Good morning, investors. Today we’re covering, how the AI bubble is forming, Ferrari’s worst day in years, gold’s unstoppable run, and much more.
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This Week’s Top Stories
NEED TO KNOW
The AI Bubble
Behind the headlines, a tight web of deals is inflating the AI bubble—companies investing in each other, driving valuations higher, and feeding the same hype loop that once defined the dot-com era.
According to Bloomberg, the AI ecosystem is becoming a circular economy of capital and demand. Nvidia funds OpenAI → OpenAI pays Oracle → Oracle buys Nvidia chips. AMD’s in with billions of GPUs, and even Intel’s joining the loop.
This closed circuit of investment and dependency has sparked incredible short-term growth—but also echoes past bubbles where companies funded each other’s valuations in a feedback loop. It’s innovation on one side, speculation on the other.
NEW STOCK IDEA
Ferrari Hit The Brakes
Ferrari’s 2025 gains were wiped out in a single trading day. But history shows every 30% drop since 2016 has recovered in around six months.
Ferrari ($RACE) experienced one of its sharpest single-day declines after disappointing 2030 projections spooked investors. The stock, which had climbed over 770% since 2016, suddenly erased all its year-to-date gains.
Despite the selloff, Ferrari’s fundamentals remain steady—its earnings per share have compounded at roughly 20% annually, with a price CAGR near 25%. The latest price drop may simply mark another period of valuation reset rather than a fundamental shift.
CHART OF THE WEEK
Stocks Vs. Gold
Over the last 25 years, gold has quietly beaten the S&P 500—defying every cash flow model and proving that fear can be a stronger driver than fundamentals.
Gold’s long-term performance tells a story few expected. Since 2000, the metal has surged more than 900%, outpacing even the S&P 500’s strong total return.
The past quarter century saw multiple cycles of inflation, monetary easing, and geopolitical tension—all tailwinds for a “non-productive” asset often dismissed by traditional investors. Yet every crisis reminded markets why gold still matters: it’s not about yield, it’s about safety.
NEW STOCK IDEA
$AZO Compounded At 20%
AutoZone has compounded at roughly 20% annually since 2011—outpacing most tech darlings by simply selling car parts and buying back its own stock.
AutoZone ($AZO) is the perfect example of how consistency beats excitement. Over the past decade, the company grew revenue at an 8% CAGR and earnings per share around 6%, but the real driver was disciplined capital allocation.
With strong free cash flow and relentless share buybacks, the stock’s compounded annual return has reached about 20% since 2011. AutoZone’s model is simple yet durable: steady demand for maintenance, high margins, and a focus on shareholder returns.
WHAT WE’RE WATCHING
Other Big Things Going On
📊 Q3 earnings season kicks off
🇺🇸 U.S. Recession Odds Plunge To Just 6%
🚀 Broadcom Soars 13% on OpenAI Deal
🛍️ Trump’s 100% China Tarrifs Loom
📈 The Meme ETF Is Back