Direxion Daily INTC Bull 2X ETF

Macro uncertainty is what's driving semis equities right now.

More than hyperscaler capex forecasts and other earnings releases.

The Fed's policy meeting next week could lead to a hawkish surprise, which is resulting in institutional investors playing things cautiously at the moment.

Ongoing US/Iran escalations -> rising oil prices -> prolonged inflation -> potential rate hike.

- Brent crude up 35% in three weeks

- US 10Y yield set for its biggest weekly increase since early May

- Fed funds futures traders now price in a 36% chance of a rate hike decision next week by the Fed (up from just 13% last week)

So ultimately, the prolonged war is having a negative second-order impact on semis. Which is why all your favourite names - from $Nebius(NBIS.US) to $Sandisk(SNDK.US) to $Applied Optoelectronics(AAOI.US) - are all moving in lockstep regardless of their individual sub-sector or any sort of business fundamentals.

Another example is $Intel(INTC.US) erasing all it's post-market gains today after reporting solid earnings yesterday. That would not happen under any sort of clear/stable macro conditions.

Business fundamentals for the semis will certainly superceed all macro uncertainty in the long-run.

Morgan Stanley: Intel CapEx Spend

Core Forecasts and Capex Revisions

> WFE and Capex Projections: The 2027 WFE forecast is set at $202 billion (a 31% year-over-year increase), which incorporates a $25 billion capex assumption specifically for Intel, though analysts see potential for further upside.

> Upward Revisions: Intel previously revised its 2026 capex outlook to over $20 billion and signaled that 2027 capex will be "significantly above 2026 levels".

> CPU Demand Drivers: Producing 5 million incremental Xeon 6 units requires an estimated $5.3 billion+ in WFE. Expanding logic wafer capacity to capture two-thirds of incremental CPU units (22.4 million units through 2030) demands a minimum of $23.8 billion for Xeon 6 and $27.9 billion for Xeon 7.

Key Equipment Beneficiaries

> Outside the US:

Tokyo Electron (TEL): Historically counts Intel as a major customer (ranging from over 10% up to 20.4% in F3/20).

Lasertec: Has seen Intel represent 10% or more of its customer base historically, peaking at 31.6% in F6/22.

> Within the US:

KLA Corp (KLAC): Highlighted as an outsized US beneficiary. Although Intel has not been a 10% customer since F6/15, Intel is heavily leaning on KLA to improve manufacturing yields and margins to succeed as a viable foundry, positioning KLA for potential massive revenue growth from Intel between 2025 and 2027.

$KLA $Intel(INTC.US)

• Nasdaq composite fell to a four-week low amid rising oil prices due to U.S.-Iran tensions.

• Alphabet and Tesla stocks experienced significant declines.

• $ASML(ASML.US) stock rebounded after a strong Q2 earnings report.

• Intel's stock surged following a major earnings beat and positive guidance. $Intel(INTC.US)

• T-Mobile's stock dropped despite a Q2 earnings beat; management rejected a Starlink deal.

• Google stock fell amid concerns over AI leadership and increased spending.

• Novocure's stock rose after reporting strong sales growth for its cancer treatment.

A TON OF THINGS HAPPENED IN THE STOCK MARKET TODAY.

Here's a full recap:

1. Tesla $Tesla(TSLA.US) was down 14% today, its worst day since January 2024, while Google $Alphabet(GOOGL.US) was down 7% after posting its first negative free cash flow quarter since 2004. The macro backdrop is not helping either. Crude oil has pushed back above $90/barrel for the first time since June and is up 25% over the past month. At the same time, the 10-year Treasury yield has crossed 4.7%, while jobless claims came in at 187K vs 211K expected, showing a stronger labor market but also raising concerns that inflation pressure could persist. Today was the worst day for the Mag 7 since April 2025 with all 7 stocks erasing $800B of market cap.

2. AMD $AMD(AMD.US) CEO Lisa Su said at the AMD Advancing AI event today that the AI accelerator market could grow to $1.4T by 2030, within a broader compute market expected to reach $2T. She also noted that monthly AI token consumption has surged 158x over the past two years, underscoring how quickly compute demand is scaling. AMD unveiled Helios, its new rack-scale AI system built around the MI450 accelerator, which Su called the fastest AI accelerator in the industry. Helios is now in full production, with shipments expected to start at the end of Q3 and ramp through Q4.

3. Intel $Intel(INTC.US) posted a strong Q2, with revenue of $16.1B vs $14.5B expected, up 25% YoY, and adjusted EPS of $0.42 vs $0.22 expected. Adjusted gross margin came in at 41.8% vs 39% expected, up 1,210 bps YoY, while non-GAAP operating margin reached 17.2% vs 10.7% expected. Segment results were strong across the core business, with CCPG revenue up 13% YoY to $8.9B, DCAI revenue up 59% YoY to $6.3B, total Intel Products revenue up 28% YoY to $15.1B, and Intel Foundry revenue up 31% YoY to $5.8B. Management said Q2 marked Intel’s strongest revenue growth in more than 15 years, driven by better execution, higher factory yields, improved cycle times, and stronger customer demand.

4. Trump warned that the U.S. will hold Iran responsible if the Houthis resume attacks on commercial shipping. He said the Houthis had acted “responsibly” after previous U.S. strikes, but are now “starting up again” after reportedly firing on two Saudi Arabian ships last night. Trump said the Houthis are a proxy of Iran, and that any further attacks would trigger major military punishment against both Iran and the Houthis.

5. Nvidia $NVIDIA(NVDA.US) is committing $1.5B to Amkor $Amkor Tech(AMKR.US) through a prepayment tied to a multi-year advanced packaging and development agreement. The funding will help Amkor expand U.S. packaging capacity at its Arizona campus as both companies work on next-generation packaging and test technologies for AI and accelerated computing. The partnership will focus on high-density interconnects and heterogeneous integration, which are key for combining multiple chips and components into more powerful systems.

6. The top 10 most active options today by contracts traded were $Tesla(TSLA.US) with 3.6M contracts, $NVIDIA(NVDA.US) with 2.4M contracts, $Alphabet(GOOGL.US) with 994K contracts, $Amazon(AMZN.US) with 940K contracts, $SpaceX(SPCX.US) with 917K contracts, $Apple(AAPL.US) with 732K contracts, $Intel(INTC.US) with 706K contracts, $Micron Tech(MU.US) with 664K contracts, $Alphabet - C(GOOG.US) with 560K contracts, and $Microsoft(MSFT.US) with 532K contracts.

7. South Korea is moving to tighten rules around leveraged single-stock ETFs and ETNs beginning July 31. Retail investors will now need about $20,300 in cash to open or add to a position, up from roughly $6,800 previously. The key change is that stocks, bonds, and other securities will no longer count toward the deposit requirement, making it harder for retail traders to access these leveraged products.

8. U.S. mortgage rates rose for the third straight week, with the average 30-year fixed climbing to 6.58%, putting rates back near their highest level in a year.

9. AMD $AMD(AMD.US) and Cerebras $Cerebras(CBRS.US) are teaming up on a disaggregated AI inference architecture that divides workloads between both platforms. In the setup, AMD Helios manages prompts and long-context processing, while Cerebras’ Wafer-Scale Engine focuses on ultra-low-latency token generation. The companies say the combined system can deliver up to 5x more tokens per second per watt than Cerebras alone, with initial availability expected through Cerebras Cloud in the second half of 2026.

10. Uber $Uber Tech(UBER.US) cut 10% of roles in its customer service operations as it restructures the division and leans further into AI. The company said fragmented workflows were making it harder to roll out AI at scale, and this marks Uber’s first layoff round specifically tied to AI-driven efficiency.

11. SpaceX $SpaceX(SPCX.US) is reportedly turning away satellite operators looking for dedicated Falcon 9 launches beyond 2028 as the company shifts more of its long-term launch strategy toward Starship, per Bloomberg. SpaceX has also stopped taking future Falcon 9 rideshare reservations and has paused production of some expendable Falcon components, though Falcon 9 is still expected to remain active for NASA and Pentagon missions. The risk is timing: if Starship is not commercially ready by 2028, the market could face a major launch-capacity gap, creating a bigger opening for competitors like Rocket Lab, Blue Origin, and ULA.

12. Meta’s $Meta Platforms(META.US) new $12B Texas data center financing, tied to a nearly 1GW project, is reportedly being discussed at yields above 7%. That is roughly 40 bps higher than Meta’s $27B Hyperion financing from just nine months ago, adding about $48M in annual interest expense. Hyperion bonds are now trading around 96 cents on the dollar, showing how financing costs for massive AI infrastructure projects are starting to move higher.

WALL STREET IS THE GREATEST SHOW ON EARTH.

Source: amit