The Trump Tornado: Chaos, Opportunity, and Market Mayhem

Trump’s policies and pronouncements whip markets into a frenzy, leaving destruction in their wake but did anything change?

Welcome back to your weekly recap on the markets.

Let’s get into it …

Investors were re-introduced to the Donald Trump tornado effect the past few weeks.

He did this during his 1st term.

It’s mostly a product of the media and his haters paying attention to his every breath.

Most presidents can go a week without making much news.

With Trump, the media reports on if he has 2 scoops of ice cream, rather than 1.

So when he turns his attention to the markets - it has a tornado effect.

Tariffs, spending cuts, interest rates, geopolitics rip through the markets like a tornado creating fear and panic.

And then it’s over.

Sure, some destruction will be left in the wake.

But did anything really change?

The answer is no.

I will reiterate what I said on Monday word for word:

If I was 65+ years old, on fixed income and had a modest nest egg. I’d move to the sidelines until the dust settles on this tariff stuff.

Trump can afford to play these games politically - a 65 year old with a modest nest egg can’t.

Everyone else can tactically take advantage of the volatility these events create. In fact, the younger you are - the more you should appreciate these political games.

The Donald Trump tornado effect is a gift for younger investors.

It’s an absolute nightmare for those trying to preserve wealth.

Figure out which side of the spectrum you are on.

Taking a step back … here’s the year-to-date (YTD) performance of the major index funds:

• S&P 500 (SPY): -1.73%

• NASDAQ (QQQ): -3.8%

• Russell 2000 (IWM): -6.8%

Not so scary at all.

Broadcom AVGO 0.00%↑ Earnings

High level:

• AVGO initial guidance was for $14.6B in Q1 revenue
  The company delivered: $14.92B in Q1 revenue

• For the upcoming Q2: $14.9B
  Expectations was for $14.73B

For a full recap make sure you watch my video:

On the conference call, Broadcom not only reiterated its “serviceable addressable market” or SAM for 2027 … but they added 2 more additional clients that are in development stages for custom chips.

If you’re not familiar with Broadcom, the company has a diversified business. But in the AI space they are the leader in making custom chips that compete with Nvidia’s GPUs.

During Nvidia’s conference call about a week ago … CEO Jensen Huang said:

I will say this, just because the chip is designed doesn’t mean it gets deployed. And you’ve seen this over and over again. There are a lot of chips that gets built, but when the time comes, a business decision has to be made, and that business decision is about deploying a new engine, a new processor into a limited AI factory in size

He’s referencing Broadcom here. And he’s not wrong.

The difference is Nvidia’s GPUs carry a 70% gross margin. Meaning for every $1 a major company spends on Nvidia’s products $0.70 cents is profit!

That’s great for Nvidia.

But to steal a line from the great Jeff Bezos …

Your margin is my opportunity.

I love that line.

And it holds true in business.

I believe the tech giants do create custom chips with Broadcom and the stock triples over the next 5 years.

This week:

CoreWeave potential IPO news may cross. This could spark interest in Nebius NBIS 0.00%↑ . Keep that in mind if you’ve acted on our recommendation. If the CoreWeave IPO flops, that’s bad for NBIS. If it soars, Wall Street will look for comps and will see that NBIS is a more interesting investment opportunity than CoreWeave.

Monday

• Oracle ORCL 0.00%↑ Earnings

Tuesday

• Dicks Sports DKS 0.00%↑ Earnings

• Kohl's KSS 0.00%↑ Earnings

Wednesday

• Adobe ADBE 0.00%↑ Earnings

• Starbucks SBUX 0.00%↑ Annual Meeting

Thursday

• Ulta Beauty ULTA 0.00%↑ Earnings

This week I’ll be at the Nebius Meetup in San Francisco. Really just a vibe check to see how the developer community is embracing them as a partner.

Do me a favor - follow me on my other social media accounts, I post different stuff on each platform:

https://lnk.bio/equityempire

I’ll be back on Monday.

Just remember, Trump’s tornado is wild when it rips through markets. But the damage is often minimal.

Colin