Hi Income traders,
This week's One to Love and One to Leave comes down to a pretty simple idea:
I want the long-duration infrastructure story, not the short-term geopolitical oil trade.
Why XLE Is Dead Money From Here
I know energy has had a bid because of Iran, the Strait of Hormuz, and the latest oil scare. And I'm not saying oil has to go all the way back to where it was before this Iran situation started. That would probably be too cute.
But I do think the market has already pulled the easy panic premium forward.
Oil can stay elevated. Iran can simmer. Headlines can keep flying. But for Energy Select Sector SPDR Fund (XLE), that may not be enough. Energy stocks need more than "things are tense" to keep working. They need sustained upside in crude, improving earnings revisions, and a market willing to pay up for the sector.
Right now, the better odds are that oil mean-reverts from the panic zone, even if it doesn't fully collapse back to pre-Iran levels. Crude is moving on every U.S.-Iran headline. Brent is whipping around on ceasefire chatter and supply scares.
That's real. But it also means the trade is heavily headline-driven now.
So my view on XLE is simple: not a disaster, not a short-the-world call, just dead money for now.
If oil cools from here, XLE probably loses its best near-term catalyst. If oil stays high because the situation worsens, the broader market may start worrying about inflation and growth again. That's not exactly the cleanest setup.
Love: DELL and the Hardware Cycle
The one I love is Dell Technologies (DELL).
This is one of my favorite "AI is physical now" plays because Dell sits right in the middle of the upgrade cycle. Companies are going to be buying servers until the cows come home.
Everyone wants to talk about semiconductors, and I get it. Chips matter. But the AI buildout doesn't stop at chips. You need servers. You need storage. You need networking. You need services. You need on-premise infrastructure for companies that don't want their sensitive AI workloads living in the public cloud.
That's where Dell gets interesting.
Dell reported fiscal 2026 revenue of $113.5 billion, up 19 percent. Its Infrastructure Solutions Group revenue hit $60.8 billion, up 40 percent.
Even more important: Dell closed more than $64 billion in AI-optimized server orders, shipped more than $25 billion, and entered fiscal 2027 with a record $43 billion AI backlog.
That's not a cute little AI side project. That's a full-blown hardware cycle.
And the company is guiding for roughly $50 billion of AI-optimized server revenue in fiscal 2027, which would be up more than 100 percent year over year.
That's the key point: Dell isn't just selling boxes. Dell is selling the ecosystem.
Servers, storage, networking, services, enterprise relationships, deployment support, and a trusted position with companies that want AI capacity but don't want to lean entirely on hyperscalers. In a world where every company is trying to use AI without losing control of its data, Dell has real leverage in the room.
How This Plays Out
Leave XLE because the Iran/oil premium may simmer, but the trade feels more headline-driven and less durable from here.
Love DELL because the AI infrastructure upgrade cycle isn't a one-quarter trade. It's a multi-year corporate spending cycle, and Dell may be one of the cleanest vertically integrated hardware plays that isn't a semiconductor stock.
Will Mark pick either one on Monday's Ticker Highlight?
Join the Ticker Highlight show through Monday and pick the price you want to pay.
Have a great weekend.
Hans