Last month, after ServiceNow reported second quarter results that exceeded expectations on multiple fronts, shares of NOW rose by 6%. The company is attempting to reposition itself beyond a provider of cloud-based digital workflows to what they are calling “the AI-powered operating system for enterprise transformation.” Yet, the market is cautious as the stock is down nearly 20% YTD and lags other AI software stocks – this analysis looks at the puts and takes weighing on this promising AI stock.

In late 2022, when Bitcoin was trading near $16,000, the I/O Fund issued a Strong Buy Alert. At the time, many of the market’s biggest crypto bulls were silent. Fast forward to today, Bitcoin is up over 600%—and now we are hearing the same aggressive upside targets that we heard years ago prior to Bitcoin’s 70% plunge. In this week’s report, we take a hard look at these exuberant, bullish calls and contrast them with our systematic models that correctly identified the 2021 top and 2022 bottom. While on-chain analysis still supports higher prices—technical and liquidity trends suggest we are entering the final leg of this cycle. If you have any crypto exposure, or are holding large gains in Bitcoin, this is a report you don’t want to miss.

In our last Broad Market Report titled, Historic Uncertainty Meets $7 Trillion Dollar Debt Wall: What Comes Next For The S&P 500, the S&P 500 was trading near 5800 and still well below its February high. We outlined the unique macro risks that were dominating investor sentiment, which were at historic extremes. At the same time, technical signals suggested a path to new all-time highs remained likely. “The market breadth, Q1 earnings beats, and the size of this rally suggest that new all-time highs are likely to follow; however, one cannot underestimate the unique risks within the backdrop of markets.” Since then, the S&P 500 has surged through overhead resistance, validating many of those technical setups. In fact, the market largely ignored the unique macro risks, many of which are still present.

This week, Google cleared a major hurdle with Search accelerating from 10 points of growth last quarter to 12 points this quarter -- putting to rest many doubts that Search monetization is at risk given the popularity of apps such as Chat-GPT with 600 million active users (and counting). After hours, the stock was flat given Google's current capex spend would take nearly 5 years to pay back at Google Cloud's current growth rate. However, while the puts and takes caused a neutral reaction, one risk remains for Google that all tech investors should not overlook. While the market has been distracted by Search and Google Cloud, there is one key area where Google has lost major real estate that remains the predominant concern. I've dug this up for you below.

When it comes to AI cloud leaders, Oracle is not often mentioned, yet the company is quickly positioning itself to lead among Microsoft, Amazon and Alphabet when it comes to cloud growth over the next few years. For the upcoming fiscal year, Oracle guided for a 20-point acceleration in Cloud IaaS growth to >70%, driving a 16-point acceleration in overall Cloud growth to >40%. Supporting its long-term growth is robust RPO momentum, its recent 4.5 GW expansion with OpenAI and its $30 billion/year cloud deal starting in FY28. Below, I break down Oracle’s FY26 AI cloud acceleration, Stargate economics, and bull, base and bear case scenarios that assess if Oracle has what it takes to become the next $1 trillion AI stock.

Robinhood’s fundamental transformation over the past two years has been nothing short of remarkable. Crypto is driving strong revenue growth at 50% YoY in Q1, while TTM operating margin is approaching 40% after being at (72%) at the start of 2023. Robinhood was an initial trailblazer in zero-commission trading, yet the company arguably made one of its most significant moves at the end of June with the launch of Stock Tokens. The tokenization of assets marks an entry into a market that will reach multi-trillions over the next decade. With that said, Robinhood remains heavily reliant on crypto as one of its three main revenue drivers. While crypto was instrumental in Robinhood’s first $1 billion quarter in Q4, this elevated reliance presents a headwind for Q2 as spot volumes declined significantly in June.

The market evolves quickly, and nowhere is that more apparent than in AI stocks, which continue to lead in both innovation and returns. At the I/O Fund, our deep coverage of AI stocks, combined with active management of crypto positions, gives us a unique vantage point. As we move into the second half of the year, we want to highlight key insights every investor should understand about where AI stocks and crypto could go next.

Data center power demand is forecast to surge over the next decade, with some estimates seeing demand increasing 3x by 2030. Inference is expected to be a primary driver with power demand growth projected at a 122% CAGR through 2028 as providers work to serve billions of requests and process hundreds of trillions of tokens. Combined with a 5x increase in GPU power consumption over the next two to three years with Nvidia’s Rubin Ultra, power is quickly becoming a major bottleneck for the industry. As a result of this expected demand growth, nuclear is re-emerging as a preferred clean energy source for AI data centers. Below, we discuss nuclear energy’s potential to address AI data center demand, its advantages and drawbacks, plus Big Tech’s increased interest in nuclear with a record-setting deal, and more.