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Luke Kawa3/10/25

Semis crater, extending annual losses versus S&P 500 to more than 15%

It’s another awful day for semiconductor stocks, both outright and relative to the S&P 500. The VanEck Semiconductor ETF is down nearly 4% as of 12:15 p.m. ET, nearly twice as much as the benchmark US stock index.

Chips have gone from market leader to laggard real quick. The AI trade has had its legs kicked out from under it, and semiconductor demand outside of that high-flying segment hasn’t been able to stand on its own two feet.

Broadcom is off more than 5%, losing most of its post-earnings gains, while Marvell Technology and Microchip Technology are doing even worse. Semi kingpin Nvidia is also down more than 4% on the session.

The chip-centric fund is now trailing the S&P 500 by more than 15% over the past year. Since the launch of the ETF in late 2011, it’s been rare for semis to lag the benchmark US stock index by much more than this over a one-year period, which may hint at a relative bottom. On the other hand, we’ve seldom seen the degree of colossal outperformance that a handful of chip stocks have been able to deliver in recent years.

Broadcom, Nvidia, TSMC, Analog Devices, and Texas Instruments are the only five out of 25 components in SMH to deliver a positive return over the past 252 sessions; on the other side of the spectrum, Intel and AMD have shed over half their value during this span.

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Retail traders are making stock picking look easy

Study after study tells us that stock picking is incredibly difficult, with the lion’s share of active fund managers underperforming the S&P 500.

To that, retail traders say: “What, like it’s hard?”

According to JPMorgan strategist Arun Jain, retail investors’ stock picks are trouncing strategies that would employ dollar cost averaging into the tech-heavy Nasdaq 100 and even the best-performing slices of the AI trade so far this year.

Within ETFs holdings specifically, retail’s relative performance is more mixed: besting the S&P 500 year to date, but lagging the Nasdaq 100 (again, assuming dollar-cost averaging strategies).

“In single stocks, retail has unsurprisingly outperformed benchmarks over the past month or so, consistent with a concentrated tilt toward MU, AMD, and NVDA,” Jain wrote.

JPM Retail PnL

Of course, as the old saying goes, don’t confuse brains with a bull market.

But there’s another saying that tells us to make hay while the sun shines. And it seems retail traders are making some serious hay.

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Dell jumps after landing a $9.7 billion Pentagon contract

Dell is surging after the company won a five-year $9.7 billion software agreement with the US Department of Defense to consolidate and manage Microsoft software licenses across the American military ecosystem.

It’s a big win for the company ahead of its earnings release after the close on Thursday.

This massive award has also drawn attention to Dell’s relationship with President Donald Trump and his administration. On Giving Tuesday in December, Michael Dell and his wife, Susan, appeared alongside Trump at the White House and announced a $6.25 billion charitable commitment to fund investment accounts for older kids who would not be eligible to receive money through the One Big Beautiful Bill Act.

Trump has also publicly championed the IT firm on multiple occasions. At a Mother’s Day event at the White House earlier this month, Trump publicly endorsed Dell, saying, “Go out and buy a Dell. They’re great.” Filings showed the president’s trust owned Dell shares during Q1.

Dell’s stock has skyrocketed over 145% year to date.

Per CNBC, Department of Defense Chief Information Officer Kirsten Davies said at a Pentagon press briefing that Dell Federal Systems beat out multiple competitors for this agreement, with the Pentagon expecting this arrangement to provide $422 million in annual savings.

IBM rallies after committing to spend $10 billion to pursue the holy grail of quantum computing

IBM boasts of “more quantum computers than reported by all other industry players combined.”

Scholz Inaugurates Europe's First IBM Quantum Data Center

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Max Knoblauch2h

Best Buy surges on better-than-expected Q1 sales, earnings

Best Buy is on pace for its best trading day in more than a year in premarket trading Thursday, following Q1 earnings that beat Wall Street’s expectations.

In its first quarter, the retailer reported:

Adjusted earnings of $1.28 per share, compared to estimates of $1.23 per share from analysts polled by FactSet.
$8.94 billion in sales, versus the $8.82 billion consensus estimate.

Best Buy reaffirmed its full-year guidance and said it expects comparable sales growth of 1% in Q2. (The same quarter last year saw the launch of Nintendo’s Switch 2.)

The company will replace CEO Corie Barry with company veteran Jason Bonfig in October of this year.

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Dollar Tree surges on Q1 earnings beat, boost to full-year profit outlook

Dollar Tree is surging in premarket trading after the discount retailer reported Q1 earnings that exceeded Wall Street’s expectations, prompting management to boost its full-year earnings outlook.

The key Q1 figures:

Adjusted earnings per share of $1.74 (compared to analyst estimates of $1.55).
Comparable-store net sales growth of 3.5% (estimate: 3.27%).
Net sales of $4.97 billion (estimate: $4.96 billion).

The big strength, obviously, was in the bottom line. The company’s gross profit margin expanded by 120 basis points, largely thanks to lower freight costs, higher mark-ons, and reduced product shrink.

Dollar Tree raised its fiscal 2026 adjusted EPS guidance to a range of $6.70 to $7.10 (up from its prior forecast of $6.50 to $6.90). The $6.90 midpoint sits ahead of the $6.69 consensus estimate, per Bloomberg.

Guggenheim analyst John Heinbockel noted that sentiment on Dollar Tree was sour heading into this report, with estimates weakening “on a combination of low-income household health, elevated freight expense, and even the helium shortage,” which helps explain why there’s such an “outsized reaction” to these results.

While traffic was down, the consumers that did frequent Dollar Tree were spending more: average ticket sizes were up 4.5%.

“We continued advancing our strategic plan — a more relevant assortment, agile cost management, a stronger customer connection, and new store growth coupled with improved store conditions — all driving operating margin expansion and delivering a strong bottom-line performance,” CEO Mike Creedon said in a press release.

The retailer expects to open approximately 400 new store locations while converting roughly 630 existing venues into its more profitable multi-price format.

To further lower frictions for convenience-seeking shoppers, Dollar Tree officially launched a partnership with DoorDash alongside its earnings release. The distribution agreement brings more than 9,000 stores across 48 states onto the app, allowing users to order over 10,000 products on-demand. The partnership will add to existing delivery agreements with Instacart and Uber Eats as Dollar Tree increasingly competes on convenience as well as price.

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