Markets
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Luke Kawa

Retail traders are forcing institutional investors into their favorite stocks

JPMorgan’s note on retail trading activity is so nice, I have to write about it twice.

In addition to leaving a big mark on how stocks trade on earnings releases, strategists led by Arun Jain also flagged how in meme stock land and beyond, retail traders are basically forcing institutions to play a game of follow-the-leader.

“As an interesting pattern within ‘Meme’ stocks (e.g. Opendoor Technologies), retail buying in prior months is followed by non-retails joining the trade more recently,” they wrote. “This is in line with our reading on the broader market — retail investors benefitted from ‘buying-the-dip’ as we entered the sharp V-shaped recovery post-Liberation Day, while the High Beta rally (which also included Meme stocks) was fueled by non-retail investors catching up via higher beta exposure.”

OPEN retail and non-retail activity

I would also be remiss not to say that retail buying outstrips non-retail buying by a substantial margin, further underscoring the notion that “buyer’s binges” are a more important part of so-called “short squeezes” than investors who bet against the stock actually closing their positions.

However, Jain and co. caution that “as a result, High Beta Crowding is at all-time highs and is likely to experience snapbacks as sentiment sours with policy uncertainty or weak economic data.”

Along these lines, Goldman Sachs strategist John Marshall is telling clients to buy large-cap meme stocks including Palantir Technologies and Advanced Micro Devices(?!?).

In the case of the latter, we’re really stretching the definition of what “meme stock” means. AMD, while trading at about a 40% premium to the Philadelphia Semiconductor Index as a whole, isn’t outrageously valued and has a fairly well-established and successful business model. However, per Goldman, it is a name with elevated retail activity.

The phenomenon of “herding behavior” is well known in nature. It’s just a little surprising to see retail traders being portrayed as the shepherds and professionals as the sheep!

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Luke Kawa

Broadcom jumps after locking down Google as a customer for future generations of TPUs

Shares of Broadcom rose more than 3% in postmarket trading on Monday after its most important customer doubled down on the custom chip specialist’s ability to produce its most valuable commodity.

In a filing, Broadcom said that it entered into a long-term agreement with Google to supply future generations of TPUs (custom AI accelerator chips) as well as a supply assurance agreement for networking and other equipment “through up to 2031.”

Bernstein analyst Stacy Rasgon indicated that Broadcom’s investor relations team told him that Google’s long-term agreement “has revenue commitments that go along with it through the timeline.”

Gemini 3 launched to rave reviews in November. The model was trained on TPUs co-developed by Broadcom and Google.

The same Monday filing showed that Broadcom, Google, and Anthropic expanded a partnership that will see the Claude developer access 3.5 gigawatts of AI compute capacity beginning in 2027, powered by the TPUs co-designed by the custom chip specialist and the search giant.

Bernstein’s Rasgon added that Broadcom’s team suggested these 3.5 gigawatts are “only part of a larger partnership over time.” He thinks Broadcom’s fiscal year 2027 guidance for AI revenues of $100 billion “is looking increasingly light” thanks to this news.

For what it’s worth, the enhanced pact with Anthropic hinges upon the firm’s ability to afford AI compute. But based on the insane trajectory of its run-rate revenue that may not be a big hurdle to clear.

“Broadcom’s expanded agreements with Google and Anthropic add rare multi-year visibility, reinforcing a $40-$50 billion AI revenue opportunity tied to Anthropic’s 3.5 gigawatt deployment starting in 2027, while building on the previously disclosed 1GW ($10 billion) starting in 2H,” wrote Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada.

Luke Kawa
2h
Anthropic boasts revenue run rate of $30 billion as the Claude developer expands its partnership with Google and Broadcom

Anthropic’s revenue run rate is higher than the trailing 12-month revenues of all but 129 S&P 500 companies.

Anthropic Co-founder and CEO Dario Amodei
markets
Luke Kawa

Health insurers surge after Medicare agrees to pay 2.48% more in 2027, a bigger-than-expected boost

Health insurance stocks are surging after the Centers for Medicare & Medicaid Services said it plans to boost Medicare Advantage and Part D payments by 2.48% in calendar year 2027.

The likes of CVS, Humana, UnitedHealth, Molina Healthcare, Oscar Health, and Elevance Health are gaining in postmarket trading.

Wall Street analysts had anticipated that rates for 2027 would go up between roughly 1% and 1.5%.

These stocks had gotten crushed in late January when the Trump administration proposed relatively flat federal payment rates.

Insurance companies that provide government-sponsored plans, like Medicare Advantage, faced headwinds from higher-than-expected costs in 2025.

Luke Kawa, Tasha Matsumoto
6h
Stocks maintain gains after whipsawing as traders digest war updates

Stocks rose for the fourth consecutive session as traders vacillated between hopes for a ceasefire and fears of an escalation.

Bull kicks
markets
Matt Phillips

Iran war winners Dow, LyondellBasell downgraded by Bank of America

Dow, Inc. and LyondellBasell — two petrochemicals stocks that surged as markets priced in shortages due to the closure of the Strait of Hormuz — should decline as investors focus on the long-term outlook for normalized petrochemical prices once the war resolves, Bank of America analysts wrote in a note downgrading the two stocks Monday.

BofA moved its rating on the shares from “neutral” to “underperform,” writing:

“Over time, as chemical markets normalize, we expect 1) investor focus to shiſt back to ‘normal’ or ‘sustainable’ earnings profiles and 2) the conflict to resolve without material asset rationalization, both of which likely bias shares lower over the next twelve months.”

Analysts also lowered their stance on another petrochemicals and building materials stock, Westlake, to “neutral” from “buy.”

While cutting those ratings, BofA actually raised its more near-term price targets for the shares. It upped LyondellBasell to $68 from $55, and Dow to $35 from $31.

But those price targets still imply declines of more than 10% compared to where both shares were trading late Monday morning. Both stocks are up roughly 30% since the start of the Iran war.

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