The end of the ceasefire... Another $25 billion in AI debt... Big Tech is going to get even less capital efficient... Investors are leaving the Mag Seven behind... Where to find opportunities outside the AI darlings...
There's no more ceasefire...
In a press conference at the NATO summit in Turkey, President Donald Trump bluntly said that, as far as he's concerned, the ceasefire with Iran is "over." He added that he doesn't "want to deal with them anymore."
Later, Trump said that the U.S. military had "hit [Iran] very hard" and would likely do so again tonight. And he even raised the possibility of the U.S. reimposing its own blockade on Iranian ships in the Strait of Hormuz.
We'd argue that the "ceasefire" had never really been on. Iran has struck several ships in the Strait of Hormuz over the past few weeks, while the U.S. has also launched strikes against Iran.
But Trump's comments make it official that hostilities are likely about to ratchet up again. And it came after the U.S. Treasury Department revoked a temporary waiver that allowed Iran to export oil.
That's why we saw oil prices jump today, with West Texas Intermediate crude up more than 5% to $74 per barrel – a two-week high. And stocks fell, too, with all three major indexes falling more than 1% this morning.
The losses in stocks weren't as bad as they could have been, though. Both the S&P 500 and Nasdaq Composite indexes rallied throughout the day, with the Nasdaq finishing up 0.2% today...
As our colleague and Ten Stock Trader editor Greg Diamond noted in an update for subscribers today, "The market is likely discounting the fact that the U.S. and Iran will come to yet another agreement... and any new weakness will be a buying opportunity."
Elsewhere, Amazon raises more debt for its AI investment...
Yesterday, Amazon (AMZN) revealed it's raising more debt in a bond sale. While Amazon's filing with the Securities and Exchange Commission didn't disclose just how much the company would raise, CNBC and Bloomberg later reported that the company would raise at least $25 billion.
Amazon said the money raised would go toward "general corporate purposes," which include things like paying down other debt, funding acquisitions, or investing further in the business.
But we can assume that the money raised will go straight into AI...
This year, Amazon has forecast $200 billion in capital expenditures – up from $131.8 billion last year. And as we've noted in previous Digests, the heavy spending plans from the leading tech companies are no longer covered by their cash flows.
Last year, Amazon generated $139 billion in operating cash flow – just enough to cover its AI spending plans. But this year, those capex plans have surged 50%, and operating cash flow isn't going to do the same.
So it's no surprise that Amazon has now raised more than $100 billion in debt this year.
It's not the only one...
In the June 16 Digest, we wrote that "AI debt is booming." Back then, Nvidia (NVDA) had become the latest AI mega cap to raise debt – joining Amazon, Meta Platforms (META), and Oracle (ORCL).
These companies will have to keep turning to debt to fund their heavy investment...
As JPMorgan Chase analysts recently showed in a note to clients, Amazon, Meta, and Alphabet (GOOGL) brought in a combined $125 billion in free cash flow ("FCF") in 2025. This year, those analysts expect an FCF deficit of more than $20 billion.
Of the three companies, JPMorgan expects only Alphabet to be FCF-positive in 2026. And its analysts expect Alphabet to join its peers next year as they all grow their investments in AI quicker than their cash flows. Combined, the three will run at an FCF deficit of nearly $80 billion in 2027, according to JPMorgan.
As we've written before, these companies are losing the capital efficiency that allowed them to command premium valuations and made them such good investments for years.
Investors are finally starting to notice...
Last year, the Magnificent Seven tech stocks – Microsoft, Meta, Tesla, Amazon, Nvidia, Apple, and Alphabet – rose more than 20%. While that didn't come close to the 64% return the group averaged in 2024, it still outperformed the market by about 5 percentage points, according to Roundhill Investments.
Now, investors are starting to look for a return on all that AI investment. And the Mag Seven don't have a lot to show for it yet. So investors are rotating out of what used to work and into other areas...
Financial writer Ben Carlson, who publishes the blog A Wealth of Common Sense, recently shared the following chart. In the chart, you can see that most of the market's gains this year came from the "S&P 493" – the rest of the benchmark index. Take a look...
With some Mag Seven stocks' rises offsetting others' declines, they contributed a few points to the S&P 500's overall jump this year. But it wasn't much.
Overall, the other 493 stocks made up 96% of the index's year-to-date return. That compares with 45% in 2024 and 54% last year.
As investors wait for a return on the hundreds of billions of dollars in AI investments, it's clear that the Mag Seven's luster is wearing off. Folks are rotating their money into other investments.
Here's where the money is going next...
At Stansberry Research, our analysts are always looking for "blind spots" that other investors may be missing. A few weeks ago in the Digest, we highlighted work from DailyWealth Trader editor Chris Igou, who noted that – based on history – the healthcare sector could deliver double-digit gains over the next 12 months.
That's not the only place Chris is seeing opportunities today, though. As he wrote in yesterday's DailyWealth Trader, investor rotation is benefiting smaller companies. From Chris...
Let's jump right into the big shift taking place...
We can see this through a ratio of small-cap versus large-cap stocks. When small caps outperform their larger peers, this ratio goes up. But when the opposite happens, the ratio falls.
That's what we were seeing for years heading into 2025. Any rally in this ratio quickly reversed course.
If you owned the biggest names on Wall Street, you did darn well. That's not the case anymore, though.
After the ratio found a bottom in April 2025, it has been climbing higher. And it just broke out to its highest level since the start of 2024. Check it out...
This breakout is different from the spikes we saw in 2023 and 2024 in one major way: It has been a steady change for well over a year. It's not a fluke spike in a month or two before the trend reverses lower.
As Chris went on to explain, this rally in small caps isn't just hype. Small-cap earnings are rising again after nearly three years of declines. And that's good news for small-cap stocks going forward.
More from Chris...
It looks like we are now entering a new period where small caps dominate for not months, but a year or more. And there's underlying data to support the rally.
That's just one example of the opportunities available outside of the Mag Seven. And now that the rotation out of large-cap tech is in full swing, these investment ideas are the ones that are going to thrive.
We'll continue to share opportunities like this in the Digest. And across Stansberry Research, our editors will have recommendations that take advantage of this rotation.
New 52-week highs (as of 7/7/26): Arch Capital (ACGL), Alpha Architect 1-3 Month Box Fund (BOXX), Canadian National Railway (CNI), Healthpeak Properties (DOC), Equity Residential (EQR), Exelixis (EXEL), iShares Biotechnology Fund (IBB), Ideaya Biosciences (IDYA), Lamar Advertising (LAMR), Eli Lilly (LLY), LXP Industrial Trust (LXP), Match Group (MTCH), Omega Healthcare Investors (OHI), Invesco High Yield Equity Dividend Achievers Fund (PEY), Roivant Sciences (ROIV), Travelers (TRV), UnitedHealth (UNH), Union Pacific (UNP), and State Street Health Care Select Sector SPDR Fund (XLV).
In today's mailbag, we're asked to share an old brisket recipe... We're happy to oblige. Keep your notes, requests, gripes, and what-have-you coming to feedback@stansberryresearch.com.
"Many years back, Porter shared his favorite brisket recipe. It was the one that you rested the brisket in a towel inside a small cooler. Now that I have a smoker capable of doing it 'Low and Slow at 205 degrees', I was wondering if he could share that recipe with us one more time?" – Subscriber Timothy S.
Corey McLaughlin comment: What a pleasure to read this request...
This is not the first time a subscriber has asked us to dig up Stansberry Research founder Porter Stansberry's brisket recipe... originally published 19 years ago. Here is a direct link. Print it out, take a picture of it, whatever you need to do – and enjoy.
Congrats on the smoker. As you said, low and slow...
An aside... In looking this up, I was also tickled to recognize Stansberry's top open recommendation, which we published just below the recipe.
On June 22, 2007, Seabridge Gold (SA) was up 618% – on its way to the 995% gain that would top our Hall of Fame for many years. Folks who read our daily Digest e-mails still see Seabridge's name every day, though newer wins have pushed it down to the No. 6 Hall of Fame spot.
All the best,
Nick Koziol
Baltimore, Maryland
July 8, 2026
