Notes Toward a Theory of Collective Insanity
Semiconductors · Geopolitics · Asset Bubbles · The Week That Broke Consensus
Sunday, 10 May 2026 · Issue CCXLVIII · Private circulation only
Written somewhere between the AMD earnings call and the third consecutive global record high.
Let me tell you what this week looked like from the inside.
Tuesday night, AMD reports. Revenue $10.3 billion. That's 38% year-on-year. It's $460 million above the Street's already-generous consensus. Q2 guidance of $11.2 billion — above the top end of estimates. The data centre GPU segment is the engine. The stock opens Wednesday up 18%. Fine. Expected. AMD is printing. We knew that.
Then things started to accelerate.
Wednesday morning, Axios drops a report: Washington and Tehran are working on a one-page memorandum of understanding to end the war. One page. The document that might reopen the Strait of Hormuz — through which a fifth of the world's oil usually flows and through which, in March, only 154 ships transited where thousands once did — is going to be a single page of paper. Brent crude falls off a cliff. Down 7.5% in a session, below $100 for the first time in weeks. Bond yields crater. The S&P closes at a record. The Dow adds 1.1%. The Nasdaq adds 1.6%. MSCI All-Country World Index hits a new all-time high.
On the same day, Samsung crosses $1 trillion in market capitalisation. One quarter's operating profit — 57.2 trillion won, roughly $39 billion — exceeded the entire full-year profit of 2025. Korea's KOSPI triggers a "sidecar," a trading curb that kicks in when prices swing too hard, too fast. The index still closes up 6.45% at 7,384, a level that did not exist in the imagination of Korean equity investors twelve months ago.
Then Tokyo opens Thursday.
Japanese markets had been closed for Golden Week. Three days of global euphoria had built up with nowhere to go. The Nikkei opened, absorbed the backlog, and did not stop. It closed at 62,009. An all-time high. A number that would have seemed like a typo in 1990, when Japan's bubble peaked at 38,915 and then spent thirty-five years trying to get back there. SoftBank, which owns pieces of everything that AI is touching, jumped 16.45% — its best single session since March 2020, which if you'll remember was also a historic moment, just in the other direction.
The week also produced: DDOG up 28% on a Q1 beat and guidance that made the Street look like it had been modelling a different company. Intel hitting a record high on AMD's coattails. Arm, Qualcomm, the whole semiconductor supply chain convulsing upward simultaneously. And somewhere in there, a Bloomberg report that Apple has held exploratory conversations with Samsung and Intel about manufacturing chips in the United States, a sentence that contains within it entire restructuring of the global fabless model.
Thirty-five years. That's how long it took the Nikkei to recover from its bubble peak. It crossed that old record in early 2024. It's now 60% above it. The people who waited for the recovery are, demographically, not the people celebrating it.
You're allowed to feel two things at once here.
The first: this is real. AMD's $10.3 billion quarter is not a market hallucination. Samsung's eightfold year-on-year profit increase is not a rounding error. The hyperscaler capex — $660 billion in committed infrastructure spending across the top four cloud providers in 2026 — is creating genuine, durable demand for HBM chips, for networking silicon, for everything downstream. Datadog's beat was a beat. The money is showing up in actual income statements. This is not 1999.
The second: the market is pricing something beyond the actual numbers. The S&P's forward P/E at 20.9x embeds continuous execution through an energy shock, a leadership transition at the Federal Reserve five days from now, unresolved fiscal negotiations in Washington, a war that is somewhere between ceasefire and active conflict depending on which hour you check the newswire. The Iran "deal" is one page and has not been confirmed by Tehran. Iran's Foreign Affairs Ministry said it was "under review." Oil is at $95.42. Gold is at $4,730. Bitcoin is at $80,715 — still elevated, still pricing petrodollar erosion and dollar reserve share at its 57% twenty-five-year low.
The VIX closed at 17.19. For context: when Brent was above $120 and the Strait of Hormuz had essentially stopped functioning as a trade route, the VIX got to the mid-thirties. It has compressed with extraordinary speed. Either the market has correctly identified that geopolitical risk was always going to be transient, or it has decided, as a collective organism, to stop being afraid — which is a different thing entirely, and a more dangerous one.
The week also contained one number that received approximately zero coverage in the midst of all this.
U.S. hiring plans, tracked by Challenger, Gray & Christmas: 10,049 announced new hires in April. Down 69% from March. Down 38% from April 2025. Companies are not adding headcount into the rally. They are buying back stock, raising guidance, and in Cloudflare's case, announcing that the productivity of the people they kept has become "incredible." The gap between what the equity market is celebrating and what the labour market is producing is widening with each passing week. AI revenue is concentrating upward. The 13.4% net profit margin for the S&P 500 in Q1 is the highest since FactSet began tracking it in 2009. That margin expansion is the story. The question of where it comes from — and who absorbs the cost — is the other story, running quietly beneath this one.
Three thousand ships used to cross the Strait of Hormuz every month. In March, it was 154. The global economy has absorbed that shock remarkably well, or it has borrowed against a resolution that hasn't arrived yet. One page of memorandum, currently under review by a foreign ministry, stands between the current price of oil and its counterfactual. Between the Nikkei at 62,000 and a very different number. Between a VIX at 17 and wherever fear lives when it returns.
The records are real. The earnings are real. The Saudi Arabia of semiconductors — memory chips, the thing the entire AI economy runs on — just crossed a trillion dollars and it did so in a week when a war that could restart tomorrow is being priced as finished.
Somewhere in Tokyo, someone who bought the Nikkei in 1989 and held it for thirty-six years just broke even.
Congratulations. The rally is extraordinary. Watch the one page.
*For informational purposes only · Not investment advice