No Value Pick this week.

Overall, the market seemed to get hit with something nearly every day, with the S&P 500 ending the week down 2.0%.

  • Monday — Google DeepMind Vice President John Jumper announced he was leaving for Anthropic — just days after Gemini co-lead Noam Shazeer announced his departure for OpenAI. Alphabet (GOOG) dropped ~7% and took Amazon (AMZN, -4.8%), Meta Platforms (META, -2.3%), and Microsoft (MSFT, -3%) down with it.
  • Tuesday — South Korea’s KOSPI plummeted nearly 10% and the US market reaction ended with Micron (MU) plummeting 11.4%, Taiwan Semiconductor (TSM) falling 5.2%, and Nvidia (NVDA) dropping 3.2%.
  • Wednesday — Apple (AAPL) and Microsoft both announced price increases, citing “soaring memory chip costs amid the AI boom.”
  • Thursday — There was a brief respite from the bad news when Micron (MU) reported record revenue and EPS that was a genuine blowout of expectations, with Micron jumping 12%, recovering from the previous day.
  • Friday — The personal consumption expenditures (PCE) price index — the Fed’s preferred inflation gauge — showed inflation at its highest rate since April 2023, adding to the Fed’s rate-hike fears.

Our past picks did well against the S&P 500, gaining 1.2% despite taking a number of losses from our information technology picks. It was also a volatile week for the companies on the watch list. Out of 423 on the list, 30 fell by more than 10%, and 27 rose more than 10%, so 14.2% of our watch list moved more than 10% in a single week — an unprecedented number.

How Our Picks Fared

📉 ON Semiconductor (ON) — DOWN ~25.5%

  • This was a company-specific earthquake — a massive acquisition announcement that the market hated: ON shares plunged about 21% on Friday June 27th after announcing its largest acquisition ever — a $7 billion all-stock deal to acquire Synaptics (SYNA), aimed at broadening its push into AI compute, human-machine interface technology, and connectivity solutions for physical AI applications.
  • The acquisition was funded entirely in stock, meaning significant dilution for existing shareholders — always a red flag for the market.
  • The broader semiconductor sector selloff from June 23rd onward compounded the pain, as the global chip rout hit ON on top of the acquisition-driven selling.

📉 Western Digital (WDC) — DOWN ~21.4%

  • After surging 32.6% in the prior two weeks, WDC faced a perfect storm of unwinding pressures.
  • The SanDisk share-swap transaction officially closed on June 22, 2026, introducing a substantial near-term share overhang and triggering intensive arbitrage-driven hedging that placed immediate downward pressure on the stock.
  • The retirement of $858.4 million of 3.00% Convertible Senior Notes in exchange for approximately 21.3 million new common shares caused material equity dilution, dragging down near-term EPS expectations.
  • The stock had surged more than 54% in the prior month alone, leaving the valuation stretched at a forward P/E of 40x–45x and exposing it to sharp reversals on any negative catalyst.
  • The broader semiconductor sector rout — triggered by South Korea’s KOSPI plunge — dragged memory and storage names broadly lower, hitting WDC as one of the sector’s biggest year-to-date winners and therefore a prime target for profit-taking.

📉 Oracle (ORCL) — DOWN ~19.4%

  • Oracle’s decline over this period was a slow-motion unwind of multiple compounding concerns — the stock suffered its worst week in 25 years, with the selloff described as its steepest since August 2001 during the depths of the dot-com bust.
  • Oracle’s annual 10-K filing on June 22 disclosed a workforce reduction of 21,000 employees — roughly 13% of its global headcount — incurring $1.84 billion in restructuring expenses, up sharply from $374 million the prior year.
  • Oracle filed a prospectus supplement on June 23 authorizing the sale of up to $20 billion of common stock through at-the-market offerings, creating significant shareholder dilution risk on top of the $43 billion in debt raised in fiscal 2026.
  • Reports emerged that Microsoft had pulled back on a $3 billion Oracle Cloud leasing deal over security concerns, raising questions about customer retention at the highest levels.
  • The OpenAI IPO delay into 2027 hurt Oracle directly — given that Oracle’s backlog is heavily concentrated in OpenAI-related commitments, any uncertainty about OpenAI’s financial trajectory creates a read-through risk for Oracle’s revenue visibility.
  • The combination of these forces left Oracle down roughly 22% from its June 1st peak of $248.15 to approximately $148, representing an extraordinary round-trip within a single quarter.

📈 Johnson & Johnson (JNJ) — UP ~11.5%

  • JNJ’s gain was the mirror image of the tech selloff — a classic defensive rotation story compounded by company-specific positive news.
  • Institutional investors rotated capital into Johnson & Johnson for defensive exposure as market participants sought shelter from growth-stock volatility — with the Nasdaq falling five consecutive sessions, healthcare stalwarts like JNJ became natural beneficiaries.
  • The company’s operational momentum was strong — recent earnings beat, upward revision of full-year sales and earnings guidance, and rapid commercial uptake of recently approved treatments including Icotyde and Darzalex, with market share gains for Tremfya in inflammatory bowel disease.
  • JNJ reached a new all-time high of $255.11 on June 26th — a remarkable milestone for a 140-year-old company.

📈 Meritage Homes (MTH) — UP ~12.5%

  • Meritage Homes’ gain was primarily driven by falling oil prices (via the Iran deal) feeding through to lower Treasury yields — a direct tailwind for homebuilders.
  • Major institutions lifted their positions in Meritage Homes during this period, raising its institutional shareholding rank to first in the Homebuilding & Construction Supplies industry, with the stock delivering a 24.41% one-month return.
  • Meritage specifically focuses on entry-level and first move-up buyers, making it the most rate-sensitive of the major homebuilders — any decline in mortgage rates has an outsized positive effect on its order book and margins relative to luxury-focused peers.

📈 Merck & Co. (MRK) — UP ~13.0%

  • Merck had the strongest and most fundamental-driven gain of the three healthcare winners — a cascade of FDA approvals and pipeline milestones landing in rapid succession.
  • On June 12, the FDA approved Keytruda (including Keytruda Qlex) in combination with Welireg as adjuvant therapy for adults with clear cell renal cell carcinoma — the first approval for Welireg in earlier-stage kidney cancer, based on Phase 3 LITESPARK-022 data showing roughly 28% reduction in risk of recurrence, with 81% of patients disease-free at follow-up.
  • Merck’s tulisokibart met primary and key secondary endpoints in the Phase 3 ATLAS-UC induction study in moderately to severely active ulcerative colitis — a meaningful win in immunology that begins to address the post-Keytruda pipeline narrative.
  • The FDA also approved Keytruda and Keytruda Qlex in combination with Trodelvy as first-line treatment for PD-L1+ advanced triple-negative breast cancer, adding another label extension to the world’s top-selling cancer drug.

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