Inside the Joe Terranova ETF rebalance

Portfolio Strategy & Stock Performance - The fund owns six of the "Magnificent Seven" mega-cap stocks, excluding Apple, due to its negative performance across one-month, six-month, and twelve-month timeframes [1][2] - Microsoft, Meta, and Nvidia have demonstrated positive performance across one-month, six-month, and twelve-month periods [3] - Nvidia is up 80%, Microsoft is up 48%, and Meta is up 47% since the April low [8] - The fund added KLA and Lamb Research, semi-equipment names, to the ETF due to a positive reaction to news between the Chinese and the US [14] - The fund prioritizes stocks making recent highs, exemplified by KLA Corp and Lamb Research having 52-week highs in July, versus Applied Materials' high in October [16] Earnings & Market Reaction - Microsoft and Meta had positive price action post-earnings, while Amazon's results were considered a disappointment [7][8][9] - Amazon Web Services' underperformance and disappointing guidance contributed to the muted response to Amazon's earnings [9][10] - The market may experience a 5-7% correction or consolidation, potentially driven by macro factors rather than individual stock performance [10] AI & Innovation - Innovation and AI are key areas for capital commitment, driven by concerns about productivity enhancement and margins [12][13] - Palantir is considered a pure play in AI and is expected to continue attracting capital despite its valuation [20][21] - Palantir has strong margins related to free cash flow and organic revenue growth at 35% for 2025 [22] Individual Stock Outlook - Amazon, Alphabet, and Microsoft are expected to set new highs before year-end, navigating late summer volatility [11] - Palantir is up 110% year-to-date and 18% in a month, with expectations of 53% revenue and earnings growth this quarter [18][19] - Analyst community shows skepticism towards Palantir, with 51% holds and 16% sells, and a 12-month price target of $116 [23]