Bloomberg Surveillance TV: October 13th, 2026

NVIDIA

Across the shows: 27 speakers in other episodes, 23 bullish and 8 bearish calls, past 30 days

• Sarah Kunst · Cleo CapitalBearish

  Nvidia's two-to-three-year chip lead will narrow over time as competitors catch up.

  Kunst says she has long argued Nvidia has a couple-year head start, which was two or three years when this was a year ago. Over time that head start will narrow and other good chips will emerge. Efforts to use less compute, meaning less powerful chips are needed, also mean the gap is narrowing, which she says is not surprising. She does not say Nvidia will fall outright, and some other supply chain pieces will be harder to replace.

  “So I've been saying for a while that I think NVIDIA in particular has a couple year head start. And this was, you know, two, three year head start and this was like a year ago. So yeah, over time that head start will narrow”at 13:22

Taiwan Semiconductor Manufacturing Company

Across the shows: 2 speakers in other episodes, 1 bullish and 1 bearish calls, past 30 days

• Sarah Kunst · Cleo CapitalBullish

  Some supply chain pieces like TSMC are harder to replace, with fewer competitors.

  Kunst says not every name will face the same problem as Nvidia's lead narrowing. Other pieces of the supply chain are going to be harder to replace, such as Taiwan Semiconductor or other parts along the way where there are not as many competitors. These seem like a viable near-term position in her view.

  “There are other pieces of the supply chain that are just going to be harder to replace, whether that's a Taiwan semiconductor or some of the other pieces along the way where there aren't as many competitors,”at 13:47

Anthropic

Across the shows: 27 speakers in other episodes, 11 bullish and 31 bearish calls, past 30 days

• Sarah Kunst · Cleo CapitalBearish

  Anthropic's repeated safety warnings serve attention, regulatory capture and liability goals, not just concern.

  Kunst lists several motives behind Anthropic's repeated warnings: attention, the regulatory capture it seems to want, and liability. If someone warns you repeatedly that a thing is dangerous, it is much harder to later say you did not know. Companies such as Meta have paid landmark settlements over safety issues, so getting ahead of that makes sense. She also says there are true believers at Anthropic who see something probably not there.

  “I mean I think some of it is certainly the attention, some of it is the regulatory capture they seem to want, some of it's liability, right?”at 14:35

US stock market outlook

• Mike Wilson · Morgan Stanley

  S&P 500 needs a final catch-down, roughly 50/50, which Morgan Stanley would embrace.

  Wilson says the correction started in June as an internal breadth correction. The open question is whether the S&P 500 needs a final catch-down to finish it, which he puts at about 50/50. He would embrace that, since he sees no growth issues. He watches financials relative performance as a leading indicator and bond volatility, which he expects equity volatility to catch up to, as the signals for when the final clean-out comes.

  “do we need a final kind of catch down in the S and P 500 to kind of finish this correction and I would say it's sort of fiftyfifty but that would be something we would really embrace”at 2:30

• Mike Wilson · Morgan Stanley

  Mid-cycle rotation favors quality and capital goods; large-cap financials down 20-30% now show value.

  Wilson argues the market is moving from early-cycle to mid-cycle, so the call is a factor call on quality rather than a sector call. Within sectors, higher-quality names outperform lower-quality ones. He names healthcare and industrials, and capital goods in particular, because their revisions are still quite good and they tend to be high-ROIC businesses with strong backlogs. He also says large-cap financials, down 20-30%, are starting to show value after early-cycle selling has advanced.

  “It's a factor call more than a sector call. I would say, know, health care, industrial, like... And cap goods is an area we're focused on lately because the revisions there are still quite good”at 10:21

US elections & politics

• Mike Wilson · Morgan Stanley

  Midterms will be a clearing event; no major policy change given Trump's veto power.

  Markets tend to get most anxious before the midterm results, so Wilson views the election, whatever the outcome, as a clearing event that lets the market look forward. He does not expect a big sweep that changes policy, and even if Democrats won both houses of Congress, Trump's veto power would make it hard to change policy in the short term.

  “I actually view the midterm elections no matter who wins or how... What the outcome is as a clearing event so the market can kinda look forward.”at 3:57

US rates & the Fed

• Mike Wilson · Morgan Stanley

  Fed is letting markets tighten conditions and push rates to neutral, an orderly process so far.

  Wilson says the Fed chair wants the market to do the tightening. The Fed has raised rates 25 basis points, has not said what it will do next, and has let the market move to where the neutral rate is. This has been done in a fairly orderly way. Bond volatility has become a bit disorderly, but not in a way that will cause a growth problem.

  “I want the market to do the tightening for me. So what has he done? ... He's allowed the market to go to where the neutral rate is, but it's done it in a pretty orderly way.”at 5:26

US growth & recession risk

• Mike Wilson · Morgan Stanley

  No earnings-driven growth problem over the next six to twelve months; only a growth scare in parts of market.

  Wilson says the economy has been booming, with about 8.5% growth in the third quarter, and that the earlier call was that the economy ran too hot. Multiples have come down because financial conditions are tightening, which he sees as probably a good thing. He does not see an earnings growth problem over the next six to twelve months. The growth scare is emerging in some parts of the market and may tap the brakes on activity, which he says is what the market needs.

  “We don't have a growth issue from an earning standpoint, I don't think, over the next six to twelve months. It's a growth scare emerging in some of the parts of the market that might tap the brakes”at 5:26

US deficit & government debt

• Mike Wilson · Morgan Stanley

  Not worried about US fiscal sustainability; Europe's problems are more acute and US funding is flexible.

  Wilson argues that US fiscal sustainability is not a real worry when other countries have much more acute problems. He invokes the hiker analogy: you only need to be faster than the slowest hiker. He says the US economy has the most flexibility in funding its deficit, in line with what John Gray said earlier. He sees Europe's debt problems as the bigger issue.

  “I'm not worried about The US fiscal sustainability issue when you have other problems around the world that are much more acute, number one.”at 6:15

AI infrastructure & data centers

• Mike Wilson · Morgan Stanley

  Hyperscaler bond spread widening is a supply issue, not credit stress; weak links will emerge.

  Wilson notes credit spreads are widening in some hyperscaler bonds. He sees this as more of a supply issue than a credit issue, because the data centers have not stood up yet and are not making interest payments, so credit stress cannot yet exist. He expects some weaker links and credit problems within the build-out, but not enough to stop the CapEx cycle. Supply has slowed somewhat, which he calls a good outcome for now.

  “credit spreads are now widening in some of these hyperscaler bonds... that's more of a supply issue in my view than a a crude credit issue because these data centers haven't even stood up yet.”at 7:37

Enterprise AI adoption & AI software

• Mike Wilson · Morgan Stanley

  Next year AI leadership shifts from enablers to adopters as companies use AI to expand margins.

  Wilson says the AI capex cycle is transitioning from enablers, the few stocks that benefited from spending early on, to adopters. Companies are now using the technology to expand margins, per Morgan Stanley's work. The technology has become useful enough that average people can build applications and become more productive, which is why he expects next year to be about adopters.

  “I think next year is about the adopters. Okay? So in other words, this technology is now at a point where it's actually useful.”at 8:21

AI chips & semiconductors

• Mike Wilson · Morgan Stanley

  Semiconductor stocks look set to make a new low as they remain somewhat commodity-like.

  Wilson says semis were expected to have a pretty good correction three months ago, and that they are still somewhat of a commodity and are now going through that. He draws an analogy to silver stocks, which people laughed at three or four months ago but which are on track. He concludes semis look like they will make a new low, as part of the adjustment in early-cycle groups, and that the sell-semi call is pretty well advanced but not finished.

  “I think these stocks look like they're gonna now make a new low. Okay. That also is part of the adjustment process.”at 9:21

US–China AI & chip race

• Sarah Kunst · Cleo Capital

  China's competition to Nvidia is expected, not new; the sell-off shows jittery, weak-handed investors.

  Kunst argues the competition is not potential, since it has been known for years. China likes to get its hands on Nvidia chips because it likes to reverse engineer them, so none of this is surprising. It is arriving when expected, maybe even a little slower. The fact that it immediately triggers a sell-off across Asia and potentially the US is not a good sign, showing that these investors do not have diamond hands.

  “This competition isn't potential. Right? We have known this... this is exactly what we expected... So the fact that it's immediately triggering a sell off across Asia, potentially spreading into The US, that's not a great sign.”at 12:25

AI regulation & safety

• Sarah Kunst · Cleo Capital

  AI firms will face hack liability suits that could massively change the sector, as damages are unknown.

  Kunst expects that eventually a party such as Hugging Face will say the AI company owes it for a hack. That would massively change everything, because no one knows what damages a judge will award for a giant hack. She says social media has got away with saying it is just a platform for decades, and if that rationale holds for AI companies, they are not really incentivized to put guardrails on.

  “I think eventually we are going to see, somebody like a Hugging Face say, hey guys, I... It's your AI, you owe us for this hack. And I think that that is going to massively change, kind of everything”at 15:27

Cybersecurity

• Sarah Kunst · Cleo Capital

  Many AI-era hacks succeed via brute-forced weak passwords on poorly defended sites, not all-seeing AI.

  Kunst argues many hacks are not happening because the AI is all-knowing and all-seeing. They go to billions of websites and brute-force passwords, and sometimes it works. That is a failure on the side of the sites getting hacked, because they are not doing a good job. The hacking is an engineering failure on the defenders' side rather than evidence of superhuman AI.

  “A lot of these hacks aren't happening because the AI is sort of all knowing, all seeing. They just go to billions of websites and brute force password is password, and sometimes it works.”at 17:12

AI bubble & tech valuations

• George Saravelos · Deutsche Bank

  Next 12-18 months hinge on AI capex payoff; an AI unwind is the biggest unpriced asymmetric risk.

  Saravelos says that in 2027 the market will be all about the return on AI. The biggest driver of markets this year has been upgrades to growth expectations and CapEx, largely tied to AI, so the next twelve to eighteen months depend on how the market assesses the CapEx payoff. He says the biggest structural asymmetric risk not priced is an unwind of AI, though this is not Deutsche Bank's baseline expectation.

  “So I do think in 2027, it's all going to be about the return on AI... the next twelve to eighteen months are all gonna be about how the market assesses, the the CapEx payoff.”at 20:01

US dollar

• George Saravelos · Deutsche Bank

  Without AI the dollar would be weaker; an AI unwind would make it correlated with equities, not a safe haven.

  Saravelos argues that without AI, the dollar would have been much weaker. Foreign fixed income inflows into the US have slowed sharply as yields repriced, but this was offset by bigger inflows into US equities and capital markets to finance the AI build-out. If the AI ecosystem unwinds, the dollar would be much more vulnerable and would behave more like equities than a safe haven, similar to the dot-com unwind in 2001-02.

  “in the absence of AI, the dollar would have been a lot weaker... So I do think this completely changes the behavior of the dollar. If you're in a situation where something unwinds in the whole AI ecosystem, the dollar would be a lot more vulnerable.”at 20:50

US Treasuries & yields

• George Saravelos · Deutsche Bank

  An AI unwind would likely steepen the curve and lift term premium, though the net effect is ambivalent.

  Saravelos says if AI unwinds, the US's ability to attract capital would be worse, and the US fiscal position is much weaker than in 2001-02. This would likely produce very substantial steepening of the curve and potentially higher term premium. But a weaker economy would also bring the Fed cutting, and the market is currently pricing AI's inflationary consequences. He calls the ultimate impact on term premium quite ambivalent, since US fiscal reaction could go either way.

  “you would expect to see very, very substantial, steepening of the curve and potentially an increase in in term premium in the background as ultimately, The US's ability to attract capital, I think, would be worse.”at 22:57