Market Overview - The stock market struggled to gain momentum in the last trading days of the year, with the Dow futures down 0.06%, S&P 500 futures down 0.07%, and Nasdaq futures down 0.10% [1][16] - The European Stoxx 600 index rose 16% this year, reaching historical highs, with the banking sector leading gains, up 65%, potentially marking the largest annual increase since 1997 [17] Global Market Sentiment - Despite recent lackluster performance, global stock markets are expected to achieve their third consecutive annual increase, with the MSCI global stock index up approximately 21% for 2025 [3][19] - Historical data shows that the index has averaged a 1.4% increase in January over the past ten years, with six instances of growth [3][19] Currency and Economic Indicators - The US dollar is on track for its worst annual performance since 2017, with a decline of nearly 10% and a projected drop of 9.6% for the year [4][20] - The dollar index recently stood at 98.03, close to a three-month low, influenced by expectations of Federal Reserve rate cuts and concerns over fiscal deficits [4][20] Economic Projections - Goldman Sachs forecasts strong economic growth resilience in the US for 2025, with expectations for faster growth in 2026 due to tax cuts and favorable financial conditions [7][22] - Despite recent stagnation in the non-farm employment market, factors such as AI data center construction and significant tax refunds are expected to boost economic momentum [23] Company-Specific Movements - Mining stocks saw pre-market gains, with Harmony Gold up 3.76%, Pan American Silver up 3.02%, and several others also showing significant increases [23] - Tesla's stock rose over 1% in pre-market trading amid expectations for the upcoming release of its Optimus project [24] - Applied Digital surged over 30% in pre-market trading due to plans to spin off its cloud business and merge with EKSO [25] - Chinese concept stocks also saw pre-market increases, with Baidu up over 5% and Vipshop up over 2% [27]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - There is a divergence in the outlook for the cryptocurrency market in 2026 among leading global crypto institutions, primarily concerning the existence of Bitcoin's four-year market cycle and the uncertainty of the U.S. interest rate cuts [1][11] - The transition of crypto mining companies to AI data centers is seen as a positive trend, with companies expected to benefit from the growing demand for AI computing power [3][38] - The U.S. is expected to see significant developments in asset tokenization and prediction markets, which may drive the next wave of crypto market growth [4][46] Summary by Sections 1. Observing the Fed's Rate Cut Rhythm - The total market capitalization of cryptocurrencies fell by 8.6% in 2025, with Bitcoin's price declining by 6.1%, marking the first year to break a three-year growth streak [2][12] - The price of Bitcoin is correlated with global M2 growth rates, which are currently weaker than in previous cycles, suggesting that the performance of the industry in 2026 will depend on the pace and scale of monetary easing by major economies [2][16] 2. U.S. Crypto Mining Transitioning to AI Data Centers - The cost of Bitcoin mining has risen significantly, with the average cost including depreciation reaching $111,557 per BTC, exceeding the current Bitcoin price [3][39] - The U.S. energy department anticipates a need for an additional 100GW of peak power supply by 2030, with a significant portion allocated for data centers, making the transition of mining companies to AI services a natural choice [3][38] 3. U.S. Rapidly Advancing Asset and Prediction Market Tokenization - The Nasdaq has applied to the SEC to launch tokenized stocks, with expectations for tokenized stocks to trade alongside traditional stocks by the third quarter of 2026 [4][46] - The monthly betting amounts on platforms like Polymarket and Kalshi have surged from under $100 million in early 2024 to over $13 billion by November 2025, indicating explosive growth in demand for event contracts [4][48] 4. Investment Recommendations - The report suggests focusing on companies with substantial self-owned power capacity, low debt ratios, and low market value per watt of power, as well as those collaborating with major firms like Google and Amazon [5][43] - It also recommends prioritizing investments in leading cryptocurrency companies during this cyclical opportunity [5]

Core Insights - Nvidia-related stocks experienced a collective surge, indicating strong market interest and potential investor confidence in the sector [1] Stock Performance - NEBIUS saw an increase of over 6% [1] - Applied Digital and Recursion Pharmaceuticals both rose by more than 4% [1] - CoreWeave experienced a rise of over 3% [1]

Group 1 - NEBIUS shares increased by over 6% [1] - Applied Digital and Recursion Pharmaceuticals both saw gains of over 4% [1] - CoreWeave's stock rose by more than 3% [1]

Company Overview - CoreWeave is a company that provides a cluster of supercomputers for rent, allowing users to access their processing power, particularly in the AI sector [2] - The company has experienced significant volatility, with a notable increase of approximately 108% since it began trading, outperforming the XLK Technology ETF and the S&P 500 [3] Market Performance - Despite a recent decline of 55% from its all-time highs, CoreWeave has managed to hold onto a critical support level, indicating potential resilience [5][6] - The company is currently facing a high-risk designation from analysts, with a renewed buy rating and a price target set at 135, although this represents a cut from previous estimates [4] Technical Analysis - Key resistance levels to watch include recent highs at 9066 and a gap near 98, with the 20-day simple moving average crossed above, indicating potential upward momentum [7] - Volume profile studies reveal significant trading concentration areas at 74, 90, 98, and around 105, which could influence future price movements [8] Options Market Activity - The options market for CoreWeave has seen substantial activity, with around 640,000 options traded, of which 62% were calls, indicating bullish sentiment [10] - Notably, a significant trade involved a long put option, suggesting some bearish sentiment, with a break-even point at approximately 4810, indicating a potential downside of 42% [12]

Group 1 - Nvidia-related stocks saw a pre-market rise, with CoreWeave increasing nearly 6% [1] - NEBIUS and Applied Digital both experienced gains of over 4% [1]

Core Insights - Applied Digital has seen a significant rise in its stock price, attributed to the closing of a loan facility for AI data center development, resulting in a 10% increase [1] - The company has transitioned from being primarily a Bitcoin mining operation to focusing on high-performance computing and data center hosting [2][4] - Applied Digital has established a $7 billion lease agreement with a major partner, Cororoe, and is developing a $3 billion data center expected to launch in 2026 [3][4] Financial Performance - The stock has increased over 250% in the past year, reflecting strong market performance [7] - Analyst consensus indicates a majority of buy ratings, suggesting confidence in the company's future prospects [7] - Estimated sales for Applied Digital are projected to reach $300 million in fiscal year 2026 and $550 million in fiscal year 2027, although no adjusted profits are expected in the near term [11] Market Context - The company is experiencing a favorable trend in stock performance, despite concerns about potential overinvestment cycles in the market [9][12] - Short interest remains high at 28%, indicating some market skepticism [12] - The highest price target for the stock is set at $56, with the current price at $24, suggesting potential for further upside [13]

Core Viewpoint - The emergence of new cloud companies like CoreWeave in the AI era is reshaping the traditional cloud service business model, focusing on the integration of supply and demand in the IaaS sector [1] Group 1: Cloud Computing Business Model - CoreWeave's business model in the IaaS sector emphasizes the integration of upstream supply and downstream demand, leveraging large-scale demand to share costs of data center construction and R&D [2] - Demand integration involves shared data centers, which enhance capacity utilization by smoothing out usage peaks and troughs across different industries and time zones [3] - Supply integration requires a complete operational IaaS cloud computing center built on three layers of infrastructure: civil construction and energy supply, IT and non-IT hardware, and software and engineering capabilities [5][6] Group 2: Demand and Supply Integration - The first layer of infrastructure (civil construction and energy) accounts for approximately 5% to 10% of total data center investment, with the main costs arising after operations begin [6] - The second layer (IT equipment) constitutes 60% to 70% of hardware investment, with servers being the most critical component, accounting for 40% to 50% of total investment [8] - Non-IT equipment, including power and cooling systems, represents about 20% to 30% of total investment, with a decreasing share in AI data centers [9] Group 3: Long-term Uncertainty - The core value of IaaS cloud services comes from the integration of computing power demand and production factors, which requires strong capabilities in both demand and supply chain integration [10] - CoreWeave's customer structure is highly concentrated, with approximately 80% of its revenue in FY2024 coming from two clients, Microsoft and NVIDIA, indicating a significant dependency on a few large customers [11][12] Group 4: Customer and Supplier Dynamics - CoreWeave's reliance on a limited number of major clients poses a risk, as losing a key customer could severely impact revenue [12] - The company’s major suppliers are also concentrated, with three suppliers accounting for 80% to 90% of total procurement, limiting CoreWeave's bargaining power [26][29] Group 5: Core Competencies - CoreWeave's strength lies in its engineering capabilities, allowing rapid deployment of data centers, but it lacks significant software and programming expertise compared to competitors [17][21] - The company primarily offers hardware rental services, which limits its ability to provide higher-value services and expand its customer base beyond large tech firms [24][34] Group 6: Market Position and Future Outlook - CoreWeave's current business model may not sustain long-term competitiveness against larger cloud service providers, given its reliance on a few major clients and limited service offerings [34] - The company must enhance its technical capabilities and diversify its customer base to reduce dependency on large clients and improve its market position [25][34]

Core Insights - IREN Limited's transition towards AI cloud infrastructure enhances long-term prospects but significantly increases capital intensity, indicating substantial future capital requirements that will affect its financial trajectory [1] Group 1: Capital Expenditure and Financials - IREN plans to deploy 140,000 GPUs by 2026, involving multibillion-dollar investments for site upgrades, including a $5.8 billion partnership with Microsoft [2] - In Q1 of fiscal 2026, IREN reported an operating cash flow of $142.4 million, while investing outflows reached $280.9 million, highlighting a capital strain due to heavy spending on property and equipment [3] - To address the capital gap, IREN is increasingly relying on external financing, including Microsoft prepayments and a $1.0 billion convertible note issuance [3] Group 2: Growth Potential - The Zacks Consensus Estimate predicts a revenue growth of 116.4% in 2026, reaching $1.10 billion, suggesting that rising AI demand may validate the initial capital investments [4][10] Group 3: Competitive Landscape - Key competitors CleanSpark and Applied Digital are also making significant CapEx investments in AI infrastructure and High-Performance Computing (HPC), with CleanSpark focusing on rapid commercial implementation and Applied Digital transitioning from crypto hosting to AI data centers [5][6][7] Group 4: Stock Performance and Valuation - IREN shares have increased by 188.5% over the past year, outperforming the broader Zacks Finance sector [8] - IREN is currently trading at a forward price/sales ratio of 6.78X, which is higher than the industry's 3.36X, indicating potential overvaluation [12] - The Zacks Consensus Estimate for IREN's fiscal 2026 earnings is 79 cents per share, a significant increase from 4 cents year-over-year, but the fiscal 2027 estimate shows a decline of 56.33% [15]

Core Insights - A 23-year-old former OpenAI employee, Leopold Aschenbrenner, is preparing to lead a $700 million funding round for Fluidstack, a cloud computing startup that provides computing power to OpenAI's competitors, with Google also considering participation [1][3][4] - Fluidstack's valuation is expected to reach $7 billion post-funding, reflecting the growing demand for AI infrastructure [3][4] - The company has secured significant contracts, including a $50 billion data center partnership with Anthropic, indicating its pivotal role in the AI arms race [4][14] Company Overview - Fluidstack is a "Neocloud" company specializing in high-performance GPU computing for AI firms, with clients including Mistral AI and Character.AI [4][12] - The company was founded in 2017 and initially focused on renting out GPU power from gaming cafes and idle servers, generating $1.8 million in revenue in 2022 [12] - Following the AI boom, Fluidstack's annual recurring revenue (ARR) is projected to reach $180 million by the end of 2024, a 620% increase year-over-year [12] Investment Dynamics - Aschenbrenner's hedge fund, Situational Awareness LP, has raised over $1.5 billion and achieved a 47% return in the first half of 2025, significantly outperforming the S&P 500 [8][9] - The fund's strategy includes investing in companies benefiting from AI infrastructure while shorting industries likely to be disrupted by AI [9][10] - Fluidstack's rapid expansion includes a $10 billion memorandum with the French government to build a 1 GW AI supercomputer and significant contracts with TeraWulf and Cipher Mining [13][14] Competitive Landscape - The investment in Fluidstack reflects a broader trend of talent and resources shifting away from OpenAI, with former employees establishing competitive ventures [15] - Aschenbrenner's unique background as a former OpenAI researcher positions him as a key player in the evolving AI landscape, drawing comparisons to historical figures who identified market opportunities ahead of the curve [9][15] - The reliance of new cloud companies like Fluidstack on a few major clients raises concerns about potential valuation bubbles in the sector [14]