Closing Bell 10/27/26

Anthropic

Across the shows: 63 speakers in other episodes, 49 bullish and 50 bearish calls, past 30 days

• Chamath Palihapitiya · Social CapitalBullish

  Anthropic's 85% compute margin and falling compute cost show a strong business.

  Chamath calls Anthropic's S-1 one of the most important documents of the cycle and a really solid business. He cites growth of over 1300% year over year in the first half, and an 85% margin on serving compute to users. The cost of compute has fallen from about $6.50 per dollar in 2024 to roughly 50 to 53 cents now. He argues that about 80% of recent revenue came from models, and that stale-model concerns are misplaced. Premium frontier pricing funds the next training run and serving costs, while older models become cheaper and widen the customer base in a Jevons-style effect. He calls the $80 billion loss an accounting headline.

  “I mean, we're talking 85%. That's incredible. And the decline over time of the cost of that compute from about, I don't know, $6.50 per dollar to... In '24 to about... I think it's about 50¢ or so”at 15:19

• Roger McNamee · Elevation PartnersBearish

  Anthropic's S-1 is speculative fiction; equity-for-compute discounts won't recur at scale.

  McNamee argues the company got to its current point by trading equity for compute capacity at huge discounts to cash prices. Going forward it will buy compute at full price, so paying a dollar for what might have cost 25 cents. He says the S-1 shows a model that won't recur and probably won't be sustained through the September quarter. He notes the filing conspicuously leaves out September-quarter numbers.

  “The problem with the s one is that it's speculative fiction. It is a moment in time, and it's a very special moment in time because the company has managed to get to this point by trading equity for compute capacity.”at 17:45

• Chamath Palihapitiya · Social CapitalBullish

  Anthropic can reach $200B revenue, which needs about six gigawatts of compute it already has contracted.

  Chamath says his projections see Anthropic reaching $200 billion, which by his estimates requires about six gigawatts of compute. The company has not disclosed its current compute, but the S-1 shows capacity under contract that could exceed six gigawatts, which he calls a positive. He cites a BofA study that puts a megawatt at about $57 million, which gives a sense of compute costs. He says the contracted compute must still be monitored, since some of it will not be deployed until data-center shells are built.

  “we see the ability for Anthropic to get to $200,000,000,000. And by our estimates, that's gonna require about six gigawatts of compute.”at 18:39

OpenAI

Across the shows: 25 speakers in other episodes, 10 bullish and 20 bearish calls, past 30 days

• Chamath Palihapitiya · Social CapitalBullish

  OpenAI will do well, but its consumer compute costs are an albatross; ads look promising.

  Chamath calls OpenAI and Anthropic extraordinary companies that will both do well and matter for the next decade. He credits OpenAI's push into enterprise and says ChatGPT built the brand that made AI synonymous with GPT. He says OpenAI carries an albatross in the cost of serving compute to consumers. He thinks its advertising model looks extremely promising as the best way to monetize that, but it still needs to play out.

  “They have done a good job, Sam, Sarah, and team into pushing into the enterprise... That said, they do have a little bit of an albatross with the cost to carry that compute for the consumers.”at 21:55

The Coca-Cola Company

Across the shows: 2 speakers in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Brandon Gomez · CNBCBearish

  Coca-Cola's flat North American volumes and pressured US consumer may last into 2027; a beat isn't enough.

  Coca-Cola raised its outlook and beat expectations, with global volume up 5%. But North American volume was flat, with international markets doing the heavy lifting. The CFO confirmed that underlying consumer pressure is there and could last into 2027. Gomez says strong brands and international growth can help but may not fully offset a cautious US consumer and rising costs. This is why investors are looking past the beat and shares are down.

  “The company's CFO confirming on the call that the underlying pressure across the consumer landscape is there, and it could last into 2027.”at 28:59

US stock market outlook

• Mike Wilson · Morgan Stanley

  S&P 500 base case is $8,300 by May; correction is mostly over and the broadening trade is starting.

  Wilson says the market has been in correction mode for four or five months since June. He estimates 80 to 90% of the usual breadth destruction has already happened. He points to the equal-weighted index starting to outperform the cap-weighted S&P 500, with cyclicals now joining defensives. He expects the S&P 500 to catch down to that breadth. He calls the broadening plus the durable AI trade the bull story, with a looser Fed as fuel for higher levels. He is constructive on the next six months and calls 8,000 possible, with 8,300 as his base case by May.

  “We have a $8,300 price target for May as a base case.”at 8:11

• Meghan Shue · Wilmington Trust

  Constructive on US equities and overweight; sees the correction nearing its end with internals improving.

  Shue says her team is generally constructive and overweight equities. She points to market internals: on tough down days in the headline index, capital rotates into other parts of the market rather than out of stocks, which she calls constructive. Treasuries resuming their safe-haven role and a dovish Fed view support this. She agrees the tech correction that began around June is probably nearing its end.

  “I think we're we're generally pretty constructive on the market. We're overweight to equities. ... when the headline index is down, capital rolling and rotating into other parts of the market rather than out of the market, I think that's constructive.”at 43:51

• Meghan Shue · Wilmington Trust

  Underweight tech and industrials; overweight communication services, consumer discretionary and real estate, favouring pricing power.

  Shue's team moved to a slight underweight on tech back in the spring, when memory stocks were ripping, and held steady rather than chasing them. They like communication services and other parts of the market participating in the AI trade, including consumer discretionary and real estate. Their approach is to pick companies that are both exposed to the AI trade and diversified, with strong pricing power.

  “So what we moved to just a slight underweight on tech back in... Basically back in the spring... moved to an underweight, but we do like communication services. We like some of those other parts... including in consumer discretionary and real estate.”at 46:13

US rates & the Fed

• Mike Wilson · Morgan Stanley

  Fed unlikely to hike much; market tightening already does its work and liquidity matters more.

  Wilson expects the Fed probably will not raise rates at the meeting that day, and says the issue is liquidity, which is harder to measure, rather than hikes. He argues the Fed chair wants the market to tighten conditions on its own. Back-end yields above 5%, which he says reached 5.35%, and energy-driven tightening have already done much of that work. He thinks the Fed will likely hike less than the one or two hikes the market expects. A more dovish Fed would be fuel for stocks.

  “he doesn't really wanna raise rates that much higher because that that hurts Main Street. Okay? He wants to let the market kinda tighten for him.”at 9:55

• Meghan Shue · Wilmington Trust

  Expects the Fed to deliver two to three rate cuts over the next twelve months, not hikes; bullish for small caps.

  Shue says Treasuries have resumed their role as a safe haven, which she views as constructive for the market. Her team holds a pretty dovish view on the Fed over the next twelve months, expecting two to three rate cuts rather than hikes. She says that would be very bullish, particularly for small caps.

  “we have a pretty dovish view on the Fed over the next twelve months, expecting two to three rate cuts rather than rate hikes. So that would be very bullish, particularly for small cap.”at 44:18

Market sentiment, positioning & volatility

• Mike Wilson · Morgan Stanley

  Hedge fund positioning is at zero-percentile derisking; worst-case S&P downside is about 5%.

  Wilson's prime brokerage business shows hedge funds are very derisked, at the zero percentile over the last twelve months. He says they can always take less risk, but that still reads as bullish. Retail, systematic and passive flows and some sentiment indicators have not yet reached levels that signal all clear. Even if those align, he sees about 5% downside in the S&P 500 at worst, not 10%.

  “They're very derisked. I mean, they're at the zero percentile for the last twelve months.”at 12:09

• Meghan Shue · Wilmington Trust

  The bull market is unloved due to recurring AI scares; the skepticism is healthy and prevents euphoria.

  Shue says the bull market has been unloved because every few months there is a scare about AI: hyperscalers overspending, being too highly levered, or productivity not materializing. Her reading of market data and investor conversations shows heavy skepticism. She thinks this is healthy because it takes air out of the balloon and keeps the market from reaching euphoria, and she sees the lack of euphoria as encouraging.

  “I think this is actually healthy because what it tends to do is it takes... It tends to take some of the air out of the balloon along the way so that we don't get into this state of euphoria.”at 45:22

Sports, betting & prediction markets

• Mark Lasry · Avenue Capital Group

  Sports franchise values keep rising; a Las Vegas NBA team could become one of the most profitable.

  Lasry says franchises are going up in value and have been for a while. He cites growing NBA interest internationally, including NBA Europe and Africa and rising viewership in Asia. He argues Las Vegas could be one of the most profitable franchises and the third big market after the Lakers and Knicks. The Lakers sold for about $12.5 billion, above the roughly $9 to $10 billion expected for Vegas, and he says he would pay 25% more for the Lakers. He says the buyers will make a fortune on that team, and his group is one of the finalists for the Vegas bid.

  “I think, actually, Josh did a brilliant move there because he knew where Vegas was gonna trade at... Would you pay 25% more for the Lakers? The answer is yes.”at 35:01

• Mark Lasry · Avenue Capital Group

  Live sports can't be disintermediated by AI, so it's a hedge; sports valuations keep rising as an asset class.

  Lasry argues AI cannot disintermediate sports or live entertainment, so as more people look at sports they will see it as a hedge against AI disruption of their companies. Unlike companies, sports franchises are not destroyed by competitors coming up. As evidence, he cites his Bucks purchase in 2012 for $500 million, the most ever paid for an NBA team at the time, when it was the league's worst team; franchise valuations have since risen 20 to 25 times. He says sports has become an asset class with growing interest and capital, so he expects valuations to keep rising over the next five or ten years, with supply still dwarfed by demand.

  “the one thing that AI can't sort of disintermediate is sports, and it's live entertainment. ... they're gonna say that actually is a great hedge against AI. ... valuations have gone up 20, 25 times from where I invested. ... it's become an asset class. That's what's different.”at 36:47

AI infrastructure & data centers

• Mike Wilson · Morgan Stanley

  AI funding concerns from heavy supply should clear within about a month as investors get more selective.

  Wilson says a ton of supply continues to hit the AI funding market. Investors are being very judicious about which AI projects they will fund, and the price of that funding is going up. He says this is the second clearing event. He expects it to be resolved in the next month, while still describing the AI trade as durable.

  “Number two would be around this AI funding concerns. There's been a ton of supply... That probably should be cleared in the next month.”at 6:26

US elections & politics

• Mike Wilson · Morgan Stanley

  Midterms are a near-term headwind, but stocks have risen over the following 6-12 months every time since 1950.

  Wilson calls the midterms the first of several clearing events. He concedes they are typically a headwind for multiples and stocks, and that investors get nervous because the post-midterm outcome is unknown. He cites a historical pattern: 100% of the time since 1950, the market has gone up nicely over the next six or twelve months. He frames this as a potential catalyst after the election.

  “Typically a headwind for for multiples and for stocks. People get nervous... But 100% of the time since 1950, the market goes up nicely over the next six or twelve months.”at 6:26

US Treasuries & yields

• Mike Wilson · Morgan Stanley

  Falling yields signal growth worries and a defensive shift; 2-3% real yields are a strong competitor to stocks.

  Wilson says the ten-year yield moved from a bear flattener to a bull flattener. He reads this as the market pricing in a lot of tightening from energy prices, back-end rates and possibly a Fed hike, so growth may slow more than expected. He sees it as a defensive trade and a case for owning more duration. He also says real yields of 2 to 3% are as good as they have been in 20 years, which competes with stocks and supports value.

  “So we went from what I would call a bear flattener, right, to a bull flattener. So this is your defensive trade.”at 11:08

Earnings & corporate profits

• Meghan Shue · Wilmington Trust

  Earnings are driving the market and outgrowing the index; watch whether negative estimate revisions start rolling over.

  Shue says earnings have continued to be the engine for the market, with earnings growth outpacing the overall index. The key thing to watch is whether negative earnings revisions stop rolling over. If they do not, that could signal that valuations are artificially low.

  “earnings have continued to be the engine for the market, outgrowing the overall index. I think the thing here to watch is negative earnings revisions that they don't start to roll over. That could signal that valuations are maybe artificially low.”at 44:36