What Stocks I am Buying & Selling Right Now
532: Block Layoffs, Software Rout, AI Revolution
Good morning.
After Tuesday and yesterday’s posts, want to spend a bit of time going over some shifts I made in equity allocation given the volatility in the market.
The surprises keep coming.
Citrini research dropped a bomb AI post.
A bunch of different sectors saw insane volatility earlier in the week.
Then Kobeissi Letter responded.
Crypto bounced on the news that TerraForm was suing Jane Street and the classic “10am slam” selling routine paused temporarily.
Citadel responded to the Citrini piece with a lighter take on the future of AI and the economy.
Then yesterday afternoon Jack Dorsey’s Block XYZ 0.00%↑ surged almost 30% after announcing plans to cut over 40% of their workforce (4,000 people). The only explanation offered was that “intelligence tools” paired with flatter teams fundamentally change how companies operate. Dorsey is ahead of the AI curve.
Brutal and I think unfortunately this is going to be a canary in the coal mine for what comes next in corporate America. Other companies are absolutely going to follow suit in my opinion, even if some critics think this is a story about corporate bloat.
Next week we will do yet another deep dive into AI and the roles that are most insulated, but I have to be honest, at this point in time and with the Block news, this looks pretty grim lol.
If you haven’t read the guides I have put out on AI and job replacement, I would urge you to get on that ASAP:
I’m not trying to freak anyone out. But the fact is, we are getting more data points by the day right now and the majority of them suggest that in the next several years white collar jobs are going to be SEVERELY disrupted.
To top it all off, post NVDA 0.00%↑ earnings AI names are now dumping.
Makes no sense and every few hours we get a new dominant narrative driving the market.
This morning’s PPI came in hotter than expected, signaling that inflation pressures particularly in services and margins are still lingering. Short term what does this probably mean?
This pushes out rate cut expectations and keeps the Fed in a “wait and see” posture, which tends to pressure risk assets and high multiple tech.
More volatility for us!
On top of that we have the situation in Iran that might be presenting another leg higher for defense names in the short term. Polymarket odds sitting at 64% for a strike before March 31st. We have a metric shit ton of military hardware in the region.
This morning before the weekend though, I want to talk about a handful of equity opportunities that I am looking at. I shuffled some stuff around this week and trimmed some fat.
When it comes to my index and sector exposure I feel good:
tech
ai/storage/energy
defense
When it comes to individual names outside ETFS though, there are a few companies I am keeping a very close eye on with the drastic moves driven by the recent narratives.
They are kind of diamonds in the rough right now, some are names you have definitely heard of (at solid levels) and a few you probably have never heard of. We will also walk through some historical names we have talked about for a gut check.
Let’s get into it.
Axon Enterprise AXON 0.00%↑
Price: $550
52-week average: $650
We touched on Axon awhile back and it was a name I was closely watching given it had pulled back a good deal from ATHs.
Axon Enterprise is a public safety technology company best known for TASER conducted energy weapons and a growing ecosystem of law enforcement hardware and software.
The company sells body worn and in car cameras, digital evidence management platforms, and now cloud-based tools used by police departments and government agencies.
Over time, Axon has shifted from being a hardware centric business toward higher margin, recurring software and services tied to long term agency contracts. They also just absolutely crushed earnings.
I added more this week (after cutting my SSYS 0.00%↑ position) and plan to hold this through mid terms and the next presidential election. They continue to see strong momentum driven by large, multi-year public safety contracts.