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SUMMARY
Amit Kukreja and guest analysts discuss a turbulent trading session marked by escalating conflict between the US and Iran, which drove broad declines in equities and volatility across major indices. The episode features in-depth coverage of after-hours earnings from Dell, MongoDB, Palo Alto Networks, Credo, and GitLab, alongside macroeconomic analysis and sector-specific commentary.
MAIN POINTS
- Escalating US-Iran tensions trigger a sharp market selloff, with President Trump warning of severe retaliation.
- Major cybersecurity and tech stocks, including CrowdStrike and Palo Alto Networks, experience notable declines amid sector volatility.
- Upcoming economic data, including the jobs report and CPI, are highlighted as key market catalysts for September.
- Market closes with S&P 500 down 0.69%, Dell and other tech names prepare to report earnings after the bell.
- Dell, GitLab, MongoDB, Palo Alto Networks, and Credo earnings are anticipated, with Dell up 1.2% after hours.
- Dell reports a significant revenue and EPS beat, raising full-year guidance and highlighting explosive AI server demand.
- MongoDB and Credo both deliver double beats on earnings, but their stocks fall as investors react to high expectations and prior rallies.
- GitLab and Dell emerge as after-hours winners, with GitLab posting strong growth and Dell up over 10%.
- OpenAI and Anthropic announce new AI models, with OpenAI's Astra model demonstrating advanced cybersecurity capabilities.
- Robinhood Chain posts parabolic growth in daily gas fees, surpassing Ethereum's daily fees on August 31.
- Dell's partnership with Palantir on sovereign AI and on-prem GPUs is discussed as a potential demand accelerator.
- Meta explores classifying its AI glasses as assistive devices for government coverage, and launches a low-cost audio transcription API.
- Dell's earnings call begins, emphasizing record revenue, EPS, and AI server backlog, with management outlining structural demand drivers.
- Dell details broad-based growth in storage and traditional servers, citing modernization, security, and AI as key factors.
- Dell raises guidance across all business lines, projecting 80% year-over-year revenue growth for Q3 and strong full-year performance.
- Dell executives forecast AI will constitute 75% of all data center demand by 2030, estimating a trillion-dollar opportunity.
- Credo's earnings call highlights growth in optical components and guidance for over $600 million in optical revenue for fiscal 2027.
- Discussion turns to the memory market, with Micron and SK Hynix expected to benefit from surging AI-related demand and constrained supply.
- Elon Musk's predictions on AI-driven GDP growth and the rapid advancement of AI software capabilities are analyzed.
- Panelists debate the sustainability of the AI trade amid macro headwinds, bond yields, and oil prices, while remaining bullish on long-term AI infrastructure.
- The future of software companies is questioned as panelists discuss AI's potential to disrupt traditional SaaS models and seat-based pricing.
- The role of application layers, security, and governance in sustaining software companies in an AI-driven world is explored.
- Regulatory and safety concerns are identified as factors that may slow the rollout of advanced AI models and buy time for incumbent software firms.
- Meta's shift to Slack for AI agent capabilities is discussed as an example of evolving enterprise software needs.
DETAILED ANALYSIS
The trading session opened amid heightened geopolitical risk, with escalating conflict between the United States and Iran dominating investor sentiment. President Trump's warnings of severe retaliation in response to Iranian actions led to broad-based declines in major indices, with the S&P 500 and NASDAQ both falling over 0.7%. The market's reaction reflected not only the immediate risk of military escalation but also the uncertainty surrounding potential disruptions to global oil supplies and broader macroeconomic stability.
September, historically a volatile month for equities, was further complicated by upcoming economic data releases, including the jobs report, consumer price index (CPI), and the Federal Open Market Committee (FOMC) rate decision. Analysts noted that while inflation appeared to be weakening, persistent concerns about higher rates, elevated oil prices, and ongoing hostilities in the Middle East continued to weigh on risk appetite.
Within the technology sector, cybersecurity and software names experienced pronounced volatility. CrowdStrike, Palo Alto Networks, and Rubrik all saw sharp declines, with CrowdStrike giving back recent gains and Rubrik falling from post-earnings highs. The panel highlighted the challenging environment for high-multiple growth stocks, particularly those not yet GAAP profitable.
Despite robust revenue growth, the market appeared increasingly sensitive to valuation and the sustainability of elevated growth rates. Comparisons were drawn to the semiconductor sector, where names like Marvell and SMCI had previously surged but faced similar skepticism ahead of earnings.
Attention quickly shifted to after-hours earnings from several high-profile technology companies. Dell, GitLab, MongoDB, Palo Alto Networks, and Credo were all set to report, with Dell drawing particular interest due to its outsized year-to-date performance and centrality to the AI infrastructure buildout. Dell's results did not disappoint: the company reported a significant beat on both revenue and earnings per share, raising full-year guidance and attributing much of its success to explosive demand for AI-optimized servers.
Fiscal year revenue guidance was increased to $192 billion, up nearly 70% year-over-year, and adjusted EPS was guided to $25.50. The company cited a record $60.9 billion in AI server orders, $16.4 billion in AI server revenue for the quarter, and a $95 billion backlog. Management emphasized that customers no longer viewed IT as a cost center but as a strategic value driver, leading to increased investment across infrastructure, storage, and client devices.
Dell's earnings call provided further detail on the sources of growth. Traditional server revenue was up 122%, driven by data center modernization, heightened security requirements, and incremental demand from AI and agentic workflows. The company noted that a significant portion of the installed base remained on older server generations, representing a durable refresh opportunity.
Storage revenue grew 26%, with strong demand for Dell's IP portfolio and robust performance across PowerFlex, PowerStore, PowerProtect, and PowerVault product lines. The company also highlighted the growing importance of unstructured storage and the expanding contribution of storage to overall profitability. Commercial PC revenue grew 22%, as large enterprises continued to refresh their installed base, while consumer revenue rose 7%.
Other earnings results were mixed. MongoDB and Credo both delivered double beats on revenue and EPS, but their stocks fell sharply as investors reacted to high expectations and prior rallies. MongoDB raised its fiscal year revenue guidance and reported 30% year-over-year growth, yet the stock declined over 12% after hours.
Credo, a key player in optical components for data centers, guided for over $600 million in optical revenue for fiscal 2027 and projected 85% year-over-year total revenue growth, but also saw its shares fall. The panel speculated that the selloffs reflected a combination of profit-taking and the market's demand for ever-higher growth rates in high-beta names. In contrast, GitLab and Dell emerged as after-hours winners, with GitLab posting strong growth in gross bookings and net annual recurring revenue, and Dell up over 10%.
The discussion then broadened to encompass macroeconomic and sector-specific themes. The surge in oil prices, with crude nearing $91 per barrel, was identified as a key headwind for risk assets, particularly as higher energy costs feed into inflation and raise the specter of further rate hikes. The panel also examined the shifting landscape for dividend and fixed-income investors, noting that the yield on the US 10-year Treasury now exceeded the dividend yield for 97% of S&P 500 constituents, prompting potential rotation out of equities and into bonds.
In the realm of artificial intelligence, both OpenAI and Anthropic announced new model releases. OpenAI's Astra model, which demonstrated the ability to identify zero-day exploits autonomously, was initially limited to a small group of testers due to safety concerns. Anthropic released Claude 5.1, which was lauded for its performance improvements.
The competitive dynamics among AI model developers were highlighted, with the need to balance rapid innovation against safety, regulatory, and reputational risks. The discussion also touched on OpenAI's confidential filing to go public, underscoring the high stakes and capital intensity of the AI arms race.
Robinhood Chain was spotlighted for its parabolic growth in daily gas fees, surpassing Ethereum's daily fees on August 31. The panel noted that Robinhood's expansion into on-chain trading, prediction markets, and broader financial services positioned it as a potential long-term winner in the tokenized asset space, even as its stock remained closely tied to Bitcoin's performance. The broader theme of financial innovation and the race to capture trading flow in a tokenized world was explored, with Robinhood, Coinbase, and Kraken identified as key contenders.
The conversation returned to the memory market, where Micron and SK Hynix were seen as major beneficiaries of surging AI-related demand and constrained supply. Elon Musk's comments on the rapid acceleration of AI software capabilities and the potential for AI to drive 20-30% global GDP growth were analyzed in the context of memory pricing and supply-demand dynamics. The panel noted that while memory output was increasing at 20% per year, demand was growing at multiples of that rate, leading to rising prices and strong forward guidance from memory suppliers.
UBS research was cited, projecting that Micron could buy back up to 40% of its outstanding shares by 2028, given its free cash flow generation and capital return policies.
The sustainability of the AI trade was debated, with panelists acknowledging the potential for further volatility amid macro headwinds, rising bond yields, and elevated oil prices. Nonetheless, the long-term outlook for AI infrastructure remained bullish, with Dell, Nvidia, and other hardware providers expected to benefit from secular growth in data center modernization and AI adoption. The future of software companies was also questioned, as the panel discussed the potential for AI to disrupt traditional SaaS models and seat-based pricing.
While some argued that advanced AI models could enable enterprises to build custom solutions and bypass incumbent vendors, others emphasized the enduring value of application layers, security, governance, and network effects.
Regulatory and safety concerns were identified as factors that could slow the rollout of advanced AI models and buy time for incumbent software firms. The example of Meta shifting to Slack for AI agent capabilities was cited as evidence of evolving enterprise needs and the importance of integrating AI into core workflows. The panel concluded by noting that while the pace of change in AI and software remains unprecedented, the ultimate winners will be those companies that can adapt, innovate, and deliver value at scale in an increasingly complex and competitive environment.
LINKS
- Amit Kukreja's Twitter/X profile.
- Amit Kukreja's Substack for deep-dive analysis.
- Free news terminal recommended by the host.