The Kobeissi Letter

BREAKING: Nvidia stock, $NVDA, extends gains to over +8% after posting record quarterly earnings results. The stock has now added over +$400 BILLION in market cap since reporting earnings. x.com/KobeissiLetter/status/20…

The AI boom is transforming Japan's economy. Japan's exports surged +23% YoY in July, the largest annual increase since October 2022. This is up from June's +19% gain and marks the 5th consecutive monthly increase in growth. The surge was driven by electronic component and semiconductor exports, which soared +49% YoY, fueled by demand from AI and data center investment. At the same time, passenger car exports rose +21% YoY. Shipments to the US rose +22% YoY, while exports to China and Europe jumped +26% and +19%, respectively. The improvement also comes as the Yen weakened +11% YoY last month, to a 40-year low against the US Dollar, averaging 161.83, making Japanese exports more competitive globally. The global AI investment wave is driving a sharp increase in Japanese exports.

Earnings growth is beginning to justify market concentration. The top 10 US stocks now account for 40% of the S&P 500’s market cap, near their highest proportion on record. Meanwhile, earnings generated by the top 10 now represent a record 38% of the S&P 500’s total earnings. This percentage has DOUBLED since the 2022 bear market. By comparison, this proportion stood at ~30% in November 2025, while the top 10 still represented ~40% of the S&P 500’s market cap. To put this into perspective, at the 2000 Dot-Com Bubble peak, the top 10 accounted for just ~15% of the S&P 500’s total profits while accounting for ~27% of its market cap. A handful of stocks are now driving both the market and its earnings.

If Nvidia, $NVDA, actually reports $108 billion in revenue for Q3 as they are guiding, that would mark +1,730% growth in 4 years. Never in history has a company of this size grown at such a fast pace. Once again, we are witnessing history. x.com/KobeissiLetter/status/20…

BREAKING: Nvidia, $NVDA, erases all losses and surges +5% after reporting record earnings results. The stock has now added +$250 billion in market cap in after hours trading. x.com/KobeissiLetter/status/20…

Absolutely insane. Nvidia, $NVDA, just guided $108 BILLION in revenue for Q3 alone. And, this guidance assumes ZERO data center compute revenue from China. This builds on the record $96.2 billion in revenue posted for last quarter for a projected total of $204.2 billion in 6 months. We now have a $5+ trillion company is seeing +106% year-over-year revenue growth. There has never been anything like what we are seeing right now with AI. This is arguably the biggest technological revolution of all time.

BREAKING: Nvidia stock, $NVDA, falls -4% after reporting a record $96.2 billion in quarterly revenue. The company beat both revenue and EPS expectations and provided stronger than expected guidance. x.com/KobeissiLetter/status/20…

It's officially Nvidia earnings day. Nvidia, $NVDA, is expected to post a record $92.3 BILLION in quarterly revenue today. This would mark +1,278% revenue growth over the last 4 years. Furthermore, this would mark nearly +$90 BILLION in revenue growth compared to Q2 2020. We t.co/64g4pPF0lX

BREAKING: Salesforce stock, $CRM, surges over +8% after reporting stronger than expected earnings. x.com/KobeissiLetter/status/20…

Hedge funds are rapidly dumping chip stocks: Semiconductor and semiconductor equipment stocks now account for ~16% of total global hedge fund market exposure, near their lowest in 6 months. This percentage has declined -8 points since its June peak. However, exposure still remains double the levels seen in November 2025. To put this into perspective, semiconductor stocks accounted for ~6% of global hedge fund exposure on average in 2024 and 2025. Meanwhile, software and services stocks now account for just ~2% of hedge funds' portfolios, near the lowest level on record. Hedge funds are locking-in massive profits in chip stocks.

US consumer confidence is declining: The Conference Board Consumer Confidence Index fell -0.8 points in August, to 89.4, its lowest since January. This also marks its 2nd-lowest level since April 2025. This comes as the Expectations Index dropped -5.8 points, to 68.2, its lowest since January. The decline reflects growing pessimism about future job and income prospects, as well as less optimism about future business conditions. This report also highlights elevated gasoline prices, broader cost-of-living pressures, and a slowdown in hiring as key factors weighing on American households this month. Meanwhile, the Present Situation Index rose +6.8 points, to 121.2, its highest since May, after 3 consecutive monthly declines, somewhat offsetting the overall decline in the Consumer Confidence Index. Americans are worried about the economy.

US housing demand has collapsed. US new home sales fell -10.5% MoM in July, to 607,000 units, the lowest in 6 months and far worse than the -1.4% decline expected. Excluding January 2026, this is the lowest level since November 2022. New home sales have now fallen in 3 of the last 4 months and are down -6.3% YoY. The Midwest was hit hardest, with sales plunging -42.7% MoM, to 43,000, the lowest level since 2012. At the same time, sales in the South, the nation's biggest homebuying region, accounting for more than 60% of the total, fell -13.0% to 383,000, the 2nd-lowest level since January. This comes as the 30Y mortgage rate hit 6.81%, its highest since August 2025, weighing on homebuyer demand. The housing market is historically unaffordable right now.

The market is consolidating before its next big move. On Tuesday, the S&P 500’s intraday trading range was just 0.46%, near its lowest since December. For most of this month, the index’s intraday trading range has not exceeded 0.75%. Since the beginning of the month, this indicator has surpassed 1.00% in only 2 sessions, on August 3rd and August 4th. This makes August the least volatile month so far in 2026, based on this metric. Meanwhile, the volatility index, $VIX, is trading below 17 points for the 3rd consecutive week, the longest such streak since the final 2 weeks of 2025 and the first week of this year. Market volatility has been historically low this month.

It's officially Nvidia earnings day. Nvidia, $NVDA, is expected to post a record $92.3 BILLION in quarterly revenue today. This would mark +1,278% revenue growth over the last 4 years. Furthermore, this would mark nearly +$90 BILLION in revenue growth compared to Q2 2020. We are witnessing the biggest technological revolution in modern history.

BREAKING: Meta stock, $META, surges over +5% after the company agrees to pay up to $16.7 billion to settle claims that Facebook and Instagram harmed children. x.com/KobeissiLetter/status/20…

BREAKING: US oil prices extend losses and drop below $80/barrel for the first time since August 10th. x.com/KobeissiLetter/status/20…

BREAKING: US July PCE inflation, the Fed's preferred inflation metric, hits 3.7%, above expectations of 3.6%. Core PCE inflation was 3.3%, the second highest reading since October 2024. US inflation continues to run at nearly double the Fed's 2.0% target. Own assets or be left behind.

AI stocks are increasingly moving in the opposite direction of the rest of the market: The 40-day correlation between the US Broad AI Index and the S&P 500 ex-AI Index is down to -0.60, the lowest on record. The correlation has now been negative since late-June, marking only the 2nd negative reading on record after July 2024. This also marks a sharp reversal from the +0.65 positive correlation seen in mid-May. In other words, AI stocks are increasingly diverging from the broader market, suggesting capital is rotating between AI and non-AI stocks. This comes after the US AI Index surged +160% since April 2025, significantly outperforming the S&P 500 ex-AI Index, which gained ~35%. The AI trade is becoming increasingly independent of the broader market.

BREAKING: Real disposable income growth has now trailed real consumer spending growth for 24 consecutive months, the longest streak in data going back to at least the 1960s. This means Americans have been spending more than their inflation-adjusted incomes have grown for 2 consecutive years. As a result, Americans have increasingly relied on savings and debt to fund the gap. By comparison, the previous longest streak was ~23 months, set in the late 1970s. Meanwhile, the US personal savings rate has fallen -1.7 percentage points since January, to just 2.7%, its 4th-lowest reading since the 2008 Financial Crisis. Furthermore, US credit card debt surged by $21 billion in Q2 2026, to $1.26 trillion, the 2nd-highest level on record. Consumers are using debt to "fight" inflation.

BREAKING: Global physical gold-backed ETFs attracted +$6.4 billion in inflows last week, their largest weekly intake since January. This was led by North America at +$4.4 billion, followed by European funds at +$1.7 billion, and Asia at +$300 million. This also marks their 3rd-largest weekly inflow on record and the 7th consecutive weekly inflow. Over this 7-week stretch, global gold-backed ETFs have attracted +$16.4 billion. Meanwhile, total AUM in global gold ETFs rose +$33 billion last week, to $615 billion, the highest level since the 2nd week of May. The global gold rush is accelerating:

BREAKING: US oil prices extend losses to over -5% on the day and drop below $81/barrel. The move comes even as the US has said there are no ongoing negotiations with Iran. x.com/KobeissiLetter/status/20…

BREAKING: Commercial and industrial loans at US commercial banks surged +$254 billion YoY in the week ending August 21st, to $2.93 trillion, the highest level since June 2020. This also marks the largest YoY increase since March 2023. Last week alone, commercial and industrial loans jumped +$8.4 billion. As a result, these loans are now just $137 billion below the May 2020 peak of $3.07 trillion. Such a rapid increase is usually a sign of improving credit demand and business activity, especially when it rises alongside improving CapEx. This all comes despite inflation remaining above 3.0% for 5 consecutive months, suggesting businesses are increasing borrowing even as price pressures remain elevated. US business are leaning heavily into credit.

Investors are moving away from long-term bonds. Treasury Bill ETFs have attracted +$51 billion in inflows since February 27th, the most among all fixed-income categories. Over the same period, ETFs tracking long-term bonds have attracted just +$7 billion. This is despite long-term bonds offering a higher ~4.7% indicated yield versus the ~3.7% for Treasury Bill ETFs. However, long-term bonds can lose significant value when yields rise, while Treasury Bills are much less sensitive to changes in yields. This risk has become increasingly important, with the 30Y Treasury yield rising +70 basis points since February 27th, now at 2007 levels. Investors are choosing lower yields in exchange for lower risk.

Institutional investors are extremely bullish worldwide: Long positioning in the S&P 500 futures among asset managers is up to ~$375 billion, near its highest level on record. This is just ~$20 billion below the peak posted in May 2026. Since April 2025, bullish bets by asset managers on S&P 500 futures have surged by +$160 billion, or +74%. Meanwhile, their long exposure to MSCI Emerging Markets futures is up to ~$44 billion, also near its highest on record. Long positioning in MSCI EAFE futures, which track developed markets outside the US and Canada, is up to $39 billion, its highest on record. Institutional investors piling into equities globally.

BREAKING: Total onchain transaction count on Solana hit a record 4.2 billion in July, up +13.5% month-over-month. This marks an increase of 2 billion transactions compared to December 2025, or +91%. The surge in activity comes as Solana, $SOL, rallied +40% in 8 days to its highest level since February 3rd. Also contributing to the increase in Solana onchain trading activity is tokenized assets, with RWA market cap now above $38 billion. Several onchain platforms have helped catalyze this growth, including Jupiter which now processes 71% of DEX aggregator volume on Solana. In total, crypto has added +$580 billion in market cap since August 16th. Onchain trading activity is officially back to record highs.