by Jason Bodner
September 1, 2026
In December 1947, physicists at Bell Labs invented the transistor. It changed everything. For decades prior to that, vacuum-tubes powered every computing machine ever built, but those hot, fragile, power-hungry glass tubes failed constantly and limited what was possible. The transistor replaced all of it… and not gradually. This wasn’t an “improvement” on the old methods; it was a whole new paradigm. On Wednesday’s earnings call, NVDA CEO Jensen Huang used the term “inflection point” for this transition.
Headlines (always) give investors every reason to feel wary. Trade tensions are back, as President Trump slapped 50% tariffs on Canadian goods, including vehicles and steel, and for good measure, suggested renaming Lake Ontario “Lake America.” Canada retaliated with tariffs on 700 U.S. products.
The core PCE inflation measure remained stuck at 3.3%. Fed Chair Warsh’s first Jackson Hole speech struck a hawkish tone, saying inflation remains too high. Rate-hike expectations jumped, and short-term yields rose while stocks reacted to the pressure. Every ingredient for a risk-off week was present.
But Thursday wiped out those fears: NVIDIA reported revenue of $96.2 billion for the quarter, up 106% year-over-year. Data-center revenues reached $89 billion, up 117%. The stock gained 8.74% Thursday, adding $441 billion in a single-day. But the real surprise was their new guidance of revenue growth of 70% projected for fiscal 2028, nearly twice what analysts expected. “AI has reached its inflection point,” Nvidia’s CEO said. “Tokens are productive and profitable… And demand is accelerating.”
More confirmation came from memory suppliers that make AI possible:
- SK Hynix’s CEO said global memory is heading for its worst-ever supply shortage in 2027, with demand exceeding supply well beyond 2030.
- Micron Technology CEO said supply won’t catch up with AI-driven demand until at least 2028.
- A Samsung Executive Vice President warned constraints will become even more severe in 2027 before persisting through 2028. Samsung has already locked 60%-70% of its capacity into multi-year data center deals.
These three companies together control over 90% of global dynamic random-access memory (DRAM) supply, and they are all saying the same thing at the same time – this is not a “memory trade.” This is a multi-year structural reality.
The data reflect this: Our Big Money Index (BMI) closed last week at 69.1%, near its highest level since before the recent Situational Awareness blow-up. ETFs also saw inflows, as passive money flooded back in simultaneously with active institutional buying. NASDAQ gained 1.57% last Thursday alone.
The VIX (volatility index) fell to 14.51, as the market absorbed every headline and kept on chugging.
ETF flows tell the most complete story. Gold funds occupied the top six inflow slots for the second consecutive week. Bitcoin and Ethereum ETFs attracted multiple days of fresh inflows. International equity ETFs across Europe, emerging markets and developed markets all saw buying. ARK Innovation and ARK Genomics attracted inflows. The lone outflow was a municipal bond ETF. Gold, crypto, international equities, and innovation ETFs all saw inflows last week. That is not a risk-off signal.
The sector flows confirmed the rotation.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Healthcare led for the S&P sectors for the tenth consecutive week, with 52-inflows – a streak without recent precedent. Financials saw 45-inflows. Materials followed at +43, driven almost entirely by gold miners. Technology recovered to log 43-inflows as confidence returned. Meanwhile, Discretionary and Industrials saw modest outflows as the late-summer rotation continued.
Here are charts of positive flows into the top four-sectors:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The top-ranked stocks in my data bank reinforced the same message from a different angle. Enterprise software, cybersecurity, and networking companies dominate the highest scores, with their businesses generating recurring revenue from AI infrastructure without the direct semiconductor exposure that made the Situational Awareness trade so volatile. These are names the flows have been pointing at for weeks, and they are now the names leading the recovery.
Within technology, this recovery reveals something interesting. The highest-ranked names in our data are concentrated in enterprise software and cybersecurity – businesses that generate recurring revenue from the AI buildout without direct semiconductor exposure. But the AI infrastructure stocks that bore the brunt of the forced liquidation are also seeing their model scores recover. Their fundamental scores never deteriorated through the entire sell-off. What did compress were technical scores: downward momentum as prices fell under forced selling pressure. With the Citadel overhang clearing and NVDA confirming the demand picture, the technical scores are poised to go back toward where fundamentals pointed: When the world’s largest AI chip company reports 106% revenue growth and guides 70% higher, it validates the entire demand layer – the optical networks that carry the data, the memory that stores it, the software that monetizes it. The scores are following the phenomenal earnings. That’s exactly how recoveries begin.
Citadel has now reduced its exposure from the Situational Awareness portfolio by more than 80%, so the overhang that suppressed AI names for six weeks should now be functionally gone.
Here’s the key point: The thesis Leopold Aschenbrenner developed was correct. His problem was the leverage… not the thesis. AI is here and accelerating. The biggest companies’ executives are confirming it. “This time last year, one lab alone was driving the buildout,” Nvidia’s CEO Huang noted. “Today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel.”
In 1947, the transistor didn’t announce itself. It was invented in a lab in New Jersey while the rest of the world was focused on something else, like the new “Cold War.” The vacuum-tube industry had no idea what would soon hit them. Electronic architecture changed and the old paradigm became irrelevant.
The memory company’s CEOs confirm this rising demand. The earnings confirm the revenue. The flows confirm the conviction. The noise from the global press was loud, as usual, but the signal was louder.
Lao Tzu said, “Knowing others is intelligence; knowing yourself is true wisdom.” The market knows where it is going – and it’s telling you. You don’t need any diverting headlines to tell you what to think.
Navellier & Associates owns Nvidia (NVDA), and Micron Technology, Inc. (MU), in managed accounts. We do not own SK Hynix ADR (SKHYV), in managed accounts. Jason Bodner owns Nvidia (NVDA), personally. He does not personally own Micron Technology, Inc. (MU), or SK Hynix ADR (SKHYV).
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
What to Expect from Mid-Term Elections (and Trump’s Trade Wars)
Income Mail by Bryan Perry
The Amazing Stock Buyback Phenomenon Continues
Growth Mail by Gary Alexander
The Perils of Market Seasonality (or “Selling All Stocks”)
Global Mail by Ivan Martchev
Why U.S. Investors Should Care About EU Natural Gas Prices
Sector Spotlight by Jason Bodner
AI (Like the Transistor, PCs and Internet) Will Change Everything
View Full Archive
Read Past Issues Here
Jason Bodner
MARKETMAIL EDITOR FOR SECTOR SPOTLIGHT
Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation and distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner
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