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Tag Archive for: (META)

april@madhedgefundtrader.com

March 14, 2025

Tech Letter

Mad Hedge Technology Letter
March 14, 2025
Fiat Lux

 

Featured Trade:

(TECH SECTOR HEADING TO A NEW SPACE)
(DBX), (MCHP), (META), (MSFT)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-03-14 14:04:042025-03-14 16:02:25March 14, 2025
april@madhedgefundtrader.com

Tech Sector Heading To A New Space

Tech Letter

Anyone out there who has children in high school or college, the best piece of advice to give them to prepare for a highly lucrative career in technology is that their path will most likely start outside of the United States.

Why?

In one fell swoop, Big Tech and other smaller tech firms have decided that American salaries are not worth the money and have accelerated a full-on position migration to the rest of the world.

The salary arbitrage is something that gets missed in corporate America but is also a reason why these American tech companies keep beating earnings results.

Everyone knows the biggest expensive line item to a tech firm isn’t the software, but the salaries.

Every executive I talk to has widespread plans to cut jobs, whether it be in Seattle, Washington, or Los Angeles, California, and install them in places like India, Moldova, or even notorious Ukraine.

This is happening quietly, but the trend has picked up pace in 2025.

The early numbers in the United States are portending poorly for US employment and many good tech jobs will be reinstalled in cheaper countries and paid 5X lower than what it once was.

Since 2017, the United States has created 0 jobs for native born Americans, and this is part of the reason why.

Compounding the situation, in a global survey, some 61% of tech companies worldwide said they expected to reduce their workforces over the next five years because of the rise of artificial intelligence.

Tech firms such as Dropbox and IBM have previously announced job cuts related to AI. Tech jobs in big data, fintech, and AI are meanwhile expected to double by 2030.

The digital-financial-services company Ally is firing roughly 500 employees, or 7% of staff.

Ally made a similar level of cuts in October 2023, the Charlotte Observer reported.

Jeff Bezos's rocket company, Blue Origin, is sacking about 10% of its workforce, a move that could affect more than 1,000 employees.

Meta CEO Mark Zuckerberg told staff he "decided to raise the bar on performance management" and will act quickly to "move out low-performers." On just recently, the company had laid off more than 21,000 workers since 2022.

Microchip Technology is cutting its head count across the company by around 2,000 employees, the semiconductor company said a few days ago.

Last year, Microchip announced it was closing its Tempe, Arizona facility because of slower-than-anticipated orders. The closure begins in May 2025 and is expected to affect 500 jobs.

Microsoft cut an unspecified number of jobs in January based on employees' performance.

If anyone thinks this is a blip on the radar, then check your head again.

Once the WFH (work from home) movement started during 2020, there was no going back from there.

Tech companies don’t need warm bodies in offices anymore, so physical location doesn’t matter for lower-level employees.

95% of Silicon Valley will now be outsourced, and all “entry-level” jobs will originate in low-cost-of-living countries.

This is the new American tech sector. Ownership will still be mostly American, but workers will be offshore.

What is the result of this?

Tech stocks will stay higher for longer because of the massive cost savings in wages, which will allow management to beat earnings quarter after quarter.

It gives the balance sheet a reprieve allowing tech to hire more workers elsewhere for less money even if they aren’t an equal replacement.

It also opens the opportunities to deliver more value back to shareholder in the form of dividends or stock splits.

Tech firms won’t die off, but balance sheets will be financially engineered to the max to the benefit of executive management and to the chagrin of the American tech worker.

Once the macroeconomic backdrop calms, it will be time again to jump into tech stocks.

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-03-14 14:02:032025-03-14 15:57:38Tech Sector Heading To A New Space
april@madhedgefundtrader.com

March 12, 2025

Tech Letter

Mad Hedge Technology Letter
March 12, 2025
Fiat Lux

 

Featured Trade:

(SHOULD I CARE ABOUT ORACLE?)
(ORCL), (AAPL), (META), (AMZN)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-03-12 14:04:552025-03-12 16:10:36March 12, 2025
april@madhedgefundtrader.com

Should I Care About Oracle?

Tech Letter

If readers want to know if the Oracle AI story is dead or not, then listen here.

The story is still alive, so don’t give up on a good thing.

Oracle is getting swept up with the wider macroeconomic scare that has been triggered by geopolitics.

The fear porn has reached fever pitch and is causing tech stocks to detour from their usual self.

The question now is if the sabre-rattling will result in the economic recession we have been waiting 6 years for.

The flood of government money for at least 4 of those years carried spending habits even if those jobs were unproductive or fraudulent.

As it relates to Oracle’s business model, there is no recession in the sub-sector they are in, but I believe they chose to tank the earnings result since all equities were getting dragged down.

The truth is that Oracle’s business is experiencing great growth in the cloud, and AI demand is accelerating sales growth.

The macroeconomic volatility gave Oracle’s management the perfect excuse to guide down since a high forecast would have resulted in a selloff anyway.

Oracle's leadership encouraged investors to focus on the potential for its cloud business to benefit from enterprise AI spending.

A growing backlog for cloud services is giving the company clear visibility for beating growth metrics.

Meanwhile, sales of Oracle's closely watched cloud-infrastructure business increased 49%, compared with 52% growth for the segment in Oracle's November-ended quarter. Oracle's guidance for the May-ending quarter of 9% revenue growth missed previous forecasts of 9.5% growth.

Oracle's cloud infrastructure business is racing to build out computing capacity for AI startups and other users of the cloud. The Oracle Cloud Infrastructure business rents computing power to other companies, competing against much larger hyperscalers Amazon.com (AMZN), Microsoft (MSFT), and Alphabet's (GOOGL) Google.

Chairman and Chief Technology Officer Larry Ellison said that Oracle is on track to double its data-center capacity during the calendar year. The company now expects capital expenditures to grow to $16 billion for its May-ending fiscal 2025, roughly doubling from a year earlier.

Ellison appeared at the White House in late January with President Donald Trump, OpenAI leader Sam Altman, and SoftBank Chief Executive Masayoshi Son to announce an AI infrastructure effort costing $100 billion called Stargate.

While tight data center capacity has demanded some patience from investors, I believe that we move past some of the capacity constraints in the second half of this calendar year.

The deep selloff from $190 per share to $140 has to hurt.

It was just only a short time ago when Oracle was a deadbeat tech stock left behind by the likes of Apple and Facebook.

They have reinvented themselves as an AI infrastructure company, and that has done wonders for their stock.

When they were down in the dumps, ORCL stock was trading below $50, so we are a far cry from that.

Once the tech market gets its mojo back, ORCL will definitely return back in form to that buy the dip stock that did so well in 2023 and 2024.

Just bide your time until we can jump back into ORCL.

 

 

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-03-12 14:02:482025-03-12 16:10:23Should I Care About Oracle?
april@madhedgefundtrader.com

February 28, 2025

Tech Letter

Mad Hedge Technology Letter
February 28, 2025
Fiat Lux

 

Featured Trade:

(BITCOIN PRICE A SCARE)
(MSFT), (META), ($BTCUSD)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-28 14:04:292025-02-28 16:12:56February 28, 2025
april@madhedgefundtrader.com

Bitcoin Price A Scare

Tech Letter

It’s fascinating that Bitcoin was supposed to be the new currency of the Trump administration, and under those conditions, one might believe the price of Bitcoin will double and triple pretty soon.

The results have been dire since the new President took over, with the price of Bitcoin cratering to $77,000 per coin from $107,000.

These devastating results have caught traders off guard, and many have lost their shirts in the quiet storm.

I don’t really care about Bitcoin personally, and I’m usually not in the business of recommending the product, but I do care what it signals about liquidity and the risk on/off sentiment.

The tariffs are starting to scare investors, and we see it in the price of Bitcoin.

Liquidity being pulled can create a cascading effect where nobody knows where the floor is.

Bitcoin could fall a lot further, considering many could just not be bothered to fight through the tariffs and can’t stomach it.

Nobody ever went bankrupt from taking a profit, right?

With all-time highs in many asset classes, it is almost as if Trump thinks he is playing with house money to push through aggressive strategies that put enormous trade pressure on other countries.

It’s a political calculus that fosters uncertainty, and many know that markets hate uncertainty, especially tech stocks.

On the heels of a good Nvidia earnings report, we have received a sell on the news price action, and that is very negative to the overall tech sector.

Year to date, we stand 3.5% in the red, but looking to March expiration, I believe this is a short 3-week buying opportunity until the next bevy of geopolitical chaos.

I recommend keeping your portfolio small for the time being and let the trade rhetoric pass through until you go big.

I did execute 2 more bullish positions in Palantir and Microsoft today.

A rout in Bitcoin deepened forced money to the sideline in the face of the most popular Trump trades.

Alt coins also did poorly too with Ether, Polkadot, and XRP all dropping more than 7% in one day.

Remember in 2022 during the crypto winter, when prices plummeted amid rising interest rates and industry woes.

Trump said Thursday that 25% tariffs on Canada and Mexico would come into force from March 4, undermining hopes he might reverse course after a previous delay. He also said Chinese imports would face a further 10% levy, prompting officials in Beijing to promise “all necessary measures” in response.

The selloff underscores a swift change of fortunes for what was previously one of the most popular Trump trades in global markets: buying Bitcoin on the expectation that the president’s crypto-friendly approach would lead to a broad rally.

Traders are still waiting for Trump to come up with concrete steps for the sector, including a Bitcoin stockpile.

Trump has already made a few changes that have pleased crypto bulls, including putting crypto advocates in key positions. The Securities and Exchange Commission, which embarked on a year-long crackdown under former Chair Gary Gensler, has also closed investigations into several crypto outfits in recent weeks.

Readers shouldn’t get too rattled by the geopolitics.

More often than not, the bluster serves as a good entry point into tech stocks.

I do believe 2025 will be the year of volatility, and buying on these big dips is a big part of our benefit to it.

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-28 14:02:522025-02-28 16:12:41Bitcoin Price A Scare
april@madhedgefundtrader.com

February 26, 2025

Tech Letter

Mad Hedge Technology Letter
February 26, 2025
Fiat Lux

 

Featured Trade:

(NVIDIA EARNINGS TO SWAY THE NASDAQ)
(NVDA), (META), (BTCUSD)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-26 14:04:182025-02-26 14:16:32February 26, 2025
april@madhedgefundtrader.com

Nvidia Earnings To Sway The Nasdaq

Tech Letter

It’s been a steep drop for tech stocks the last few days and there is a lot to piece through here.

It was due at some point.

Look, we are at Himalayan highs in the Nasdaq and that doesn’t mean it will be smooth sailing from here.

To find that incremental dollar to push up tech stocks is not as easy as it once was.

We aren’t in the golden years of technology anymore.

The big question is why someone should input that extra dollar when there is a flattening of momentum in the entire tech establishment.

A.I. is the big two-letter acronym that everyone is focused on so it is not a surprise that profits are being taken leading up to Nvidia’s earnings.

Nvidia isn’t as ironclad as it used to be and that worries me.

Nvidia is carrying the market on its back like it has been doing for the past year and market breadth has remarkably narrowed.

If there was no Nvidia, we would be looking at a demonstrably lower stock market than this expensive stock market we are trading right now.

Remember that I urged readers to pile into tech stocks after that mid-January Deepseek selloff and that was the perfect elixir to profits.

Now, where do we find that indicator or signal to go green?

It’s a tough one and we must be patient.

All I have left in the portfolio is a bull call spread in Meta that has been taken out to the woodshed and beaten like the proverbial red-headed stepchild.

Then we look at other signs of liquidity and alternative barometers and Bitcoin has to scare you.

The quicksand drop to $85,000 per coin questions whether the bull market in tech stocks is still alive or kicking.

At the very minimum, the kicking is getting weaker and weaker each following earnings season.

But investors can hold on to hope for a few more hours. After the bell today, the world turns to fourth-quarter earnings for the linchpin of AI euphoria, Nvidia (NVDA).

This two-plus-year bull market has weathered several multi-month periods when Nvidia's stock price sputtered. But the company's stock hasn't contributed to the bull market since last June, as its share price has effectively gone nowhere in that time.

Over the last 10 years (40 reports), buying Nvidia stock just before the earnings announcement has yielded a median return of 3% to 4% on the one-day, one-week, and one-month time frames. Holding for three months has yielded nearly 18%.

The disparity highlights the volatile earnings reactions that might net bullish results but can also cause significant discomfort in the near term.

But for the entire Nvidia obsession, investors are right to question how much AI is still a picks-and-shovels or even an energy trade (as it morphed into in 2024).

If I had to nail down a date, investors expect the 2nd half of 2025 to calculate what exactly future cash flow will look like and if the infrastructure investment in AI is really worth the hassle.

A great deal of capital was asked to front AI and we are creeping towards that day where AI will need to sink or swim.

As it stands, the AI overlords like OpenAI helmed by Sam Altman, still puts on a happy face like nothing will fail to surpass expectation. It is easier to put on a good face when someone is worth billions upon billions. 

In the short, we are preparing for a buying opportunity in the best and brightest.

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-26 14:02:412025-02-26 14:16:20Nvidia Earnings To Sway The Nasdaq
april@madhedgefundtrader.com

February 19, 2025

Tech Letter

Mad Hedge Technology Letter
February 19, 2025
Fiat Lux

 

Featured Trade:

(THE EYEWEAR PIVOT NOBODY SAW COMING)
(META), (ESSILORLUXOTTICA)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-19 14:04:232025-02-19 14:17:13February 19, 2025
april@madhedgefundtrader.com

The Eyewear Pivot Nobody Saw Coming

Tech Letter

Meta (META) migration into the eyewear business is a little bit of a head-scratcher until peeling back the layers and really understanding what is going on.

EssilorLuxottica’s agreement to prolong its long-term collaboration with Meta Platforms for the development of smart eyewear over the upcoming 10 years is a massive victory for Meta CEO Mark Zuckerberg.

This milestone offers meaningful insight into the direction of where the business model is heading.

Many have expected that Meta would start to branch out into other venues once their core businesses start to stagnate.

The digital ad game and social media platforms only go so far in terms of growth these days, and shareholders are waiting on the next big thing.

Short-term prospects are what drives the stock movement, and Meta is looking for that pixie dust.

EssilorLuxottica is the largest maker of eyewear in the world and the owner of many eyewear brands and retailers, including Ray-Ban, LensCrafters, and Pearle Vision in the U.S.

EssilorLuxottica also acquired Heidelberg Engineering, maker of imaging and healthcare machinery and technology, largely for the ophthalmic and eyecare markets worldwide.

Prescription glasses are not cheap, ranging into the thousands of dollars for designer frames and lenses.

If Meta can figure out how to do this all online without going to the optician, imagine the juicy margins they could extract from this sort of venture.

Meta and EssilorLuxottica have a relationship for the production of the Ray-Ban smart glasses. The glasses’ latest version gives consumers video, camera, and Bluetooth headset capability in a stylish eyewear frame with a cool brand on it.

Heidelberg Engineering makes complex, sophisticated, expensive equipment that you may be exposed to if you’re examined in an ophthalmologist’s office. Buying Heidelberg makes EssilorLuxottica more entrenched in the industry where it is the established leader.

The tie-up with EssilorLuxottica is the perfect onboarding situation to understand how to perfect the optimal glasses and lenses and then to transfer it into an online experience.

Remember, even if this investment is for VR purposes, the application revolves around virtual eyewear as well.

Meta now understands they need to secure a monopoly on eyewear, and it is a conscious decision to make that a launching point into more of their products.

In the future, Meta wants consumers to access Instagram, Whatsapp, and Facebook through EssilorLuxottica eyewear products.

Meta also hopes to secure the first mover advantage while other big tech firms lack the deep knowledge of eyewear. There have already been numerous failed attempts at smart glasses, and so Meta founder Mark Zuckerberg is doubling down with a relationship with Europe’s most deeply entrenched premium eyewear firm.

Although the boost to the bottom and top line won’t happen quickly with a possible relationship with EssilorLuxottica, this could anoint Meta as the gatekeeper to the new virtual world through this new eyewear tech.

It’s becoming clear that Meta is running up to certain upper limits in regards to the growth of their 3 platforms, and they are looking for another super booster to prop up profits.

I don’t believe that Meta will be allowed to acquire this eyewear company because of anti-competitive laws, but adopting its best products and practices and hiring their best talent seems a lot more on brand from Meta.

Meta has never been shy at poaching outside talent and rewarding them handsomely.

On the flip side, EssilorLuxottica would be smart to adopt some tech now by hiring the right people and trying to digitize the experience further otherwise, Meta will get what they are coming for.

Meta pushing the envelope is one of the big reasons why they have stayed ahead of other big tech companies and why the stock has done so well the past few years.

Meta stock is a great short-term and long-term proposition for patient and impatient investors.

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-02-19 14:02:042025-02-19 14:21:12The Eyewear Pivot Nobody Saw Coming
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