To The Moon

The market finally got the inflation number it did not want.

September CPI rose 3.7% year over year, hotter than expected. QQQ fell 1.97%, the S&P 500 dropped 1.11%, and the damage underneath the indices was considerably worse in some of the highest-beta AI and semiconductor names.

The immediate market equation is simple:

Hotter CPI → fewer rate cuts → higher bond yields → higher discount rates → lower tech valuations.

But I think investors make a mistake if they stop the analysis there.

Inflation can compress the price investors are willing to pay for technology.

It does not automatically destroy the earnings those companies are producing.

That distinction determines whether this is the beginning of something much worse or the creation of another buying opportunity.

WHY TECH IS TAKING THE HARDEST HIT

QQQ has a duration problem.

Much of the value assigned to high-growth companies comes from earnings expected many years into the future. When risk-free yields rise, those distant cash flows become less valuable today.

That is why a CPI surprise can hit a semiconductor stock even when absolutely nothing changed overnight in its order book.

And there is another problem.

AI was already crowded.

Investors entered this correction with enormous gains in semiconductors, memory, infrastructure and other AI beneficiaries.

When inflation suddenly changes the rate outlook, leveraged and momentum positions get reduced first.

That creates:

Macro selling → deleveraging → stop losses → more selling.

The first move can therefore become much larger than the fundamental change warrants.

I think some of that is happening now.

3.7% CPI IS BAD. THE NEXT NUMBER MATTERS MORE.

One CPI print does not establish a new inflation trend.

The important question is whether September represents a temporary interruption in disinflation or the beginning of another sustained inflation acceleration.

If inflation stays around 3.5%-4% for several months, the market will have to reconsider the entire rate path.

That would be genuinely difficult for expensive growth stocks.

But if the next inflation data cools again, this selloff could reverse surprisingly quickly.

So I would not build my portfolio around one CPI print.

I would build it around the possible paths from here.

THE 10-YEAR YIELD IS MY REAL DASHBOARD

For technology investors, I think the Treasury market now matters almost as much as earnings.

My framework:

Below 5.0%: Constructive

Growth valuations get breathing room.

5.0%-5.2%: Selective

I want profitable growth, not stories.

5.2%-5.4%: Caution

Valuation compression becomes meaningful.

Above 5.4%: Stress Zone

I expect another round of selling in long-duration technology.

Toward 5.5%+: Opportunity may emerge

This sounds counterintuitive.

But if yields spike while AI earnings remain intact, some exceptional businesses may eventually become much cheaper without becoming worse businesses.

That is exactly the setup I want.

QQQ: HOLD, ROTATE OR SELL?

My answer is:

Hold the core. Raise selectivity. Keep cash. Buy weakness gradually.

I would not dump QQQ because CPI printed 3.7%.

But I also would not blindly buy every 2% dip.

After a huge technology rally, a proper valuation reset could easily become 8%-12%.

So I want multiple entry levels.

MY QQQ PICK LEVELS

Rather than anchor to a single intraday quote, I would use percentage drawdowns from the recent high.

-5% to -7%: First Pick

Begin adding.

-8% to -10%: Preferred Pick

This is where risk/reward becomes considerably more attractive.

-12% to -15%: Strong Pick

If earnings remain healthy, I would become aggressive.

Beyond -15%: Thesis Check

At this point I want to understand whether we are experiencing valuation compression or a genuine earnings recession.

This approach also prevents one of the most common mistakes in corrections:

Using all the cash on the first red day.

BUT I PREFER INDIVIDUAL STOCKS HERE

QQQ gives diversification.

Individual stocks give me greater asymmetry.

And this correction is creating enormous dispersion.

Some AI companies are falling because rates rose.

Others are falling because their fundamentals are being questioned.

I want the first category.

MU IS BECOMING EXTREMELY INTERESTING

Micron around $874 has now experienced a brutal correction.

It is dealing with three fears simultaneously:

Higher rates.

CXMT competition.

Conventional DRAM supply concerns.

Yet the HBM story has not disappeared.

That makes MU one of my highest-conviction watches.

$860-$890: First Pick

$800-$840: Preferred Pick

$740-$790: Strong Pick

$930-$950: First Recovery

$990-$1,020: Bullish Confirmation

Below $740: Thesis Check

If CPI pushes MU toward $800 while HBM demand remains intact, I would view that very differently from MU falling because HBM orders were cancelled.

Same price decline.

Completely different investment conclusion.

SNDK MAY BE AN EVEN CLEANER MACRO OVERREACTION

SanDisk around $1,336 has also been crushed.

But remember what just happened.

Investors punished SNDK partly alongside DRAM stocks after the CXMT server-memory news.

SanDisk is primarily a NAND story.

Now inflation is adding another layer of indiscriminate semiconductor selling.

That combination interests me.

My levels remain:

$1,300-$1,350: First Pick

$1,200-$1,275: Preferred Pick

$1,100-$1,175: Strong Pick

$1,425-$1,475: First Recovery

$1,525-$1,575: Bullish Confirmation

Below $1,100: Thesis Check

SNDK is increasingly becoming my mispricing watch, while MU remains my higher-conviction fundamental memory pick.

WHAT ABOUT NVDA?

Nvidia is where I would distinguish between company risk and multiple risk.

If AI accelerator demand remains extraordinary, Nvidia can continue producing huge earnings.

But if bond yields rise, investors may simply refuse to pay the same multiple for those earnings.

That can produce an uncomfortable situation:

EPS estimates rise while the stock falls.

That is not necessarily bearish long term.

It can actually improve forward valuation rapidly.

For NVDA, I would therefore watch earnings revisions more closely than the daily share price.

If estimates stay firm while the stock corrects 10%-15%, I become more interested.

If estimates begin falling alongside the stock, I become more cautious.

CRCL IS MORE COMPLICATED

Circle is particularly interesting in a higher-rate environment.

Higher rates can increase reserve income.

But higher rates simultaneously compress valuations for growth stocks and reduce speculative liquidity.

So CRCL has a built-in contradiction.

Higher rates can help the income statement while hurting the multiple.

That means I would not automatically interpret persistent inflation as bearish for Circle's business.

It may be bearish for CRCL's stock price in the short term.

Those are different things.

My broad CRCL zones:

$78-$82: First Pick

$70-$75: Preferred Pick

$62-$68: Strong Pick

$88-$92: Recovery

Above $100: Fundamental Confirmation Needed

Below $60: Thesis Check

THE BIGGER RISK IS NOT CPI

There is a scenario that worries me considerably more.

Imagine:

Inflation remains elevated.

Treasury yields continue climbing.

Oil remains expensive.

Consumer spending weakens.

And corporate earnings estimates start falling.

That would create:

Higher discount rates + lower earnings.

That is the dangerous combination.

Right now, we mainly have the first half.

Valuations are being compressed.

If earnings remain resilient, corrections eventually create opportunities.

If earnings join the decline, I become much more defensive.

MY 2-4 WEEK SCENARIOS

50% Base Case: Volatile Consolidation

Tech remains choppy as investors digest CPI and reset rate expectations.

QQQ trades sideways with another 3%-6% downside risk before stabilising.

Individual high-beta AI names swing considerably more.

This is my highest-probability outcome.

30% Bear Case: Yields Break Higher

Inflation fears persist.

The 10-year pushes decisively higher.

QQQ suffers another 7%-10% correction from here, while high-beta semiconductor names could fall another 10%-20%.

This sounds frightening.

But if earnings remain intact, this could create some of the best entries of the quarter.

20% Bull Case: Inflation Fear Fades

Subsequent data softens.

Yields retreat.

Investors realise they deleveraged too aggressively.

QQQ recovers rapidly and AI leaders rebound.

The stocks that suffered the greatest forced selling could move fastest.

WHAT WOULD MAKE ME BUY AGGRESSIVELY?

I want a very specific combination.

Stocks falling.

Treasury yields peaking.

Earnings estimates stable or rising.

AI capex intact.

That is the sweet spot.

Price says fear.

Fundamentals say growth.

Macro stops getting worse.

That is when I want to deploy capital.

WHAT WOULD MAKE ME DEFENSIVE?

The opposite combination.

CPI remains above expectations.

10-year yield keeps rising.

Earnings estimates fall.

AI capex guidance weakens.

Credit conditions tighten.

If those happen together, I stop calling every decline a buying opportunity.

The market would be signalling something deeper than valuation compression.

MY PICK-LEVEL STRATEGY

I am not rotating completely out of tech into value.

That feels like reacting to yesterday's CPI rather than investing for tomorrow's earnings.

Instead, I would divide capital into three buckets:

Core: QQQ

Keep long-term exposure.

Conviction: MU, SNDK and selected AI leaders

Buy disproportionately when price falls faster than fundamentals.

Dry powder: Cash/Treasuries

Earn attractive yield while waiting for better prices.

This is important.

When cash itself earns meaningful returns, there is absolutely no reason to chase.

Patience has become profitable.

MY HIGHEST-CONVICTION PICK FROM THIS SELLOFF

For me, it is still MU.

Not because it cannot fall further.

It clearly can.

But because several independent fears have collided at once:

CPI + yields + CXMT + DRAM fears + AI deleveraging.

That creates the possibility of overshooting.

At $860-$890, I start.

At $800-$840, I prefer it.

At $740-$790, I become aggressive only if HBM and earnings remain intact.

That last condition matters.

I am not buying a falling ticker.

I am buying a thesis at progressively better prices.

THE QUESTION IS NOT WHETHER TECH CAN FALL FURTHER

It can.

The better question is:

What would you want to own if it does?

I already know my answer.

I want companies where earnings power remains intact but valuation is being compressed by macro fear.

Because eventually one of two things happens.

The fundamentals deteriorate, and I change my thesis.

Or the macro pressure eases, and the market suddenly remembers why it owned these companies in the first place.

3.7% CPI makes me more patient.

It does not make me abandon technology.

If anything, another leg lower could finally turn some of the AI stocks I refused to chase into the opportunities I have been waiting for.

I am not a financial advisor. Trade wisely, Comrades!

Are you using the tech selloff to buy, holding cash for a deeper correction, or rotating into value?

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