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The theme last week was the comeback of AI-related stocks. Semiconductors are now among the leaders in an otherwise weak market breadth environment outside of tech. 

CRDU +42%, 2x long CRDO. Lagging semiconductor stock that had a big 2-week bounce after a 50% drop from its all-time highs.

LABX +42%, 2x long ALAB. Semiconductor stock firmly back above its 50dma and starting to bull flag.

IONX +33%, 2x long IONQ. Quantum computing stock that is back above its 200dma.

FLYT +33%, 2x long FLY. Beaten-down space stock with what will likely turn out to be a dead-cat bounce.

RKLX +29%, 2x long RKLB. Beaten-down space stock.

QCML +27%, 2x long QCOM. Ever since it recovered above its 200dma, it has been finding support near its rising 20EMA.

INTW +26%, 2x long INTC. Another AI semiconductor stock.

FBL +26%, 2x long META. Meta released its AI agent Muse and is back near all-time highs. The dips to its 20EMA are likely to be bought until its next earnings report.

AMDL +26%, 2x long AMD. One of the price leaders in semiconductors.

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MarketSurge powers the charts in this video.

Last week began with a big downside gap in anything AI-related after comments from Anthropic’s, OpenAI’s, and SpaceX’s CEOs that the progress in AI should probably slow down because of safety concerns. Those gaps were quickly bought and erased by the end of the week. In many cases, some of the AI stocks even had a strong green week – DELL, AMD, SNDK, MU.

Software, on the other hand, started the week with a big breakout, followed by sideways consolidation. Cybersecurity led the way – CRWD, NET, FTNT, ZS, PANW, OKTA.

Crypto had its mid-week shakeout. First, the Clarity Act didn’t pass the House. Then, the Fed raised rates on Wednesday. By Friday, all major crypto assets and stock proxies were back near their multi-week highs – ETHA, IBIT, SOLZ, ZCSH, PURR, MSTR, COIN, HOOD, etc. The SEC rolled out a 5-year exemption for tokenized stock trading, which lit up the entire space.

From a big-picture perspective, small caps keep losing ground. Russell 2k is not far from testing its 200dma. Large and mega caps continue to show incredible resilience and keep the indexes afloat. Going higher on bad news (rate hikes) is typically bullish, especially if we see follow-through next week. The volatility is likely to remain elevated ahead of the Midterm elections. The results from them can have a significant impact on who the next leaders are. A democratic sweep will probably put many AI-related stocks under pressure, as it would make the development and operation of data centers more tightly regulated.

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Three themes stood out last week: crypto rally, a bounce in AI-related stocks after a downside gap on Monday, and a breakout in cybersecurity stocks.

1. TEMT +69%, 2x long TEM. It quickly dipped below its 20EMA to shake people out. Then it formed a tight-range inside day, followed by a large bullish reversal candle that started a 4-day run to new swing highs.

2. FPSX +48%, 2x long FPS. Makes electrical distribution equipment for data centers. It rallied from its 52-week lows after beating earnings estimates and raising its 2027 guidance by 30%. 

3. MSTX +34%, 2x long MSTR. After a mid-week pullback, crypto rallied to finish the week strong.

4. CRWL +29%, 2x long CRWD. Last week began with a major breakout in cybersecurity stocks.

5. ZCSH +25%, Crypto.

6. SOLT +24%, 2x long Solana. Another crypto play.

7. KEEX +24%, 2x long KEEL. Develops and operates AI data centers.

8. BWET +20%. The best-performing ETF this year. It went from 20 to almost 900. It tracks the cost of shipping crude oil by sea via large tankers. The fund buys and owns freight futures.

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