Portable Data Centers
Bringing AI To Remote Places
Construction of AI data centers can take anywhere from six months to multiple years to complete. Accordingly, they can’t build data centers quickly enough to keep up with the demand. Accordingly, we will need new, innovative solutions to meet the demand. For example, a startup private company named Armada makes portable AI data centers for use in remote locations. Armada’s portable product is a shipping container filled with servers.
These portable data centers can be brought online in weeks, rather than months or years, as is the case with larger, permanent data centers. Portable data center solutions are not a replacement for large data centers, but a great way to meet data center needs in remote locations. Bloomberg notes that Armada is targeting the energy complex, mining, and defense industries. Per Bloomberg:
The San Francisco-based startup (Armada) is already working with Fidelis New Energy and Bakken Energy to deploy Leviathans in states including North Dakota, Texas, West Virginia and Louisiana that have available surplus power. Earlier this year Armada struck a deal to work with Microsoft on deploying some of its pods in Saudi Arabia for Aramco.
Another benefit of these portable data centers is that they can be easily exported. Consequently, American companies can provide the world with data centers much more easily. Per one Armada investor:
America’s AI leadership hinges on owning the entire stack — from power and silicon to software — and being able to deploy it anywhere
What To Watch Today
Earnings
Economy
Market Trading Update
Yesterday, we discussed the week ahead and the deluge of data coming that could move markets. As we have discussed, the bullish tone of the market has continued relentlessly over the last couple of months while volatility has become increasingly compressed. For example, the market has had a very long stretch of daily moves of less than +/- 1%. While that does not mean the market will crash, periods of very low volatility tend to beget high volatility.
Historically speaking, the market has traded above the 20-DMA for a long stretch in concert with the chart above. Again, this chart does not mean the market will crash, but a correction below the 20-DMA is becoming more likely.
Another reason we expect volatility to increase is that we are entering a seasonally weak period in the market, which corresponds with periods of increased volatility.
This also explains why August and September are two of the weakest months of the year.
While all of this is historical data, none of it guarantees that the market will correct over the next two months. It only suggests that the probability of some corrective action is increasing. As such, we recommend that risk management become increasingly important, a point we made in this past weekend’s #BullBearReport.
“The return of meme-stock euphoria is a stark reminder that complacency is again gripping markets. Whether it’s zero-day options, surging penny stocks, or speculative AI plays with no earnings, the current environment mirrors the excessive risk-taking seen in early 2021. Retail investors are chasing high-beta trades, while volatility remains suppressed and equity indices hover near all-time highs. This combination creates a seductive but dangerous backdrop for capital deployment.”
The key is participation with discipline.
Here’s how to engage without overexposing your portfolio to unnecessary risk:
Maintain a Quality Core: Anchor your portfolio with high-conviction positions in companies with strong balance sheets, consistent free cash flow, and durable earnings. These names will hold up best when sentiment shifts.
Limit Speculative Exposure: Allocate no more than 5–10% of your portfolio to high-beta or momentum-driven trades. Think of this as your “tactical sleeve,” not your investment foundation.
Use Options Strategically: Deploy covered calls on overbought positions to harvest premium, and consider protective put spreads on indices like SPY or QQQ to buffer against sudden drawdowns.
Tighten Risk Controls: Reassess trailing stops or profit targets on positions that have run sharply higher. Locking in gains is not market timing — it’s risk management.
Raise Tactical Cash: A 10–20% cash position provides flexibility for better entry points when volatility inevitably returns. Dry powder is a strategy, not a missed opportunity.
Monitor Sentiment Extremes: Use positioning data, put/call ratios, and VIX term structure to gauge crowd behavior. When speculation reaches a fever pitch, it often pays to do less, not more.
Don’t Chase, Rebalance: If specific sectors have dramatically outperformed (like AI or micro-cap tech), use strength to trim and rebalance into more reasonable valuations and stable growth.
The goal here isn’t to avoid the party — it’s to ensure you’re near the exit when the music stops.
Trade accordingly.
Absolute Scores Are Getting Overbought
While only a few stocks are keeping up with the broader market indexes, many stocks are becoming overbought. As shown below in the SimpleVisor graphic, most of the stock factors are overbought, with nearly half having a score of 0.50 or higher. Large-cap growth and high beta are now very overbought. It’s telling that the equal-weight S&P 500 ETF (RSP) is also among the most overbought. This indicates overboughtness in the broader markets. Despite the high number of overbought factors, most are at varying degrees of oversold versus the S&P 500. For instance, the equal-weighted ETF (RSP) is very overbought (0.62), but slightly oversold versus the S&P 500 (-0.17). When this market corrects, we may see negative performance across many factors; however, a good number of factors could still outperform the market.
Portfolio Benchmarking: Five Reasons Underperformance Occurs
Comparing your performance with an index is the most useless and potentially dangerous thing you can do as an investor.
Stock buybacks, the “substitution effect,” taxes, expenses, and fees contribute to the index’s underperformance. Repeated studies have shown that roughly only 1 in 4 mutual fund managers outperform the market index over long periods. Of those outperforming, the average outperformance was just .12% before fees and expenses. However, the costs and expenses were larger than the level of outperformance. That, of course, does not include the tax impact on gains and income.
The problem with chasing performance is that once you fall behind, you take on more risk to try to make up the difference. Ultimately, this leads to more costly outcomes in the future, compounding the underperformance.
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