Good morning investors,
I made it from London back to my hometown of Bristol, where I am writing from today. My mum says hi of course. There is something strange about working on this newsletter in the afternoon, racing to get it out before US markets open rather than in the quiet hours before dawn. The time difference scrambles the routine, but the markets do not care where I am sitting or what the clock says on my side of the Atlantic.
What I can tell you is that the tape closed at fresh records again yesterday, and futures are pulling back modestly this morning as traders digest the run and parse the latest twists in the Iran saga.
Dow futures are down 210 points, or 0.4%. S&P 500 futures have slipped 0.2%. Nasdaq futures are off just 0.1%, cushioned by strength in Nvidia and a blowout from Hewlett Packard Enterprise.
The Session
Yesterday gave us another round of records. The S&P 500 gained 0.3% to close at almost exactly 7,600. The Dow added 0.1%. The Nasdaq rose 0.4%, led once again by Nvidia.
The path to those highs was anything but smooth. Iran reportedly halted communication with US negotiators in the morning, with state media claiming the country would move to fully block the Strait of Hormuz and that no dialogue would resume until Israel stopped all attacks in Lebanon and Gaza. Oil surged on the headline.
Then Trump, in characteristic fashion, told CNBC he "couldn't care less" if negotiations were over, before later posting that talks were "continuing, at a rapid pace" following a productive call with Netanyahu. The whiplash is exhausting, but the market has learned to look through it. Stocks recovered and closed green.
This is the pattern we have seen for weeks now. A scary Iran headline, a sharp move in oil, and then a recovery as the worst-case scenario fails to materialize. Eventually one of these flare-ups will not resolve so neatly. For now, the market keeps betting on de-escalation.
Alphabet Raises $80 Billion
The most consequential corporate news came from Alphabet, which announced it will raise $80 billion through equity offerings to fund its AI infrastructure buildout. The package includes a $10 billion investment from Berkshire Hathaway.
Shares fell more than 2% on the news, and I understand why. The reaction here is worth thinking through carefully.
On one hand, this is an extraordinary endorsement. Warren Buffett's Berkshire taking a major stake in Alphabet is a high-profile vote of confidence in the company's long-term AI and cloud strategy.
On the other hand, there is a more uncomfortable read. As one commentator put it, if the greatest business model in the history of capitalism cannot fund its AI ambitions from internal operations, then who possibly can? Alphabet generates enormous free cash flow. The fact that it feels compelled to raise external capital tells you something about the sheer scale of the spending this cycle demands.
I lean toward viewing this as a marginal negative, even if the long-term thesis on Alphabet remains intact. It reinforces the AI debt and capital-raising story I flagged yesterday. The buildout is now consuming capital at a rate that even the most profitable companies on earth cannot fully self-fund. That works as long as the returns materialize. It becomes a concern if they do not.
Berkshire Pivots
The Alphabet stake is part of a larger story about the new Berkshire.
Greg Abel, who took over as CEO in January, is putting his own stamp on the conglomerate. Monday's $10 billion Alphabet purchase brings Berkshire's total holding above $26 billion, making it larger than the firm's long-standing Bank of America and Chevron positions. Combined with a $6.8 billion deal to acquire homebuilder Taylor Morrison, Abel committed nearly $17 billion in just two days.
This is a meaningful departure. Buffett avoided big technology for six decades, save for his Apple position starting in 2016. His thesis was always that he did not understand new technology well enough to make an informed bet. Abel clearly does not share that hesitation. He raised the Alphabet stake by 224% in his first quarter at the helm.
What strikes me is the willingness to buy near all-time highs. Buffett famously waited for the fat pitch, sometimes for years, sitting on mountains of cash. Abel is signaling he is not willing to wait decades for the perfect entry. Berkshire's $380 billion cash pile has weighed on the stock, which is down 13% from its May 2025 record while the S&P has risen 34% over the same stretch. Abel is putting that cash to work.
To be fair, Alphabet is not a wild bet. There is near-consensus that it is a long-term compounder with or without AI. But it does depend on expensive AI capex, faces regulatory and monopoly pressure, and needs Gemini to keep pace with Anthropic and OpenAI. These are exactly the variables Buffett would have steered clear of. The era has changed.
HPE Stuns
Hewlett Packard Enterprise delivered the standout earnings of the session, surging 25% after reporting record results and pulling its long-term financial targets forward by two full years.
Revenue grew 40% to $10.68 billion, crushing the $9.79 billion estimate. Adjusted earnings of 79 cents trounced the 53 cents expected. It was the company's biggest earnings beat since 2018.
This is another data point in the enterprise AI infrastructure story that has run through every earnings report this season. Dell surged 38% last week. Snowflake jumped. Now HPE accelerates its targets by two years. The demand for AI servers and data center buildout is not slowing. If anything, it is intensifying.
The CFO noted the company has been agile in passing cost increases on to customers and has locked in long-term agreements extending into 2027. That pricing power and visibility is exactly what you want to see. It suggests the demand is durable, not a one-quarter spike.
Huang Anoints Marvell
Marvell soared more than 21% after Jensen Huang called it the next "trillion-dollar company" during an onstage appearance at Computex in Taipei.
Huang's logic is worth understanding because it explains where the AI buildout goes next. When you take a computing problem and disaggregate it across thousands of chips spread throughout a data center, the binding requirement becomes connectivity. The chips need to share data quickly. That is precisely what Marvell's networking and interconnect chips enable.
This is the same theme I have been developing for weeks. The bottleneck keeps migrating. From GPUs to memory to networking and now toward photonics. Marvell sits at the networking layer, and Nvidia has put a $2 billion investment behind that conviction. The stock is up over 158% year to date.
Marvell's market cap sits just short of $192 billion. The trillion-dollar label is aspirational, not imminent. But Huang's endorsement carries weight, and the move yesterday shows how eager the market is to find the next leg of the infrastructure trade.
Nvidia Brings AI to the Laptop
I wrote yesterday about Nvidia's push into the PC. The market is digesting that move now, and the implications are coming into focus.
The RTX Spark superchip, pairing a Blackwell GPU with a custom Arm-based CPU, will power laptops from Dell, ASUS, HP, and Microsoft this fall. Nvidia gained around 5% on the news. Intel and AMD each fell roughly 5%. The Arm-versus-x86 battle just escalated, and the incumbents are on the wrong side of it.
What interests me most is the timing. AI's impact has been felt unevenly. It dominates markets and certain corporate workflows, but specialized AI laptops and phones have not made much of a splash with consumers. Gemini search results and routine ChatGPT usage are nice-to-have functionalities, not transformative experiences for most people.
Nvidia is now trying to run the ball through the consumer space. Whether that succeeds is an open question. The enterprise and data center demand is undeniable and immediate. The consumer AI device story is still searching for its killer application. If Nvidia and Microsoft can change that, it opens an entirely new market. If they cannot, this remains a data center story for now.
Huang also reassured investors yesterday that Nvidia has enough supply to support robust growth in both CPUs and GPUs, while acknowledging constraints remain. He went so far as to say the Vera data center CPU could end up more popular than the company's GPUs given its role in crunching information.
Anthropic Files
The IPO frenzy I have been warning about is accelerating.
Anthropic confirmed Monday that it has filed confidentially with the SEC, jumping ahead of OpenAI in the race to public markets. The company recently passed OpenAI in valuation at $965 billion and expects to be profitable in Q2.
With SpaceX set to list June 12 and investors poised to pile in, we are heading into something of a frenzy. Expect more indirect ways to own Anthropic to emerge, just as we saw with SpaceX. And expect the eventual S-1 to finally answer the questions we have all had about the company's financials and inner workings.
The supply question I raised yesterday becomes more pressing with each filing. SpaceX, Anthropic, and likely OpenAI all hitting public markets before year-end. These names can enter major indices within days. Whether that new supply is supportive or whether it pulls capital out of existing tech names as funds rebalance is the dynamic I will be watching most closely through the back half of the year.
Jobs Week Begins
The data calendar gets serious today.
JOLTS job openings for April arrive this morning, expected at 6.89 million, roughly flat with the prior 6.87 million. The report offers a read on hirings, quits, and layoffs, providing sentiment data from the labor market that the Fed watches closely. The quits rate in particular tells you how confident workers feel about finding new jobs.
This kicks off a week that culminates in Friday's nonfarm payrolls report. After Q1 GDP was revised down and jobless claims ticked higher, every labor data point matters more than usual. The market is trying to determine whether the economy is genuinely softening or simply normalizing.
On the earnings front, Palo Alto Networks, Dollar General, Ulta Beauty, and Victoria's Secret all report. Palo Alto is the one I care about most given my long-standing conviction on cybersecurity as a structural multi-year theme. Dollar General will offer another read on the lower-income consumer that Walmart flagged as increasingly strained.
A Word on the Technicals
After nine consecutive up weeks for the S&P 500, the momentum picture remains strongly positive across short, intermediate, and long-term timeframes. We have seen a series of flag-pattern breakouts, sharp run-ups followed by brief consolidation and then resolution higher. Dell was a recent textbook example.
The honest read from the technicians is that there are no confirmed sell signals yet. The overbought metrics are stretched but have not flashed the warnings that would suggest the rally is over.
I would add my usual caveat. These explosive run-ups tend to end in dramatic fashion when they do end. The longer and steeper the move, the sharper the eventual reset. I still expect a breather, a typical 5% pullback of the kind we see several times a year, before a stronger finish into the midterms. But I am not fighting the tape here. Positive momentum deserves respect until it breaks.
Final Thought
It is genuinely strange writing this from Bristol in the afternoon, watching US futures while the people around me are winding down their day. But the discipline of the work is the same wherever I am. Sort through the noise, find what matters, and stay anchored to the thesis.
What matters today is that the AI infrastructure cycle keeps producing evidence of its own durability. HPE pulling targets forward two years. Marvell anointed as the next giant. Nvidia expanding into every layer of compute. Alphabet raising $80 billion because even it cannot self-fund the buildout. Anthropic filing to go public at nearly a trillion dollars.
The story is intact. The risks, concentration, capital intensity, IPO supply, and a fragile Iran ceasefire, are real but not yet thesis-breaking.
Stay invested. Stay disciplined. A pause would be healthy and would not change the destination.
Best regards from Bristol,
Dan Sheehan [email protected]
Subscribe: https://substack.com/@dansheehan3
Market Pulse with Dan Sheehan is a personal market commentary newsletter and is independent from my employer. The content is provided for informational and educational purposes only and reflects my views as of the publication date, which may change without notice. Nothing contained herein should be construed as personalised investment, legal, tax, or financial advice, or as a recommendation to buy or sell any security. Any positions discussed represent my own views and may not be suitable for every reader's objectives, financial situation, or risk tolerance. Information is derived from publicly available sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Readers should conduct their own research and consult their own professional advisers before making financial decisions.