Rebels Edge · Wed, May 27, 2026
AI Chip Stocks EXPLODE as Zscaler COLLAPSES
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The hosts reviewed strength in memory chips and AI infrastructure alongside sharp earnings- and guidance-driven moves in individual stocks. They contrasted declines in Zscaler and Vera Mobility with gains in Dycom Industries and Digital Turbine, while also discussing oil prices, volatility, prediction markets, and sports.
- Micron continued rallying as demand for high-bandwidth memory used with GPUs supported semiconductor stocks.
- WTI crude fell from above $103 to around $90 amid peace talks, while the VIX hovered near 17.
- Zsquared reportedly gained about 7% on AI infrastructure expansion and planned Russell 3000 inclusion; both hosts disclosed being paid advisors.
- Zscaler fell more than 30% amid capital-spending pressure on free cash flow, analyst target cuts, and sales-leadership departures despite 25% revenue growth.
- The Zscaler put-buying example was explicitly historical, from May 2025, rather than a current trade.
- Dycom reported record first-quarter results and raised fiscal 2027 guidance, supporting a substantial share-price gain.
- Vera Mobility plunged roughly 68–71% after Avis Budget terminated a contract representing over 10% of revenue; the hosts also highlighted its debt burden.
- Digital Turbine jumped about 55% after reporting 20% revenue growth and earnings of $0.16 per share versus $0.08 expected.
Full transcript
Welcome back to the Rebels' Edge, where the unstoppable rally in semis is what we're doing the best today, and which are following the sewer to the downside.
We got one of those to lead it off, and there were puts trading ahead of it on today's Rebels' Edge.
>> [music] [music] >> Yeah, this uh damn Zscaler. Uh thank god I don't have long position in this one,
Pete, cuz it might be a >> [laughter] >> It's definitely not It's It's not good.
Although, uh in today's Rebels' Edge, we've got another stock in there that ain't doing too great, so we got a couple of good ones, couple of crummy ones. But, you know what? That's the way it That's the way it goes.
>> Yep. Well, we've got one that was a $200 stock. It ain't a $200 stock anymore.
And uh we'll be filling you guys in on all the details as to why that is. But, let's kick it off, Pete, with a little uh memory chip uh down memory lane when Pete was, of course, a specialist in Micron. Boy, one of the
hot memory chip stocks right now. And uh high bandwidth memory for GPUs is what everybody wants. So, uh we're seeing US and Asian markets lifted higher on this move alone, Pete.
>> Yeah, it's been It's been pretty unbelievable, right? I mean, it it goes up. It doesn't really fall back. It goes up, doesn't really fall >> [laughter] >> I mean, there's not a whole lot of corrections going on here. So, uh you know, and then you look at different time frames, and you see how much this stock has been moving around, and you know, a lot of people are starting to they were trying to do the
same thing as they they they've been doing John when they when they talk about everything about AI. Well, yeah, that's done. It's a bubble. It's going to blow up and it is. Well, that hasn't really happened. Micron with memory, that hasn't really happened. So, yeah, the move to the upside's been pretty strong and continues to be so.
>> Well, last Thursday, Pete, crude oil was up over 103.
It is barely holding on to 90. West Texas Intermediate, 90 right now. And that's of course because of these ongoing peace talks.
We'll have to see how that continues to play out, but my question is how is the VIX reacting to crude oil sliding and for the most part the market heading higher.
>> Yeah, you know what, John? It's It's not doing a whole lot today, but it already had pulled back and here we were in the 16s. And we are right there, call it high 16s, very low 17s.
You know, today's range is probably something that that it probably makes a lot of sense because of the movement that we're getting and the and the why of that movement, but it's been pretty interesting and here we are. I mean, that's that's There's the shot right there. We are somewhere between that 1680, call it 17, and kind of planted
there right now. So, what is it telling us? It's telling us exactly what's going on. Well, it's you know, the S&P has been moving around pretty nicely and you know what? 16 is about a 1% move, right, in the S&P?
Well, that's pretty close to what we've been doing lately. We're holding on a little bit, John, to that 7,500 for the S&P.
That's something you're kind of I think a lot of people are kind of watching that as well. So, we'll see. If it starts slip slipping through there or starts getting hit a little bit, we might start to see that volatility get back into the 17s, but either way 16 17 unless it starts to fly, um I think the general direction is going to be a little bit lower.
>> Well, tell me about this one, Pete. My Polymarket pick today was uh uh Trump announces US blockade of Hormuz lifted by {dot} {dot} {dot} {question mark}. Okay, so what is the betting market saying about that? Well, it was,
Pete, 84% chance that he'd lifted by the 31st of May. That dropped by 50% overnight. It's now 34%, Pete, and that's the heaviest uh you know, basically 5 million went flushing into this thing just saying, "Nope, it ain't
happening by the 31st. It ain't happening." And they just pounded it. Um so, that gives you an idea though of how you could make money in those prediction markets, folks, because uh again, if you're somebody that believed that 84% chance or whatever like yesterday was a
good bet, um you could have gone against it. You could only lose 16 cents for every dollar you bet, but if you bought it at 84, Pete, it's not a good day for you today.
>> Not a good day at all. You know what?
Looking at things, John, you know, with without even paying attention to where it was yesterday, I would just say this.
Um the June 7th seems to me, if I was looking and I and I wanted to get in here, that one seems the most probable that that's a possibility of happening.
Otherwise, yes, it could happen May 28th. Yes, it could happen May 31st, but that just seems like that is um a little bit closer than I think that this kind of uh negotiation is going to go through. And uh you know, obviously the president would like to have it done yesterday,
but he continues to be very very adamant about pushing for certain things and uh and you know what? I think that the prediction markets are starting to feel that out and he wants to get this thing done, but he wants to get it done right. So, it might take a little bit longer. So, we'll see.
>> Yeah. Well, we've got one Pete that you and I are advisors. We're basically paid advisors to a small cap stock on our small cap spotlight today that we've covered several times in the last few weeks because A, they rang the bell at the
NASDAQ.
And B, here they are Zsquared, ZSQ R, and they're expanding into AI infrastructure, Pete, because it takes so long, folks, to get permitted, to get power, not just to get CPUs and compute,
but these guys already had that all lined up because they were a miner. And just like a lot of other miners, like Hut, for instance, Hut 8, these guys are catching a lot of wind at their back, I'll say, Pete. And the
Russell 3000 index decided to add them to the Russell index indexes when they reconstituted it. Now, they're going to do that after the market closes Friday, May 22nd. Basically, they
published this and the actual Pete inclusion is Friday, June 26th. And for those who don't follow it as close as Pete and I, folks, the actual inclusion means that the folks that are rebalancing their
portfolios in the Russell will add this as of the market close on Friday, June 26th. So, it's good news today, but it could certainly lift this stock through June, Pete, and you would anticipate the biggest lift might come right at the end
there where people are basically scrambling to get in if they have a portfolio that's part of the Russell's.
So Russell is one of the biggest brand names in small caps and ZSQR stands to benefit from that inclusion, right Pete?
>> Yeah, absolutely. And I think that everything we hear it sounds like there's a lot of excitement about that whole thing. So yeah, I think I think that for all the right reasons should they be there? Yeah, and I think it's great and it's not that far away.
>> Yeah, data centers in particular, like I say, conversions of minors into data centers a big deal always makes headlines and this one caused the stock to pop about 7% today. ZSQR is the symbol. All right, Pete. How
about another stock that begins with Z, but thank God we're not in this one and it's Zscaler.
>> Yeah.
>> Because Zscaler collapsed over 30% today. Investors just hitting the exits with both elbows, Pete, just like get me out. Um So cloud security, you might think that that's something that a lot of people would need and indeed they do, but in
this case when you've got firms reducing their price targets by 20 and 30% that ain't good, Pete. And the CapEx is dragging down their free cash flow margins a lot.
>> Mhm.
>> So Needham, Wedbush, even Jim Cramer are talking about this one, Pete, and it's it's looked pretty ugly all day.
>> Yeah, looks terrible. And also John, you you mentioned a couple of the big reasons why and it made a made a lot of sense. The price targets like Wedbush and those guys who are bringing those down, but they also lost a couple of big uh sales leaders and you know what? They consider those very key people. So, the fact that they've lost at least two,
they're not too happy about that. At least the the folks that are selling obviously are not too happy about that because they're turning and saying, "You know what? I don't even want to touch this thing." And it's interesting because they had a strong Q3. Revenue was up 25% year-over-year. So, from that perspective, that was pretty solid. But, there are other things that uh you know,
that that have got people a little bit with their underwear in a bundle and they're they're they're just saying, "You know what? I I don't care. I want out." And that's exactly what we're seeing right now. And they want out in a bad way because this is a pretty substantial move. You saw that uh that that on the screen just a little bit ago what it looks like. I'll tell
you what, down 30-plus percent, 31% not so good, John. And um that's at least about where they're they're they're trying to fight off of being on that that move to the downside side. But, the problem is uh I don't know. I think there's too much weighing on it right now. And this is not one where I'd say, "You know what? It's
time." I I don't think that's true on this in this case.
>> Well, um I had an unusual activity from a year ago, Pete. So, this is not an active one, folks. This isn't like, "Oh, Pete and John rung the register on this one because the stock dropped this far." This stock has a nasty habit,
apparently, Pete, of falling really big as we head into this quarter. And that's just an example from, like I say, 2025 from May 19th, as you guys can see there. And they were buying June 200 puts with the stock at 251. And so, when
these guys get the feeling that something's not so good in Zscaler, yeah, I'd say uh you might not want to be long this stock in this May-June time frame. Is it written in stone that that's the case?
No. But, this is the second year in a row when we've seen a really big drop, Pete. It had just clawed its way all the way back into the 190s, and then all the way back down. Pretty damn ugly.
>> That is.
>> All right.
Let's look at one maybe that's not quite as ugly, Pete. Dycom Industries. Because this one um this quarter checked every box for growth, operational strength. Um these guys did it all, Pete. Um DY is the symbol here, folks. And uh basically
first quarter posting double-digit growth across virtually every key metric. So, they also raised full-year guidance for 2027. So, not so bad, Pete.
Pretty much the opposite of what we heard out of Zscaler.
>> The exact opposite. Yes, John, you're right. You know, engineering specialty contracting, that's what these guys do, and it's record-breaking, by the way, in that Q1 that you were just talking about. That's impressive. They raised the guidance, you know, that's always a good thing because, you know what, once we get the earnings, we always talk about this, you go and look what Well,
what's the guidance look like? Well, the guidance looks pretty damn good. So, the combination of both of those moving to the upside, you can see this. This a $100 move. I mean, it's a pretty substantial. You're going from what, call it four and a quarter up to it let's call it five and a quarter. That's a pretty deadgum nice run, right? So,
yeah, they're doing just about everything right, John. Almost exactly the flip side of what we were just talking about with Zscaler, unfortunately for them. And that's exactly what we're seeing with Dycom.
It's just the you know, the polar opposite in a good way. So, impressive, yes. And these guys are absolutely crushing it, and they they plan on crushing it into the future as well.
>> Well, at the uh a 1 year ago, Pete, the stock was 229. Now it's $533 a share. Yesterday we were talking about Micron and how it made a move like that in just 2 months.
But this one very strong move.
Revenue guidance, like you said Pete, that was pretty astonishing because basically they threw another billion onto what their guidance would be going forward. So that's a pretty good a pretty good report, I'd say.
>> Yep.
>> Now let's talk about Vroom.
V R R M. And this one's another one of those Pete where boy am I glad we weren't in this one.
Vera Mobility. It was down as much as 68% today. This mobility technology company slashed full year earnings outlook. You know why? Because one of their biggest clients, Avis, basically said, "You know what? We're going to find another way to
do what you guys do. We don't need you anymore." And turns out they account for a pretty significant amount of their revenue, Pete. So I I am chuckling, but this is one of those deals where when you get all your eggs in pretty close to one
basket, you can see why that's not such a good deal. Right now shares are down 68% on heavy turnover of 44 million shares, Pete. It's an ugly day to be long Vera Mobility.
>> And that terminated contract that you were just talking about John with Avis Budget, that's a that's a key element for them.
It's it's it's over 10% of the total revenue and they basically just said, "Look, we're we're going to walk. We don't want to do this anymore. It's it's not working for us." And that's that makes it pretty tough. And the last I looked John, this thing was down 71% or something close to that. I think you know, 68% 71% by the time you get down there, I guess it's not all that much
difference, but there's a little bit of a difference. But, I will say this, um when I was looking at the numbers that that that they have as a company, John, they got debt of $1.1 billion with total cash of 55 million. So, I look at that, I get a little bit nervous, and this is one of those that even with that
contract, I don't know um that that was one of the kind of companies that I wanted to be with.
Obviously, that was a a big player for them, and it's not good, and it's uh going to be very, very difficult, I would think, in the future for these guys, unless they can get something done with somebody else. They They've got a little bit of an issue, I think, right now.
>> Well, let's switch gears once again, Pete, and go to a big winner.
Digital Turbine, which is uh the symbol is Apps, A P P S. And what do these guys do? Well, they operate basically uh device solutions and app growth platform. So, uh their numbers, Pete,
apparently pretty impressive. Up 55% today >> [laughter] >> on 32 million shares changing hands. I'd say people liked this one, and if you look back and see where they've come from, Pete, it's a volatile little
stock. I mean, um August of a year ago, the stock was down around three bucks, and it shot all the way up to almost where it is today, to about 750, and then bled all the way back down. I mean, you want volatility? Digital Turbine is
your stock if you like volatility.
>> Yeah, and and sometimes you like it, but sometimes you don't. I mean, you [laughter] know, depending on if you're on the right side of that whole thing. You know, the revenue, John, was up 20% year over year, so that That great. Uh their margins are are are very strong and they were talking about that. They also talked about the beats that they had,
the guidance that they put out there, the expectations for the revenue, the EBITDA, all of that. Uh, they really did a great job. I I mean, it it makes sense why they're doing as well as they are as far as the stock movement that they're getting, which is 50 plus percent or better.
Um, they really did hit everything that they needed. I took a look at the earnings, John. They were expecting 8 cents, they delivered with 16 cents.
Revenue, like I mentioned, up 20% year over year. So, uh, they are doing everything right and it's pretty much the contrary to what we were just seeing with that Var Mobile, but um, you know what? Not trying to make fun of those guys because, you know what? You never know, but um, it just is not working for them right now and boy, between that
debt and then you look over and you look at what's going on with Digital Turbine, these guys seem to have everything in order right now. So, I think they deserve to be crushing it the way they are.
>> Let's let you take over the sports segment, Pete.
>> Well, we were talking about the NBA yesterday, John, because how we're you know, we're we're at the final four essentially. And um, you know, it's it's great to I was watching the game last night. I really it was it was a lot of fun. OKC, for the most part, had control almost the entire way through it, John.
As a matter of fact, they dropped 40 on the San Antonio in the second quarter alone. So, uh, OKC was really bringing it to them.
Uh, Wimbley was uh, Wimbley was having a difficult time. He Here's what his numbers looked like yesterday, John. He was four of 15 with field goal shots.
Not so good, right? Uh, zero for five with three pointers. That ain't so good, either. Here's the other problem. So, De'Aaron uh, Fox gets in there and he puts up kind of the same numbers. So, they just did not have and you know what? OKC's been there as well where they They can't be able to they don't
the the the rim right and they're not able to get any points and we've seen that happen to them as well. So, it's interesting, but OKC at home, this was a blowout. They They beat them in every single way. I I think when you look at what Wembanyama's been doing, John, is he getting kind of tired? When you're a 7'4" guy and you're making it up and down the court like that and you're
playing these playoff games very aggressive, you know who really played well yesterday were the guys that people don't really talk as much about. You got Chet Holmgren, John, and Hartenstein.
Those two guys, the bigs on on the OKC side of things, combined for 12 of 17 on field goals. So, while Wembanyama was having a really tough night, these other 7-footers were having a pretty damn good night, actually. And the two big men really started moving them up and down and it was a very physical game. It
reminded me a little bit of some of the games back in the days of, you know, the Bulls and the Pistons and all that kind of thing where they let them play a I don't think that works very well for San Antonio. It certainly works pretty well, I think, for OKC. And that's why they absolutely drubbed them yesterday. They
I think they beat them by like 15, 17 points, something close to that. But they were They were doing everything right, John. They were 44% on the three-pointers, 48% on the field goals. And for whatever reason, and I don't know what it was, if it's fatigue or what, but uh San Antonio really
struggled. So, we got another one tomorrow night. We'll see what happens, but right now, um that could be the end of it if uh San Antonio can't step up.
>> Yeah. Well, you know who's been having a hard time stepping up, Pete, is SGA.
>> Yeah.
>> Um SGA, I thought you guys would like this stat, uh was one of five in the first quarter. One of five.
Um you can't shoot 20% folks and uh win very many games. When you're the the star that's supposed to be filling up the hoop. Luckily, like Pete said, the two big men did that. And the two big men, you know, putting up field goals, not just standing under the rim
and jamming it, but putting up field goals, that's a big deal. But, I love this quote Pete from SGA. He said, "If it was five me's out there, we would have BEEN DOWN 20." >> [laughter] >> AND HE'S RIGHT. THAT'S THAT'S pretty
honest because you can't shoot 20% and stay in the game. But luckily, the other guys had his back Pete, and the other two big men really made it hard on Wembanyama because if if you let that kid score like you
and I said yesterday, if he scores 20, you're okay. If he scores 30, you're dead. You're dead. And luckily, they didn't let him do that.
>> Yeah. Now, you're exactly right. How about a little NHL? I know we don't hit it very often John, but these guys this is this is what really interesting to me. So, the Golden Knights, now half the world doesn't even know who the hell the Golden Knights are, right? I mean, you know, let's be honest. But they're a Las Vegas team and they should know who they
are. These guys are only in their ninth season total John, and it's their third cup finals that they're going to be in.
Now, I sit here in Minnesota, you know, the this is the hockey world right up here.
I don't even remember the last time we were there. I I I'm not even sure if we've been there in forever it feels like. I know that we have never won a Stanley Cup, which is really sad, but it's amazing how the Golden Knights they put this thing together, they're doing unbelievably well. And and when I say unbelievably well John, how about this?
Colorado pretty much the entire year the best team in all of the NHL, right? I mean, these guys dominated. The Avalanche were unbelievable. Well, they just got swept 4-0. So, they not so good for them and now the Golden Knights get a chance to rest for a little while because you've still got
the Hurricanes out there playing as well, John. So, the Hurricanes and the Canadians are going to go at it. Right now, the Hurricanes are up 2-1. They still got to get to four, so they got a couple games left at least and it's going to be pretty interesting because now the Golden Knights get a little chance to rest and if if that works well
for them and hopefully it does.
Sometimes, you know what? You kind of lose that momentum that you've got and they've got obviously got some pretty good momentum with this sweep that they just got done with. But, what do you think about something like that? Do you think it's better or worse to be cuz if if you actually do get a little extra time, maybe you get healed up, some of
the injuries they had got. It's a long season for hockey, the long playoffs that they play. But, you also lose a little bit of that momentum. What do you think?
>> Well, the sweep will give them a lot of confidence, obviously.
Um, especially like you say, you know, this is a team that's won three Western Division Conference Championships now.
So, like you said, they just finished this one, five Pacific Division titles and they won the whole thing back in '23, Pete. Um, which is again kind of sad for you and me being guys that uh at least part of our lives grew up in Minnesota with the North Stars that are
now the Dallas Stars. Um, and now we've got the Wild. So, hopefully the Wild won't enjoy the same curse that the North Stars did. But, yeah, Vegas, man, that is a a franchise that's well put
together, Pete. Um, from the beginning of that franchise, they started uh you know, winning games against teams people didn't think they should be beating. And now, I don't think anybody really wants to play them.
Um but, the the team that like you said, the Hurricane, that's going to be an interesting if it's the Hurricanes. We don't know for sure. Like you said, it's only 2-1, but if it's the Hurricanes against the Knights, um I think the uh the betting lines out there in Vegas will be interesting, Pete.
>> [laughter] >> Just let's make sure the players themselves don't bet on it, John. We got a lot of going up. You know, this this quarterback, and I almost said poor quarterback. He's not a poor quarterback. This quarterback that's trying to get back into college football or whatever, um you know, who knows how that whole thing's going to play out, but uh don't don't go out there bet when you're in
college, man. I mean, what the hell are you doing? And if you're in the pros, don't go out there bet. You shouldn't be out there bet. Leave that to everybody else. You You're there to play. I mean, you know, it's it's too much of that going on, and I feel bad for these guys. I really feel bad for this quarterback, but you know what? He he probably knew the risks and
decided it was okay to take that risk, and uh I think he's finding out that it's not so great, because you know what? He signed a pretty damn good contract to go down there, a contract with NIL or whatever, um and it's not like it looks like it's not going to happen. I think he's going to have to try again some some way, some sort of
thing in court or whatever, but unbelievable that uh that he did it in the first place.
>> Yeah. Well, um we always appreciate you guys tuning in.
We've got one more Rebels Edge this week. It'll be coming your way tomorrow at 1:00 p.m. Eastern Time. So, make sure you mark it on your calendar. Join us tomorrow on all the socials, the uh YouTube and so forth, and uh hopefully we'll have a uh an interesting video or
two, Pete, for us to lead us into sports tomorrow.
See you then.
>> [music]
Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.