Morning Markets for Friday, June 26, 2026

Key Concepts

• AI Capex Bubble: The massive capital expenditure by hyperscalers (Microsoft, Google, Meta, Amazon) on AI infrastructure and data centers.
• Quantum Computing Modalities: Different architectural approaches to quantum hardware, specifically Trapped Ion, Superconducting, and Neutral Atom.
• Retail Investor "Ants": A term for South Korean retail investors who collectively influence the market, often using high leverage.
• Recurrent Revenue: Digital-first business models (like Grand Theft Auto) that rely on microtransactions and ongoing online engagement rather than one-time physical sales.
• mRNA Technology: A platform for vaccine development (used by Moderna) that allows for rapid precision adjustments to match circulating virus strains.

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1. Market Overview and Corporate News

• Energy Markets: Oil prices are trending toward their largest monthly drop as transit through the Strait of Hormuz increases, with Persian Gulf exports reaching 75% of pre-war levels. However, security concerns persist following attacks on cargo ships and warnings from the Iranian Navy.
• Metro (Grocery): Shares are declining due to a prolonged strike at a Quebec distribution center, which is negatively impacting third-quarter sales and increasing costs related to contingency supply plans.
• Chorus Entertainment: Reported a 16% revenue decline in Q3, missing analyst estimates. The company faces ongoing pressure on linear television advertising demand, though cost-management initiatives helped boost profits.

2. The AI Investment Landscape

• OpenAI IPO Delay: Reports suggest OpenAI may delay its IPO until 2027. Chad Morgan Lander (Washington Crossing Advisors) notes that while OpenAI has ~$30 billion in revenue, it faces over $1 trillion in future infrastructure commitments. The company must "square its P&L" before going public.
• Valuation Concerns: Experts warn of an "extreme over-extrapolation" of future profits in AI-related stocks. Companies like SpaceX, which launched at 100x revenue, illustrate the risks of high-premium valuations that require perpetual 10%+ growth.
• Investment Strategy: Analysts recommend shifting toward "quality" stocks—companies with consistent earnings, low debt, and high return on invested capital (ROIC). Microsoft is cited as a preferred AI play due to its data center ecosystem and potential to monetize AI productivity at a lower price point than competitors.

3. Moderna and mRNA Vaccine Outlook

• FDA Path: Moderna’s mRNA flu vaccine received a 9-0 recommendation from FDA advisors. CEO Stefan Bancel remains "cautiously optimistic" about final approval by August 5th.
• Revenue Strategy: Moderna does not include flu vaccine revenue in its 2024 guidance, viewing this year as a period to "oil the machine" and educate the market. Meaningful revenue contributions are expected by 2027.
• Geographic Diversification: While the US remains the primary market for research and manufacturing, Moderna is actively diversifying revenue toward Europe, the UK, and Australia.

4. Gaming Industry: The Grand Theft Auto 6 Phenomenon

• Economic Impact: GTA 6 is expected to be a massive cultural and financial event, with forecasts of 38 million copies sold in the first year and $3+ billion in revenue.
• Business Model Evolution: The industry has shifted from physical, one-time product sales to digital-first, "recurrent revenue" models. GTA 6 is described not just as a game, but as an "operating system" designed to cultivate an online community similar to the engagement levels of major pop-culture icons like Taylor Swift.
• Pricing Power: The $80 base price point signals a shift in industrial pricing power, with potential for "collector’s editions" to drive further upsells.

5. South Korea’s "Ant" Market and AI Volatility

• Market Mania: South Korea’s KOSPI index has seen extreme volatility, driven by 14 million retail investors ("ants") and a heavy reliance on two memory chip giants: Samsung Electronics and SK Hynix.
• Systemic Risk: These two companies comprise over 50% of the KOSPI. Analysts warn that if the global AI capex bubble bursts or if AI productivity gains fail to materialize, South Korea could face a deep recession.
• Leverage Warning: The popularity of leveraged ETFs (2x or 3x returns) among retail investors has drawn concern from financial watchdogs, as these instruments multiply losses during market downturns.

6. Quantum Computing: "Hot Picks"

Anton LGO (Wedbush) identified three pure-play leaders based on their specific architectural modalities:

1. IonQ (Trapped Ion): The largest, most global, and most vertically integrated player.
2. Rigetti Computing (Superconducting): Known for high gate speeds (nanoseconds) and strong capitalization.
3. Inflection (Neutral Atom): A full-stack platform company with significant inroads into the defense and aerospace sectors (NASA, Saffron).

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Synthesis/Conclusion

The market is currently defined by a "super-cycle" of AI capital expenditure, which is driving massive growth in semiconductor demand (South Korea) and infrastructure (Microsoft). However, there is a growing disconnect between high-momentum valuations and actual profit realization. Investors are advised to pivot toward quality, cash-generative companies while remaining wary of the "AI bubble" risks, particularly as the industry moves toward a more mature phase of quantum and AI utility by the end of the decade.