Wall Street Is Watching: The AI Data Center Buildout You Can’t Ignore

3 Simple Steps to Catch Small Caps Before They Surge

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Good Morning,

– Truly yours, Fred Frost

📈 Yesterday's Market Recap

Markets closed out with a surprising lift, buoyed by optimism over potential rate cuts and robust consumer demand in key sectors. Tech and consumer discretionary stocks led the charge, shrugging off lingering inflation concerns. It wasn’t all rosy, but the momentum suggests investors are betting on growth.

• Tech Stocks Rally: AI infrastructure names like Applied Digital surged 19%, driven by strategic expansions. → Stocktwits


• Auto Sector Gains: Automotive stocks climbed on hopes of lower borrowing costs spurring sales. → CNBC


• Momentum ETFs Shift: Invesco S&P 500 Momentum ETF rebalanced, adding Oracle and Visa to top holdings. → Seeking Alpha

📉 Daily Performance Snapshot

🔭 What to Watch Today

Markets woke up to Powell’s reminder that stocks aren’t cheap and traders are deciding whether to shrug or sulk. Here are three things worth your screen time today.

💡 Opportunity Watch

Most people are focused on yesterday’s market drop. But what really matters is how government rules and company spending are shaping what comes next. Here's what deserves attention..

• China’s WTO Status Shift: China no longer wants to be treated like a "developing country". That means it will get fewer special discounts and help. This could change trade taxes, so pay attention to other countries that sell goods (not China) and to how the U.S. and Europe react. → ABC News
• China AI Capex Re-acceleration: Alibaba is spending more money on AI. The government supports this, which could boost demand for computer chips and servers. Some Chinese tech stocks traded in the U.S. might get a short-term lift. → Seeking Alpha
• Crypto Tax Normalization: Stronger tax rules in 2025 will push money into safer investments like regulated ETFs, brokers who follow the rules, and tools that help with taxes. It may not be flashy, but it’s steadier and lasts longer. → Finance Monthly

These 3 Stocks Are Off the Radar — For Now

XELA’s 300% move came fast. But early chart signals and news flow gave traders a head start. We’ve identified 3 new names that look similar — right before the move.

This is your early window — before the crowd catches on.

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🔥 The Big Bullet

OpenAI, Oracle, and SoftBank expand “Stargate” with five new AI data centers

What happened: The companies behind the “Stargate” project announced an expansion that adds five new AI data centers. Reporters were brought to a flagship site in West Texas as part of a coordinated reveal, timed with Oracle’s customer event. The goal is to build more compute capacity to train and run larger AI models. The buildout pairs OpenAI’s model needs with Oracle’s cloud infrastructure and SoftBank’s capital network. The West Texas site is meant to showcase scale, land access, and energy options. Local coverage highlighted a media tour, signaling confidence in timelines and permits. The announcement framed the move as a long-term capacity plan, not a short-term test. For details and on-the-ground color, see Fortune’s report on the Stargate expansion and the Texas showcase.

Why it matters: More data centers can mean higher demand for chips, memory, networking gear, and power. Recent trading showed how sensitive markets are to AI news, with the Nasdaq slipping as “AI frenzy” cooled, so fresh capacity plans can sway sentiment. Suppliers tied to AI infrastructure can benefit if orders hold up. Power solutions are in focus because running big models uses a lot of electricity; some investors watched hydrogen and other alternatives after Plug Power’s update on fuel cells for AI data centers. If these sites go live on schedule, it could support long-term cloud and AI revenue. But if costs or delays rise, margins may get squeezed. The plan also raises questions about grid capacity and energy prices. For investors, this is a story about capital spending and execution risk. Policy and local approvals also matter because they can change timelines.

What’s next: Watch for confirmed construction milestones, equipment orders, and interconnect upgrades tied to the Texas hub. Keep an eye on chip and memory names for clues about order strength and pricing, especially after Micron’s stock move on its high-bar results. Monitor how financing is structured and whether partners shift terms or timelines. Track regional power projects, including any on-site generation or storage, and local community approvals. Investor sentiment could swing with broader tech moves if enthusiasm fades again, as seen when major indexes weakened on cooling AI momentum. Also watch partnerships among chipmakers, cloud players, and model labs; scrutiny rose after questions around a large Nvidia–OpenAI deal structure. Construction costs, supply chains, and energy contracts are the key swing factors. Clear delivery dates and capacity targets will be the main catalysts for the next leg of market reaction.

• How obtaining enough reliable electricity is becoming a bottleneck for large AI infrastructure plans – Business Insider
• What fixes industry groups and utilities are considering to avoid delays – The Coinomist
• How what’s happening with Stargate might ripple into energy markets – McKinsey

🧭 Policy & Market Ripples

• Fed Rate Cut Risks: Powell’s ‘no risk-free path’ warning looms as a 25 bps cut may fuel inflation over job fixes. → Seeking Alpha
• Gold and Stocks Diverge: Gold hits $3,770 while equities stay high, signaling investor bets on conflicting economic outcomes. → Benzinga
• AI Workslop Costs: AI-generated ‘workslop’ wastes corporate time, with 40% of employees receiving subpar content monthly. → Fortune

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