In Today’s Issue:
The streak is over
PLTR earnings
Winners and losers from volatility in the oil market
and more……..
Next Webinar:
Identifying and Profiting From the Top Themes in the Market
5/22 2pm EST
The Streak is Over
SELL IN MAY AND GO AWAY
OR
BUY IN MAY AND PRAY 🙏
— #That Martini Guy ₿ (#@MartiniGuyYT)
12:43 PM • May 5, 2025
The green streak had to end at some point. Looked like it could be much worse, but kind of ended with a whimper. So far this morning the bears look more serious, we will see.
I don’t disagree with Jefferies here….
Given markets rebound post Liberation Day debacle, time is running out as short-term positive expectations on the tariff front are already being priced and unless there is a meaningful reduction in Tariff Tantrums …further sentiment-based rallies are likely to be more difficult or to remain short-lived…
-Jefferies Daily Macro
Meanwhile, ignore stuff like this. It doesn’t matter the definition……
As long as you have the ability to be nimble, which everyone should, then you trade based on what you see, not what you think.
I have significantly slowed down my purchase of new longs and have been now slowly adding back to shorts. What I see is a bunch of names bumping up against resistance with no good reason to blow through it…
For example, SPY bumping up against the 200 day moving average.
The big earnings news last night was PLTR (deep dive below), which is off a bit over 8% so far this morning. This was a big risk on name and will probably dampen retail sentiment. Chart looks like a classic double top and I don’t own it but may look to if it settles in some support area.
At 98x sales, you BETTER beat expectations by a mile! PLTR - dropped 9% after hours despite raising Sales Forecast on strong demand for its AI products.
-Bear Traps Report
As part of the overall risk off move the past two days, gold is moving back up. Interestingly for the Bitcoin bulls, Bitcoin is pretty stable here….
Someone should have thought to put them both in an ETF together :)
If these public companies keep buying bitcoin and refusing to sell, eventually bitcoin will be repriced in the market.
Just a matter of time.
— #Anthony Pompliano 🌪 (#@APompliano)
12:29 PM • May 5, 2025
Speaking of crypto, I mentioned yesterday how I missed CEP for SPCX (but I got the other 2 Cantor SPACs). It sold off yesterday and pulled an undercut and rally at the 10 day. Still too risky for the fund with a $10 floor, but I did buy it personally….
Again, this is a risky one, currently it won’t go much below $10, after the merger though the floor comes out and it could do anything.
FOMC is tomorrow and options look to be pricing this as a nothing burger. Could be right, but I think all ears will be on the language and the presser. Nobody expects an interest rate move, but the language could move the market a lot…
Palantir Earnings Big Picture
I think PLTR is an extremely important stock because of it’s spot in the AI boom and the fact that a lot of retail loves it. I had GPT take a deep dive on the earnings.
1. Palantir’s Big Picture Q1 & Guidance
Revenue: $884 M vs $862 M consensus (+2.5%)
Full-Year Guide Raised: $3.890–3.902 B vs $3.741–3.757 B prior; consensus $3.752 B
U.S. Commercial Growth Boost: 68% guide (vs 54% prior); actual +71% YoY ($255 M)
Government Sales: $373 M (+45% YoY)
EPS: $0.13 adj. (in-line)
Share Reaction: –9% after hours (market wanted “more juice” given 64% YTD gain)
Key Takeaway: Growth remains “ferocious,” but at PLTR’s ~40× forward P/S, even strong beats need to be spectacular to move the needle.
2. Stock Implications for PLTR
Valuation Risk: At ~40× P/S, PLTR must sustain 60–70%+ growth to justify multiple. Expect high volatility and potential multiple contraction if guidance isn’t continually raised.
Buy-the-Dip vs. Wait:
Bullish View: If you believe “operational AI” stays hot, any pullback toward the 10 day moving average represents a buying opportunity.
Bearish View: If growth slows to sub-50% or larger tech sell-off hits, PLTR could retest the 50 day moving average on multiple compression.
3. AI Ecosystem Winners & Losers
Below are stocks poised to win (or struggle) off PLTR’s earnings beat but tepid reaction. Each rated 1–10 on investment potential over the next 6–12 months.
🚀 AI “Infrastructure & Deployment” Winners
Ticker | Name | Rationale | Rating |
|---|---|---|---|
NVDA | NVIDIA | Ubiquitous GPU provider for AI training/inference; supply constrained into 2026. | 9/10 |
MSFT | Microsoft | Azure AI + Palantir Foundry partnership; secular cloud + AI synergy. | 8/10 |
AMZN | Amazon | AWS BlackRock-style AI stack & DataZone; benefitting from every enterprise AI rollout. | 7/10 |
GOOGL | Alphabet | Google Cloud AI tools & Vertex AI; still underpenetrated vs. peers in hybrid enterprise wins. | 7/10 |
ACN | Accenture | System integrator for large-scale Foundry deployments and AI modernization programs. | 7/10 |
⚠️ Pure-Play AI/Data Dogs to Watch
Ticker | Name | Rationale | Rating |
|---|---|---|---|
AI | Elevated valuation vs. patchy customer adoption; risk of renewed multiple compression post-PLTR. | 3/10 | |
SNOW | Snowflake | Strong data-cloud story but underdelivering on AI-driven monetization; expensive at ~40× P/S. | 4/10 |
PATH | UiPath | RPA tailwinds intact, but limited for “heavy” AI workloads; risk of churn if automation stalls. | 5/10 |
DDOG | Datadog | Observability leader, but premium already reflects AI-Ops potential; upside modest. | 5/10 |
4. Client & Supplier Playbook
Palantir’s ramp touches dozens of sectors—here are key names positioned to benefit:
Role | Ticker | Name | Thesis | Rating |
|---|---|---|---|---|
HW Supplier | NVDA | NVIDIA | GPUs for AIP training & inference; every new Foundry rollout boosts datacenter orders. | 9/10 |
Cloud Host | MSFT | Microsoft Azure | Preferred host for Foundry; deeper entrenchment via AI-optimized SKUs and co-sell motions. | 8/10 |
Integrator | ACN | Accenture | Implementation partner on Foundry and AI automation—fees scale with PLTR’s client adds. | 7/10 |
Defense OEM | RTX | Raytheon Technologies | Prime Palantir defense customer; joint bids on large Gov’t AI/ISR programs. | 7/10 |
Health Tech | ORCL | Oracle | EMR data hosting & integration synergy as hospitals (~30% of U.S. beds) adopt Foundry. | 6/10 |
5. Actionable Recommendations
Hold/Accumulate NVDA, MSFT on any dips (< –3% intraday) to ride the “operational AI” wave—these have the best risk/reward.
Trim PLTR around if you need index exposure; redeploy into NVDA or MSFT. If you believe in secular scale, add on a pullback.
Underweight Pure-Play AI (C3.ai, Snowflake) that lack enterprise-wide deployment platforms and face margin pressure if growth slows.
Buy RTX, ACN for indirect leverage to Foundry adoption—these trade around reasonable multiples (RTX ~17× PE, ACN ~22× PE) and provide diversified cash flows.
Bottom Line: Palantir’s results underscore that “AI without action” remains just hype. The winners are those providing the infrastructure, cloud, and integration muscle to scale enterprise AI—while expensive, they have the balance-sheet heft and sticky revenue models to justify premium multiples. Conversely, pure-play software names with lofty valuations face the greatest downside if every quarter doesn’t continue to blow past expectations.
Oil Market Volatility Creates Opportunity
Energy, specifically energy needed to power AI has been one of my favorite themes. Luckily I avoided the temptation to bet on “drill baby drill” for Trump II as I know he also wanted much lower oil prices. Oil drilling stocks haven’t gone anywhere….
With the massive drop we have seen in oil prices over the past couple of days…..
I wanted to do a deep dive on the implications for oil, and natural gas. Longer term natural gas interests me much more, but short term there looks to be an opportunity in some of the beaten down oil stocks.
Oil Outlook: Supply Up, Prices Down
Executive Summary
Oil: OPEC+ is adding ~411 kbpd of supply in June, surprising few fundamentals‐driven investors but likely to trigger further pressure on “oil-levered” equities unless demand picks up markedly.
Natural Gas: The core U.S. gas thesis remains intact—producers are sticking to 2025 activity plans, export demand (LNG/NGL) is ramping, and macro data (BP, XOM, MSFT) continue to support a bullish skew.
Winners: Integrated majors (XOM, CVX, COP), select refiners (VLO, SHEL), and tanker names (FRO, DHT) on the oil side; U.S. gas names (AR, EXE, RRC) and LNG/service providers on the gas side.
Losers: Pure‐play upstream E&Ps (e.g., EOG) and NGL‐heavy producers without export flexibility, which will see margin erosion if crude/NGL prices remain under pressure.
Why Oil is Under Pressure
OPEC+ Supply Hike
June’s voluntary cut unwind (+411 kbpd) was telegraphed by KSA “smoke signals” and dovetails with Trump’s growth agenda. But with CFTC positioning already neutral–long, the extra barrels risk pressuring WTI below $70/bbl unless demand data surprises to the upside.Demand Pull Needed
Retail and generalist flows have ignored the recent rally; without fresh catalysts (strong U.S./China PMI, lower COVID restrictions in Asia), oil equities will stay pinned.Volatility Skew: Left-Tail Risk
Options markets remain skewed to protect against further price slides, underscoring the asymmetric downside in crude.
Oil-Exposed Recommendations
Strategy | Names | Why & How to Trade |
|---|---|---|
Overweight Tankers | Frontline (FRO), DHT Holdings (DHT) | Pure-play VLCC exposure to rising Middle East volumes—buy FRO on dips toward $6.50; DHT on dips <$2.80. |
Tactical Refiners | Valero (VLO), Marathon Petroleum (MPC) | Crack spreads can widen if crude falls faster than product cracks—add on any rally in diesel cracks above $25/bbl. |
Underweight Pure Upstream | EOG Resources (EOG), ConocoPhillips (COP) | Below $70 WTI, cash flow erosion accelerates—trim or hedge with put spreads (e.g. EOG Jul $120/$100 put spreads). |
Core Integrates (Neutral Tilt) | Exxon Mobil (XOM), Chevron (CVX) | Dividend safety and diversified earnings cushion you—use small “pocket” long exposures on 2% pullbacks. |
Natural Gas: Tight Fundamentals, Right-Tail Upside
2025 Activity Plans Intact
AR, EXE, RRC all reiterated 2025 production guides; EXE will add two Haynesville rigs in 2H25 to meet soaring LNG demand.LNG & NGL Export Strength
BP and XOM data confirm robust U.S. LPG premiums—tariff fears haven’t dented realizations. U.S. LNG offtake is ramping, supporting Henry Hub.Volatility Skew: Right-Tail Opportunity
Gas bulls benefit from unexpected cold snaps or export surges.
Gas-Exposed Recommendations
Strategy | Names | Why & How to Trade |
|---|---|---|
Core Appalachia | Antero Resources (AR), Range Resources (RRC) | “Equity bond proxies” with optional upside—buy AR on dips to $17.50; RRC on dips to $15.00 for 7–8% yield plus gas optionality. |
Haynesville Optionality | EXCO Resources (EXE), ExxonMobil (XOM) | EXE trading 6× cashflow—add on any pullback below $14; XOM gives cheap LNG leverage—buy on dips <$108. |
Service Safeguards | Schlumberger (SLB), Halliburton (HAL) | Contract pricing power in core basins—add small stakes on any weakness in energy-services ETFs. |
Select Upstream | Comstock Resources, Sabine Oil & Gas | Early movers in LNG‐linked plays—take starter positions (3–4% portfolio) on pullbacks toward year‐to‐date averages. |
Macro Hedges & Risk Management
Crude Downside Hedge: Buy ICE Brent Jul–Oct calendar spreads to cap oil losses.
Watchpoints:
China Demand: A surprise drop in refinery runs or LNG imports is the biggest catalyst for a commodity selloff.
Fed Policy: Sticky rates into summer will pressure mid‐cap E&Ps and refiners—adjust position sizes accordingly.
Bottom Line:
Play the curve, not the commodity. In oil, lean on tankers and refiners for relative value while avoiding pure upstream stress below $70 WTI. In gas, double down on free‐cash‐flow leaders (AR, RRC) and Haynesville optionality (EXE, XOM). Overlay macro hedges to protect against China slowdowns and Fed‐driven volatility.
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