Hope you all had a fantastic weekend. As I write, S&P 500 futures are down 0.4%, and oil is up 2%, having pulled back from a 4% gain a few hours ago. Today, I want to share my thoughts on Iran, what it means for markets, and a new small-cap opportunity I’ve added to my portfolio.
It looks like oil is flowing through the Strait of Hormuz, which is good. At the end of the day, markets care about how a conflict affects the economy. If oil keeps flowing, that takes some pressure off. Iran may be losing control of the Strait, and that would be good for markets. But I think we’ll keep chopping around these levels until a real end to the conflict is in sight.
Why? Because there’s still a risk.
If Iran feels cornered, with its economy deteriorating, the rial losing value and inflation soaring, it could still do serious damage to the global economy.
How? By hitting a few oil production facilities. My reading is that Iran has been playing the long game, using control over Hormuz flows to slowly hurt the economy through higher oil prices. But if it loses that control, attacking oil infrastructure on land could become one of its remaining ways to apply pressure. It doesn’t need every drone or missile to get through. A few successful strikes could be enough.
Thinking out loud here, and after listening to a few geopolitics podcasts, I don’t think Iran wants to go down that road. The economic damage could be so widespread that it would turn much of the world against it. That isn’t in its interests. Lately, Iranian officials have repeated that they don’t want war with neighbouring countries; they want the US and its military assets out of the region.
That’s part of why I’m still optimistic about markets here. But the risk remains. If the regime feels cornered enough, it could decide that a much more damaging escalation is its last way to preserve its power and influence.
Anyway, I’m not a geopolitical expert. This is just me thinking out loud. Let’s talk about a few stocks.
Last week, I wrote about tokenisation, specifically Coinbase ($COIN) and Securitize ($SECZ).
One week later, Coinbase is more or less where it was, while Securitize has gone in a completely different direction. SECZ is up 50% in a week. I wouldn’t have expected it to work that well, that quickly, even in my wildest dreams.
As I said in the last article, I didn’t buy SECZ because I preferred Coinbase for longer-term exposure to the trend. I think it has a clear distribution advantage over Securitize and other smaller platforms. I still think it was the right choice for me, although I wouldn’t have complained about being on the other side of that 50% move…
But anyway, I’m still quite bullish on the setup for crypto and tokenisation stocks, especially Coinbase. My understanding is that regulators are opening a path for tokenised stock trading without having to wait for the CLARITY Act to pass. As more products are rolled out, I see room for Coinbase to move higher with each announcement.
Outside of that, most of the Mag 7 have been fairly flat since I turned bullish, with one big exception: META.
META has gone parabolic following its new MUSE agent model. It’s close to its all-time high, and I think it could keep grinding towards it, although some consolidation wouldn’t surprise me after such a fast move.
I’m still bullish on the Mag 7, but they could face some near-term headwinds if interest rates keep rising and financial conditions continue to tighten. That said, these are some of the biggest cash generators in the world. Their ability to fund investment from their own cash flows should make them less dependent on external financing, even if higher rates can still weigh on their valuations.
So my view hasn’t changed much: bullish on the Mag 7 longer term, but a little less bullish on META in the short term after this run.
My portfolio right now is made up of Mag 7 names, crypto stocks, and real-economy businesses that I think are less vulnerable to AI disruption. I also wrote about that last group last week, and they’ve continued to do well in what has been a fairly choppy environment elsewhere.
Finally, I want to talk about a new position: Schmid Group ($SHMD). I bought it last Friday at around $4.70.
This market has been wild. Investors seem hesitant about the broader picture, but when a company gives them a convincing growth story, they’re very quick to bid it up. I think SHMD could attract that kind of attention as glass substrates become a bigger topic in AI.
SCHMID makes manufacturing equipment for circuit boards and advanced substrates, including equipment used to process glass. So the opportunity is in selling the machines that manufacturers need as they invest in new production capacity.
The reason glass matters is fairly simple. As AI chip packages get larger and more complex, connecting all those components becomes harder. Glass can provide a flatter, more stable base and allow denser connections. That could help manufacturers build larger, more capable packages. It won’t magically solve every memory bottleneck, but it could help with some of the physical limits the industry is running into.
The NVIDIA connection caught my attention, although the wording matters here. On its August earnings call, SCHMID said it was supporting major players in the NVIDIA, AMD and Intel supply chains with technology and equipment for glass-core substrates. That gives the opportunity some substance, but it doesn’t mean NVIDIA has signed a direct contract with SCHMID.
What makes this more interesting to me is that the broader business is already seeing orders pick up. Equipment backlog reached €95 million as of August 21, up from €54.8 million at the end of June. These are company-wide equipment orders, so we shouldn’t treat them all as glass-related demand. Still, there’s an improving business underneath the story.
That’s the longer-term opportunity I see: an improving equipment business with additional upside if glass substrates move into wider production. If manufacturers commit to building that capacity and SCHMID wins the equipment orders, the interest in this technology can start showing up in its numbers.
But there are reasons to be careful. SCHMID still reported an operating loss in the first half and cut its full-year adjusted EBITDA margin guidance to 6–9%, from above 12%. It also used €29.3 million of operating cash, mainly to fund working capital, and raised money through convertible debt. So execution, cash needs and potential dilution matter here.
After watching SECZ run without me, it would be easy to get too excited about the next small-cap story. I think that’s worth keeping in mind with this position.
I bought SHMD with a longer-term view, but what I’ll be watching is whether customer interest turns into production orders, and whether those orders turn into better margins and cash flow. Management itself identified customer qualification and metallisation, the process of making conductive connections through the glass, as hurdles to wider adoption.
I think the stock could move before all of that is clear. That’s part of why I’m interested now. But if the headlines keep coming and the business doesn’t follow, I’ll have to reconsider. A good story can get a stock moving quickly. To keep holding it, I’ll want to see the numbers catch up.That’s where I stand this week. Still bullish, keeping an eye on the risks, and looking for opportunities in the chop.
If you enjoyed the article, a like and a restack help me a ton. And feel free to leave a comment. I’d love to hear how you’re seeing this market.
Thanks for reading.
Arctic