Market Intelligence Brief

IBM's stock fell 25.21% on Tuesday, its worst single session since record-keeping began in 1968 and worse than Black Monday 1987, after preliminary Q2 revenue of $17.2 billion missed the Street's roughly $17.9 billion estimate and EPS of $2.93 came in below the $3.02 consensus. CEO Arvind Krishna's letter cited customers redirecting capital spending toward servers, storage, and memory late in the quarter to lock in supply ahead of expected price increases — a warning now read by strategists as a symptom of AI-infrastructure spending distorting the whole hardware cycle, not an IBM-specific problem. ⏰ ALREADY PRICED? (Tuesday) Bearish

US chip, memory, and storage names fell sharply again Thursday, with Sandisk down 13%, Seagate down 10%, Western Digital down 9%, and Intel and Micron each down 6%, as investors continued to reprice the durability of AI-driven demand against oversupply fears from China's CXMT. Micron — a personal watchlist name — has now shed more than 30% from its recent highs. Bearish

Netflix shares remain under pressure after Thursday's after-hours drop of more than 8% on record Q2 revenue of $12.56 billion (up 13% year over year, essentially in line with the Street's $12.59 billion estimate) but guidance that came in below expectations; Bernstein SocGen cut its price target Friday citing lingering revenue-growth concerns, and the stock is now the single most-discussed name on retail trading forums (see Retail Investor Activity below). Bearish

Data-analytics software maker Databricks is raising roughly $3 billion in a Coatue-led round that values the private company at $188 billion, up sharply from a $134 billion mark earlier this year — a reminder that private AI-infrastructure capital is still flowing even as public chip and memory names sell off, a split worth watching for what it says about where AI conviction actually sits right now. Bullish

PayPal's board sees the $53 billion take-private bid from Stripe and Advent International as undervaluing the company and is also weighing regulatory and financing hurdles to any deal, according to Reuters — the stock had surged on the initial report earlier this week. Mixed

The US carried out fresh strikes on Iranian infrastructure for a sixth consecutive night, expanding its target list to bridges and port structures, while Tehran continues to threaten retaliation near the Strait of Hormuz — a chokepoint for roughly 15% of global maritime oil trade. Oil is on track for a weekly gain as a result. Bearish

USD/JPY traded around ¥162.4 and EUR/JPY near ¥185.8 as of this morning, both little changed even as equities across Asia and the AI complex sold off sharply — Asian FX stayed subdued Friday as Middle East tensions offset a softer dollar, a flat currency tape that suggests the market isn't yet treating the equity stress as a policy-relevant shock for either the Fed or the BOJ ahead of their respective late-July meetings. Neutral

Bitcoin eased roughly 1% to just above $64,200 as of this morning's reading and extended its slide below $64,000 intraday as the fresh Iran strike and a fresh Trump comment on China added to the day's broader risk-off tone. Bearish

South Korea's Kospi extended its recent slide Friday as the AI-hardware selloff hit Samsung Electronics (005930) and SK Hynix (000660) again, with some strategists warning the technical trend has now turned against the index after weeks of AI-driven gains. Full detail on the Korea-Japan chip linkage is in China & Asia below. Bearish

India's largest IPO of the year attracted bids worth $31 billion, powered by institutional demand for SBI Funds Management, underscoring how much capital is still chasing Indian financial assets even as developed-market tech sells off. Bullish

Netflix is now the single fastest-rising name in retail chatter, per ApeWisdom's Reddit mention tracker: mentions jumped to 401 from 56 a day earlier, vaulting it from 15th to 3rd on the mention leaderboard as traders debate the post-earnings guidance drop. Micron held the top spot for a second straight day (851 mentions, up from 698) as the memory-chip rout keeps it front of mind, with SPY and AST SpaceMobile also elevated; SpaceX (SPCX) ranked in the top 5 of both ApeWisdom's mention tracker and Robinhood's Investor Index of top holdings by conviction — a cross-source overlap worth flagging given the stock's slide below its IPO price this week. On the Japan side, JPX's weekly individual-investor data for the week of July 6-10 showed retail essentially flat, a modest net sell of roughly ¥101 million on TSE Prime — not a meaningful skew either way. Notably, Matsui Securities' bull-bear ratio on Japan's chip and electronics names (Kioxia, Advantest, Lasertec, Tokyo Electron, SUMCO, Murata, Taiyo Yuden) sat in a tight 48-51% range as of that same week — essentially neutral positioning going into Friday's rout, meaning today's selloff wasn't preceded by an obvious retail flight from these names.

Andy Burnham, the former Greater Manchester mayor nicknamed the "King of the North," was formally elected Labour leader Friday with over 85% backing from Labour MPs and will replace Keir Starmer as prime minister on Monday, becoming Britain's seventh PM in a decade. Markets are watching for cabinet appointments and policy signals given his more interventionist reputation. Mixed

Beijing rebuked the UK over its nationalization of British Steel, with China's commerce ministry saying it supports using legal means to protect its interests — an early friction point for the incoming Burnham government's industrial policy. Mixed

The US struck bridges and a port tower in its widening Iran campaign overnight, marking a sixth consecutive night of attacks, while the IEA chief warned the Strait of Hormuz standoff now threatens global energy security. Bearish

President Trump used a primetime address to allege "shocking vulnerabilities" in US election security and accused China of 2020 election interference, contradicting his own intelligence community's findings; major networks split on airing the speech live, and analysts flagged the claims as a new friction point ahead of the midterms. Mixed

Flooding in Texas has killed at least two people with the state bracing for more historic rainfall through the weekend. Neutral

A school bus crash in Uganda killed at least 20 pupils, one of the deadliest road accidents reported there in recent years. Neutral

A Texas federal jury found Kioxia infringed a Viasat flash-memory patent and ordered it to pay $229 million in damages covering past infringement through March 2026, a verdict that landed Thursday just as the broader memory-chip complex was already sliding — the stock was among the hardest hit in Friday's Tokyo session. Bearish

SoftBank Group sank sharply Friday as Asian chip stocks tracked Wall Street's AI selloff into a second day, even as the group's Nvidia-linked "Noetra" sovereign-AI data center project with Sony and Honda continues to advance in the background. Bearish

Advantest and Taiyo Yuden both fell hard in Friday's session as the memory and chip-equipment complex sold off across the board, extending losses that began with Thursday's Wall Street rout in Sandisk, Seagate, Western Digital, Intel, and Micron. Bearish

Tokyo's benchmarks tumbled hard through Friday's session as the AI-valuation scare that hit Wall Street Thursday landed in full force on Asia, with breadth overwhelmingly negative across the exchange; full Japan-specific stock detail is above and in today's Japan Intelligence Brief. Bearish

Finance Minister Satsuki Katayama told parliament there is no change to the government's position that specific monetary policy decisions are the BOJ's jurisdiction, as the government finalizes an economic blueprint that will add an explicit footnote citing the BOJ Act's independence provision — a response to market unease after political pressure on the central bank helped push JGB yields to multi-decade highs earlier this year. The BOJ's policy rate remains at 1.0%. Neutral

Seven & i Holdings shares jumped as much as 3.6% on a Nikkei report that it is negotiating a double-digit stake in Zabka Group, Poland's largest convenience-store chain, in a deal likely worth several hundred billion yen — the company's first major overseas convenience-store investment since its $21 billion Speedway acquisition in 2021, and a sign of its ambition to expand beyond Japan and North America. Bullish

Japan's ruling coalition is aiming to decide by early August whether and by how much to cut the 8% consumption tax on food, part of the same economic blueprint reaffirming BOJ independence — a live fiscal-policy wildcard for household spending heading into autumn. Neutral

Lawmakers are moving to extend the current Diet session to around July 25 to complete work on an Imperial House Law revision that keeps married women in the royal family while continuing to bar female emperors — a change that landed alongside broader coverage of Japan's shrinking monarchy. Neutral

South Korea's Kospi fell again Friday as Samsung Electronics (005930) and SK Hynix (000660) tracked the broader chip-sector selloff, with some technical strategists warning the index's momentum has now turned bearish after a strong multi-week run driven by AI demand. Korean memory pricing signals remain the key leading indicator for Japan's own chip-equipment names. Bearish

Chinese President Xi Jinping told a Shanghai AI conference that the technology "should not be a solo performance by a single country," positioning Beijing as an open, cooperative alternative to US AI dominance; 29 countries signed a framework at the same event establishing a World AI Cooperation Organization. Neutral

Chinese AI-linked shares fell sharply as the global AI-valuation scare spread across Asia's tech complex, even as Moonshot AI unveiled a new open-source model, Kimi K3, that its backers say rivals US frontier offerings on several benchmarks. Bearish

Fast-fashion giant Shein secured approval from Hong Kong's listing committee to proceed toward an IPO, sources told Reuters, a step forward for one of the region's most closely watched pending listings. Bullish

China's crude imports have plunged during the Iran conflict, with analysts split on how quickly volumes recover once the Strait of Hormuz risk premium eases. Bearish

Tuesday's 25.21% single-session collapse in IBM — its worst day since record-keeping began in 1968 — has become the reference point for this week's broader AI-hardware selloff, as strategists debate whether it reflects company-specific execution problems or a genuine crack in enterprise AI-infrastructure spending. Full Tech Intelligence Brief coverage goes deeper on the model and infrastructure angle. ⏰ ALREADY PRICED? (Tuesday) Bearish

Even as public AI-adjacent names sold off, Databricks locked in a $188 billion valuation in a roughly $3 billion Coatue-led round, up from $134 billion earlier this year — a split between private and public AI conviction worth watching closely. Bullish

Amazon CEO Andy Jassy said the company's custom chip business already has $225 billion in signed commitments, a data point cited by bulls as evidence the underlying AI-infrastructure buildout remains intact even as sentiment toward AI-hardware equities sours. Bullish

A Texas jury's $229 million verdict against Kioxia over a Viasat flash-memory patent (detail in Japan section above) adds a company-specific legal overhang on top of the sector-wide DRAM oversupply concerns already pressuring memory names. Bearish

PayPal's board views the Stripe-Advent take-private bid as undervaluing the company and is weighing regulatory and financing hurdles — full detail in Markets & Macro above. Mixed

At an internal meeting, Microsoft CEO Satya Nadella reportedly criticized a rival frontier AI model for being "editorially controlled," arguing that built-in refusals to do "random things" don't make sense for a general-purpose assistant — a window into the industry's live debate over how much guardrail behavior a frontier model should carry. Neutral

President Trump's primetime speech alleging election vulnerabilities and China interference was not carried live by ABC, NBC, or CNN on their primary channels, and fact-checkers noted the claims contradict his own administration's intelligence assessments — a story with midterm-cycle market relevance given its use as a rationale for further election-security legislation. Mixed

Fed Governor Lisa Cook said she is prepared to act soon if inflation doesn't begin to slow, one of several Fed voices this week (alongside Dallas Fed's Logan) keeping the rate-cut debate alive ahead of the July 28-29 FOMC meeting. Neutral

Bitcoin eased roughly 1% to just above $64,200 as of this morning's reading and fell further below $64,000 intraday as fresh geopolitical risk aversion spread across risk assets broadly. Bearish

Citadel Securities is investing $400 million in Crypto.com at a $20 billion valuation, one of the largest institutional bets yet on a crypto exchange and a signal that institutional appetite for crypto infrastructure remains intact even as Bitcoin itself softens. Bullish

Polygon's chief executive announced layoffs as the network works through integrating its recent Coinme acquisition, part of a broader restructuring push across the layer-2 ecosystem. Neutral

Gracie Abrams released her new album to widespread critical attention and performed a track from it on Fallon the same day, capping one of the bigger pop release weeks of the summer. Neutral

Nolan's Greek epic is drawing attention for composer Ludwig Göransson's score, built from ancient Greek instruments and scrap metal, alongside strong early buzz around its ensemble cast. Neutral

Actor Ryan Hurst tore his bicep during a stunt and will be recast in Amazon's upcoming God of War series, a notable production hiccup for one of the platform's highest-profile game adaptations. Neutral

Lucid Motors shares jumped 29% after the company called circulating bankruptcy rumors "completely false," though its balance sheet still shows real cash-runway pressure — a sharp reminder of how violently sentiment can swing on a single denial in this market. Bullish

SpaceX stock dropped below its IPO price this week, even before insider-selling lockups begin to expire — one of the most-discussed names on retail forums this week (see Retail Investor Activity above) and a test case for how newly public space names hold up once initial excitement fades. Bearish

A staffer responsible for operating President Trump's teleprompter reportedly won big wagering on what the president would say in his public remarks — an odd, and now-scrutinized, use of insider foreknowledge that has nothing to do with markets but everything to do with a good story. Neutral