory clarity around robotaxi deployment standards.

Cybersecurity

Drones:

Quantum Computing

Auto-driving

The Tape Outlook

Market remains constructive with an expanding pool of actionable setups. Following last week’s benign inflation prints and with two weeks remaining before the Jackson Hole Economic Symposium, the tape offers clear runway. Focus on relative strength leaders emerging from sound bases across the sub-sectors with solid themes.

The information provided in this note is for educational and informational purposes only and does not constitute financial, investment, or professional advice.