From the T&Q Desk
Good Morning Traders and Quants! Welcome to jampacked week of critical economic data releases and earnings reports. We closed last week at record highs yet again, buoyed by strong earnings, trade relief, and cooling rates. A U.S.-EU tariff deal over the weekend removes one of the largest near-term uncertainties, but at a 15% baseline tariff, protectionism is now structurally embedded. As the August 1 deadline approaches, attention shifts to Canada and China. This week will be a stress test for the rally: the FOMC meets, 38% of the S&P 500 by market cap reports earnings, and jobs data fills the calendar.
Three Weeks Ago, We Gave You Four Stocks. They’re Up Over 11.5%.
Our analysis has identified six more to watch within the AI ecosystem.
Digital Ocean (DOCN) is a cloud infrastructure provider.
Significant upside potential: Analyst consensus price target of $39.78-$40.36 represents 38% upside, with DCF analysis suggesting fair value at $45.08 (35% undervaluation)
Strong financial performance: 14.1% revenue growth year-over-year and impressive cash flow growth of 31.21% vs industry average of -18.03%
AI positioning: New GradientAI platform launch and cloud GPU partnerships capitalize on the AI infrastructure boom
Vertiv Holdings (VRT) is a critical infrastructure company focused on data center solutions, particularly well-positioned for the AI and cloud computing boom.
AI data center infrastructure play: Strong positioning in the rapidly growing AI data center market with thermal management and power solutions
Multiple analyst upgrades: Recent upgrades with price targets ranging from $136-$165, supported by strong institutional ownership of 89.92%
Shareholder returns: Impressive 270% dividend increase to $0.0375, signaling strong cash generation and management confidence
CrowdStrike (CRWD) is a leading cybersecurity company that continues to dominate the endpoint protection market despite high valuation concerns.
Market leadership: Named Gartner Magic Quadrant Leader for Endpoint Protection Platforms for 6th consecutive year, with cloud-native Falcon platform
Strong recurring revenue growth: 23% ARR growth and strong institutional buying, with Moody's upgrading outlook to positive
Strategic partnerships: Recent Nvidia partnership for AI security integration and analyst price targets around $450-$530
Solid Biosciences (SLDB) is a biotech company focused on treating Duchenne muscular dystrophy, with unanimous analyst support and massive upside potential.
Unanimous analyst support: 100% analyst buy recommendations with 13/13 Strong Buy ratings, indicating high conviction
Massive upside potential: Average price target of $15.91 vs current price around $6, representing 138% potential upside
Strong institutional backing: 92 institutions increased their positions, showing growing confidence in the company's prospects
Humacyte (HUMA) develops bioengineered human tissues and organ systems, representing a cutting-edge approach to regenerative medicine.
Extraordinary growth projections: Revenue expected to grow at 455.28% per year, significantly outpacing biotech industry average of 57.64%
Massive upside potential: Average price target ranges from $9.83-$14.50 vs current price of $2.30-$2.67, indicating 268-473% upside potential
Strong analyst consensus: 5 out of 6 analysts rate it Strong Buy, with revenue forecasts reaching $1.36 billion in 2025 and $14.34 billion by 2027
Marvell Technology (MRVL) is a semiconductor company well-positioned for the AI and data center infrastructure boom.
Strong fundamentals: 27% upside potential with price target of $94.47 vs current $74.21, supported by over 63% revenue growth
AI and data center exposure: Strong positioning in AI infrastructure and data center demands, benefiting from the ongoing digital transformation
Attractive valuation: Trading at 17.8% discount to intrinsic value, making it relatively undervalued compared to other semiconductor stocks
From our Partners
Most Traders Get Crushed. One Shift Changes Everything.
You start with hope. Maybe a few wins. A strategy that almost works.
Then come the losses. The overtrading. The gut decisions. The regret. The revenge trades.
And suddenly, trading feels like chaos and irritation, instead of confidence.
Here’s the shift: the best traders don’t guess, they engineer.
They are stone cold. They use a confluence of signals.
They manage risk like pros. And they trade less, while earning more.
The Confluence Code reveals this exact playbook.
It’s not theory, it’s a structured edge. And it’s now accessible.
Word Around The Street
1. U.S.-EU Trade Deal: Averted Crisis, Embedded Tariffs
The U.S. and EU reached a tariff deal over the weekend, avoiding a trade war and locking in a 15% baseline tariff on EU goods, with higher rates on steel and aluminum. While this resolves near-term uncertainty, European officials have reacted coolly, seeing the deal as a defensive measure rather than a win. Canada remains unresolved, with Trump hinting at unilateral tariff action if talks stall.
2. Earnings Crescendo: Big Tech and Beyond
This week will be the heaviest of earnings season: 38% of the S&P 500 by market cap will report. Amazon, Apple, Meta, and Microsoft headline the Magnificent 7 results. Investors will be watching for AI capex updates, guidance on tariff impacts, and margin resilience. Thus far, beat rates are strong, but tariffs are expected to pressure profitability in H2.
3. FOMC and Policy Signaling
The Fed meets Wednesday and is widely expected to hold rates steady. Markets still price in two 25bp cuts by year-end. Powell’s tone will be critical: recent data shows a resilient labor market and slowing growth, with tariff uncertainty muddying the outlook. A cautious but non-urgent stance would likely keep risk sentiment intact.
4. Signs of Euphoria—or Just Momentum?
The S&P 500 has closed at record highs for five consecutive sessions, and margin debt has crossed $1 trillion for the first time. The Nasdaq remains above its 20-day moving average for 63 straight days. While some point to overextension, sentiment surveys remain balanced: AAII bulls have ticked down, with more investors neutral. For now, low volatility, strong breadth, and solid earnings are sustaining the advance.
Previous Trading Day Recap
The S&P 500 and Nasdaq both posted fresh record closes Friday, capping a week of steady gains. Alphabet’s AI-driven earnings helped propel sentiment, and the Magnificent 7 now make up 33% of the index. Materials and industrials led Friday’s advance, while energy and communications lagged. Bond yields dipped, with the 10-year finishing at 4.38%. Oil eased on concerns about China demand and supply growth. Gold fell 1.1% for the day and ended slightly lower on the week.
Durable goods orders fell 9.3% in June, which was better than expectations for an 11% drop largely due to a 22% slide in transportation equipment after a spike in aircraft orders the month before. Ex-transportation orders rose 0.2%, pointing to stability in core manufacturing. Earnings season remains strong: 33% of S&P 500 companies have reported, with 82% beating estimates by an average of 6.2%. Earnings growth expectations for Q2 have been revised up to 5.4%, from 3.8% at the end of the quarter.
Earnings
Cadence Design (CDNS)
Welltower (WELL)
Southern Copper (SCCO)
Enterprise Products Partners (EPD)
Hartford Financial (HIG)
Economic Data
Dallas Fed Manufacturing Index
Overnight Markets
Asia: Nikkei -1.10%, Shanghai 0.12%
Europe: FTSE -0.10%, DAX 0.23%
US Pre-Market
Final Take
With a trade deal in Europe and Big Tech earnings ahead, the market has a clear runway, at least for the moment. But the combination of high concentration in megacaps, record leverage, and embedded tariffs means the next leg will need more than optimism to sustain. This week’s data and earnings will show whether this rally can broaden, or whether it remains a top-heavy trade.