Tesla is still dominating. In the first half of 2026, they secured over 52% of the U.S. EV market. 1. Tesla: 52.3% — 242,100 units sold 2. Chevrolet: 6.1% — 28,267 3. Hyundai: 5.8% — 26,936 4. Cadillac: 4.7% — 21,855 5. Rivian : 4.7% — 21,770 6. Toyota: 4.7% — 21,767 7. Ford: 3.6% — 16,606 8. Kia: 2.7% — 12,627 9. BMW: 2.4% — 10,790 10. Subaru: 2.2% — 10,064 11. Honda: 1.8% — 8,407 12. Lexus: 1.7% — 7,814 13. GMC: 1.4% — 6,645 14. Lucid: 1.1% — 5,208 15. Volvo: 0.9% — 3,964 16. VW: 0.8% — 3,768 17. Mercedes: 0.6% — 3,010 18. Porsche: 0.6% — 2,967 19. Other Brands: 0.6% — 2,596 20. Nissan: 0.4% — 1,774 21. Audi: 0.4% — 1,697 22. Genesis: 0.1% — 560 23. Dodge: 0.1% — 534 24. Jeep: 0.1% — 418 25. Mini: 0.1% — 307 26. Acura: 0.0% — 108 (Data Via Cox Automotive Q2 2026 EV sales)

Last Sunday, I previewed caution on capex spenders & more optimism on their customers. This past wk, Mag7 (spenders) -5.8%, while Semi Index (customers) +1.2% with S&P -0.6%. This wk, we get earnings from four of the Mag7 for a more complete picture. Last week, WTI +8% and yields across the 2-30 yr curve increased by 9-15 bps, which was also a major issue for equity markets. De-escalation in Iran over the weekend should help both oil prices and yields during the start of this upcoming week. I continue to believe November 3rd mid-terms put a powerful impetus on the US administration to get oil prices down well before then. This is my current framework for AI investing: Positives: 1) The advent of Agentic AI on January 30th with the formalization of OpenClaw will drive 10-100x more token production. 2) Microprocessor vendors benefit in the move from 8 to 1 GPUs per CPU to ~unity in the move to Agentic AI. 3) The current philosophy of the hyperscalers that they cannot afford to lose the AI race keeps me more bullish on the recipients of that capex spend than the spenders. Negatives: 1) AI native revenues will be determined in the near-term by the trade-off between the top 1% of companies focusing on controlling their AI spend vs the ramp of the other 99% given the move from token maximization in March to token minimization by June. 2) Part of that control of AI spend will come at the expense of non-security software companies, IT services and headcount. 3) The cost of money is also more expensive which is a headwind to equity multiples. 11 of the major central banks have gone from cutting rates from roughly 2.7% in July of 2025 to 2.4% by early February to raising them to 2.6% today. At the same time, 10 year treasury yields across the 11 associated countries stayed flattish at roughly 3.2% from July of 2025 through February and has now risen to 3.8%. For megacap earnings this week, my belief is much like last week, ROIC (the interplay between capex and future EPS estimates) is likely to have an outsized impact on the near-term direction in stock prices. $META should have benefitted from increased engagement during the World Cup. But Meta revs grew 27% in Q3:25 vs 22% in Q2:25 creating tough comparisons for the Q3:26 guide. In addition, a potential launch of a public cloud and LLM API may embolden Meta to increase capex spend. Fortunately, valuation in the teens is low vs 22x CY26 PE for the S&P. $MSFT Azure has a high bar given Google GCP revs accelerated from +63% y/y in CQ1 to 82% in CQ2. But I wonder if the focus on AI cost control is an increasing tailwind for Co-Pilot. It operates natively within the Microsoft 365 ecosystem where enterprise work already happens. But Microsoft owns 27% of OpenAI which I remain negative on given they are caught between Google in consumer AI and Anthropic in enterprise. $AMZN AWS rev growth also has a high bar to clear due to GCP. In addition, higher oil prices are likely to be pressuring the logistics cost of their e-commerce business as well as consumer purchasing power. The shift of their 4 day Prime event to late June from early July should benefit Q2 but at the expense of Q3 guide. $AAPL is benefitting from the AI capex spend of others, especially their partner, Google. But I believe CQ3/CQ4 estimates are too high for both revenues and margins (due to rising semiconductor prices) and valuation at a 37x PE is expensive. From a longer-term perspective, I remain bullish on the potential upgrade cycle from a foldable phone with AI enabled Siri. Best of luck in the week ahead.

CHOOSE YOUR FIGHTER Warren Buffett vs Stanley Druckenmiller Buffett stepped down as Charman of Berkshire Hathaway $BRK.B today. Druckenmiller has never had a losing year in more than 30 years. Here are their full portfolios as of Q2 2026. BERKSHIRE HATHAWAY - Apple $AAPL: 22% - American Express $AXP: 17% - Google $GOOGL: about 12.6% across both share classes - Coca-Cola $KO: 11% - Bank of America $BAC: 9.2% - Chevron $CVX: 4.7% - Occidental $OXY: 4.3% - Chubb $CB: 3.9% - Moody's $MCO: 3.7% - Kraft Heinz $KHC: 2.6% - DaVita $DVA: 2.1% - Delta $DAL: 1.8% - SiriusXM $SIRI: 1.2% - VeriSign $VRSN: 0.8% - Kroger $KR: 0.7% - Liberty Live $LLYVA: about 0.6% across both share classes - Ally $ALLY: 0.4% - Lennar $LEN: 0.4% - New York Times $NYT: 0.4% - Capital One $COF: 0.2% - Louisiana-Pacific $LPX: 0.1% - Nucor $NUE: 0.1% - Macy's $M: 0.1% - NVR $NVR - Jefferies $JEF - D.R. Horton $DHI DUQUESNE FAMILY OFFICE - Natera $NTRA: 17% - Insmed $INSM: about 5.7% in shares and calls - Taiwan Semi $TSM: 5.4% - Brazil ETF $EWZ: about 5.1% in shares and calls - Amazon $AMZN: about 4.6% in shares and calls - STMicro $STM: 4.5% - S&P 500 Equal Weight $RSP: about 3.7% in calls and shares - Fox $FOXA: about 2.8% across both share classes - YPF $REPYY: 2.7% - CDW $CDW: about 2.7% in shares and calls - BBB Foods $TBBB: 2.3% - Google $GOOGL: 2.3% - Seagate blockstack:native: 2.3% - United Airlines $UAL: 2.1% - Sea $SE: 2.0% - NewAmsterdam Pharma $NAMS: 2.0% - Russell 2000 ETF $IWM: 1.9% in calls - Sandisk $SNDK: 1.5% - Revolution Medicines $RVMD: 1.4% - S&P 500 ETF: 1.3% in calls - Bitdeer: 1.2% - CRH: 1.1% - Delta: 1.1% - Tesla $TSLA: 1.0% in calls - Fluor: 1.0% - D.R. Horton: 0.9% - Coupang: 0.9% - AMD: 0.8% - Palo Alto Networks: 0.8% - Cleveland-Cliffs: 0.8% - Hut 8: 0.7% - Caris Life Sciences: 0.6% - Argentina ETF: 0.6% - Woodward: 0.5% - Meta: 0.5% in calls - Nuvation Bio: 0.5% - Protagonist Therapeutics: 0.5% - Roku: 0.5% - Cavco: 0.5% - ADMA Biologics: 0.4% - Hyperliquid Strategies: 0.4% - Rambus: 0.4% - Rhythm Pharmaceuticals: 0.4% - Champion Homes: 0.4% - Daktronics: 0.4% - PureCycle: 0.4% - Southern Copper: 0.4% - Linde: 0.4% - Entegris: 0.4% - Teva: 0.4% - Unity: 0.4% - Aeva: 0.4% - Riot Platforms: 0.4% - Qnity Electronics: 0.4% - Equinix: 0.4% - Lam Research: 0.4% - Definium Therapeutics: 0.3% - Belite Bio: 0.3% - 10x Genomics: 0.3% - Wabtec: 0.3% - Eli Lilly: 0.3% - Xenon Pharmaceuticals: 0.3% - Olema Pharmaceuticals: 0.2% - Repligen: 0.2% - Rocket Companies: 0.2% - Baidu: 0.2% - Arm: 0.2% - Carvana: 0.2% - Reddit: 0.2% - Alcoa: 0.2% - Thermo Fisher: 0.2% - Danaher: 0.2% - F5: 0.2% - Vista Energy: 0.2% - Skeena Resources: 0.2% - JBS: 0.1% - Monte Rosa Therapeutics: 0.1% - Relay Therapeutics: 0.1% - DBV Technologies: 0.1% - CCC Intelligent Solutions: 0.1% - UWM Holdings: 0.1% - Navitas Semiconductor: 0.1% - Solstice Advanced Materials: 0.1% - FTAI Aviation: 0.1% - Beam Therapeutics: 0.1% - Aurora Innovation: 0.1% - IREN: 0.1% - Grupo Financiero Galicia: 0.1% - Wave Life Sciences: under 0.1% Both own Google, Delta and D.R. Horton. Neither owns Nvidia $NVDA.

Last wk, S&P/Nas/Mag7 were +1.2%/+1.7%/+4.0% despite oil +4% & bond ylds +7bps on Iran flare-up. 2 days remain during this seasonally favorable time from the last 3 trading days of June through first 9 days of July. Earning season starts w/ big banks on Tuesday. As I first posted about on June 28th and reiterated on July 5th, the seasonality is historically very favorable from the last three trading days of June through the first nine trading days of July during which the S&P/Nasdaq have advanced 1.6%/2.5% and been up 78% of the time since 1985. The S&P/Nasdaq is up 3.0%/3.6% during the first 10 trading days of this time period in 2026 already. But for the heart of the AI trade, the Semiconductor (SOX) Index is down 7.0% during these last 10 trading days on fears of a “speed bump” that I have been posting about since 6/28. For the AI trade going forward, two separate thoughts with two different implications are beginning to coalesce in my mind. The first thought is that AI revenue growth for the leading LLM models is likely to hit a “speed bump” and slow in the September quarter. Last week, $SPCX and $META released new LLM models that both closed much of the gap with the leading edge models from OpenAI and Anthropic. But Meta plans to price their model at roughly 1/4th the cost of the two leaders with SpaceX aggressive as well. This is particularly relevant as companies switched from token maxing in March to token minimization in June. As an example, the CEO of Coinbase posted on June 26th, “How to keep AI spend flat while token usage grows exponentially... Putting this into practice has cut our AI spend nearly in half, while our token usage continues to grow.” Sam Altman on Thursday: “we have heard enterprises on their concerns about AI costs, and 5.6 sol is a huge step forward for dollars-per-task, as are terra and luna”. But on a positive note, two more public cloud providers have been recently added to the four that already existed of $AMZN, $GOOGL, $MSFT and $ORCL. SpaceX in the past month raised over $100B in equity plus debt and plans to spend hundreds of billions to attack the $28.5 trillion TAM they talked about in their IPO prospectus. News surrounding Meta last week seems to imply that they are launching a cloud offering not because they have excess compute but so 1) they can double their compute spend from 7 MegaWatts in 2026 to 14 MegaWatts in 2027 and 2) have capacity to sell their Muse Spark LLM. So in summary, with this seasonally favorable period of time for the overall market coming soon to a close, I believe cutting back excess exposure is prudent. Reaction by investors on Tuesday to bank earnings which should be strong, may give us a good tell as to the risk vs reward at current levels over the shorter-term. As for the AI trade, I believe selectivity is key as we work our way through the “speed bump” and the positive implications of 4 aggressive public cloud vendors now becoming six versus the negatives of token maxing in March turning to token minimization in June. All the best in the week ahead.

🇺🇸US DATA RUNS HOT: INFLATION STICKY, DEMAND FIRM INFLATION • Headline PCE MoM: +0.2% vs +0.1% est.; prior -0.1% • Headline PCE YoY: +3.7% vs +3.6% est.; prior +3.7% • Core PCE MoM: +0.2% vs +0.2% est.; prior +0.1% • Core PCE YoY: +3.3% vs +3.3% est.; prior +3.3% GDP • Q2 GDP annualized: +1.5% vs +1.5% est.; prior +1.5% • Personal consumption: +3.4% vs +3.2% est.; prior +3.2% • GDP Price Index: +6.4% vs +6.2% est.; prior +6.2% • Core PCE QoQ: +3.6% vs +3.4% est.; prior +3.4% INCOME & SPENDING • Personal income MoM: +0.4% vs +0.2% est.; prior +0.2% • Personal spending MoM: +0.2% vs +0.1% est.; prior +0.3% • Real personal spending MoM: 0.0% vs 0.0% est.; prior +0.4% DURABLE GOODS • Durable goods orders MoM: +1.1% vs +0.5% est.; prior +0.5% • Durables ex-transportation: +0.4% vs +0.6% est.; prior +0.7% • Core capital goods orders: +0.2% vs +0.7% est.; prior revised to +1.7% • Core capital goods shipments: +1.4% vs +1.0% est.; prior revised to +2.4% BOTTOM LINE: Inflation remains sticky while consumer demand and headline durable goods beat expectations. GDP growth was in line, but stronger price pressures could keep the Fed cautious on rates.

US MORTGAGE DEMAND FALLS AS RATES HIT 6.85% US mortgage applications fell 2.7% last week, according to the Mortgage Bankers Association. Refinancing applications dropped 6.2%, while home-purchase applications slipped 0.2%. The average 30-year mortgage rate rose six basis points to 6.85%, adding further pressure on borrowers and the housing market.

China’s retail sales of consumer goods climbed 1.2% in the first seven months from the same period last year to CNY28.78 trillion (USD4.27 trillion), the NBS said today. Excluding automobiles, the figure advanced 2.7% to CNY26.51 trillion (USD3.93 trillion). Retail sales of consumer goods edged up 0.6% to CNY3.9 trillion (USD578 billion) in July.

HERE IS HOW THE MARKET CLOSED TODAY Five of eleven sectors finished green. Technology was the worst at -1.1%, Basic Materials -1.8% and Real Estate -1.1% behind it. Chips led the selling: - Lam Research $LRCX -5.6% - Intel $INTC -5.6% - Micron $MU -4.7% - Advanced Micro Devices $AMD -3.4% - Nvidia $NVDA -2.4% Software and hardware went with them. Oracle $ORCL -5.2%, Dell $DELL -5.4%, Hewlett Packard Enterprise $HPE -6.2%, Palantir $PLTR -2.2%. Apple $AAPL +3.6% was the largest megacap gainer, the day after its iPhone event. Google $GOOGL +0.6% and Microsoft $MSFT +0.2% held up. Meta $META -1.4% and Tesla $TSLA -1.2% did not. Defensives caught the rotation. Philip Morris $PM +2.2%, AbbVie $ABBV +1.6%, Uber $UBER +2.1%, Intuitive Surgical $ISRG +2.0%. Consumer Defensive was the best sector at +0.3%.

S&P 500 GUIDANCE SKEWS POSITIVE Of 252 companies providing a guide direction: Raised: 173 Maintained: 59 Cut: 20 FY EPS: 38% above Street, median spread +0.6% Next-quarter EPS: 43% above, median spread +1.4% FY rev: 41% above Street, median spread +0.5% Next-Qtr rev: 57% above, median spread +2.7% Near-term revenue guidance remains the strongest.

Last wk, S&P/Nas/Mag7 +0.4%/+0.1%/-0.8%. Cooler inflation (CPI, PPI) & economic data (consumer sentiment, retail sales) but +5% oil steepened the yield curve but lowered odds of a rate hike. Looking forward, I continue to believe the impact of Agentic AI with the advent of OpenClaw on January 30th has at least a year to run: 1) Token production has gone up roughly ~7.5x from the end of January more than offsetting the nearly 50% token cost reduction seen since open-weight model usage started to take off in May. 2) Combined annualized run-rate revenues for OpenAI and Anthropic which ended last year at $29B seems to be around $100B currently with Anthropic getting profitable in Q2. 3) Capex from the Big6 hyperscalers accelerated from 84% y/y/ in CQ1 to 92% in CQ2 with forecasts for nearly 100% in Q3. But this is being supported by cloud revenue growth at the 3 Big Public cloud vendors of $AMZN $MSFT $GOOGL accelerating from 23% y/y in Q1:25 to 35% in Q1:26 to 43% in Q2:26. Arguable more important is public cloud operating margins expanded from 34% to 37% and 39% during those time periods. 4) The $500B financing deal backstopped by up to $125B from $NVDA adds even more lower cost money to fund AI capex spend for the non-hyperscaler players. Nvidia gained 0.5% last week. 5) The liquidation of Situational Awareness and retail accounts during July cleared out some of the frothiness in the AI related names In terms of negatives: 1) The cost of money (yields on government bonds) remain near the highest levels for the 30 yr tenor at 5.3% since 2007. 2) Given large scale offensive US military actions are seemingly off the tablein favor of financial sanctions, probably driven by current election polls, I now believe Iran is likely to hold the Strait of Hormuz hostage until past the US mid-terms. This would be akin to them releasing the US hostages in 1981 (they were held for 444 days) just hours after President Reagan was sworn in replacing Carter. There were severe financial sanctions then also. 3) Since 1990, which happens to be the Gulf War, from the end of July through November 9th, which covers the reaction to all mid-term results, the performance is worse than non mid-term years. For mid-term years the median S&P500 gain from 7/31-11/9 is 0.9% with gains 56% of the time but the median peak loss from 7/31 is 6.2% (intra-period median peak loss of 9.9%.) For non mid-term years the median gain is 2.7% from 7/31-11/9 with gains 59% of the time and the median peak loss from 7/31 is 3.5% (intra-period median peak loss of 5.2%.) This year with the momentum seen by the Socialists which are not big business friendly, I see more risk than normal. 4) The easy money on the AI technical rebound from oversold levels on 7/29 due to the forced sale by Situation Awareness is probably over. There were negative stock reactions to headline beat and raise earnings on both revs & EPS for AI infrastructure winners $CSCO (-8% for the week but still up +45% YTD), $AMAT (-6%/+97%) and $COHR (-14%/+77%). While negatives can always be found, their biggest crime was arguably their recent bounce from 7/29-8/7 of 8%, 24% and 71% respectively and their market beating YTD gains. In summary, I remain bullish. Even from the end of July through November 9th during mid-term years since 1990, the S&P has an additional median gain of 4.2% to its peak before giving some of that back closer to the election. Given some of the negatives, especially the reaction to solid earnings data, I would add some hedges back on further market gains and get more selective. Consumer discretionary hedges should also make sense if oil is higher for longer. I believe value should continue to accrue to the infrastructure layer which includes 1) the public cloud vendors such as Amazon, Microsoft, Google and 2) the semiconductor companies. $INTC, my favorite semi company, still gained 0.8% last week despite: 1) a $20B equity offering which causes ~5% dilution and 2) being up 178% YTD. This clears the funding overhang. All the best in the week ahead.