Mega-Cap Earnings Take Centre Stage Amid AI Chip Rout

The Big Picture

Markets are on edge today. The Nasdaq 100 briefly fell into correction territory this week. Chip stocks are leading the slide. SK Hynix earnings disappointed, sending fresh shockwaves through the AI trade. Hedge funds face margin calls as losses mount. The FT reports prime brokers are fielding demands for collateral on AI-related positions.

Earnings Season Hits Its Peak

Tonight is the biggest night of the season. Microsoft and Meta both report after the close. Azure cloud growth and AI spending are the key metrics for MSFT. Meta bears are already active — options flow shows the stock in the top five for negative bets, with RSI at 43. Chipotle and Starbucks also release results today. Tomorrow brings Apple and Amazon — the two largest companies in the world by market cap. Mastercard reports Thursday morning. Friday sees oil majors ExxonMobil and Chevron close the week.

Bears Double Down on Distressed Names

Short sellers are not standing down. Hertz short interest hit 84.1% of free float — up 7.5 percentage points in a week. Chewy jumped 14.2pp to 80.4%. Wolfspeed sits at 80.6% with zero shares left to borrow, yet the stock is still up 162% in three months. Nvidia tops the negative options bets table. Its RSI sits at 42. Tesla carries the most extreme bearish signal, with RSI at 27 and the stock down 31% year-to-date.

Analyst Moves to Watch

CarMax was upgraded today, ending at least one firm's bearish stance. IQVIA received a target lift to $266.74. CoStar Group took the sharpest cut — consensus target fell 11.7% to $38.89. Upstart announced a $4 billion forward flow agreement with Castlelake, a notable sign of confidence in AI-driven lending.