TMTB EOD Wrap

Dec 16, 2024

∙ Paid

QQQs +1.4% with another strong day as SOX +2% outperformed led by AVGO +10.4% showing how fast things can shift in this market (even on big liquid names) and continuing the trend of big moves and follow throughs on earnings. Pretty unique and fun time in tech getting these rapid big moves in large liquid names. Now close to +40% since the print. Our friend J Favuzza @ Jefferies had a good chart this morning showing that % of TMT stocks moving >10% on earnings is 38% this quarter, which is the highest in 10 years and spread of +ve moves greater than -ve moves:

Overall a fruitful earnings season if you were long the right stocks.

BTC now hitting $106k. Non-profitable tech led the way up today, but Megacaps were also strong - strength all around as breadth improved. Odds of a fed cut on Wednesday are 100% but focus is on the commentary and dot plot. Let’s get to it…

Internet

CHWY +4.5%: Didn’t see anything here today…Stock was weak last week as BC (largest shareholder) sold a $500M slug. We thought stock absorbed it well. Bulls playing for the following in this “not exciting but sleep well at night” long: net adds inflecting positive in Q4 while average rev per customer comps get much easier going fwd, growth is re-accel’ing back to dd in Q4 after 5 quarters of single digit growth, product enhancements such as sponsored ads driving better spend, industry trends improving (see recent TGT comments about pet doing better), and buybacks helping support the stock. 3p data has also been improving last couple of weeks. And BC is locked up until 2/6 so they won’t be selling any until then.
GOOGL +3.6% continues to re-rate higher as investors get more excited about AI product releases, Waymo traction in ‘25, and search continues to track inline to better than street. Plenty of room for the stock to re-rate higher - only trading at 16x FY25 FCF
RBLX +3% shaking off some mixed Yipit data - 2nd straight day shakes off mixed news, makes me thinks wants higher. High level - stock is in the middle of an inflection in narrative due to ads ramping and in-game experiences/partnership with SHOP driving better monetization
Rally in some unloved names: ETSY +4.5%; MTCH +3%. We thought this snippet of how one investor accounted for the px action in ETSY was on point, courtesy of our friend Seth Ostrie at Gugg: “pods are short and someone is covering causing pain for other pods and the remaining pods short are asking why it's up bc the analysts are getting questions by the PMs why it's up”
RDDT +3%: Weird PR this morning about an IPO offering, which might have signaled a secondary. Then the company updated the link to make the date 2021 instead of 2024, but the PR says company is in quiet period and well, RDDT wasnt public in 2021. Then a big block came through in the morning - not sure if that was related. Still a mystery to me. Anyways, we think stock was strong today helped by TikTok news and also fact Ilya said data is running out to train on - we think that latter points makes it more likely RDDT will be able to command a higher price for any future LLM deals and more likely to sign more.
SHOP +1.3% as Clev was positive
NFLX +40bps despite the very positive Loop downgrade
AMZN +2.2% as Jefferies and UBS raised PTs.
META +1.4% as ISI dug into Threads and raised #s and PT (details in morning note)
ROKU +90bps as M-sci was positive
TTD flat lagged as Hedgeye moved to short bench. Hedgeye nailed the long but now is more cautious in 2025 view citing multiple headwinds: lack of major catalytic events (Olympics, political spending) suggesting growth deceleration, while industry consolidation raises competitive concerns. Specifically, HE called out Walmart-Vizio and Omnicom-Interpublic deals might signal shift in advertising technology landscape regarding first-party data ownership and audience targeting, noting vertical integration by larger players could pressure TTD's independent platform position as consolidated entities favor internal ecosystems.
PTON +7% as M-sci called out better gross adds
LYFT +1% / UBER +50bps - all in all anemic price action despite LYFT CEO’s tweet saying market share same as last year and better Yip data
ABNB +90bps on better M-sci data

Semis

AVGO +10.5% following through on Friday’s beat. Investors coming out at $12+ in CY’27 EPS and throwing a 30x multiple on that.
MRVL +3% and NVDA -1.7% as investors continue to shift to ASICs and continue to worry about scaling and data limits in training.MS also out with a big bullish report on ASICs this morning. Ming-kuo also called out some thermal issues in GB 300.

MU +6%: No surprise this is rallying hard in front of their print on Wedneday. Tech investors love pattern recognition and neg sentiment similar heading into the print and no one wants to get blown up in Dec so close to end of the year, which means many shorts covering ahead of the print. No strong view on this print (will have some bogeys tomorrow), but we’ve called out v attractive r/r in MU near $100.
TER +5% on JPM’s upgrade
SMCI - 8% on raising capital and being removed from Nasdaq
ARM -4.5% - didn’t hear anything on this one. Maybe Masa investment means they sell some ARM stock? Not sure…
MCHP - 1.5% on BofA’s downgrade

Software

APP +6% as Loop raised PT to $450 from $385 citing positive e-comm checks
CRM +80bps ahead of Agentforce 2.0 event tomorrow
Large cap: NOW/MSFT +80bps
FSLY +6% continues to act well as investors get more positive on pricig environment
Security names strong: CRWD +5.5%’; PANW +3%; ZS +3%; CYBR +1.8%

Elsewhere

TSLA +6% new ATHsas Wedbush raised target and they raised px on Model S by $5k
Fintech strong on BTC strength: HOOD +7.5%; COIN +1.5% SQ +2%; AFRM +3% as DB raised tgt
NTAP +3% as JPM upgraded to Buy

Bullish and Bearish Weekly Option Flow

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