Today in Focus: RXT

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Market Condition: Bullish

Commentary: Relatively muted but green open. Glad to not see another big gap up. Tomorrow we have the FED Decision. That is the natural position to shake people out, start a period of chop or alternatively lock people out with a strong move upward if Warsh decides to go full dovish.

Don’t be surprised to see some choppiness kicking in here in the market today. Patience is important here. We can easily resolve to a choppy market here. Wait for catalysts and good buy points to steadily build out exposure. Tempting to try to get in heavy long after such a move in the QQQ but be patient.

SPCX has rallied hard since IPO. Options are trading for it today along with Leveraged ETFs. I think it’s potentially going to squeeze and should be watched as a bellwether. Not a setup for me but it’s likely going to be a market leading indicator for a while. PLTR was like this previously.

Upcoming Earnings:
After Hours: LZB
Before Open: JBL

In Play

RXT: Signed definitive Agreement with AMD to deploy 30MW of AMD Compute

Key Metrics RXT: Industry Group: Software - Infrastructure, Market Cap: 1.85B, Float: 96.35M, Short Interest: 15.93%, Days to Cover: 0.78, Sales Y/Y TTM: -0.49%, EPS Y/Y TTM: 52.70%, Earnings: May 07 BMO, Exchange: NASDAQ

Catalyst:

This is essentially the validation and operationalization of a previously announced MOU with AMD. RXT is a turnaround and a structural pivot into Governed/Sovereign AI Infrastructure. This is the differentiator that RXT are going for vs commoditized rentable infra provided by hyperscalers. RXT are essentially the customer in this deal but AMD are aligned with them and this seems to me to be more than just a total story.

I have concerns that they may use this price advance to do a stock offering. The company is heavily in debt but on the positive side have managed well and are FCF positive now. There is room for additional catalysts here if RXT get named customers on board to fund the build out. Strong continuation chart, high short interest.

Current Positions: DOCN, SNOW, APPS, AEHR, DELL, INOD

Closed: SCO

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_{Note: This is my methodology for identifying stocks in play. There are many valid approaches to trading catalysts—find the setups, timeframes, and risk parameters that align with your strategy.}