‘Agentic AI’ is stuck and OpenAI, Anthropic, SpaceX can’t save it We tend to think of AI spending as if it were a wine bottle from which amazing amounts of productivity will simply flow. It’s more like a flask, a complex instrument that needs to be handled in a certain way till the vapors of productivity effervesce out of it. What that means is a lot of hard engineering work is going to be required to make this stuff pay off. Right now, that’s not happening. The giants of AI assure the world that “agentic” AI is already changing the landscape. Remarks at Bloomberg’s AI Forum Tuesday make clear that the technology is not spreading as fast inside companies as hoped. The reason is that it takes a lot of practical, tedious engineering work that no AI can magically solve. One outcome is that the biggest and best AI models will become increasingly less important as the model function itself becomes a commodity. thetechnologyletter.com @SpaceX @OpenAI @AnthropicAI

Tomorrow is the twice-yearly in-person auction of the Leitz auction division of camera company Leica. It’s out of my budget, but it’s fascinating. The biggest “pre-bid” so far is €400,000 for a “black-paint” version of the Leica MP, a mechanical camera from the 1950s. It’s predicted it may go as high as €800,000. If you can’t make it to Wetzlar, Germany, tomorrow, read my preview and follow along on the Leitz auction site. An investing diversion: The rarified world of Leica’s beautiful, valuable cameras The Leitz auction house has the franchise on the historic creations of the Leica camera brand. The fact that these cameras fetch hundreds of thousands or even millions of dollars is not merely a savvy market approach. It is also a reflection of the beauty of a technology that has endured. thetechnologyletter.com @leica_camera

SpaceX surges 30%: $22 billion left on the table SpaceX and underwriters left a bunch of money on the table with today’s offering. If the stock keeps to the tradition of tech IPOs this year, it could close above $180. thetechnologyletter.com/ $SPCX @SpaceX @elonmusk

Tim Horan of Oppenheimer has done a great job sizing up SpaceX even before liftoff. I was not, however, convinced of the value in the AI business. You add up Colossus leasing, Grok, and Cursor, and what you have is shaky data center deals, yet-another-AI model on its way to being a commodity, and an over-valued coding startup, none of which sounds that great to me. SpaceX at $190? Maybe on the Mars stock exchange SpaceX has gotten its first initiation of coverage prior to going public, and if you can stomach a seven-year cash burn of $215 billion, the shares might be worth $190. Mind you, AI revenue is just about as certain as colonies on Mars. thetechnologyletter.com $SPCX @SpaceX @grok @elonmusk

The former CFO of Schneider Electric is now the CFO of Oracle, and seems to be counting on not having to replace computer chips at some point in the future that is a “steady state.” There really isn’t such a thing in technology. You need to keep moving. Oracle’s massive spending feels predicated on naiveté. Oracle stock slips: ‘Who knows if the GPUs don’t need to be replaced’? Oracle’s newly installed CFO Hilary Maxson explained how the return on all this spending will be great for Oracle. You have to wonder, though, when the CFO makes comments such as maybe the GPUs will not need to be replaced. This is tech, not HVAC. thetechnologyletter.com $ORCL $NVDA

I tend to tell people that I write about technology and stocks. But some days, I feel that I write about strange things going on in the market. Take the case of Fermi, which went public in October and still has no customers over seven months later. The optimistic view is that the desire of giant companies such as OpenAI has to lead to customers someday… Fermi: No customers, no problem AI stocks fell out of bed on Wednesday, with Nvidia, Broadcom, Marvell, BE Semiconductor and other big AI names dropping three percent or more amidst what appears as generally profit-taking and a risk-off attitude about the group. Even Vertiv stock sold off despite a favorable initiation of coverage. But Fermi America, which has no customers, soared by 24% prompted by OpenAI’s ongoing interest in massive data center capacity. $FRMI thetechnologyletter.com/

And so it begins, the hunt for how Cerebras will diversify away from its massive reliance on OpenAI, currently expected to constitute upwards of 80% of Cerebras’s revenue for years to come. Good problem to have? Maybe, maybe not. Street loves Cerebras: Can they make these numbers? Nine analysts initiated coverage of Cerebras Systems with a Buy on Monday, all with Buy ratings or equivalent, and $340 being the top target. The question is whether the company’s heavy reliance on OpenAI as top customer will add up to the numbers currently in the spreadsheets. None of the analysts have any answer to that question, really. thetechnologyletter.com $CBRS @cerebras

It’s just a breather for stocks, as today’s pick-up shows, but there are underlying concerns, such as the gradual entry of outside money into the data center boom. Seeds of doom, possibly, down the road. The TL Podcast for June 8th: Battered but not broken The 4% collapse of the Nasdaq on Friday is a necessary corrective to valuations that had continued to soar higher on AI enthusiasm. The market is questioning the sustainability of AI the boom. We probably are not yet in the danger zone; that’s more likely to be 2027. New initial public offerings such as Innio and Arxis represent a makeover for the industrial and aerospace technology categories. And Cerebras Systems get the thumbs-up with price targets as high as $340. thetechnologyletter.com $AVGO $MU $SNDK

It’s fascinating how older stuff such as ball bearings and specialty materials is getting a new lease on life with these carve-outs and roll-ups. The IPOs of 2026: AI turns to industrials and defense-tech While AI chip company Cerebras is the headliner for initial public offerings thus far in 2026, some of the biggest offerings have been by industrial or quasi-industrial companies such as Innio and Arxis. These IPOs represent well-established technologies and well-established product categories that are newly relevant in an AI age. thetechnologyletter.com $INIO $MWH $ARXS $FPS $CBRS

Partnering with the money guys such as Apollo and Blackstone is an ominous turn for a crazed AI infrastructure market. So is the “huge” demand for Broadcom’s services by Google and others well in advance of actual deployment of chips. Not the end of the road, but a potential warning sign about the AI trade. Broadcom: Should we be worried about Apollo and Blackstone? Shares of Broadcom sold off hard following Wednesday’s earnings report, prompted by pressure on gross profit margin. That’s not a big deal as results continue to be stellar. The one concern is the entrance of Apollo and Blackstone’s balance sheets to support Broadcom. Are these outsider financiers the start of something ominous for AI? Plus, quantum hopeful Quantinuum has a robust open, and ASML gets yet another positive review. Subscriptions to the newsletter are $1 a week for the first four weeks. thetechnologyletter.com $AVGO $APO $BX

The goal of TL is to make people money. It doesn’t make sense to be cavalier about the risks involved in investing. The AI Trade has a very big risk that probably will become clearer as we move into 2027. The entrance of outside investors — bankers, hedge funds, creators of abstruse securitized products — may be the weak link that makes the entire enterprise susceptible to an “exogenous” shock such as rising interest rates or 6% inflation. The TL Podcast for June 3rd: Hard landing or soft for AI? When SpaceX and OpenAI and Anthropic fail to generate the revenue needed, how hard will the AI boom implode? I can imagine a scenario in which they try to take away all the revenue of the “systems of record” of Salesforce, Workday, Hubspot, etc. Subscriptions to the newsletter are $1 a week for the first four weeks. thetechnologyletter.com

At mid-year, the TL20 is up 70%, well ahead of the 17% of the Nasdaq. The TL20 has been more heavily weighted to Micron Technology of late, which has seriously outperformed Nvidia, thus contributing to market-beating gains. This is not AI-based stock picking. This is knowing about tech companies and markets and stock valuations based on years of experience. Subscriptions to the newsletter are $1 a week for the first four weeks. thetechnologyletter.com

Jensen Huang’s Nvidia is looking pretty good with his company’s $2 billion stake in Marvell after Huang sang the company’s praises at Computex. The double-dealing in the AI market, with companies taking stakes in vendors and then talking up those companies’ stocks, is rather remarkable. Nvidia’s Huang pumps Marvell stock but consider the alternatives Name-dropping about Marvell Technology by Nvidia’s CEO sent its shares soaring but here there are other things to consider in networking and fiber-optics such as Lumentum and MaxLinear. Also, the Street is underestimating ASML’s growth — possibly by a wide margin. Subscriptions to the newsletter are $1 a week for the first four weeks. thetechnologyletter.com $NVDA $MRVL $AVGO $LITE

When you make promises well in excess of what you’ve delivered or can provably deliver, that’s slide-ware. Whether it’s Google warning of a quantum-crypto doomsday, or a roadmap from a vendor such as D-Wave that has plans to have a machine six years in the future, we’re living in an age of quantum slide-ware. D-Wave’s gate discussion brings more quantum slide-ware Quantum computing hopeful D-Wave on Monday talked up its roadmap to a hundred “logical” qubits’ worth of gates in 2032. The fact is, it’s still slide-ware, and there is as yet no proof they’ll hit their targets on time nor that it will add up to a very valuable machine by then. Among “boutique” stocks, I’d rather buy ASML. thetechnologyletter.com $QBTS $IONQ $RGTI

The entry — again — of Nvidia into the PC processor market is not as earth-shattering as is being branded. It remains to be seen if enough AI “agents” actually show up in enterprises to make it matter. But if they do, it could make capitalism obsolete, according to Deutsche Bank. Nvidia, Intel, Dell and the microprocessor craze The entire personal computer “complex” is getting a lift Monday as Nvidia announced a new PC microprocessor. Frankly, the enthusiasm is a little overblown, in my view. Intel and AMD trade lower on the news. Also, favorable views on recently public Rare Earths Americas, and following where the AI money comes from and where it goes. thetechnologyletter.com $NVDA $DELL $INTC $AMD $MU $WDC $SNDK

One of the things I appreciate about Jay Chaudhry of Zscaler is his blunt quality and absolute tenacity in defending his company. “Totally wrong” is refreshingly direct to hear from an interviewee. Zscaler CEO: ‘Investors don’t appreciate the platform we have built’ Cyber-security software giant Zscaler’s stock plunged 32% on Tuesday, and CEO Jay Chaudhry sat down with me to explain some of the notions people have about the company that are “totally wrong” in his view. His company is still “best in class” in cyber-security, he points out. Rumors of increased competition from the likes of Fortinet and Check Point aren’t true at all, he says. And as for AI “agents,” if even a handful of Fortune 500 firms start rolling out the stuff, it can meaningfully add to Zscaler’s revenue. thetechnologyletter.com $ZS @zscaler $PANW $FTNT $NTSK $CHKP

Unbelievable numbers from Dell tonight. An 88% jump in revenue, year over year, at $44 billion. And more of the same promised this quarter. The company’s forecast three months ago didn’t come close, nor did the Street. This is unlike anything we’ve seen from Dell in years. Some giant AI companies just ordered a lot of servers. And Dell was actually able to ship them. Dell soars: Enormous revenue upside, and profit, too Dell’s shares surged 17% as the company said it is going to have $60 billion worth of AI server sales this fiscal year. Its first-quarter revenue blew away both the company’s own forecast and Street consensus. And the surge in profit is even more surprising, putting to bed worries about erosion from low-margin AI servers. And it looks like the good times will keep rolling this quarter and beyond. thetechnologyletter.com $DELL $INTC $MU $AMD

The software analysts have been desperate for some company to offer up a thing they could point to that says that packaged software will survive and maybe even thrive in the AI future. The Snowflake “Cortex Code,” dubbed CoCo, has handed the bulls what they wanted. It is being celebrated as a pivotal development. Mind you, it has 7,100 accounts in total using it, and we don’t actually know how much money Snowflake makes off of it. Hallelujah! Street gaga for Snowflake’s ‘CoCo’ One tool for “agentic” artificial intelligence at Snowflake has suddenly ignited the passion of Street analysts, driving Snowflake stock up over thirty percent in early trading and sending price targets zooming. It’s a little too soon to declare victory, but it seems to be resonating as a sign software can survive. thetechnologyletter.com $SNOW