1. Team RB & HG Agree: SpaceX’s AI Is the Big Unknown

EMILY FLIPPEN, TEAM RULE BREAKERS

Of SpaceX's (NASDAQ:SPCX) business lines, xAI looks the roughest financially. The business is producing billions in losses while generating little by way of revenue, and Grok and its other AI efforts have arguably trailed the competition. You’d be forgiven for wondering why xAI was included in the SpaceX offering at all, especially since most of the "moonshot" premium attached to SpaceX rests on management's AI plans, not cash-producing assets.

But xAI isn’t worthless. It's backed by contracts, the largest with Anthropic, which has reportedly agreed to pay $1.25 billion a month to rent the output of the Colossus data center through 2029. Given SpaceX generated under $20 billion in total sales last year, these deals are massive opportunities that attach more value to SpaceX’s future performance than its trailing numbers might suggest.

So both Team Rule Breakers and Team Hidden Gems land here: give SpaceX credit for what it has proven, and stay curious about what it has promised. A company doesn't build this kind of structural dominance by operating incompetently, and AI moves fast enough that what's true today is likely not true tomorrow. Watch compute contracts and data center demand for the clearest sign of whether SpaceX can turn its promises into reality.

Tom Gardner’s Team Hidden Gems five-year price target: $217.52
Team Rule Breakers’ five-year price target: $141.84 (The figure is the mean of three separate analyst price targets – a deliberately balanced call. Full breakdown coming soon in a dedicated article for members!)

Image shows chart of Nvidia's free cash flow over the past three years

2. Nvidia Slips Amid Global Chip Sell-Off

Nvidia (NASDAQ:NVDA) closed 5% lower yesterday, dragging other chip stocks with it, as fears around AI infrastructure costs and “circular” financing agreements – where a chipmaker finances a developer that then uses the funding to purchase from the chipmaker – weighed on sentiment. Nasdaq 100 futures fell close to 1% this morning.

Nvidia commits to $50 billion lease for large Texas data center: The FT reports the company is leasing a one gigawatt facility to house hundreds of thousands of GPUs. Once finished, it would be in a position to sublease capacity to partners.
$5 billion commitment made to AI startup led by OpenAI co-founder: Nvidia has agreed to an investment in Safe Superintelligence, a business run by Ilya Sutskever. The deal, announced as a “long-term partnership,” involves Nvidia providing the latest Vera Rubin hardware to increase computing capacity.

3. China DUV Output Triggers ASML Pullback

ASML (NASDAQ:ASML) dropped 5.8% yesterday following a report by The Information that a Shanghai-based, state-backed company has started mass-producing deep ultra violet (DUV) lithography machines, representing a major threat to its dominance in this area.

Undisputed global monopoly could be coming to an end: It marks a big jump for China in bypassing Western tech and building a domestic chip supply chain. As for ASML, the stock is outperforming the S&P 500 by 109% since the Stock Advisor recommendation by Team Rule Breakers in March 2025.
“This is a classic example of taking a breath over the volatility and calmly assessing the situation”: Fool analyst Sanmeet Deo expressed his view on the news, saying “the Chinese threat has always been real,” but “the DUV tools represent a low-margin, slowing business for ASML. The real moneymaker is in the EUV tools that are powering ASML’s AI-driven demand curve.”

4. Microsoft Unveils AI Cybersecurity Model

Microsoft (NASDAQ:MSFT) announced a new AI model for identifying cybersecurity vulnerabilities, as it aims to address a growing concern in the generative AI space and grow its own cybersecurity business.

“We have world-leading performance at 50% of the cost”: Mustafa Suleyman, CEO of Microsoft AI, said that testing showed the model outperformed peers including Anthropic and Alphabet (NASDAQ:GOOG) on relevant benchmarks.
Generative AI models making it easier for attackers to exploit weaknesses: Microsoft joins other major tech players in releasing models to help with defending against exploitation, as it continues to emerge as one of the unintended consequences of AI advancement.

5. Next Up: PYPL, UPS Lead Off ENPH For Results

PayPal (NASDAQ:PYPL) posted fiscal Q2 revenue up 5% to $8.7 billion and raised its full-year non-GAAP guidance, even as non-GAAP earnings slipped 1% to $1.38 per share. It was the first full quarter under new CEO Enrique Lores, who called the transformation "well underway." The stock edged down around in pre-market trading about 0.5% in response.
United Parcel Service (NYSE:UPS) also delivers earnings before the opening bell. After reporting a sharp 27% drop in earnings last quarter, the Dividend Investor rec will be hoping recent restructuring and network optimization can yield results.
Enphase Energy (NASDAQ:ENPH) should post results after the market closes after a tough Q1. The SA rec by Team Rule Breakers is forecast to show declining revenue versus this time last year due to tariff headwinds.

6. Today’s Take: When the Going Gets Tough, Part 2

While Newton’s first law of motion that an object stays in motion or at rest until acted upon relates to physical laws, I find it pertains to investing laws as well. 90% of the time the markets act normally, cruising along. 10% they go haywire. During that 90% I try not to get in my own way and let compounding do its thing

— ANDY CROSS, CHIEF INVESTMENT OFFICER

7. Your Take

Summer is in full swing, and vacations often mean stepping away from the daily market noise. Do you check your portfolio on holiday, or do you deliberately unplug? Has getting distance ever improved your investing?

Debate with friends and family, or become a member to hear what your fellow Fools are saying!

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