TOP STORY
🚀 Meta Soars 15% After Surprise AI Breakthrough (Its Best Week Since 2024)

📈 It was a beautiful green week for all investors, but a massive week for tech, with Meta ($META) surging 15% this week after a leaked memo showed AI breakthroughs, and SK Hynix ($SKHY) jumping 13% after its blockbuster U.S. IPO (our two feature stories for today).

🔄 In other news, the “FOMC minutes” from Fed Chair Kevin Warsh’s first meeting were released on Wednesday, showing the committee was split 9-to-9 on whether an interest rate hike is coming before year-end, with inflation projections revised up and growth projections revised down.

📊 Across the indexes:

• The S&P 500 rose +1.23%

• The Nasdaq rose +1.69%

• The TSX rose +0.09%

🛢️ Oil prices also had a brief scare midweek when Trump called the Iran ceasefire “over” at the NATO summit, sending Brent Crude up as much as 6% throughout the day before floating down to ~$76/barrel by Friday.

🌍 And since the ceasefire comments are quite a big update, let’s quickly talk about what’s going on there before switching gears to Meta (of course, if you're tired of the war/oil updates, feel free to scroll ahead!).

🕊️ The Iran Ceasefire Is Over. Or Is It?

⚔️ After a couple of weeks of relative silence, the ceasefire extension between the U.S. and Iran signed last month that led to a reopening of the Strait of Hormuz (and a falling oil price) broke down on Tuesday following Iranian attacks on 3 commercial vessels going through the Strait.

💥 The U.S. retaliated hard, hitting over 80 Iranian targets that same day, followed by a second wave of roughly 90 targets Wednesday into Thursday, which Iran responded to by striking U.S. military bases in Bahrain and Kuwait, and later hitting an air base in Jordan.

🗣️ Then on Wednesday at the NATO summit in Ankara, Trump directly said “I think it’s over,” calling Iran’s leaders “cuckoo,” and threatening to “very probably attack Iran hard again.”

💰 The U.S. Treasury also withdrew the waiver that had been letting Iran sell oil, effectively reimposing sanctions, though just a day later on Thursday, Trump said he didn’t think a full restart of the war was likely and that things would “end very quickly.”

🚫 Still, Iran’s navy announced on Saturday that the Strait would stay closed until the end of what it called U.S. “interference” in the region, warning that any vessel that tries to cross will face a “severe response.”

🤞 As of now, the U.S. says the Strait is open, while Iran says it’s closed, so it seems we’re back to crossing fingers (again).

🤖 But enough about the war, let’s switch gears to the big story of the week - Meta’s AI breakthrough! But first, a quick word from this week’s sponsor, Harvest ETFs!

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TOP STORY
🤖 Meta Soars 15% After Surprise AI Breakthrough

😰 Coming into this week, Meta was the worst-performing Magnificent Seven stock of the year, down 12% since January, and the only Mag-7 name to fall in both the first AND second quarters.

📈 But this week things turned dramatically for the better, after Meta had its best week since early 2024, surging 15% (+6% on Friday alone) and erasing its entire loss for the year in one shot (now up ~3% year-to-date).

🗞️ Many of the headlines credit the rally to Meta's new AI announcements: Muse Image, its new image-generation model, and Muse Spark 1.1, its most advanced agentic coding model yet…

🔍 But according to analysts, the shiny new models aren't what actually moved the stock…

💰 The "AI Factory" Hiding in a Leaked Memo

📄 On Thursday, an internal memo reviewed by Reuters revealed two things: the AI infrastructure Meta is racing to build is coming in far more efficiently than the market thought, and Meta will start manufacturing its own custom AI chip, code-named "Iris", in September in partnership with Broadcom ($AVGO) and Taiwan Semiconductor ($TSM).

💸 According to Justin Post, analyst at BofA, Meta’s build-out was estimated to cost roughly $45 billion per gigawatt. But per Meta’s own projected ~$145 billion in 2026 CapEx and the capacity figures in the memo, the company’s cost per gigawatt is tracking closer to $22 billion, roughly half the original expectations.

💬 As Post wrote in his note to clients:

🧩 To understand why this matters, a gigawatt of AI compute is basically a measure of how much electrical power a data centre’s servers can draw at once. More gigawatts mean more chips running simultaneously, and cost per gigawatt tells you how efficiently a company turns CapEx into usable AI "horsepower."

☁️ A Vertically-Integrated AWS Competitor

🔗 As we covered last week (full story here), Meta is planning to create a cloud computing competitor to AWS and Azure (something Zuckerberg confirmed this Thursday in an interview with Bloomberg).

🚀 And with new info this week, notably Meta’s plans to build its own AI chip, the story of Meta becoming a viable (and profitable) alternative to AWS/Azure is getting stronger. As one analyst put it:

💡 Justin Post from BofS also flagged just how cheap the market is pricing Meta's compute: by his math, investors currently value Meta's compute at just $4B per gigawatt, vs $59B for Amazon's and $110B for Alphabet's. He pegs fair value at $12B per gigawatt, with "significant upside considering the specialized AI capacity that Meta is building."

⚡ And based on the leaked memo's numbers, Meta has a lot of compute capacity coming soon: with 1 new gigawatt online already in 2026, another 5.5 gigawatts in the second half of the year, and ~14 gigawatts of total compute targeted by the end of 2027, double what it runs today.

🏗️ Overall, “AI vertical integration” is what Big Tech is striving for. Because if a company can control its AI pipeline (data centres, chips, compute capacity, models) it can control its costs, instead of paying a company like Nvidia ($NVDA) whatever it decides to charge. And for Meta, that blueprint is also the one needed for a competitive cloud computing service.

🧠 This, alongside new and more powerful AI models, a more efficient infrastructure build-out, and new in-house AI chips, paints a picture of the company quickly moving away from dependence and toward a vertically integrated AI stack.

📣 Analyst Reactions

🎯 Wall Street’s reaction has been very bullish, with most analysts rating Meta a “Strong Buy” at an average price target of $817, ~22% above current prices. But not everyone agrees.

🐻 The bears argue that the compute cost breakthrough is based on a leaked internal memo rather than an official company disclosure, and that even if true, cheaper compute doesn’t mean higher profit. In fact, massive profits as a result of Meta’s massive CapEx investment are yet to be seen. Melissa Otto, head of Visible Alpha Research at S&P Global, said it best back in April:

⚠️ And buried under Friday's rally was a genuinely negative headline: the EU Commission issued a preliminary finding that Meta violated its Digital Services Act with "addictive" design features like infinite scroll and autoplay, and if Meta doesn't change them, it risks a fine of up to 6% of global revenue. That's on top of two child-safety trials Meta lost earlier this year.

👀 What Happens Next

🔮 Meta reports Q2 earnings on July 29, with management guiding revenue between $58 billion and $61 billion.

💰 But many investors will really be looking at is whether the ‘$22B per gigawatt’ math holds. If it does, this week's rally is the market waking up to a real cost advantage. If it doesn't, it's a 15% pop built on an internal memo.

🌼 How Blossom Reacted: A ~5x Jump in Trading Volume

🌼 On Blossom, Meta's big week sent $META trading volume to nearly ~4.7x its year-to-date average on Friday, the biggest Meta trading day of the year on the platform. But unlike most volume spikes we see, this one was driven by the sellers.

💸 For the first time in months, Meta sellers actually outnumbered buyers on Friday. On a normal day, buyers outnumber sellers 5-to-1. Across the week, members sold $4.8M vs just $2.1M bought, and of everyone who sold, 61% closed out their entire position.

🤔 Interestingly, the average sell was $3,760 vs an average buy of just $965, so by the numbers, it looks like long-time Meta holders used the week's news to cash out.

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🗞️ Ok, let’s move on to our next big story of the week, SK Hynix’s massive IPO on the Nasdaq! But first, a quick word from our other sponsor this week - Harvest ETFs.

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IPO REPORT
📈 SK Hynix’s Record Nasdaq Debut and the Building IPO Boom

🎉 This week, SK Hynix ($SKHY), the South Korean semiconductor chip giant and the world’s leading supplier of high-bandwidth memory (HBM) used in AI chips, officially IPO’d in the U.S., jumping 13% on its first day of trading on the Nasdaq, ending the day at $168.

💵 The offering raised $26.5 billion, making it the largest-ever U.S. listing by a foreign company and the second-largest share sale in U.S. history, behind only SpaceX’s $86 billion IPO in June (which we covered here). Demand for shares were reportedly 7x oversubscribed!

🧠 SK Hynix controls roughly ~60% of the global HBM market, now giving U.S. investors one of the most direct ways to play the AI memory shortage outside of Micron ($MU).

🧮 What Is HBM, and Why Is Everyone Obsessed With It?

⚙️ HBM (high-bandwidth memory) is a specialized type of chip that sits physically stacked on top of AI processors like Nvidia’s GPUs, feeding them data far faster than regular computer memory can. Every major AI chip on the market needs it, and without it, a GPU is basically a powerful engine with a clogged fuel line.

🏭 SK Hynix, Samsung, and Micron are the only companies in the world that make HBM at scale, and SK Hynix’s own SEC filing puts its market share at 56.4%.

⏳ The current memory market is so tight that analysts say the memory shortage (the one that caused Apple to raise prices across its product lineup a couple weeks ago) could persist into 2030, simply because building new manufacturing capacity takes years. And that’s what these memory companies have been capitalizing on.

🇰🇷 The “Korea Discount”

🤔 SK Hynix already traded in Korea before this U.S. listing, and its stock has already surged more than 625% over the past year, pushing its market value past $1 trillion, only the second Korean company ever to reach that milestone, just after Samsung (which reached it in May).

⁉️ But if shares were already soaring, why bother with a second listing in the US?

📉 Well, the answer is something called the “Korea Discount,” a long-running pattern where Korean stocks trade cheaper than global peers, due to the “chaebol system” (the family-controlled mega corps that dominate Korea’s economy), which creates a management culture that tends to protect family control rather than maximize shareholder returns.

⚖️ For instance, despite SK Hynix being ~2x more profitable than Micron, Micron actually trades at a higher valuation.

🌐 Therefore, by listing directly on the Nasdaq, SK Hynix opens itself up to a much larger pool of U.S. and global investors who previously had no easy way to buy in, which is exactly the kind of demand that showed up on debut day.

🌎 A Broader IPO Wave Building

📊 Per Fortune and Yahoo Finance, U.S. IPO proceeds hit approximately $115.6 billion through the first half of 2026, driven largely by a handful of AI and chip mega-deals (SpaceX alone is ~75% of that number).

🔀 But analysts now expect the remaining half of the year to diversify beyond just AI and tech into mid-cap and previously overlooked sectors like advanced manufacturing, defence, energy, and consumer.

🚀 The next mega IPO is expected to be Anthropic, which is reportedly eyeing a public listing later this year at a valuation near $1 trillion. OpenAI also confidentially filed IPO paperwork with the SEC, though it hasn’t set a date and may be leaning toward a 2027 debut instead.

📝 Other names on the “could be” list range from Kim Kardashian’s clothing brand Skims, to Discord and Stripe, all the way to defense-tech startup Anduril.

🥳 But overall, it’s looking to be a pretty packed year for IPOs…

FROM THE BLOSSOM COMMUNITY
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