📈 Microsoft's Record Rally

Broadcom Beats on AI Demand, Tesla Drops $152B on Politics, Omada Health IPOs at $19, 23andMe DNA Gets $305M Bid, Lululemon Craters 20% on Guidance

Author

Evelio Silvera
June 06, 2025

In partnership with

Good morning.

⚡ The Fast Five → Broadcom Beats on AI Demand, Tesla Drops $152B on Politics, Omada Health IPOs at $19, 23andMe DNA Gets $305M Bid, Lululemon Craters 20% on Guidance

🔎 Market Trends → US stocks end lower as Tesla slumps 14% on Trump-Musk feud; US Futures Flat After Lackluster Session

And now


⏱ Your 5-minute briefing for Friday, June 6, 2025:

MARKET BRIEF
Before the Open

As of market close 06/05/2025.

Pre-Market

  • MongoDB (MDB) with a +12.84% gain, the best performer on the S&P 500.

  • Brown-Forman Class B (BF.B) with a −18% drop, making it the worst performer on the S&P 500.

Fear & Greed

 

Markets in Review

Musk vs. Trump: Sparks Fly, Tesla Tumbles

The S&P 500 fell 0.5% and the Nasdaq lost 0.8%, both breaking a three-day winning streak. The Dow slipped 0.3% as a high-profile clash between Musk and Trump rocked market sentiment.

The Big Picture:

Wall Street opened with optimism after Trump called his phone meeting with China’s Xi “very good.” But gains reversed as the day unraveled into a spectacle between Elon Musk and President Trump, rattling confidence around the EV sector and government support for innovation.

Tesla (TSLA) cratered 14.3% after Musk denounced Trump’s tax bill, which axes EV credits. Trump fired back, hinting at cutting SpaceX contracts. Musk responded by threatening to mothball spacecraft. The spat, while theatrical, has real implications for industrial policy, subsidies, and investor positioning.

Meanwhile, jobless claims climbed and Fed Governor Adriana Kugler warned tariffs could prolong inflation well into 2025. Yet, oil prices and MongoDB’s (MDB) strong earnings gave bulls a bit of breathing room.

Market Movers:

  • Tesla (TSLA) cratered 14.3%, second worst on the S&P 500, as political heat and subsidy threats ignited investor concerns.

  • Brown-Forman (BF.A) dropped 17.3% on weak results and cautious guidance, facing a hangover from shaky consumer trends.

  • MongoDB (MDB) surged 12.8% after hiking its full-year forecast, proving software still sells in choppy macro conditions.

What They’re Saying:

“I don’t mind Elon turning against me, but he should have done so months ago.”
— President Donald Trump, post-market

WHAT WE’RE WATCHING
Events

  • Today: Bureau of Labor Statistics - Average Hourly Earnings m/m - 8:30am

    Why You Should Care: It's a leading indicator of consumer inflation - when businesses pay more for labor the higher costs are usually passed on to the consumer

  • Today: Bureau of Labor Statistics - Non-Farm Employment Change - 8:30am

    Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity

  • Today: Bureau of Labor Statistics - Unemployment Rate - 8:30am

    Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy

Earnings Reports

  • Today: Coca-Cola, Manchester United, Children’s Place, Toro Corp.

  • Monday: Casey’s General Stores, Skillsoft

MARKET BRIEF
Leading News

Microsoft's Record Rally: When AI Moats Meet Market Physics

Photo Credit: Tadas Sar

Why it matters:

Microsoft's (MSFT) surge to $469.65 reflects a broader truth about modern markets—companies with genuine AI advantages are commanding premium valuations, even when stretched by traditional metrics.

Zoom Out:

The software giant's latest all-time high wasn't driven by breaking news, but by something more fundamental: market recognition of durable competitive advantages. When 80% of S&P 500 companies beat Q1 estimates and profits jumped 13.3%, investors didn't scatter their bets—they doubled down on proven winners.

BofA's latest software spending survey tells the real story. Despite macroeconomic headwinds, enterprise software spending is still projected to grow nearly 10% annually through 2026. That's not speculation—that's businesses voting with their budgets for tools that actually work.

The Magnificent Seven collectively added $1.75 trillion in market cap during May alone, their best month in years. This isn't meme-stock mania; it's capital flowing toward companies building tomorrow's infrastructure.

Key Insights:

  • The Valuation Paradox: Yes, MSFT trades at a forward P/E near 27—stretched by historical standards. But behavioral finance teaches us that investors systematically undervalue the option value of technological leadership. The market is pricing in Microsoft's position as AI infrastructure landlord.

  • The Moat Deepens: Data analytics, cloud communications, and security remain top enterprise priorities. Microsoft doesn't just participate in these trends—it owns the rails through Azure, Office 365, and its AI integrations.

  • Quality Premium: When uncertainty rises, smart money flows to quality growth at reasonable prices. Microsoft's recurring revenue model and 20%+ margins aren't accidents—they're the result of customer switching costs that would make Warren Buffett smile.

Market Pulse:

The pattern emerging across earnings season reveals something telling: investors are learning to distinguish between AI theater and AI reality. Companies with genuine technological moats are commanding premium valuations not out of speculation, but out of recognition that competitive advantages in the digital age compound faster than ever before.

Bull’s Take:

Microsoft isn't just riding the AI wave—it's building the ocean. For patient investors, stretched valuations today often look reasonable tomorrow when backed by genuine competitive advantages and expanding addressable markets.

Headlines

  • Broadcom Q2 Earnings: Revenue, EPS Beat Estimates Driven By 'Robust Demand' For AI (link)

  • Tesla loses $152 billion in market cap after Musk-Trump spat, biggest hit ever (link)

  • Omada Health prices IPO at $19 per share, in middle of expected range (link)

  • 23andMe’s DNA data gets boosted $305m bid in new auction (link)

  • Lululemon Craters 20% After Slashing Guidance (link)

  • Procter & Gamble Is Laying Off 7,000 Jobs (link)

CRYPTO
Fear & Greed

 

Headlines

  • Bitcoin Threatens $100K, Crypto Losses Grow as Musk/Trump Feud Goes Nuclear (link)

  • Circle Shares Surge on NYSE Debut, Signalling Strong Appetite for Stablecoin Issuers (link)

  • Bitcoin ATM operator CoinFlip seeks buyer for potential $1 billion sale (link)

DAILY SHARE
On the Socials

*Hat-tip to weirddalle

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