AI Optics Rally, Financials Slip, Hut 8 Secures Mega Lease

Summary

Jon Najarian previews major technology earnings and discusses investor demands for evidence that AI spending is translating into revenue and margins. He highlights gains in AI optical-networking suppliers, weakness in StoneX, and Hut 8's reported long-term data-center agreement, while contrasting prediction-market activity with much larger securities-market trading volumes.

• Alphabet, Tesla, IBM and Intel are scheduled to report earnings, with AI spending returns and guidance in focus.
• The VIX fell approximately 5% to 17.8, benefiting traders positioned for volatility compression and time decay.
• Kalshi priced a 62% chance of the Nasdaq exceeding 31,800; Najarian cautioned that the roughly $400,000 wagered represented limited market participation.
• Lumentum rallied as hyperscaler expansion supported optical demand; JPMorgan cited valuations after pullbacks and Nvidia-driven co-packaged optics adoption.
• Coherent also advanced, supported by AI photonics demand, record bookings and its Nvidia partnership.
• StoneX declined as investors rotated away from the financial-services company.
• Hut 8 reportedly secured a 15-year agreement tied to its Beacon Point data center in Texas, worth nearly $10 billion and involving 352 megawatts of power.
• Existing power contracts, permits and infrastructure were highlighted as advantages for crypto miners transitioning into data-center services.

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   Welcome back to another exciting week of Rebel's Edge. I'm Jon Najarian. Pete Najarian doing a little Vikings television and radio network today. So he's unavailable, but I'm here and I'm going to bring you exactly what's going on in the markets today and why on today's Rebel's Edge.

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   >> [music] [music] >> Well, folks, again, even without Pete Najarian, I think we can uh figure that it's going to be a pretty

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   big week for tech. Uh obviously, Pete would be all over this as well, but the fact that we've got Alphabet, Tesla, IBM, Intel all coming out uh with earnings. They're all slated to report this week. You know, of course, what IBM warned about last week and how badly

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   they were hit. Well, uh we'll see whether or not we get warnings out of any of those other three, uh Tesla, Alphabet, or Intel and or if they give positive guidance, which of course, could have the opposite effect of the IBM warning last week. Well,

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   investors are demanding uh evidence that AI CapEx is uh bringing in the revenue and margins that they need. Obviously, we've uh spoken about Meta and the fact that they are renting out their compute already um for the excess that they

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   have. Well, uh could be others do the same and uh if that is indeed the fact, uh which we don't know yet, uh but obviously, uh that's a possibility. A number of stocks that were uh in the crosshairs because of that could be in

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   the crosshairs again. So, we wait for the rest of these earnings. This is by no means the end. It's rather the beginning of the earning cycle for tech.

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   So, the VIX volatility metric for the S&P 500 is trading under 18 again. It's down to about 17.8.

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   It's down approximately 5% on the day.

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    And obviously people that were dialing forward their volatility projections last week for this Monday, well, they're probably happy campers today cuz not only did you get the time decay, but you got the volatility compression as well.

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    So, that's a a double for them, if you will. All right. And now I'm going to jump right over into prediction markets because we have since prediction markets started to hit the mainstream, Pete and I have been covering prediction markets and what's

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    going on in the two big ones right now, Polymarket or Kalshi, and we've got some interesting announcements coming your way soon as well. But, let's focus in on Kalshi traders saying 62% chance that the Nasdaq trades over

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    31,800.

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    Now, those odds are down 20% as you can see if you zoom in really tight and close on there, you can see that over 20% drop in that. People were much more bullish about it a couple weeks ago, and now they have uh

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    soured a little, but it's still 62% chance. So, in other words, better than a coin flip. But, the thing that I note, folks, is that there's only about $400,000 wagered on this proposal uh on the prediction markets. And

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    what that tells me is I'd much rather look at the QQQ or the Spy SPY, even though this is measuring, of course, the Nasdaq. I'd much rather look at those for where real dollars are being spent, rather than approximately uh what is it here, 400 and some odd

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    thousand dollars worth of bets uh that uh show up on the Kalshi platform. Again, it's 100 to 1 every minute of the day uh on whether you think we're going to see higher numbers or lower numbers

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    uh out of the S&P, the Diamonds, which is the Dow Jones, or the QQQ, which is the Nasdaq. Um I'd say literally hundreds of times bigger every minute uh because $400,000 um is a lot of money, but in the

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    trillion-dollar stock market, it's a drop in the bucket. So, again, this is not where uh the significant portion of uh uh uh dollars are being, if you want to say, bet.

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    I'll say bet. Uh this is not where they are. Uh just as when you go for uh some of the uh sports wagering, uh the sports wagering on Kalshi and Polymarket is a thimble compared to the ocean of uh sports wagering that goes on

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    elsewhere. Now, uh I did see that about uh that some people were claiming in the World Cup uh um a significantly larger amount of people were indeed coming into the prediction markets for the sports wagering, and we'll see whether or not sports wagering

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    gets shut down on some of these platforms. But, I would point out that uh it's probably because of the diverse offerings.

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    Uh in other words, with 48 teams and 78 games, um it could be that some of those games, uh if you total up the total dollars wagered, it's still staggeringly in the sports book category, not in the uh prediction markets. But, that's what

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    makes a market, as we say. So, let's [snorts] talk about Lumentum.

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    Because this is a stock uh that's a key provider of lasers and so forth, uh optical transceivers, all that kind of stuff. They were seeing a really nice build in uh volumes and upside today because hyperscalers are rapidly um

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    scaling these clusters so that they can provide the sort of uh uh uh throughput that the data centers demand.

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    So, that stock was seeing very early action throughout the session today, and we thought it was important to sort of highlight it. So did JP Morgan, because they said reasonable valuations after pullbacks and Nvidia-driven

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    CPO adoption have fueled buying in Lumentum and other names in this space.

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    So, JP Morgan's telling you that. I'm saying this is one of the reasons that we are seeing this particular stock uh move strongly to the upside today.

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    Uh let's StoneX, which is [snorts] symbol SNEX, down significantly today. Uh weakness, yeah, this is extended uh in the financial services space. What do these guys do? Well, they provide execution, clearing, and

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    advisory services across commodities, FX, equities, all that kind of stuff.

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    You will see a lot of folks uh in the StoneX camp, and I'm not saying they're bad, I'm just saying that people decided, sort of all of once, that, uh, StoneX was not where they wanted to, uh, keep their cash. They wanted to cash

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    out, and then instead, uh, roll into some other areas, which they have been Pardon me. Which they have been actively doing.

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    Coherent, um, this is c o h r, up solid today.

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    Uh, very nice move to the upside. Again, sort of like the Lumentum, uh, AI photonics, um, and optical networking. Well, uh, Lumentum is one of their peers. So, if Lumentum is seeing that kind of volume and that kind of interest to drive the

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    stock to the upside, uh, it's rather logical that unless Coherent had a problem, they should be seeing the same.

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    And indeed, they are.

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    Uh, recent tailwinds are things like record bookings, which we had talked about previously on the show. Nvidia has a partnership with them. So, they're sort of hitting on all cylinders, I would say. Um, lastly, let's, uh, discuss Hut 8. My daughter was hired right out of

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    school to work for Hut 8, and then sadly, Hut 8, which was a miner for digital assets, primarily Bitcoin, um, hit hard times. And as we went into a uh, crypto winter at that time, um, this, uh, cryptos were trading to the

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    downside. Hut 8 basically had to restructure, did a, uh, reverse stock split, and then, uh, decided, "You know what? We have all this compute, sort of like, uh, Meta that I spoke of earlier, and with all that compute, they could,

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    uh, use their, uh, infrastructure as a data center. And so this Beacon Point is their data center in Texas and they just struck a deal for 15-year extension for that. This is the second

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    time that this particular customer has said, "Yep, we want in." You guys know the reason why, but I'll just detail it shortly. The reason is that the permitting it takes deals with the power companies and so forth, not to mention the GPUs and

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    everything else, the cooling and so forth that goes into these data centers make it very attractive for anybody who's got the compute to become a bigger player really fast by offering that excess compute to others. And that

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    is precisely what these guys did.

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    They're going to yield nearly 10 billion dollars for this 15-year contract that they've signed. So it's 352 megawatts of power.

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    So again, that's one of the big catch-22s, folks, for data centers. If you don't have the power, you can't really operate. If you want to build a data center and you can't get all the permitting through because some people don't want them in their neighborhood, you know, NIMBY, not

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    in my backyard and so forth. Well, you're going to see a lot focused on companies like Hut 8 and Zsquared, ZSQR, which I am a paid advisor to Zsquared, letting you know that, but that is

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    another company that is in this same space where former minor of digital assets that instead decides to use their permits, use their power that they've already contracted for to become a data center player. You'll

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    hear a lot more about that, folks. Trust me on that. All right. Now, we'll hit a little sports. Well, you guys know the big deal is that Spain did indeed defeat Argentina. Uh even though the game the score was close, the game wasn't that close.

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    Uh I am not holding myself out as the expert in soccer, but I love watching World Cup soccer. That uh sort of hit me maybe 20 years ago, and I still enjoy it a lot. And the the deal here is, folks,

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    if one group is getting 10 or 15 shots on goal and the goalie sets a record for stopping those shots uh in a World Cup finals, you know that the game is not really that close. It's just a matter of time. Now, could

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    Argentina have scored? And perhaps they should have when Messi did indeed yet again put a centering pass uh right out in front of the goal, and the uh kicker or striker went wide. Or actually, he went above the the crossbar um with a shot. It wasn't wide, it was

53. 12:49

    above the crossbar. But nonetheless, um when you've got a a team that's getting that many shots on goal like Spain did and so few shots on goal out of Argentina because of uh the skill of the Spanish team, uh even a great team like Argentina was

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    uh flummoxed uh trying to uh score on that. And so, uh they are indeed the 2026 FIFA World Cup champions. And Spain's second World Cup since 2010. So, very cool for them. Well done, Spain. Uh

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    lastly, um it is SEC Media Day and Media Day is actually several days. It goes on for the SEC in Florida and this is I think the first time that Florida has hosted SEC Media Day. Well, now that

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    you've got teams like Oklahoma in the SEC and so forth, um, it's even more exciting cuz they have such a powerful group of teams anyway that at Media Day, you know, this is mainly for coaches to get out there on the mic and talk about

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    issues like NIL, name, image and likeness, and perhaps expanding the playoffs for the championship and so forth. So anyway, this is the first of let me see here. I think it's 3 days

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    that they that they do this and all 16 SEC head coaches are going to be there.

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    So, big deal down in Tampa and uh, if you could be a fly on the wall there or maybe if you go to Bern's Steak House, um, you can hear some of the hubbub because Bern's is one of my favorite steak houses right down there in Tampa St. Pete and uh, one of the best wine lists around, trust

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    me. All right, well, that's going to do it for me today, folks. Um, I appreciate all of you joining us. We'll be posting up some of the media perhaps from Pete being on with the Vikings again, a team that he played a couple of years for back in the day. Uh, it was I think

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    Seattle, the Vikings, Tampa Bay and the Raiders in the NFL and then Sacramento in the World League. But anyway, um, we hope you had a good weekend and we look forward to both of us welcoming you here to

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    Rebels Edge tomorrow, the 21st of July at 1:00 p.m. Eastern time. See you then, folks.

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    Bang.

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    >> [music]

Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.