InvestAnswers: Bitcoin leaps $55,000 in 12 hours as AI infra names get "smoked"

Markets split: hyperscalers rip while AI infrastructure names get crushed

James frames the episode around what he calls "the AI split" — a divergence between hyperscalers like Amazon, Microsoft and Google hitting new all-time highs, and AI infrastructure names like Marvel, Alab, Micron and Lumentum getting hammered despite strong earnings. He attributes the hyperscaler strength partly to the midterm result: "Democratic blue wave sweep even states like Nevada and Texas turning blue," which he says means gridlock and "government can't do anything," benefiting companies with strong free cash flow.

He notes Elon Musk's comment about a "guppy level extinction event" for neoclouds as a catalyst for the selloff in AI infra names. Despite the carnage, James points out most of these names remain up heavily year-to-date: Micron up 180%, AMD up 126%, Marvel up 85.38%, ASML up 39.52%, Alab up 33%, with Alab having gone "from 80 to $500 in a couple of months" before mean-reverting hard.

He singles out Alab and Marvel as having broken key technical support levels despite good earnings, calling the moment "the irrational nature of the markets right now." He predicts, with caveats, that Marvel could reach "250, 260" within roughly two months and Alab could run to "350 to 380" by year-end, though he stresses "don't take them to the bank."

Crypto rebounds sharply as Bitcoin, Solana and Ethereum bounce off key levels

James highlights Bitcoin's volatility, noting it fell to 75.6K overnight before moving "$55,000 in 12 hours" back above the "psychological barrier" of 80K. He says "Bitcoin loves a crisis" and credits part of the rebound to Tether buying, though he notes ETF flows have been selling, which he says need to reverse to drive further upside.

Solana bounced cleanly off its 200-day moving average at $89, which James calls a "clean buy signal," while flagging a prior fake buy signal as one of the "18% of the time when the model is wrong." He says he would be "bullish on Solana here at $89," though notes unexplained heavy selling by an unidentified party. Ethereum also bounced off its 200-day moving average, falling as low as "2220" — its first buy signal on his model since June 12 — though he says Solana has given back its outperformance versus ETH since August without a clear reason, speculating "maybe Tom Lee is buying a truckload of Ethereum."

Scorecard: 65% hit rate with notable misses on Bitcoin, Nvidia and Palantir

James reviews his prior week's calls, noting he was wrong about the midterm outcome, having expected Republicans to retain the Senate. Correct calls included Google buy under 300, SpaceX short-term bearish, SK Hynix's "1.2 million won floor," and STRC's move back to 100. Misses included Marvel, Alab, Micron, Nvidia, Palantir and Bitcoin, where he had expected 81.6K support to hold.

Adding partial hits, he estimates his overall accuracy "about 65% right" this week, below his stated 80% target, calling it "quite a bit of misses this week as well."

Macro backdrop: oil tanks, yields fall, S&P 500 nears all-time highs

James notes the 10-year yield falling under 5% from "nearly 5.35" two weeks prior, calling it "good news for treasuries, good news for the Fed." He highlights oil's sharp drop from "105 bucks to $88," attributing it partly to belief in potential peace in Iran, which he says would help inflation.

He describes the S&P 500 as heading back toward all-time highs despite the AI infra selloff, framing it as sector rotation rather than money leaving the market: "the money doesn't leave the market, it goes from one space to another."

Audience Q&A: AI vs crypto, Marvel/Alab targets, and oversold chip names

Asked whether AI or crypto will outperform over the next 12 months, James says AI remains "the fastest train," with crypto producing only "flashes of brilliance," while reiterating that "99.8% of" crypto is "complete garbage" though singling out Solana as "deeply undervalued" given it handles "70% of all transactions on crypto."

He also flags SK Hynix, AMD, Broadcom, Micron and SanDisk as having bounced or being close to bouncing off key technical support levels he associates with July's prior lows, describing it as a repeating pattern across multiple AI-trade names this week.