Sam Badawi
Is Trump Crashing the Market On Purpose?
3/14/2025, 2:56:27 PM
Economic Summary
- Equity markets experienced a swift correction — about 10% on the S&P and ~15% on the NASDAQ — after an extended period of froth, indicating heightened downside risk for overvalued names.
- Fed projections and market signals imply a move toward rate cuts: analysts expect the Fed midpoint to come down from ~3.87 and futures are pricing multiple cuts (3–4) if data weakens.
- Owners' equivalent rent has declined to roughly 3.68 annualized; if it continues toward ~2%, headline inflation could fall substantially by year-end, increasing the likelihood of policy easing.
- IT and cybersecurity spending is under pressure broadly, but niche segments like cloud-native data backup/security (Rubrik) are showing strong subscription ARR growth and resilience.
- Valuation dislocations have created stock-specific opportunities — for example, Google on a multi-year forward PE looks cheaper, and long-dated option strategies are being considered to accumulate exposure.
Bullish
- Rubrik reported a strong beat with subscription revenue up 54% YoY and ARR guidance accelerating, suggesting durable demand in data security.
- Owners' equivalent rent is falling (cited ~3.68 annualized), which could push inflation toward 2% and prompt Fed rate cuts, supporting risk assets.
- Google appears attractively valued on a multi-year forward basis (mentioned ~13–18x forward), presenting buying opportunities and cheap long-dated option plays.
Bearish
- The market suffered a very rapid drawdown (S&P ~10%, NASDAQ ~15%), exposing fragility and frothy valuations vulnerable to sharp declines.
- Policy-driven uncertainty from the Trump administration could aim to damage consumer confidence, worsening economic growth and markets.
- Slowing corporate IT spend could pressure cybersecurity and enterprise software revenue growth despite pockets of strength.
Bullish tickers
GOOGLRUBRIKMSFT
Bearish tickers
SCRWDPANWZS
GOOGL
Bullish
Quoted as attractive on a multi-year forward PE (~13–18x), presenting buying opportunities and cheap long-dated option plays.
Bearish
Vulnerable to further declines in a broad market sell-off despite attractive forward multiples.
RUBRIK
1 price targets
30
Bullish
Reported a beat with subscription revenue +54% YoY and ARR guidance accelerating toward $1.35B, backed by Microsoft and a large TAM in data security.
Bearish
Smaller public company with potential volatility; slower IT budgets could pressure growth and competition exists (Cohesity, legacy vendors).
MSFT
Bullish
Strategic investor in Rubrik, providing a potential partnership/tailwind for the backup/security vendor.
Bearish
Macro-driven sell-offs could pressure shares; no specific negative fundamentals cited in the transcript.
S
Bullish
Endpoint security remains important long-term, but near-term spend softness is a risk.
Bearish
SentinelOne flagged restricted IT spend; such headwinds could weigh on sales and multiples.
CRWD
Bullish
Established endpoint security leader with structural demand over the long term.
Bearish
CrowdStrike noted slowing IT spend in the environment, which could pressure growth expectations.
PANW
Bullish
Palo Alto remains a leader in perimeter security with durable enterprise demand over cycles.
Bearish
Network-security vendors face budgeting pressure amid enterprise IT spend restraint.
ZS
Bullish
Zero-trust and cloud-security trends support long-term growth prospects.
Bearish
Zscaler and similar network security names are exposed to IT spend slowdowns.
People mentioned
ZoeChrisHardik ShahLizanne SaundersDonald TrumpJoe BidenCharlie MurphyPrinceDave Chappelle