Market Overview

Stocks finished lower last week despite bond market interventions from Treasury Secretary Scott Bessent. The Nasdaq led the rout lower, finishing down 2.05% on the week. The S&P 500 pulled back 1.43%, while the Dow Jones Industrial Average fared the best by only dropping 0.85%. But don’t let the down market fool you – tremendous moves played out in crypto, precious metals, and even select biotech names. While we’ve almost passed the "all clear" level in crypto, Crude oil remains stubbornly high and creating all sorts of problems on the liquidity front.

Stocks I Like

Iren Limited (IREN) – 85% Return Potential

What’s Happening

  • IREN Limited (IREN) is a leading vertically integrated data center operator specializing in renewable energy-powered high-performance computing infrastructure for AI cloud services and Bitcoin mining, offering investors exposure to the rapidly growing AI data center and sustainable computing sector with a focus on large-scale power capacity, liquid-cooled GPU deployments, and hyperscaler partnerships.
  • IREN’s previous quarter showed revenue of $144.79 million but a loss of $247.83 million.
  • Valuation in IREN is high. P/E is at 58.34, Price-to-Sales is at 17.45, and EV to EBITDA is at 31.42.
  • From a technical standpoint, IREN broke out from a rounding bottom recently. Let’s see if former-resistance holds as support.

Why It’s Happening

  • IREN is rapidly transforming from a Bitcoin miner into a leading AI cloud infrastructure provider, securing multi-year contracts with major AI developers and hyperscalers. Recent deals totaling $2.8 billion, combined with an existing $9.7 billion Microsoft agreement, have lifted its 2026 annualized run-rate revenue target above $4 billion, with roughly 85% already under contract.
  • Execution milestones are de-risking the growth story. The company has delivered and received acceptance for Horizon 1, the first 50 MW liquid-cooled AI cloud deployment under the Microsoft contract at its Childress, Texas campus, while also earning NVIDIA Exemplar Cloud status on the GB300 NVL72 platform—validating its technical capabilities.
  • Capacity expansion is accelerating at scale. IREN is targeting 480 MW of gross AI cloud capacity by the end of 2026 and 1.2 GW in 2027, supported by a large secured power portfolio and vertically integrated operations spanning data center design, construction, and GPU deployment.
  • The shift to AI workloads is unlocking higher-value, recurring revenue. AI cloud services are growing rapidly as the company reallocates capacity from Bitcoin mining, with customer prepayments and financing covering a substantial portion of GPU capital expenditures and providing strong visibility into future cash flows.
  • Strategic acquisitions and partnerships strengthen the platform. The recent completion of the Mirantis acquisition adds cloud software and management capabilities, enhancing IREN’s ability to offer managed AI services and deepen relationships with enterprise and developer customers in a competitive neocloud landscape.
  • Analyst Ratings:
    • HC Wainwright: Buy
    • Canaccord Genuity: Buy
    • Macquarie: Outperform

My Action Plan (85% Return Potential)

  • I am bullish on IREN above $35.00-$36.00. My upside target is $78.00-$80.00.

Carvana (CVNA) – 40% Return Potential

What’s Happening

  • Carvana Co. (CVNA) is a leading e-commerce platform for buying and selling used cars, offering a seamless online experience with vehicle acquisition, inspection, financing, and home delivery, transforming the traditional auto retail model, offering investors exposure to the rapidly growing online used vehicle and automotive e-commerce sector with a focus on convenience, transparent pricing, and scalable logistics.
  • The previous quarter had revenue of $7.38 billion and earnings of $310 million.
  • Valuation is elevated in CVNA. P/E is at 37.09, Price-to-Sales is at 3.17, and EV to EBITDA is at 560.24.
  • From a technical point of view, CVNA is trading nicely within a broadening wedge formation. If it breaks above the upper trendline of the pattern, look out above.

Why It’s Happening

  • Carvana continues to capture significant market share in the used-vehicle retail space through its seamless online platform. In the most recent quarter, retail units sold reached a company record of 197,325, representing industry-leading 38% year-over-year growth and nearly doubling volume from just two years prior.
  • Record financial performance underscores the scalability of the model. Revenue hit an all-time high of $7.376 billion (up 52% year-over-year), while net income reached $513 million and Adjusted EBITDA climbed to $769 million, delivering industry-leading margins of 7.0% and 10.4%, respectively—well above traditional automotive retailers.
  • Operational leverage is driving efficiency gains at scale. SG&A expense per retail unit continues to improve as the company expands its logistics network, inventory selection, and reconditioning capabilities, supporting profitable growth even as unit volumes accelerate.
  • Strengthened balance sheet provides flexibility for continued expansion. Net debt relative to trailing Adjusted EBITDA has improved to approximately 1.0x, and recent debt refinancing has extended maturities while reducing interest expense, positioning the company to invest in further geographic reach, same-day delivery, and inventory growth.
  • Full-year momentum remains intact. Management expects sequential growth in retail units sold in the third quarter and guided full-year 2026 Adjusted EBITDA to $2.7–$3.0 billion, an increase from $2.24 billion in the prior year, reflecting confidence in sustained demand and execution.
  • Analyst Ratings:
    • BTIG: Buy
    • Citigroup: Buy
    • Barclays: Overweight

My Action Plan (40% Return Potential)

  • I am bullish on CVNA above $55.00-$56.00. My upside target is $98.00-$100.00.

Everspin Technologies (MRAM) – 64% Return Potential

What’s Happening

  • Everspin Technologies, Inc. (MRAM) is a leading developer and manufacturer of Magnetoresistive Random Access Memory (MRAM) products, providing high-performance, non-volatile memory solutions with superior speed, endurance, and data retention for industrial, automotive, aerospace, defense, and data center applications, offering investors exposure to the rapidly growing advanced semiconductor and next-generation memory technology sector with a focus on persistent, radiation-hardened, and high-reliability storage solutions.
  • The previous quarter delivered revenue of $18.74 million but a loss of $3.59 million.
  • Valuation in MRAM is steep. Price-to-Sales is at 7.36 while Book Value is just 3.00.
  • From a charting viewpoint, MRAM is consolidating within a rounding bottom pattern. If it breaks above resistance, a new bull run should follow.

Why It’s Happening

  • Everspin Technologies delivered record quarterly revenue of $18.7 million in the second quarter of 2026, up 42% year-over-year, driven by strong demand for its Magnetoresistive Random Access Memory (MRAM) products. Product sales rose 38% as customers in industrial automation, energy management, and aerospace & defense increased adoption of its persistent, high-reliability memory solutions.
  • A newly signed $40 million multi-year defense subcontract with a U.S. prime contractor is beginning to contribute licensing and engineering services revenue. This agreement provides multi-year visibility and validates Everspin’s Toggle MRAM technology for mission-critical applications, supporting higher-margin non-product revenue streams.
  • The company is expanding its addressable market through a clear product roadmap. The upcoming UNISYST high-density MRAM family targets the multi-billion-dollar NOR Flash replacement opportunity, with the first 256-megabit device expected to tape out later in 2026 and begin contributing meaningfully in subsequent years.
  • Strategic collaborations are positioning MRAM for AI and data-center applications. Partnerships, including work with MaxLinear to explore persistent memory architectures for AI servers, highlight the potential for MRAM to improve latency, power efficiency, and reliability in next-generation computing workloads.
  • A debt-free balance sheet with approximately $44 million in cash provides the financial flexibility to invest in manufacturing capacity, foundry relationships (including Microchip and planned TSMC expansion), and R&D while management targets more than $100 million in annual revenue by fiscal 2029.
  • Analyst Ratings:
    • Needham: Buy

My Action Plan (64% Return Potential)

  • I am bullish on MRAM above $14.50-$15.00. My upside target is $28.00-$30.00.

Market-Moving Catalysts for the Week Ahead

Bessent To the Rescue

Last week, Scott Bessent and the U.S. Department of the Treasury announced they would at least double the maximum size of liquidity-support buyback operations for longer-dated nominal coupon securities. This raised the cap from $2 billion to at least $4 billion per operation.

The change will actually begin September 9 and run through the end of the current refunding quarter on November 4, which just happens to coincide with the midterm elections. Additional details expected at the next quarterly refunding.

The Treasury framed it as providing greater liquidity support in sectors that frequently see strong market participation. The surprise occurred as a recent sharp rise in long-term yields (the 30-year had hit multi-decade highs), which are threatening borrowing costs for the government.

Back to Inflation

The intervention from the Treasury last week highlights the financial system’s sensitivity to inflation. Fortunately, the recent inflation data hasn’t showed upticks in price pressures, although crude oil remains stubbornly high.

As a result, this Friday’s core PCE numbers are extra important. This is actually the Fed’s preferred inflation metric, because it allows for the substitution of goods and services. This is key because people’s behavior changes with prices.

If it comes in below estimates, then we may yet see the rebound in bonds sustained. If not, then we could be on the verge of dealing with something much more serious in the market. The policymakers may indeed be losing control.

Magnificent ELEVEN Leadership

The biggest change amongst the mega-cap tech names over the past week was the collapse in Broadcom, which dropped from fourth place all the way down to seventh place. The AI trade remains under duress, especially since political backlash is growing against data centers.

Sector & Industry Strength

On the sector performance front, there are mounting concerns as well. Healthcare and energy surged last week, while technology continued to flail. On its own, this is a very defensive capital flow. This early in a rally, technology, or some other growth area like consumer discretionary or communications, should be outperforming. The good news is that utilities is at the bottom of the pack. Bulls can also point to consumer discretionary still outperforming consumer staples.

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Editor’s Note: Tech is losing the plot, but healthcare is surging and it’s a biotech story.

A Critical Moment (Sector ETF: XLE/SPY) 

Crude oil has remained stubbornly high in recent weeks, and it’s translated to flows into energy stocks. This ratio is showing energy stocks (XLE) stacked up against the S&P 500 (SPY).

Over the past few years, this ratio has been in a downtrend. Energy stocks were not the place to be. However, a rally began in this ratio last summer, and it took out an important high from April 2024 back in March of this year, which created a higher-high.

The ratio then pulled back hard into a low in June this year, but still created a higher-low. A wedge pattern is observed on this chart. If the ratio closes above the upper horizontal trendline acting as resistance, look for energy stocks to start running even more.

A Turning Tide in Tech (Sector ETF: IGV/SMH) 

In many ways, this year has been defined by rotations. In the second quarter, you got left behind if you didn’t own semiconductors, but the third quarter has been anything but favorable for that high-flying tech sub-sector.

In recent weeks, I’ve been pounding the table on the opportunity in the software space. This chart looks at the ratio between software (IGV) against semiconductors (SMH). Unsurprisingly, SMH has outperformed IGV for years.

However, over the past few weeks have seen IGV outperforming. It even broke above the downward sloping trendline on the chart below. This signals the rate-of-descent is no longer in effect – let’s see if software can carry the weight for tech into year-end.

The State of Inflation (Sector ETF: TIP/IEF) 

It’s a good time to check back in on the state of inflation as it pertains to the bond market. Truthfully, I don’t care about what the government data says or what the latest gossip on television about inflation is. Bonds hold the truth.

I like using the ratio between Treasury Inflation Protected Securities (TIP) and 7-10 Year Treasuries (IEF) as a proxy to measure the bond market’s stance on inflation. When TIP outperforms and the ratio rises, it means inflation estimates are following.

This ratio has pulled back hard after forming what appears to be a double top. One could even argue it was a false-breakout from the triangle formation. In time, I expect inflation to reignite, but near-term, it looks to have a lid on it.

Cryptocurrency 

There it goes. Crypto finally ripped higher last week, as Bitcoin broke out from its multi-month range. I’ve been highlighting the setups in Ethereum and Solana as well, and they all followed suit. This is a strong step in the right direction for the trend.

The breakout from the rounding bottom pattern projected a rally to 74,000-76,000, which was already exceeded. But the catch is that a rally to such levels wouldn’t even create a higher-high with respect to the longer-term trend.

The May 6 high at 82,833 is what needs to be exceeded in order to give the all clear signal. Given where Bitcoin bottomed, I’m not ruling out a return to new all-time highs in time, but that’s going to happen until perhaps sometime next year at the soonest. There’s a lot of support at 65,000-67,000 now.

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