I’m in Chicago Thursday and Friday for the BEGS bell ringing. Back Monday

In Today’s Issue:

• Paul Tudor Jones disagrees with me

• Biotech wreck

• China’s new AI niche

• and more……..

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Identifying and Profiting From the Top Themes in the Market

5/22 2pm EST

Paul Tudor Jones Disagrees With Me

Second down day in a row yesterday and still seeing a bunch of names bump up against support. What makes this so hard is that after hours you get this….

So everything is green this morning. Remember, we have FOMC this afternoon so anything could happen.

I usually put zero credence in anything talking heads on CNBC are saying, except to maybe do the opposite. Paul Tudor Jones is different. Nobody can predict the market, but when he talks you should listen…..

As I often say, I trade based on what I see, not what I think. So a headline like this doesn’t mean I sell everything or go max short. Something I definitely want to keep in mind though. I do think the April 7th low was the low, but it would be normal to retest it. I would not be surprised if a retest ends up making a new low. Will worry about that when/if it happens though. In the meantime our ETF model portfolio stays conservative, my portfolio stays conservative, and the people we speak to we tell to be conservative.

Never a dull moment with this administration. I think nuclear is the future, not sure what they can do to speed it up though but I’ll go along for the ride….

I own OKLO, but think BWXT (which I added to) is a safer way to play nuclear. Have done some deep dives in the past, will do another one at some point.

NVO has been a tough one, as of right now this pushes them just over the 50 day…

Been seeing a bunch of Wall Street firms tout international over US, they started doing this after international stock had run of course. I don’t agree, so this was refreshing out of Morgan Stanley yesterday…..

Biotech Wreck

The biggest news of the day was probably the decimation of biotech. Trump’s tariffs and a new CBER director were the catalysts. I went short XBI and a couple of biotech companies. I had GPT do a deep dive to see if there may be some opportunities. Not usually a small biotech guy, but presented for your consideration…..

Below is a two-pronged look at how (1) the Prasad appointment and (2) looming pharma tariffs have rattled biotech, with both near-term sell-offs and longer-term implications—and a handful of beaten-down names that may merit a closer look.

1. FDA leadership shake-up: Dr. Vinay Prasad named CBER director

• Short-term impact:
  Within hours of the announcement, the SPDR S&P Biotech ETF plunged 2.7%, Moderna (MRNA) sank 10%, and Novavax (NVAX) gave back 6.7% as traders fled vaccine-linked names Barron's. U.S. futures also dipped on concerns broader biotech could suffer under a more skeptical regulator Reuters.

• Long-term outlook:
  Prasad’s track record of demanding randomized trials for each booster formulation suggests a tougher, slower pathway for updated vaccines and other biologics. Industry veterans warn this could raise trial costs, extend review timelines, and chill investment in mid-stage programs AP NewsAxios.

2. Trump-era pharma tariffs on the horizon

• Short-term impact:
  Markets wobbled immediately upon word that tariffs on drug imports will be unveiled within weeks, with U.S. futures sliding and large-cap drugmakers like Eli Lilly and Pfizer trimming 1–3% premarket despite Federal Reserve rate calm Reuters. Barron’s reports “major tariffs” talk has already dented sentiment across the sector—even though precise levies remain unclear Barron's.

• Long-term outlook:
  A 25% pharma tariff could tack on roughly $51 billion a year in U.S. drug costs if fully passed through, squeezing margins unless companies reshoring API production or securing exemptions ReutersHealthcare & Life Sciences Blog. Domestic manufacturers and API producers stand to gain from on-shore shifts, but globally dependent firms may face compressed profits and higher capex.

3. Potential buying opportunities amid the sell-off
As biotech indices retreat, several smaller drug developers with upcoming catalysts or niche franchises look attractively valued:

• Aurinia Pharmaceuticals (AUPH): Rare-disease specialist with a differentiated pipeline; trading near 52-week lows despite positive Phase III data for voclosporin Nasdaq.

• Heron Therapeutics (HRTX): Non-opioid pain therapy Zynrelef saw 44% sales growth in 2024; expanded label could drive 2025 upside Nasdaq.

• Esperion Therapeutics (ESPR): Cholesterol-lowering agent Nexletol has broad cardiometabolic appeal; solid cash runway into late 2026 Nasdaq.

• Pyxis Oncology (PYXS) & Plus Therapeutics (PSTV): Radiopharma innovators with mid-stage assets; poised for binary Phase II/III readouts over the next 12 months Nasdaq.

As broader biotech sentiment stabilizes, these names—down 15–30% YTD—offer defined binary risks with potential for outsized returns if data and regulatory paths align.

Bottom line:
The Prasad nomination and looming tariffs have catalyzed a classic “sell first, ask questions later” cycle in biotech. In the near term, expect continued volatility—especially in vaccine-centric and heavily imported API plays. Over the medium term, a bifurcation may emerge between companies that can shift production on-shore or command unique clinical assets (potential beneficiaries) versus those with high R&D burn and global supply dependencies (potential laggards).

China’s New AI Niche Could Upend Global Tech Investing. How to Get in on the Data Gold Rush.-Barron’s

Deep Dive: China’s AI Data Niche

Tanner Brown’s piece highlights a seismic shift in the AI value chain: training data, not just chips or models, is becoming the scarcest—and most valuable—commodity. China’s government‐backed push to lead AI by 2030 has created a massive addressable market for real-world, compliant datasets. Below is my read, plus a slate of winners and losers rated 1–10 on their positioning in this “data gold rush.”

My (GPT) Opinion

1. Data Is the New Oil. Hardware and LLM developers will still capture headlines (and margin), but without high-quality, domain-specific, privacy-compliant data, even the best models underperform in production.

2. China’s Home-Field Advantage. Beijing’s funding, the Personal Information Protection Law, and an ecosystem that can generate petabytes of user data give local players a moat: data sovereignty will remain a gating factor for foreign competitors.

3. Institutional Maturation. Regulatory tightening is painful in the short run, but it forces professionalization—favors specialists over generalist “data brokers.” Look for winners with defensible compliance and annotation workflows.

Winners & Losers

🏆 Winners

⚠️ Losers

Actionable Takeaways

1. Tilt Big-Tech China: Add incremental exposure to BIDU and 9988 on any pullback (< –3% intraday). Their ecosystems will anchor 80%+ of China’s enterprise AI data flows.

2. Own the Data Ops Layer: Position in Appen (APX.AX)—its hybrid local/foreign model is a rare compliant bridge for multinationals.

3. Architectural Plays: Keep PLTR as a core holding—its Foundry platform will be a primary aggregator of these new annotation services.

4. Avoid or Hedge:

   • C3.ai (AI): Sell into strength or use call overwrites—weak data moat makes it vulnerable if growth stalls.

   • Snowflake (SNOW): Wait on a strategic acquisition by a compliance-driven buyer; otherwise, shelfy valuation looks rich.

Bottom Line: The next leg of the AI boom won’t be won on chip speeds or model size alone, but on who controls, cleanses, and curates real-world data at scale under strict privacy rules. In China, that favors the Baidus, Alibabas, and specialist annotators—while pure-play model houses and generic data-warehouses play catch-up.

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