The Insider Report: A Final Pop Before the Drop?

Market Overview

Stocks ended mixed last week, with the S&P 500 leading the way. It finished up 0.36% and hit a new all-time high, while the Nasdaq only rallied 0.14%. Tech lost a bit of momentum and energy capitalized, showing that bears are down but not fully out. The Dow Jones Industrial Average pulled back 0.56% on the week. The good news is that the rotation is still playing out and keeping the bull trend alive. Precious metals had a solid week and cryptocurrencies are nearing a momentum of truth for their next big break.

Stocks I Like

Meta Platforms (META) – 78% Return Potential

What’s Happening

• Meta Platforms, Inc. (META) is a leading global technology company that operates major social media and messaging platforms including Facebook, Instagram, WhatsApp, and Messenger, while advancing immersive computing through its Reality Labs division focused on virtual and augmented reality, offering investors exposure to the rapidly growing digital advertising, social networking, and metaverse technology sector with a focus on AI-driven engagement, content discovery, and next-generation human connection.
• META’s latest quarter delivered revenue of $60.8 billion and earnings of $15.85 billion.
• Valuation in META is decent. P/E is at 22.41, Price-to-Sales is at 6.69, and EV to EBITDA is at 13.69.
• At a technical level, META needs to follow through after completing a potential double bottom. It could stand to benefit from a rotation within the mega-cap tech space.

Why It’s Happening

• Meta Platforms continues to dominate digital advertising with AI-driven enhancements that are accelerating growth. In the most recent quarter, advertising revenue rose 27% to nearly $59.4 billion, fueled by a 14% increase in ad impressions and a 12% rise in average price per ad, as advanced ranking, targeting, and creative tools deliver better results for advertisers.
• The company’s unmatched scale in social engagement remains a powerful foundation. Family Daily Active People reached 3.60 billion, up 3% year-over-year, while Instagram and other apps maintain high engagement levels that support ongoing monetization expansion across the Family of Apps ecosystem.
• AI is transforming both the core business and future product pipeline. Meta’s investments in models like Muse Spark are already boosting daily interactions with Meta AI by 60% and powering tools used by millions of small businesses, while also opening pathways into enterprise AI opportunities and improved user experiences across platforms.
• Non-advertising revenue streams are scaling meaningfully. Family of Apps other revenue hit $1 billion for the first time (up 73% year-over-year), driven primarily by WhatsApp paid messaging and subscriptions, adding a higher-margin, recurring growth layer beyond traditional ads.
• Reality Labs is showing early commercial traction in AI-powered wearables. Revenue in the segment grew 16% year-over-year, led by strong demand for Ray-Ban Meta AI glasses, positioning the company to capture emerging interfaces for AI interaction while the broader hardware and metaverse investments continue to mature.
• Analyst Ratings:
  • Cantor Fitzgerald: Overweight
  • Rosenblatt: Buy
  • B of A Securities: Buy

My Action Plan (78% Return Potential)

• I am bullish on METAabove $520.00-$525.00. My upside target is $1050.00-$1100.00.

Dell Technologies (DELL) – 26% Return Potential

What’s Happening

• Dell Technologies Inc. (DELL) is a leading global technology company that designs, develops, manufactures, and sells a comprehensive portfolio of personal computers, servers, storage systems, networking equipment, and IT solutions, with a strong focus on AI-optimized infrastructure and enterprise computing, offering investors exposure to the rapidly growing AI data center, cloud, and digital transformation sector with a focus on high-performance hardware and end-to-end technology solutions.
• The previous quarter had revenue of $60.8 billion and earnings of $15.85 billion.
• Valuation is elevated in DELL. P/E is at 36.48, Price-to-Sales is at 2.29, and EV to EBITDA is at 21.34.
• From a technical standpoint, DELL is consolidating its gains nicely within a rectangle formation. This points to a trend continuation in time.

Why It’s Happening

• Dell Technologies is capitalizing on explosive demand for AI infrastructure, with AI-optimized server revenue surging 757% year-over-year to $16.1 billion in its most recent quarter. This positions the company as a critical "picks-and-shovels" provider enabling the global AI data center buildout.
• A massive and growing order backlog underscores sustained multi-year visibility. Dell ended the quarter with an AI server backlog exceeding $50 billion after booking $24 billion in new AI orders, signaling that demand continues to outpace supply and supporting strong revenue recognition in coming periods.
• The Infrastructure Solutions Group (ISG) is delivering transformative growth, with overall ISG revenue jumping more than 180% as AI servers, traditional servers, networking, and storage all contribute. This broad-based strength is expanding the company’s role across enterprise, sovereign, and neocloud customers.
• Full-year guidance has been significantly raised to reflect the AI momentum, with fiscal 2027 revenue now expected in the $165–169 billion range and AI server revenue targeted around $60 billion. This outlook highlights management’s confidence in converting the backlog into sustained top-line expansion.
• Dell’s end-to-end portfolio and partnerships with leading chipmakers strengthen its competitive edge. The ability to deliver integrated rack-scale AI systems, storage, and networking solutions, combined with a recovering client PC business, creates multiple levers for growth and deeper customer relationships in the AI era.
• Analyst Ratings:
  • Citigroup: Buy
  • Evercore ISI Group: Outperform
  • Morgan Stanley: Equal-Weight

My Action Plan (26% Return Potential)

• I am bullish on DELL above $365.00-$370.00. My upside target is $620.00-$640.00.

Magnite (MGNI) – 32% Return Potential

What’s Happening

• Magnite, Inc. (MGNI) is a leading independent omnichannel sell-side advertising platform that enables publishers and media owners to monetize digital inventory across connected TV (CTV), mobile, desktop, and other channels through programmatic technology, offering investors exposure to the rapidly growing digital advertising and connected television advertising sector with a focus on independent marketplace solutions and high-value CTV monetization.
• The previous quarter had revenue of $43.84 billion and earnings of $3.44 billion.
• Valuation in MGNI is decent. P/E is at 22.01, Price-to-Sales is at 4.99, and EV to EBITDA is at 20.883.
• From a charting point of view, MGNI is flagging within a bull flag formation. These are some of the most powerful patterns in all of technical analysis. Another leg higher could be just around the corner.

Why It’s Happening

• Magnite is emerging as a clear leader in the shift of advertising dollars to connected TV (CTV) and programmatic streaming. CTV contribution ex-TAC surged 36% year-over-year in the most recent quarter, now representing more than half of the company’s total contribution, driven by broad demand from major media owners and expanding advertiser adoption.
• Strong overall business momentum is translating into accelerating top-line growth. Total contribution ex-TAC rose 17% year-over-year, exceeding expectations, while the company raised full-year guidance for contribution growth to 13–14%, reflecting confidence in sustained demand across streaming and a return to growth in other digital channels.
• Operating leverage is delivering meaningful profitability expansion. Adjusted EBITDA grew 30% with margins reaching 37%, and the company increased its full-year outlook for both EBITDA growth (above 20%) and free cash flow growth (high 40% range), underscoring the high incremental margins of its platform model.
• Strategic platform advantages, particularly SpringServe, position Magnite as a preferred partner for premium CTV inventory. Recent wins with major publishers and OEMs, along with growing participation in live sports and commerce media, expand its addressable market and deepen publisher relationships.
• Cash generation and balance sheet strength support ongoing investment and shareholder returns. Robust operating cash flow, combined with disciplined capital allocation including share repurchases, provides flexibility to invest in product innovation (including AI-driven tools) while returning capital and strengthening its competitive position in the evolving ad-tech landscape.
• Analyst Ratings:
  • Wells Fargo: Equal-Weight
  • RBC Capital: Outperform
  • Benchmark: Buy

My Action Plan (32% Return Potential)

• I am bullish on MGNI above $20.00-$21.00. My upside target is $33.00-$34.00.

Market-Moving Catalysts for the Week Ahead

Inflation Lid – Rate Hikes Tumble

Rate hike odds tumbled even more last week thanks to the inflation data. The consumer price index (CPI) came in at estimates across the board for July. But it was the producer price index (PPI) that showed the weaker reading and inflation below estimates.

The consequences of this are significant because it buys the Fed time to decide on what to do next on the interest rate front. The market has overwhelmingly priced in a hawkish central bank in the coming months.

The unwind of such a trade could set some serious tailwinds into the market’s sails on the bullish side of things. The unwind would include a bid in bonds, a selloff in the dollar, and a surge higher in stocks. I’d also keep a close watch on precious metals and crypto as well.

Stubborn Sentiment

It’s a good time to revisit the important market principle of sentiment following price, not the other way around. Stocks have been dancing around the all-time highs for a couple of weeks now, yet sentiment hasn’t flipped fully bullish yet.

To be clear – there’s been an improvement in the collective mood over the past few weeks, but we’re far from a euphoric state, which is where important highs tend to form. Remember, bottoms form in fear, tops form in euphoria. It’s just the way it works.

The market looks to have a solid pathway higher over the next several weeks. Expect sentiment to slowly, but surely track prices higher. Then look for an overwhelming bullish majority near the market’s top. Right now, I’m looking at the October period as a hotspot for an important high.

Magnificent ELEVEN Leadership

It’s all about rotation – the big movers last week were Nvidia and SpaceX. The former is coiling up within spitting distance of its all-time high, whereas SpaceX retested a former-support-turned-resistance zone. Palantir is still looking solid as well, and I have my eyes set on Meta for the next beneficiary of the mega-cap tech rotation.

Sector & Industry Strength

The greater sector posturing since the start of the second quarter remains fully bullish. Despite energy being the top-performing sector last week, it’s still firmly in the bottom of the pack. Technology remains the undisputed leader, which is bullish.

Financials and industrials are in second and third place, respectively. This is constructive for the Russell 2000 small cap index, since those are major sector components of it. It’s also good to see consumer discretionary still outperforming consumer staples. Utilities as the worst-performing sector is a good sign too.

Editor’s Note: Tech slipped up a bit last week, and energy capitalized. Bulls have work to do this week.

About That "Lag 7" (Sector ETF: MAGS/SPY) 

Just a few weeks ago, headlines started to circulate renaming the "Magnificent Seven" into the "Lag Seven." The timing of these headlines couldn’t have been better, as the market was setting up for the best buying opportunity since March.

Interestingly, the mega-cap tech basket had already bottomed weeks before the market did. The chart below shows the ratio between the Magnificent Seven (MAGS) stacked against the S&P 500 (SPY).

The ratio has been correcting into a descending channel since last summer. These are continuation patterns, and the longer-term trend is up. That’s no surprise given how important these stocks are for the overall market. Watch for a break above the upper trendline, and they should start outperforming by a wide margin again.

Alts Stopped Breaking Down (Sector ETF: XAI/BTC) 

Given the recent developments in the Dollar and precious metals, close attention should be paid to cryptocurrencies. There are some notable shifts taking place within the greater crypto complex that are signaling a rise in risk appetite.

I’m looking at the ratio between the EXANTE Altcoin Cryptocurrency Index (XAI) and Bitcoin (BTC). For years, Bitcoin dominance has been the theme for crypto, as altcoins haven’t done much since late-2023.

But a notable higher-low formed in this ratio back in May. Note that crypto prices have continued their decline – but altcoins are dropping less than Bitcoin now. If this ratio breaks above the upper horizontal trendline of the rounding bottom, a new "alt-season" could kick off a broader bull market in the crypto space.

Spreads Need Follow Through (Sector ETF: LQD/IEI) 

The bond market stopped breaking down over the past couple of weeks, largely thanks to the forex intervention by Scott Bessent and company over at the Department of Treasury. Despite the near-term relief, I still need to see some improvements on the credit spread side of things.

We’re back to looking at the ratio between investment-grade corporate debt (LQD) and 3-7 Year Treasuries (IEI). As a quick review, it’s good to see LQD outperform (ratio rising), as it signal liquidity conditions are strong. When it’s breaking down, it signals stress in credit and liquidity.

We know for a fact that policymakers watch this relationship. It’s why the Fed bought corporate bonds after the covid crash in 2020. This ratio needs to start turning higher – and decisively – sooner than later. If not, stocks could be in for some more turbulence in the coming months.

Cryptocurrency 

This week, I want to pivot over to Solana. Not only has Ethereum been displaying relative strength compared to Bitcoin, but altcoins in general have (as shown above). Specifically, Solana has been outperforming Ethereum too.

Solana broke out from a descending channel about a week ago. While the longer-term trend has been down, there’s an argument to be made that the shorter-term trend is starting to tilt back in favor of the bulls.

This is important because channels are continuation patterns. Solana looks to have a pathway to retest the 95.00-100.00 zone, and if that clears, look out above. It could be in the early stages of a new bull market.

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