To The Moon

I. Performance of Global Equity Indices (in US Dollar)

Source: Bloomberg, Tiger Fund Management

Key Highlights

◼ Last week, several major macro events in the U.S. landed in quick succession. The outcomes were broadly benign, and equity indices followed a "down first, up later" pattern. The labor market cooled somewhat but did not deteriorate sharply; inflation surprised to the downside, falling more than expected; and Japan delivered a rate hike as anticipated, without unsettling risk assets. The market's core narrative slowing growth with manageable inflation-remains intact. From a flow and positioning perspective, CTA exposure was rebuilt, the VIX fear gauge retreated, and risk appetite improved. Over the next few weeks, U.S. markets enter the holiday season while macro catalysts move into a relative "quiet window." Indices may therefore drift higher at a slow pace with subdued volatility, with earnings and fundamentals becoming the primary narrative drivers.

◼Recently, volatility in the Al complex has picked up, and most names across the supply chain have pulled back. This has been driven mainly by concerns over data-center financing and balance-sheet leverage, rather than any deterioration in underlying Al demand. Last week, Micron's earnings helped decisively reverse that sentiment: both results and guidance beat expectations by a wide margin, clearly validating an Al-driven memory supercycle. In our view, as Al transitions from training toward inference and real-world applications, data throughput and storage demand should remain highly visible and highly elastic. Valuations in the memory segment are still relatively low-trend confirmation is in place, but pricing has lagged creating a potential re-rating window akin to the "Nvidia moment" in early 2023.

◼ This week, key items to watch include the second estimate of U.S. Q3 GDP and U.S. Treasury auction dynamics.

II. Key Market Themes

U.S. Macro: Multiple "Shoes Drop" at Once—A Scare, but Ultimately Benign

Last week, volatility in U.S. equities picked up and markets saw a roller-coaster move selling off first, then rebounding. On the macro front, three major events landed almost back-to-back: labor data, inflation prints, and the Bank of Japan's rate hike. Overall, the results were "surprisingly uneventful" and did not derail the market's prevailing narrative of "slowing growth with manageable inflation."

More specifically, U.S. nonfarm payrolls for November rose by just 64,000-soft, but still better than the market's more pessimistic expectations. October payrolls came in at - 105,000, which looked sharply below consensus at first glance; however, after excluding the 157,000 decline tied to the government shutdown, the private sector still added more than 50,000 jobs. Meanwhile, the unemployment rate rose to 4.6%, and wage growth cooled materially, with month-on-month gains of just 0.1%. Taken together, these data points suggest the labor market is cooling, but not yet breaking. Inflation data, on the other hand, delivered a positive surprise: November core CPI unexpectedly fell to 2.6%, well below both expectations and the prior reading. In Japan, the Bank of Japan hiked rates by 25 bps to 0.75% as expected, and noted that uncertainty had eased-without adding meaningful pressure to global risk assets. As a result, near-term macro risks for U.S. equities appear to have been navigated safely. The next key checkpoint will be next month's December employment report. If the unemployment rate climbs to 4.7% or higher, concerns about the U.S. economy slipping toward recession could resurface temporarily-becoming the main near-term macro headwind.

Source: Bloomberg, Tiger Fund Management

From a market-structure perspective, risk appetite did not deteriorate materially last week.According to institutional trading-desk data, CTA positioning in U.S. equities has moved higher again, with roughly half of the previously forced reduction already rebuilt. At the same time, the VIX fear gauge fell back below 15, signaling a clear decline in systemic risk premia. Flows and macro data reinforced each other: rather than rotating aggressively into defense amid slower growth, the market appears more inclined to re-add risk in a still-controlled macro environment.

Looking ahead over the next two weeks, as the holiday period approaches, macro releases and policy catalysts move into a relative "quiet window," and trading activity is likely to thin.Absent any unexpected shocks, equity indices may be more prone to a low-volatility, gradual grind higher, rather than large directional swings. In such an environment, market focus often shifts from macro-driven positioning to fundamentals and industry narratives-making structural and idiosyncratic opportunities more important.

U.S. Al: Sentiment Stabilizes, and Memory Enters Its "Nvidia Moment"

Recently, renewed concerns over financing for Al data-center projects resurfaced, briefly amplifying worries about Al investment returns and triggering a broad pullback across the Al supply chain. It's important to stress that this bout of volatility reflects a repricing of project risk in credit markets, rather than any fundamental change in underlying Al demand. Take "new cloud" players such as Oracle as an example: their business model is essentially to push frontier infrastructure build-out with high leverage-very much a "borrow-to-build" approach. It is normal market behavior for creditors to demand a higher credit spread when perceived risk rises. For equity investors, however, what matters most is not short-term fluctuations in financing costs, but whether these projects are backed by durable long-term demand-and whether they can generate sustainable value returns as Al moves deeper into the inference-and-application stage.

What truly turned sentiment last week was the earnings report from Micron, the leading memory player. Both results and guidance beat consensus across the board, and management explicitly guided to next-quarter earnings that are close to doubling sequentially. This directly eased market concerns about slowing Al demand or a stalled commercialization path. In effect, Micron's report validated the thesis we have repeatedly emphasized: memory is in an Al-driven supercycle. Unlike traditional memory upcycles that are largely driven by price swings, the core engine of this cycle is Al itself. From model training to inference, from compute expansion to real-world deployment, data throughput and storage-per-compute requirements are still accelerating-bringing a level of demand certainty that is stronger than any prior cycle.

Based on the latest earnings guidance, Micron is currently trading at roughly a 7x forward P/E, which clearly suggests the market has not fully priced in this supercycle. As Al evolves from training toward large-scale inference and commercial applications, memory is no longer just a cyclical supporting character in the value chain—it is becoming a core infrastructure asset with both high visibility and high operating leverage. We believe assets with such exceptional demand visibility and earnings elasticity are rare within the Al theme, and in some ways resemble Nvidia in early 2023: the trend has been validated, but valuation frameworks are still anchored in an outdated regime. As earnings continue to be delivered, the market is likely to re-rate the memory segment toward valuations more consistent with a supercycle.

Source: Bloomberg, Tiger Fund Management

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