HAPPY SUNDAY TO THE STREET

Remember Theranos?

The blood-testing unicorn that promised to diagnose 200 diseases from a finger prick, vaporized $9 billion in valuation, and sent its founder to federal prison?

Well, Wall Street just handed a $31 billion valuation to another blood-testing company.

Of course, this time, Natera (NTRA) actually has the trial data, the FDA filings, and a near-monopoly on detecting cancer recurrence before scans can.

Same pitch deck genre, different product.

Guess, sometimes, the later bird gets the worm.

— Brooks & Cas

THE HOTTEST NEW NVIDIA ALTERNATIVE

Detailed view of patterned silicon semiconductor wafer showing many integrated circuit dies in a geometric grid, colorful electronic texture for chip manufacturing and technology themes.

What: Cerebras (CBRS) priced its IPO at $185 a share Wednesday, 48% above its initial range, then jumped 68% on its first day of trading. Its market cap after two days on a public exchange: roughly $67 billion.

Why: For a company aggressively angling for a slice of Nvidia’s (NVDA) pie, the chart is awkward. Nvidia is expected to post just under $73 billion in data-center revenue next week, growing 86% year-over-year. Cerebras grew 96%, to $171 million. That makes Nvidia's AI chip business more than 400x the size of Cerebras’ and barely slowing. CBRS now trades at 134x trailing revenue, 5x Nvidia's multiple.

What Else: Customer concentration is the load-bearing risk. 86% of Cerebras's 2025 revenue came from two UAE government-backed outfits, and only 15% of its $24.6 billion backlog converts over the next two years. Futurum's Shay Boloor says the market is "already pricing in years of flawless growth." Cyclical chip businesses rarely deliver flawless anything.

Watch: CBRS's first earnings print as a public company. Timing got Cerebras here. Execution looks like its best path forward.

TRUMP’S WANTS CUTS. HIS FED CHAIR MIGHT NOT DELIVER

Washington DC, USA - February 27, 2011: The Federal Reserve System headquarters (Eccles Building) in Washington DC.  Founded in 1913, the Federal Reserve System (also known as the Federal Reserve) is the central banking system of the United States of America.

What: President Trump wants rate cuts. He presumably picked newfound Federal Reserve Chair Kevin Warsh to deliver them. But the bond market is making that complicated.

Why: Where to begin? The 2-year Treasury spiked above 4% overnight Thursday, a fresh year-to-date high, while 20- and 30-year yields both sit above 5%. Consumer price inflation is running at 3.8%, nearly double the Fed's 2% target. The Strait of Hormuz remains blocked. Energy is now the primary inflation transmission belt, and 2-year notes are the market's vote on whether the Fed is keeping up.

What Else: Long-end tightening cuts both ways. With 20- and 30-year yields above 5%, financial conditions are tightening without any FOMC action, which is exactly the cover a dovish chair could use to justify a short-end cut. RSM's Joseph Brusuelas notes that rising breakeven inflation rates suggest Warsh "will have to prepare for the chance that inflation will continue to rise."

Watch: The next CPI print and the 2-year. Warsh testified that "inflation is a choice." The data is asking him to pick.

THE CHART REMEMBERS

What: The SOX semiconductor index now trades 62% above its 200-day moving average, per Bank of America (BAC) strategist Michael Hartnett. That is more than double the Dow's spread before Black Monday 1987 and Black Tuesday 1929.

Why: The closer matches are uglier. The Nasdaq carried a 55% spread into the dot-com crash in 2000. The French CAC All Tradable hit 73% before the Mississippi Bubble burst in 1720, when colonial-company shares were briefly accepted as legal tender. Micron (MU), AMD (AMD), Marvell (MRVL), and Intel (INTC) have all gone parabolic since late March. Hartnett's read: "Here we go again."

But: The revenue side complicates the comparison. Alphabet's (GOOGL) Q1 cloud revenue grew 63% year-over-year. Amazon's (AMZN) AWS hit $37.59 billion, up 28%. Microsoft's (MSFT) Azure-inclusive cloud unit posted $34.68 billion, up 40%. Howard Marks, citing Derek Thompson, notes the railroads and broadband build-outs were also bubbles that "transformed America."

Watch: The SOX's distance from its 200-day and the S&P advance-decline line. Sometimes bubbles permanently push the envelope wider. Sometimes they pop.

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