📈 The Euro stock up 300%

What’s going on here?

ADQ – the United Arab Emirates’ $249 billion sovereign wealth fund – announced a $25 billion partnership with US private equity firm Energy Capital Partners, designed to bulk up AI data centers mostly in the US.

What does this mean?

The UAE has put some serious cash into America’s tech industry already. MGX – another government-backed investment firm – pushed billions into the US Stargate project, working with OpenAI, SoftBank, and Oracle to fund AI infrastructure. The firm partnered with BlackRock and Microsoft on another $30 billion investment, too. So ADQ’s commitment is only the latest love-in between the UAE and the US. And probably not the last, either, with the sovereign wealth fund open to raising more cash for the right opportunities. That’s just what the president ordered: the US government wants as much foreign investment as possible to help America’s tech industry keep up with China’s.

Why should I care?

For markets: If AI is gold, data centers are pickaxes.

Mainstream headlines might focus on AI services – like the chatbots we now count as coworkers, therapists, and personal assistants. But big-money investors have been all about infrastructure. Because no matter which robot-maker wins the most customers, many behind-the-scenes firms will benefit – think utility companies, data centers, and power-focused investment firms. And with energy constraints already a bottleneck in the sector, those bumping up the bandwidth should be handsomely rewarded.

Zooming out: There’s no chip on Nvidia’s shoulder.

Investors stopped in their tracks when DeepSeek’s cheap-and-cheerful model stormed the App Store, worried that an era of efficiency would reduce demand for chips. Nuh-uh, said Nvidia: the semiconductor giant is seeing the opposite effect, with big spenders like Microsoft, Alphabet, and Amazon broadening their budgets. In fact, analysts expect some $500 billion of AI-related infrastructure spending per year by 2032, with projections picking up faster than before DeepSeek hit the scene.

What’s going on here?

They say the best defense is a good offense – but “they” must have forgotten about Hensoldt, Renk Group, and Eutelsat, because those three European defense stocks just came out on top of a rally.

What does this mean?

German firm Hensoldt’s shares jumped 35% this month, while its countryman Renk’s climbed nearly 50% – and French satellite business Eutelsat wrangled a 300% increase. That’s burned short sellers betting against the trio. And not by coincidence, either. Retail investors have deliberately targeted hedge funds with short positions, forcing them to buy back shares at higher prices. As a result, retail trading platforms have been seriously busy, with some seeing 70 times more Eutelsat trades compared to last month. No wonder Millennium, Qube Research, Marshall Wace, and BlackRock quickly cut their own short positions.

Why should I care?

Zooming in: Redditors, meet long-term investors.

Germany has unlocked a trillion dollars in fresh funding, much of which is expected to end up in the pockets of European defense manufacturers. So while some retail investors are likely chasing quick wins, plenty of investors are buying stocks to hold for the long term – likely expecting Europe’s military refurbishment to line the firms’ coffers for the foreseeable future. The tricky bit now is pricing that potential: spikes of attention can push stocks to valuations that outstrip their fundamentals, so late investors often overpay.

For you personally: What goes up must make headlines.

This type of “short squeeze” pushes stock prices to the ceiling, but history shows they can hit the floor just as fast. (GameStop, anyone?) So if you’re tempted by the momentum, make sure that you know how to time your exit. Set clear profit targets, monitor trading volumes for signs that momentum is waning, and check whether hedge funds are sticking it out or cutting their losses. Above all, make sure you can afford to lose any money you’ve placed on the line.