DHUnplugged #805: Space Race

Another good month – investors are giddy.

Oil – CRITICALLY LOW inventory (Inside Baseball).

Fed governor admits inflation is hard to control.

A major name says they are reducing stocks – but are they really?

Announcing the Winner of the CTP for Salesforce (CRM).

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Warm-Up
- Another good month - investors are giddy
- Oil - CRITICALLY LOW inventory (Inside Baseball)
- Fed governor admits inflation is hard to control
- A major name says they are reducing stocks - but are they really?
- Announcing the Winner of the CTP for Salesforce

Markets
- Huge reversal in Software stocks
- A few names on the move - and moving BIG!
- SpaceX IPO - could drain markets
- More AI valuations through the roof

Pizza Mouth !

Reversal
- Software stocks bounced this week on strong results from Snowflake and Okta, which both recorded their best days on record.
- The results signal that investors may have been too quick to declare the end of software with the emergence of artificial intelligence.
- Even as AI displaces certain tools and job functions, many software companies continue to show growth, assisted by their own AI products.
- The iShares Expanded Tech-Software exchange-traded fund rose 8% this week and closed May up 21%, the best monthly performance for the ETF since October 2001.
- With this month’s rally, the iShares software ETF is only down 3.8% for the year, still badly trailing the Nasdaq, which has gained 18% in 2026.

Snowflake
- Amazon said Wednesday that its cloud division has landed a $6 billion spending commitment from Snowflake, which includes the use of the company’s custom silicon and chips for artificial intelligence.
- Snowflake’s purchase of services and technology from Amazon Web Services will occur over five years, according to a press release about the agreement.
- Snowflake intends to expand its use of Amazon’s Graviton general-purpose chips, as well as cloud-based graphics processing units for AI.
- Snowflake and Amazon are frenemies - they compete but also partner with each other.
- Stock up 36% on this news

DELL!!!!!!!!!!!!
- Dell Technologies Inc. shares surged due to an outlook for annual sales that far surpassed expectations on demand for servers that power artificial intelligence work.
- Revenue in the fiscal year ending in January 2027 will be about $167 billion, including $60 billion from the sale of AI servers, topping analysts’ average estimate of $142.1 billion.
- The company booked $24.4 billion in AI orders and generated $16.1 billion in AI server sales in the quarter ended May 1, with Chief Operating Officer Jeff Clarke saying “The AI opportunity shows no signs of slowing.”
- The shares surged 33% to $420.91 at the close Friday in New York, the biggest single-day increase in the more than seven years since the hardware maker returned to the public markets after a five-year hiatus as a private firm.
- Up 150% YTD

More Dell
- New XPS 13 at $699 targets price-sensitive market
- Aims to compete with MacBook Neo, lower-end Windows devices
- Launch amid global memory chip crunch to gain market share
- WINING OVER JCD:
-- 13.4-inch screen (very compact footprint)
Options: 2K / 2.5K LCD (120Hz)
OLED touchscreen (higher contrast)|
- Very thin bezels ? almost edge?to?edge screen
- Weighs 2.2 lbs - one of the lightes out there and a rival to Apple's Macbook Neo

Infighting
- OpenAI may release multi-chip AI software, challenging Nvidia's (NVDA) ecosystem advantage, according to The Information
- Oh, and NVDA is now releasing a CPU for PCs that is aggrevating Intel and AMD

Kaboom!
- Blue Origin’s New Glenn rocket exploded in a massive fireball while undergoing a test on a Florida launchpad, dealing a major setback to the company.
- The explosion is the latest blow to New Glenn's reputation as a reliable alternative to SpaceX’s Falcon 9, and Blue Origin’s launch schedule is certain to suffer significant delays.
- The incident will also affect Amazon’s ambitions to build out its Leo satellite network and may delay Blue Origin's role in NASA’s Artemis program, which aims to send humans back to the moon.
- As important as it will be for Blue Origin to diagnose the cause of the rocket explosion, it could take many months to repair its launchpad in Florida.

Taking Down - Really?
- BlackRock Inc. is trimming its bet on stocks across its model-portfolio business as US equities surge to record highs following a strong earnings season.
- The firm cut its overweight position in equities from 3% to 1%, triggering billions of dollars of flows between BlackRock’s exchange-traded funds.
- BlackRock remains confident in equities and will maintain positions that bet on growing corporate profits, artificial intelligence and government spending, but is rotating away from longer-dated US debt in favor of global fixed-income and liquid alternatives.

Slight
- SpaceX is targeting a valuation of at least $1.8 trillion in its initial public offering, according to people familiar with the matter.
- The company is seeking to raise as much as $75 billion, which would make it the biggest IPO of all time, and is expected to start formal marketing of its IPO as soon as June 4.
-SpaceX had $18.7 billion in revenue in 2025, and the company's pitch to investors shows its evolution into an AI services and infrastructure giant with a total addressable market of $28.5 trillion.
- 3-5% of the shares will be floated (TIGHT)

Strategy: keep supply constrained, which:
- supports price discovery
- maintains founder control
- creates early scarcity dynamics

- - - SpaceX has reserved 5% of the shares ?in its planned initial public offering for certain employees and individuals selected by its executive officers, exempting them from post-IPO lock-up restrictions

AND.. Even more Valuations
- AI giant Anthropic is now worth more than OpenAI.
- Anthropic announced a $65 billion Series H financing at a $965 billion valuation, a round led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital.
- The financing puts its valuation above that of rival AI lab OpenAI.
- The valuation has TRIPLED since February

Let's GO!
- Shares of LG Electronics surged as much as 24% after the company announced a series of automotive innovations built with technology from Alphabet Inc.’s Google.
- The company said its new range of solutions is built on Android automotive operating systems. Its system can control multiple displays with different aspect ratios at the same time by using a single-on-chip, which is different from other conventional in-vehicle display systems, LG said.
- But 24% on this news?
- More reason that the KOSPI is moving higher

No One Care - But...
- Inflation has been above the 2% target for 5 years now
- Minneapolis Federal Reserve President Neel Kashkari said Thursday that bringing down inflation in the U.S. remains his top priority, warning that consumer prices are still “much too high.”|
- Speaking to CNBC’s Kaori Enjoji at the Bank of Japan-IMES Conference, Kashkari said that the U.S. central bank would continue taking a “balanced approach” to its dual mandate of price stability and full employment.
- 5 YEARS!
---- What that tells us is that the Fed is totally unable to do anything about inflation .... Are we the only ones that see that?

Inside Baseball
- From a colegie that will go un-named.
--- Let's just say he is someone who knows what they are talking about and runs BIG money
----- This is what he said to me.....
- Apparently, oil execs were opining with POTUS in meetings yesterday that oil inventories are at alarmingly low levels and oil prices could soon skyrocket (I might soften that language a bit but they know the oil biz better than me) if SoH does not open soon.
- I ran a few numbers on total oil inventories including and excluding the SPR.
- Total supplies are 10th percentile vs history (although that includes a period when the SPR ramped from 0 to 600mln barrels in the 1980’s).
- Today it is 4th percentile if you start from 1990 when the SPR was basically full.
- The 4 week net and % draw the last 3 weeks are the largest draws of all time.
- And not surprising the 1 week net and % draw of the SPR are also the 2 largest draws of all time the last 2 weeks.

Surprised - No....
--- This is another story similar to what we saw a few months ago
- Taiwan prosecutors suspect that three individuals smuggled at least one shipment of Nvidia Corp. AI chips to China after first exporting them to Japan.
- The trio was detained for allegedly falsifying documents related to exports of Super Micro Computer Inc. servers containing advanced Nvidia chips, which the US has barred from sale to China without a license.
- Taiwan authorities seized about 50 servers for which they accuse the trio of preparing fraudulent export documents, but at least one shipment had already gone through Taiwan customs and made it to Hong Kong.

Under/Over?
- Tesla will be somehow folder/merged or taken over by SpaceX in an all stock deal
- Tesla market cap is $1.6 Trillion so that will be a tough one to take on as SpaceX is about equal in size.
---- If this happens, when ?

Mini Retirement - Is this a THING?
- A mini retirement is when you take a planned break from working, usually for a few months to a couple of years, instead of waiting until age 65+ to fully retire.
- Tim Feerris popularized this... (4 day workweek dude)

Step 1: Work & save aggressively

2–10+ years
Build a specific “freedom fund”

Step 2: Take time off

3 months to 2 years
Travel, recharge, pursue interests, or experiment with new ideas

Step 3: Return to work

Same career… or pivot to something new

Then repeat if desired.