The Roundhill Memory ETF (DRAM) retreated for the second consecutive day as jitters in the memory industry accelerated. The fund, which has become a $24.3 billion behemoth, retreated to $62.45 in the pre-market, down by 22.75% from its highest point this year.

Why the DRAM ETF is falling

DRAM is a top ETF that gives investors access to the biggest companies in the memory industry. It tracks companies mostly from the United States, Japan, and South Korea. 

The biggest names in the fund are companies like Samsung Electronics, SK Hynix, Micron, SanDisk, and Kioxia. Its three biggest companies account for about 73.4% of the fund, presenting a major risk to the fund if things go south.

There are signs that the situation in the memory industry is changing. For one, a report on Wednesday suggested that Meta Platforms was considering starting a cloud business to sell its spare capacity.

The term “spare” sends a major warning to investors as Meta has become one of the biggest spenders in the AI industry. It plans to spend between $125 billion and $145 billion in capital expenditure this year. Most recently, it announced a $27 billion deal with Nebius, one of the top players in the neocloud industry.

READ MORE: DRAM ETF is firing on all cylinders, but beware of major risks

Therefore, there is a risk that the industry is starting to peak, which may lead to a slowdown in the memory industry that has powered their prices in the past few years. In a note, analysts at DA Davidson said:

“If Meta slows down Capex and starts monetizing it, we see significant upside to revenue and cash flow. It could stay in the AI race by going back to its open source roots.”

The DRAM ETF is also facing major challenges amid reports that Apple was putting pressure on the Trump administration to allow it to buy memory chips from large Chinese suppliers. Such a move, if it is accepted, would lead to a higher supply for chips, affecting their prices.

The ETF is also falling after a new report on SK Hynix. According to Bloomberg, the CSOP Sk Hynix Daily (2x) Leveraged Product has accumulated over $13 billion in assets and is beginning to move the stock it was created to track.

There are concerns that the growing leverage in South Korean equities will trigger a retreat in the coming months as traders start to unwind them. 

A recent report showed that household loans in South Korea rose by KRW 9.3 trillion in May, up from KRW 3.5 trillion in April, the fastest growth since August 2024. Citi noted that the surge was largely attributed to the growing demand for equities.

Bullish divergence pattern forming 

DRAM stock chart | Source: TradingView

The DRAM ETF is also at risk after forming a bearish divergence pattern, which happens when key oscillators fall when assets are rising.

In this case, as the four-hour chart shows, the Percentage Price Oscillator (PPO) has been falling since May 11 when it peaked at 10.4%. Similarly, the Relative Strength Index (RSI) has been falling, moving from the overbought level of 89 to the current 43.

A bearish divergence is normally followed by price weakness, which explains why the DRAM stock is falling today.

The decline is also happening as investors book profits in these memory stocks, which have been the best performers in the United States, Japan, and South Korea this year.

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Shopify stock has rebounded in the past few weeks, moving from the year-to-date low of $94.47 to the current $121.63. This rebound may continue, helped by its modest revenue growth and encouraging technicals.

Shopify stock jumps after crucial settlement

Shopify, the operator of the biggest e-commerce software, soared after reaching a settlement with Shopline, a company owned by Joyy, a publicly-traded company. 

The two companies asked a judge to bar Shopline from distributing its software. In a statement, Shopify said that Shopline had copied its Dawn theme, rebranded it, and sold it against it. Its chief counsel said:

“We took them to court and ​they’ve been ordered to stop and to pay us. Open source is built on trust and we’ll defend that every time someone treats it as a ​free pass to steal.”

The terms of the deal were confidential, but it is estimated that Joyy, which is valued at over $3.3 billion paid millions of dollars. Its stock jumped by 1.38% after the filing. 

Shopify’s business is doing well

While Shopify jumped on Wednesday, it remains 35% below its highest level last year, mirroring the performance of most software companies. The general view is that e-commerce companies will start abandoning Shopify and build their websites using AI. Indeed, it is now possible to build advanced e-commerce stores using tools like Lovable and Cursor.

However, there is a likelihood that the company’s business will continue doing well in the long term because of the value it gives its customers. The most recent results shows that it continues to add more costumers to its ecosystem. It added firms like Balmain Paris, Rag & Bone, Mulberry, and The Outnet.

The numbers also showed that its revenue growth jumped by 34% to $3.17 billion, a great number for a company that has been in the industry for years. Its gross profit rose to over $1.56 billion, while its free cash flow rose to $476 million. 

The management also boosted its forward guidance and now expects revenue to grow in the high-twenties in the second quarter. The consensus among analysts is that its revenue growth will be 28% to $3.4 billion, while its annual figure will grow by 28% to $14.8 billion. 

These numbers mean that the company is a bargain on a rule-of-40 metric. It has a forward revenue growth rate of 28% and a profit margin of 14%, giving it a multiple of 42%. 

Shopify stock price technical analysis

SHOP stock chart | Source: TradingView

The daily chart shows that the SHOP stock price has rebounded in the past few weeks, moving from a low of $94.47 in March to $121.63 today. It has formed an inverted head-and-shoulders pattern, a common bullish reversal sign in technical analysis. 

The stock has also jumped above the 50-day and 100-day moving averages, a sign that bulls are in control. Therefore, the path of the least resistance for the stock is bullish, with the next key target to watch being at $150.

READ MORE: Wall Street experts are bullish on Shopify stock: should you?

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Palantir Technologies PLTR shares extended their recent rally on Thursday after DA Davidson upgraded the software company to Buy, arguing that its role as an artificial intelligence orchestration platform is becoming increasingly valuable as enterprises seek flexibility in deploying AI models.

The stock rose more than 4% in premarket trading, building on an 8% gain from the previous session after Palantir unveiled a new AI partnership with Nvidia aimed at supplying advanced artificial intelligence capabilities to US government agencies.

The brokerage raised its price target on Palantir to $175 from $165, an almost 40% upside to its current levels, while upgrading the shares from Neutral to Buy, saying the company has largely grown into its previously stretched valuation as earnings and profitability have accelerated.

Palantir generated revenue growth of 68% over the past 12 months, reaching $5.2 billion, while maintaining an industry-leading gross profit margin of 84%.

AI orchestration seen as a competitive advantage

According to Investing.com, DA Davidson said Palantir’s biggest advantage lies in its ability to serve as an orchestration layer that sits above multiple AI models, allowing customers to switch between underlying technologies without disrupting their operations.

The brokerage said that capability has become more valuable as enterprises grow increasingly reluctant to rely on a single foundation-model provider.

The firm pointed to recent developments involving Anthropic, whose disagreements with the US government resulted in restrictions on some of its AI models and the withdrawal of one of its offerings from the market.

According to DA Davidson, organizations using an orchestration platform such as Palantir would face only limited disruption because the company can replace AI models underneath its software without requiring customers to redesign their workflows.

That flexibility, the analyst said, reduces concerns that enterprises could bypass Palantir in favor of directly adopting models from companies such as OpenAI or Anthropic.

The brokerage added that businesses are becoming more aware that today’s leading AI model may not remain the industry standard tomorrow and could eventually be displaced by lower-cost open-source alternatives.

Nvidia partnership strengthens government AI push

Investor sentiment also received a boost after Palantir announced a strategic collaboration with Nvidia to develop custom AI models for the US government.

Under the partnership, Nvidia’s AI infrastructure and Nemotron models will be integrated with Palantir’s software platforms to create what the companies described as a secure “intelligent engine” capable of training, deploying and managing AI models across government agencies.

The initiative further strengthens Palantir’s presence in the public sector, an area where it already has deep relationships across defense and intelligence organizations.

Pullback creates buying opportunity, Morningstar says

Despite the recent gains, Palantir shares remain down about 25% this year after surging 356% in 2024, a rally that pushed valuation multiples to elevated levels.

Several analysts believe the correction has created a more attractive entry point.

Morningstar equity analyst Mark Giarelli noted that the broader rotation away from many of artificial intelligence’s early winners has left Palantir trading more than 40% below its 2025 peak.

Morningstar assigns the company a fair value estimate of $153, implying the shares currently trade about 24% below intrinsic value.

“Palantir differentiates itself as the only AI company with a framework that organizes disparate datasets and facilitates optimized decision-making. It creates a comprehensive, closed-loop system in which data flows from individual sources and data users,” Giarelli said, adding that Palantir drives efficiency gains from data, which accumulate and translate into switching costs for customers.

“Our $153 fair value estimate implies a 2026 enterprise value/sales multiple of 48 times. We believe that we are in the early innings of an AI revolution; our base case has Palantir’s total addressable market growing to $1.4 trillion by 2033. We expect Palantir to drive efficiency among enterprises that now rely on large IT teams to interpret and present data to support decision-making. We forecast five-year average annual revenue growth of 45% for the company. We project gross margin to remain in the 83%-85% range over the next 10 years as we balance onboarding higher-margin enterprise customers with the potential for cloud costs to rise amid ever-increasing demand for computing resources,” he added.

Giarelli also cautioned that Palantir’s long-term valuation depends on the size of the AI software market and the company’s ability to sustain its competitive advantage.

“Palantir’s biggest uncertainty is the broad potential size of the total addressable market that its software can serve and the level of customer penetration it can achieve. If our bear case on market size comes to pass or a viable alternative emerges, the shares will likely prove worth far less than we expect. There is a chance that a technological juggernaut will develop software rivaling Palantir’s AI solutions,” he said.

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AeroVironment Inc. (AVAV) shares rose 4% in premarket trading on Thursday after the US Department of War awarded the defense contractor a $500 million contract for counter-unmanned aerial systems.

The Simi Valley, California-based company received a firm-fixed-price contract to procure commercial counter-unmanned aerial systems and counter small-unmanned aerial systems capabilities.

According to the Department of War, work locations and funding will be determined with each order placed under the agreement, which is expected to run through June 29, 2029.

Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity for the agreement, which carries contract number W912CH-26-D-A073.

The contract announcement added to investor optimism following AeroVironment’s strong fiscal fourth-quarter earnings report earlier this week.

The company specializes in unmanned aircraft systems and tactical missile systems for military and commercial applications.

Record quarterly results supported by acquisitions and backlog growth

AeroVironment reported record fiscal fourth-quarter revenue of $641.6 million for the period ended April 30, 2026, up 133% from a year earlier.

The sharp increase was aided by the acquisitions of defense technology companies BlueHalo and Empirical Systems Aerospace. Excluding those acquisitions, organic revenue growth was approximately 31%.

Profitability also improved significantly.

Non-GAAP adjusted EBITDA more than doubled to $140.1 million, lifting the adjusted EBITDA margin to 22%. Adjusted earnings per share increased to $1.84 from $1.61 in the prior-year quarter.

The company’s funded backlog reached $1.2 billion at the end of fiscal 2026, compared with $726.6 million a year earlier, while full-year bookings totaled $2.7 billion against approximately $2 billion in revenue.

That resulted in a book-to-bill ratio of 1.4, indicating orders continued to outpace shipments and providing greater visibility into future demand.

Counter-drone business seen as long-term growth driver

While AeroVironment is widely known for its Switchblade loitering munitions, management believes its counter-drone business could become an increasingly important contributor over the coming years.

Counter-unmanned aircraft systems generated about $200 million in revenue during fiscal 2026.

The company is expanding the business through a three-layered approach that includes the Titan family of radio-frequency jamming systems, the LOCUST directed-energy weapon under development, and the Freedom Eagle-1 kinetic interceptor designed to destroy incoming drones.

Discussing the long-term opportunity, CEO Wahid Nawabi said, “It will not surprise me in the next 3-5 years that our directed energy and our counter-UAS business would be equally as large, if not 2-3 times bigger.”

Management also cited “unprecedented” demand across its markets and projected fiscal 2027 revenue of $2.1 billion to $2.2 billion, with the midpoint implying roughly 10% growth.

Despite the recent gains, AeroVironment shares trade at about 54 times the midpoint of management’s fiscal 2027 adjusted earnings guidance and remain well below their 52-week high of nearly $420.

Jim Cramer urged investors to remain cautious because of negative sentiment surrounding the stock.

“The short sellers in this thing are so powerful,” he said on CNBC, adding they’re fully convinced that AeroVironment “paid too much” for BlueHalo.

According to Cramer, AVAV is trading near a bottom and a strong fourth-quarter report could help keep it in the “green”, but he warned of possible short-term volatility due to what he described as “a coordinated assault by institutional bears.”

He also said investors should be cautious because the “lies that have been told about this company and shading of the truth” are extraordinary.

Wall Street, however, continues to rate AeroVironment a “Strong Buy,” with a mean price target of about $295 over the next 12 months.

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US stocks moved higher on Thursday after a weaker-than-expected June employment report tempered expectations for further Federal Reserve interest rate hikes, while investors continued to assess the outlook for inflation and economic growth.

The Dow Jones Industrial Average gained 256 points, or 0.49%. The S&P 500 rose 0.39%, while Nasdaq Composite added 0.24%.

The closely watched nonfarm payrolls report showed the US economy added 57,000 jobs in June, well below economists’ expectations.

Reuters cited estimates of 110,000 jobs, while economists surveyed by Dow Jones had forecast 115,000.

The unemployment rate came in at 4.2%, compared with expectations of 4.3%.

The softer labor market data pushed Treasury yields lower, with the two-year Treasury note yield declining as investors increased expectations that the Federal Reserve may delay further rate hikes.

Jobs data shifts Fed expectations

Following the employment report, market expectations for additional monetary tightening eased.

According to data compiled by LSEG, the odds of at least one Federal Reserve rate hike this year fell to 75.6%, down from around 84% before the payrolls data was released.

Before the jobs report, Julien Lafargue, chief market strategist at Barclays Private Bank, noted that employment data could be influenced by temporary hiring related to the FIFA World Cup.

“As a result, markets are likely to place greater weight on the June CPI (consumer price index) report due on July 14, as inflation data will offer a cleaner read on the economy,” said Lafargue in a Reuters report.

The employment figures followed Wednesday’s remarks from Federal Reserve Chair Kevin Warsh, who said inflation risks had eased while reaffirming the central bank’s commitment to its 2% inflation target.

Chip stocks mixed after Wednesday’s selloff

Some of the technology stocks recovered in trading after leading the previous session’s declines.

Micron Technology gained roughly 2%. Arm Holdings advanced 0.46%.

Intel and AMD however fell 0.92% and 1.83%.

Meanwhile, Bending Spoons fell 3% in trading, a day after the Vimeo owner surged 40% during its Nasdaq debut.

Global markets mixed as investors monitor risks

Global equity markets delivered mixed performances on Thursday.

In Asia, South Korea’s Kospi dropped 7.89% to its lowest closing level since June 8, while the small-cap Kosdaq fell 6.74%. Samsung declined 9.06%, and SK Hynix plunged 14.57%.

Japan’s Nikkei 225 lost 2.47%, while the broader Topix edged up 0.09%. Australia’s S&P/ASX 200 finished little changed.

European markets recovered from early weakness, with the pan-European Stoxx 600 rising 0.6% in morning trading as investors rotated into defensive sectors including utilities, healthcare and consumer staples.

Markets also continued to monitor geopolitical developments after the United States and Iran concluded another round of indirect talks on Wednesday without any indication of progress toward a lasting peace, adding another source of uncertainty for investors.

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