🧭 MACRO SNAPSHOT

The setup heading into Memorial Day week is constructive but rangebound. Fed funds at 3.64%, 10Y at 4.57%, 2Y at 4.08% — the curve has fully un-inverted and is now ~49bps positive, which historically marks the post-recession-scare normalization phase rather than the pre-recession warning phase (source: FRED). CPI YoY at 332.4 (index level), unemployment at 4.3%, and real GDP growth at 2.0% paint a "stalled-disinflation, still-employed" picture — exactly the environment where the Fed sits on its hands and the market grinds higher on multiple expansion. S&P at 7,473 with VIX at 16.76 and HY credit spreads at just 278bps tells you risk appetite is firmly intact (source: FRED).

What matters for the book today: (1) the IBD headline that Dow logged a record high while S&P/Nasdaq booked weekly wins means broad participation, not just mega-cap concentration — bullish for the industrial/power/copper names ($GEV, $ETN, $FCX); (2) reported US-Iran ceasefire/nuclear progress is a mild risk-off unwind — bearish oil, mildly bullish duration; (3) the r/investing screen showing 73% of large-cap AI capex names trailing the S&P YTD by a median of 9 points is the most important sentiment datapoint in the brief — the "picks and shovels" trade is bifurcating, and the names that have actually worked ($LITE, $GLW, $MP, $AVGO) increasingly look like the exception, not the rule.

₿ BITCOIN DAILY WRITE-UP

Price & Market Structure: BTC sits at $77,173, +3.3% on the day but -1.4% on the week and effectively flat over 30 days. We remain ~38.7% below the $126K ATH and ~13 months past the April 2024 halving. Dominance at 58.2% is holding the structural range — neither a flight-to-quality breakout nor a risk-off collapse.

Structural Thesis: Bitcoin remains the cleanest long-duration store-of-value asset with institutional rails (spot ETFs, regulated custody) that did not exist in prior cycles. The thesis is not "number go up next quarter" — it's that fixed supply meeting permanent institutional demand creates a structurally rising floor across cycles. We hold for the 3–5 year asymmetry, not the chart.

What Happened This Week: No material structural shift. The Bitcoin Layer's "Where are the risk takers?" piece argues futures/perps/skew are still whispering bear-market positioning, which is actually consistent with a mid-cycle correction (sentiment washed out, no euphoria) rather than a top. The SEC delaying the tokenized-stocks "innovation exemption" is a minor negative for the broader crypto-as-infrastructure narrative but doesn't touch BTC's core thesis. Saylor's comment that Strategy selling some BTC before year-end is "not unlikely" is worth flagging — if the largest corporate holder shifts from accumulator to distributor, that's a structural headwind worth monitoring.

Bull / Bear Scorecard:
- 🟢 Halving supply shock (~450 BTC/day issuance) still working against persistent ETF demand
- 🟢 Institutional rails are permanent — ETF, custody, corporate treasury cohort expanded beyond MSTR
- 🟢 Mid-cycle correction precedent exists (2021 May-July drawdown preceded Nov top)
- 🔴 Cycle may have peaked early at $126K — ETF demand could have pulled forward late-cycle buying
- 🔴 Saylor signaling potential Strategy sales is the first crack in the corporate-treasury-only-buys narrative
- 🔴 13 months post-halving in a drawdown rather than acceleration is historically anomalous

Conviction Check: Action: HOLD | Conviction: 7/10. Unchanged. The data does not yet distinguish between "cycle peaked early" and "deep mid-cycle correction" — and that ambiguity is itself the reason conviction is 7 and not 8.

What to Watch: (1) Spot ETF net flows over next 30 days — sustained >$1B/week outflows would weaken the structural thesis materially; (2) BTC dominance trajectory — break below 55% on weak price = broad crypto risk-off; rise through 60% on weakness = flight-to-quality confirmation; (3) Any concrete Strategy sale disclosure — would mark a meaningful regime change in corporate treasury behavior.

Community Pulse: Sentiment is reflective and cautious rather than fearful. The top r/Bitcoin thread "People who bought Bitcoin before 2017 — do you still hold most of it?" with 304 comments is a classic mid-cycle introspection thread — long-term holders re-examining conviction, which historically clusters near local bottoms, not tops. The Bitcoin Layer's "Where are the risk takers?" piece reinforces this — derivatives positioning is still defensive, meaning the speculative excess that typically marks cycle tops is absent. Net: community tone is consistent with mid-cycle correction, not distribution phase.

🔬 TODAY'S DEEP DIVES

SMAR — Smartsheet Inc. — NEW IDEA (SCREENED, NOT ADDED)
Conviction: 1/10 | Status: WATCHLIST | Sector: Technology (SaaS)

WHAT THEY DO: Smartsheet was a publicly traded work-management SaaS platform competing with Asana, Monday.com, and Atlassian. The product is a spreadsheet-native collaboration tool used by enterprises to manage projects, workflows, and resource planning.

WHY IT'S INTERESTING NOW: It's not. The data feed returned null across every field — market cap $0, no price, no revenue, no filings. This is consistent with Smartsheet having been taken private by Blackstone and Vista Equity Partners in January 2025. There is no public equity to analyze.

BULL CASE:
- None applicable — security may not exist publicly.

BEAR CASE:
- The security may not exist publicly. If the Blackstone/Vista take-private closed, there is no equity to analyze. Adding a non-existent ticker to the target list is a data hygiene failure, not an investment idea.

KEY METRICS: N/A — all fields null.

BOTTOM LINE: Screened out. Flag for the data pipeline team — SMAR should be removed from the screen universe entirely.

AVAV — AeroVironment, Inc. — ROLLING REVIEW
Conviction: 5/10 (down from 7/10) | Status: MONITORING (downgraded from RECOMMEND) | Sector: Industrials/Defense

WHAT THEY DO: AeroVironment is the dominant US supplier of tactical loitering munitions (Switchblade 300/600) and small unmanned aircraft systems to the DoD and allied militaries. The recent BlueHalo acquisition extends them into directed energy, space, and counter-UAS — roughly 3x'ing the addressable market. They make money primarily through DoD program contracts with growing FMS (foreign military sales) tailwind from Ukraine-era demand patterns.

WHY IT'S INTERESTING NOW: The thematic tailwind is real — Replicator, attritable autonomy, drone-warfare doctrine shift — but the stock has collapsed 58% from the $417.86 52W high to $174.23, which is regime change, not pullback. The question on review is whether this is a buyable dislocation or a sign that the integration math is worse than disclosed.

BULL CASE:
- Loitering munitions are the new artillery shell. DoD Replicator initiative + stated goal of fielding thousands of attritable autonomous systems plays directly to the Switchblade franchise. Multi-year backlog visibility likely improves through FY27 (needs verification in next 10-Q).
- BlueHalo expands TAM ~3x into directed energy, space, and C-UAS — categories with structurally higher growth than legacy tactical drone alone.

BEAR CASE:
- Profitability is moving the wrong way. Operating margin -5.1% and FCF -$300M on 143% revenue growth (source: yfinance) means either BlueHalo dilution is worse than disclosed, integration costs are running hot, or Switchblade gross margins are compressing under scale. Any of these is bad.
- 58% drawdown from ATH is not a normal pullback — the market is repricing something structural, and until earnings clarify what, you don't catch this knife.

KEY METRICS: Revenue growth +143% (heavily inorganic from BlueHalo), operating margin -5.1%, FCF -$300M, price $174.23 vs. 52W high $417.86. 1W +7.9%, 1M -11.2%.

BOTTOM LINE: Conviction stays at 5/10 monitoring — thematic story intact but margin inversion needs to resolve before this earns a recommend stamp again; next 10-Q is the decisive datapoint.

📋 TARGET LIST STATUS

Changes this week: AVAV formally downgraded from RECOMMEND/7 to MONITORING/5 on margin inversion concerns. Five names reaffirmed in 50-day rolling reviews (TSLA, AFRM, SYM, GEV, ANET) — no conviction changes. No names dropped today. SMAR screened but not added (security likely non-public). AVAV and MKL are now the lowest-conviction names on the list at 5/10 — both are vulnerable to displacement if a stronger idea screens in.

💼 YOUR PORTFOLIO

⚠️ WATCH LIST

• $ENPH — Up 79% in one month, hit record high on Goldman upgrade. The 1-month move is large enough that valuation discipline matters; if next print doesn't validate, downgrade risk rises. Watch the Q2 print for utilization and margin sustainability.
• $FTNT — Up 58.8% in one month at 6/10 conviction. The move is outpacing the thesis. If the stock keeps running without fundamental upgrade, the right move is to take it off the list, not chase it.
• $AVAV — Already downgraded today to 5/10. Next 10-Q (BlueHalo integration math) is the decisive datapoint — clean margin print = potential re-upgrade; second consecutive bad print = drop from list entirely.
• $RDDT (not held, but relevant to space) — Meta Forum launch is a structural overhang, not a one-day blip. If this is in any future screen, weight that competitive threat heavily.

🔁 RE-REVIEW QUEUE

Eight names have hit their re-review window. All were dropped at 6/10 conviction for the same structural reason — displaced by higher-conviction names on the target list. Worth flagging the most thematically relevant ones for fresh dives:

• $CEG | Was 6/10 | Dropped 2026-05-13 | Reason: displaced from 50-name list. Nuclear/power-for-AI thesis has accelerated since (see $VST move). May warrant fresh look given $GEV and $ETN already on the list — does $CEG add diversification or duplicate exposure?
• $DDOG | Was 6/10 | Dropped 2026-05-07 | Observability play; AI infrastructure spend narrative may have shifted given the "73% of AI capex names underperforming" screen. Fresh dive could clarify if Datadog is in the working 27% or the lagging 73%.
• $TTD | Was 6/10 | Dropped 2026-05-07 | Ad-tech leader; no specific new catalyst, but worth checking if competitive position vs. retail media networks has shifted.
• $BWXT | Was 6/10 | Dropped 2026-05-07 | Naval nuclear / SMR thematic — same nuclear-for-AI tailwind as $CEG, plus defense exposure overlap with $RKLB/$AVAV.
• $NET | Was 6/10 | Dropped 2026-05-07 | Cloudflare edge/AI inference angle; worth checking if their AI workers product traction has shifted the growth profile.
• $KTOS | Was 6/10 | Dropped 2026-05-13 | Drones/defense; with $AVAV downgraded, may have moved up relative quality ladder in the tactical drone space.
• $CRWD, $NTRA | Was 6/10 | Dropped early May | Cyber and diagnostics respectively; no specific re-trigger but standard 14-day window has elapsed.

To run a fresh dive on any of these, ask Meridian in the chat.