Proflex Aug 10-14 — AI Numbers Keep Improving, SPY New Highs, Anthropic IPO Derisks Semis

And yet the conversation around AI remains stubbornly skeptical. The "capex bubble" narrative that drove semiconductors down 28.7% from their June 22 peak has not been disproven.
​
It has been overwhelmed by data like $134.5 billion in global semiconductor sales in June alone (SIA), up 124% year over year. Microsoft's AI revenue run rate at $37 billion and climbing 123% annually. TSMC printing record monthly revenue in July, up 44.7%.
​
The numbers are not slowing. They are accelerating.

Our view: the S&P making new highs is the precondition. Broad market strength historically pulls technology back toward leadership within 4 to 6 weeks. The SOX has already recovered 18.9% off its July 29 trough.
​
With NVIDIA earnings on August 26 as the next catalyst, and Anthropic's IPO taking shape for October, the derisking of the semiconductor trade may happen faster than the consensus expects.

That said, the path is not clean. Leverage remains elevated, the Strait of Hormuz MoU expired today without extension, and the FOMC July minutes on Wednesday could reintroduce volatility. Discipline matters more than direction this week.

The Proflex 50-Page Research Thesis on AI Trade : Opportunity or Bubble (Link Below)

We have put the entire argument into one place.

How AI is oscillating between the biggest opportunity and the biggest bubble of this decade is our detailed research note on how to think about this, with the real numbers behind it: the capex to revenue gap, the private lab economics, the depreciation debate, the circular financing map, and a direct comparison against dot com era valuations rather than dot com era vibes.

Download the Proflex Research Report here

The single most valuable thing an investor can own in this market is a framework for distinguishing the AI that is generating cash from the AI that is generating commitments.
That distinction is the whole report.

Key Drivers This Week

The AI Revenue Acceleration: Why the Market Has It Wrong

The dominant Wall Street narrative since early July has been that hyperscaler capital expenditure is outrunning revenue, that the AI trade is the next dot com, and that semiconductor valuations need to compress. The data says something different.

Combined Q2 2026 hyperscaler capex came in at $165 billion, up 87% year over year. That is a large number in isolation.

But set it against the revenue trajectory and the picture changes:

• Microsoft's AI annualized run rate hit $37 billion in Q2, up from $13 billion just 18 months ago (a +123% compound)
  ​
• AWS disclosed an AI run rate exceeding $25 billion, with custom silicon (Trainium/Graviton) alone above $20 billion
  ​
• Google Cloud revenue grew 82% to $24.8 billion in Q2 with a backlog of $514 billion
  ​
• SIA global semiconductor sales reached $134.5 billion in June, up 124% year over year, the 15th consecutive month of sequential growth
  ​
• Full year 2026 semiconductor sales are now tracking above $1.5 trillion (WSTS/SIA), a threshold nobody modeled 12 months ago

The capex is large because the revenue opportunity is larger. Barclays projects Big 5 hyperscaler capex will reach $919 billion in 2027 and $1.16 trillion in 2028, both figures above current Street consensus by more than $225 billion.
​​
That is competitive necessity: every major cloud provider now generates more than half its incremental revenue from AI infrastructure and services.

NVIDIA trades at a forward P/E of roughly 23x while delivering data center growth above 90% at 75% gross margins. That multiple is below the broader semiconductor median of 32x.
​
The skeptics priced in a collapse that the income statement flatly refuses to deliver.

SPY at All-Time Highs: Why Tech Follows the Broad Market Higher

The S&P 500 has now printed 27 all-time highs in 2026. The Russell 2000 hit its own record on Thursday. Breadth is broadening: homebuilders gained 9.4% over the past month, healthcare 8.4%, insurance 6.4%.
​
The DXY has broken below 100 and is trending at 99.5, its weakest since early 2026.

This is not the kind of tape that precedes a technology collapse. Historically, when the S&P makes sustained new highs with improving breadth and a falling dollar, the lagging growth sectors (semiconductors, software, mega cap tech) tend to catch up within one to two months.
​
​The mechanism is straightforward: rising indices pull passive flows higher, those flows are market cap weighted, and the largest weights are technology names.

The SOX bottomed at 10,445 on July 29 and closed last week at 12,417, a recovery of 18.9% in 12 trading sessions.
​
The Fibonacci 0.618 retracement of the June to July correction has been reclaimed. SOXX took a record $6.9 billion of inflows during the drawdown (per our last update), confirming the selloff was a leverage purge, not an institutional exodus.

The Anthropic IPO: Why It Derisks the Semiconductor Trade

Anthropic confidentially filed its S-1 on June 1 and is targeting an October 2026 IPO at a valuation north of $2 trillion. The company's annualized revenue run rate stands at approximately $74 billion (as of Jul 2026).

​
​
Its Series H in May raised $65 billion at a $965 billion post money valuation.

Why this matters for semiconductors: every dollar Anthropic raises is a dollar committed to compute. The company's projected revenue of $190 to $200 billion by fiscal 2028 requires massive ongoing GPU and memory procurement.
​
A successful IPO validates the private market AI valuations that underpin the entire capex cycle. If Anthropic prices well and trades well, it removes the single largest overhang on the semiconductor complex: the fear that private AI companies are overvalued and their spending unsustainable.

TSMC has raised its 2026 capex budget to $60 to $64 billion (from $52 to $56 billion), reflecting confidence in sustained demand. SK Hynix delivered Q2 revenue of KRW 79.3 trillion (up 257% year over year).
​
Micron guided Q4 to approximately $50 billion. The supply chain is not behaving like a bubble is about to pop. It is behaving like demand keeps outrunning supply.

Caution: Leverage, Volatility, and the Bumpy Road to New Highs

New highs are not the same as easy gains. The VIX at 14.25 is in the bottom quartile of its historical range, and from these levels, mean reversion spikes tend to be sharp and sudden.

The last time volatility was this compressed in 2026, the June 22 selloff erased $3.3 trillion from semiconductors in a single session.

Several structural risks deserve heavy scrutiny this week:

• FOMC July minutes (Wednesday, 2:00 PM ET): the July 28 to 29 meeting held rates at 3.50 to 3.75% against rising hike expectations. CME FedWatch currently prices a 30.6% probability of a 25 basis point hike in September. The minutes will be parsed for any hawkish lean, particularly around the oil pass through into inflation and the debate over financial conditions
  ​
• Iran MoU expiration: the 60 day negotiation window established under the June 17 Memorandum of Understanding expired today (August 17) with no agreement and no formal extension. Iran has signaled a shift from "defensive" to "offensive" posture. The Strait remains at roughly 1 to 5 vessels per day against a baseline of 60 to 73 (effectively closed)
  ​
• Positioning: Goldman's prime brokerage flagged record technology selling the week of July 20. While flows have stabilized, the recovery has been fast and largely systematic (CTA driven), not conviction driven by fundamental allocators. A sentiment shock could unwind quickly

The Week Ahead: Light Data, Heavy Parsing

US economic data is on the lighter side next week in terms of importance with FOMC minutes on deck.

No Fed speakers are scheduled for the week, but the minutes effectively serve as the Fed's voice. Jackson Hole follows the next week (August 27 to 29), so any hawkish signal in the minutes gets amplified by proximity to the symposium.

Earnings are in the wind-down phase with just 12 S&P 500 components reporting, but the batch has a distinct retail focus: Walmart (WMT), Home Depot (HD), TJX, Deere (DE), Lowe's (LOW), and Analog Devices (ADI) lead by earnings weight. Combined revenue above $100 billion will offer the clearest read on consumer spending health we have had since Q1.
​
Internationally, Alibaba (BABA) and Baidu (BIDU) report, giving a window into China's AI and consumption recovery. NVIDIA on August 26 the following week remains the true capstone of earnings season.

Iran: Stalemate Deepens, Kalshi Odds at New Lows

As we said ten weeks ago, "we'll just have to see how things progress." The progress has been backward.

The 60 day Memorandum of Understanding expired today without agreement or extension.
​
Tehran declared the deadline "no longer relevant," citing US non compliance, and signaled a shift to an offensive posture. The Strait remains at 1 to 5 vessel transits per day versus the 60 to 73 baseline, a 92 to 98% reduction.
​
War risk insurance premiums sit at 7.5 to 10% of hull value, up from 1 to 3% at the start of the conflict and representing more than a 40x increase over pre-crisis rates.

Kalshi odds that Strait traffic normalizes by year end had risen as high as 86% on June 24.
​
They have since dropped to new August lows, currently at just 38%. The trend is clear: the market no longer expects a near term resolution.

Offsetting the rhetoric, Oman-mediated technical talks on a limited safe-transit route are reportedly in "final stages," and Brent has consolidated at $88, well below the $138 April peak.
​
​The oil market is telling you something different from the political noise: strategic reserves and alternative routing are absorbing the physical disruption, even as the geopolitical premium stays elevated.

Trump stated on Fox News today that he is "not in a hurry" to reach a deal and threatened to "bomb" Oman if it interferes with US operations.
​
The administration appears to be pivoting toward increased economic pressure (new secondary sanctions targeting Chinese financial institutions and shadow shipping networks) rather than military escalation, consistent with the pattern we have observed since early July.

🧭 Proflex Playbook – Buy the Progression, Not the Narrative​​
​
​The AI trade is delivering earnings progression while the market re litigates the bull case. That gap between what the numbers say and what the tape says is where the opportunity is, provided you are in the right half of the supply chain.
​
Our conviction stays anchored in the data:

• Focus on Structural Growth: Continue to overweight the secular AI theme, recognizing its multi-year runway.
  ​
• Anticipate Shallow Corrections: Use dips as accumulation opportunities, not reasons for fear, understanding that "none of the corrections stick."
  ​
• Diversify Thoughtfully: Recognize the "decorrelation" across asset classes; consider gold, silver and Bitcoin for portfolio resilience.
  ​
• Develop Mental Models: Prioritize long-term planning (6-12 months out) over short-term news, aiming for consistent, incremental gains.

​
If you're an All-Access or Managed Portfolio subscriber, our positioning has already shifted ahead of this moment—scaling up asymmetric hard asset plays while hedging for earnings volatility and geopolitical tail risks.

​
Until next week,
​
— The Proflex Team
​ Trusted Macro Insights. Calm Investing. Tactical Trades.