Managing Risk in a Volatile Market 10/19/26

CoreWeave

Across the shows: 13 speakers in other episodes, 3 bullish and 11 bearish calls, past 30 days

• Joe Terranova · Virtus Investment PartnersUncertain

  CoreWeave's thin-liquidity unsecured debt is driving extreme volatility into its equity price.

  Joe says he avoids CoreWeave's equity, but points to its unsecured debt as the catalyst for the selloff. He notes the pricing and trading of that debt is illiquid, so the market is volatile, and that volatility is passing through into the stock price.

  “I could tell you on the debt side. Keep in mind the unsecured debt, the pricing of it, and the trading of it, the liquidity is thin... So that marketplace has extreme volatility, and it's translating into the equity price itself.”at 2:45

• Steve Weiss · Short Hills Capital PartnersBearish

  CoreWeave's leverage-based business model is a direct indictment; it was always a risky asset.

  Steve argues CoreWeave was always a risky asset that is being stressed further by higher interest rates and bond yields. He points to its IPO pricing below the original 45-49 range, at 40, and to the stock falling sharply since. He says that decline is a direct indictment of a business model built on leverage.

  “They were always risky assets... And I think that's a direct indictment of their business model that's built on leverage.”at 10:45

Micron Technology

Across the shows: 6 speakers in other episodes, 1 bullish and 4 bearish calls, past 30 days

• Jim Lebenthal · Cerity PartnersBullish

  Micron differs from past cycle tops: no debt, large cash pile, and buybacks at six times earnings.

  Jim concedes that end-of-cycle claims of cheap stocks with big order books have been heard many times. He argues this cycle is different because Micron has no debt, about $100 billion in cash, and roughly $130 billion of free cash flow, which it is using to buy back shares at six times earnings.

  “They have no debt, Micron. They have about a 100,000,000,000 in cash. They're generating a 130,000,000,000 in free cash flow... They're recapitalizing the company by buying back shares at six times earnings.”at 15:36

• Steve Weiss · Short Hills Capital PartnersBearish

  Micron's cheap multiple and big order book look like prior end-of-cycle setups; take-or-pay deals fail if spending peaks.

  Steve says the setup is eerily familiar: Micron trades at about six times earnings with a large order book, the same claim made at prior cycle tops. He notes take-or-pay contracts cover about 40% of revenue, but argues those contracts mean nothing if spending peaks, as in every cycle. He says he has taken money off the table and sold his large Micron position.

  “Their take or pay contracts for 40% of revenue... If the spending peaks, those take or pay contracts mean zero like every cycle.”at 16:06

Walmart

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

• Bill Baruch · Blue Line CapitalBullish

  Walmart has technical strength and margin expansion from membership fees; Sam's Club and grocery reach take share from Amazon.

  Walmart has moved above its 200-day moving average, which Bill reads as technical strength. About 30% of its orders are same-day, and it charges elevated membership fees, which should expand margins. Sam's Club is a Costco competitor that trades at a cheaper multiple than Costco, and Walmart reaches 94% of the US population within a three-hour window. Bill sees Walmart taking share from Amazon's core business, so he sees upside. He added the stock around Labor Day and has been adding since.

  “But last week, it got above its two hundred day moving average. We like the technical strength. ... The Sam's Club unit is definitely a Costco competitor that you're getting as an option that trades at a cheaper multiple than Costco, but they reached 94% of The US population in the three hour window.”at 40:30

• Joe Terranova · Virtus Investment PartnersBullish

  Walmart's August earnings showed revenue growth and benefit from the K-shaped consumer, driving recovery.

  Walmart needed its August 20 earnings to show that fundamental opportunity remained, including revenue growth and the ability to benefit from a K-shaped economy with shoppers visiting stores. It delivered on that, which is why the stock has bounced from a weak level it was struggling at going into the report. The recovery is real but modest.

  “Walmart's had a nice recovery. They reported August 20, and they really needed in that earnings report to show investors that there still was fundamental opportunity, ... the ability to benefit from this k shaped economy going in and visiting the store. They did exactly that.”at 41:12

NVIDIA

Across the shows: 15 speakers in other episodes, 12 bullish and 6 bearish calls, past 30 days

• Joe Terranova · Virtus Investment PartnersBullish

  Nvidia's growth moderation is a consolidation phase before the next revival, not the end of the cycle.

  Joe cites Nvidia as the template: two years ago it was growing revenue over 200% a year, then growth moderated and the stock went through a period of consolidation before reviving. He expects the AI trade to go through a similar pause that refreshes into 2027.

  “I think NVIDIA is the perfect example of that. Two years ago, you were talking about a company growing its revenue triple digits, 200%... on the other side goes through a period of consolidation before ultimately it could have this pause that refreshes again.”at 4:00

Anthropic

Across the shows: 20 speakers in other episodes, 13 bullish and 35 bearish calls, past 30 days

• Jim Lebenthal · Cerity PartnersBullish

  Anthropic will go public before Thanksgiving, raising $1.5-2 trillion to fund its buildout.

  Jim predicts Anthropic goes public before Thanksgiving and says the exact size matters less than the cash inflow, which will let it keep building out data centers. He notes OpenAI is also raising private funding now. He sees these capital events as catalysts that may settle the question of whether spending is at a peak.

  “Now we're predicting the future could go awry, but we think Anthropic is gonna go public sometime before Thanksgiving... When that happens, and I honestly don't care if it's 1,500,000,000,000 or 2,000,000,000,000, the point is it comes in.”at 7:23

Lam Research

• Joe Terranova · Virtus Investment PartnersBullish

  Lam Research will post a great quarter; its stock has lagged and the semi equipment cycle is intact.

  Joe is watching Lam's report due midweek, which he expects to be a great quarter. He notes the stock is down 37% from its June high but up 62% year to date, and ties this to his bullishness on the semiconductor equipment cycle alongside Micron.

  “They report Lam reports. Middle of the week. It reports this week. It's gonna be a great quarter... The stock has not traded well. It's down 37% off of its June high.”at 14:51

Meta Platforms

Across the shows: 14 speakers in other episodes, 13 bullish and 5 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBullish

  Meta is a product company that benefits from the AI capex it funds, so he added to the position.

  Steve says he increased his Meta position after it fell $15, and it is now his second-largest holding. He argues Meta is ultimately a product company on the receiving side of the capex cycle, so it will benefit from its own spending through the products it offers the public. He says its balance sheet gives it a unique ability to keep spending and to expand into enterprise and cloud, and that founder-led management helps it move into new areas.

  “Because I think Meta is a product company ultimately. So they'll benefit. They're on the other side of the CapEx cycle.”at 17:47

Dick's Sporting Goods

• Steve Weiss · Short Hills Capital PartnersBullish

  Dick's Sporting Goods is the ultimate consumer stock with a brand edge; he added heavily after its selloff.

  Steve bought Dick's, saw it get crushed after earnings, and added significantly at lower prices, after which the stock recovered. He calls it the ultimate consumer stock and says it has an edge through its brand in the sporting goods space.

  “I bought it, got crushed after the quarter, went down to [$121]. You know, I added significantly. It's [$144]. It's the ultimate consumer stock.”at 24:01

The Goldman Sachs Group

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

• Steve Weiss · Short Hills Capital PartnersBullish

  Goldman Sachs is a position levered to the AI trade, M&A pipeline and IPO pipeline.

  Steve owns Goldman and says it is also levered to the AI trade, the M&A pipeline and the IPO pipeline. That gives it exposure beyond its core business to the deal activity he expects.

  “Goldman Sachs, I own. Goldman is also levered to the AI trade and the M&A pipeline and the IPO pipeline.”at 24:50

Cleveland-Cliffs

• Jim Lebenthal · Cerity PartnersBullish

  Cleveland-Cliffs is too cheap even as a cyclical; a trough 5x multiple would roughly double equity.

  Jim says Cleveland-Cliffs beat on trailing metrics and raised 2027 guidance, but the street doesn't believe it: 2027 EBITDA estimates rose from $2.5 billion to $3 billion to $4.5 billion, while enterprise value is about three times that projected EBITDA. He argues even a cyclical deserves more than three times EV at a peak, and a trough multiple of five times would roughly double equity. He cites balance-sheet cleanup with leverage near 2.5x by mid-next-year, and says tariffs and hot-rolled coil prices (about $1,300 a ton, vs $800 a year and a half ago, with the forward curve above $1,200) support earnings.

  “Of course, it's a cyclical company. I will tell you that even a cyclical company at a peak of its cycle, which I'm not saying this is, deserves a multiple more than three times enterprise value. If you put a trough multiple, which we've seen before, five times on this, this pretty much doubles your equity from here.”at 29:19

Datadog

• Joe Terranova · Virtus Investment PartnersBullish

  Datadog is a buy: cloud monitoring and cloud security benefit as AI usage grows in infrastructure.

  Joe likes the Bernstein upgrade to outperform with a $350 target. He says the company is about cloud monitoring and the security around the cloud, and about AI being used in that infrastructure. His fund bought it in April, the stock hit an all-time high on October 12, and it reports on November 4.

  “I like that one. We put it in the ETF back in April... They report on November 4... This is about cloud monitoring, the security surrounding the cloud, and the utilization of AI in that infrastructure.”at 32:41

Arm Holdings

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

• Bill Baruch · Blue Line CapitalUncertain

  Sold Arm as the smallest, easiest trim; likes the CPU story but the stock has fallen sharply.

  Arm was a 60 basis point position that the fund treated as a call option with no expiration. Bill sold it as a risk-management trim while the AI trade is under pressure. He still likes the CPU story, in which Arm is moving its business into that segment. The stock has fallen well below its high for the year, and he expects it to test a level it previously broke below. Overall the view is mixed: the thesis is intact, but the position was exited as part of managing risk.

  “ARM was our smallest position. Was the easiest one to pull the trigger on. A 60 basis point position. We looked at it as a call option with no expiration date, ... We like the CPU story, which is moving its business into there, but the stock has fallen quite a bit from its high of the year.”at 42:51

Entegris

• Bill Baruch · Blue Line CapitalBearish

  Sold Entegris; despite expected pricing power, weak technicals make it not a must-own name.

  Entegris is a supply chain materials and packaging company that Bill expected to gain better pricing power in this environment. Combined with technical weakness, he concluded it is not a must-own name, so he sold it as part of managing risk around the AI trade. The argument is mainly about the stock's technical and fundamental setup relative to alternatives in the portfolio.

  “they're strong focus in the supply chain, materials, and packaging. Thought they'd gain better pricing power in this environment, but combined with the technical weakness, I think it's not a must own name.”at 43:16

UnitedHealth Group

• Steve Weiss · Short Hills Capital PartnersBullish

  UnitedHealthcare has moved up on strong quarterly execution and should keep rising.

  UnitedHealthcare has already moved higher because it executed well in the quarter. Weiss thinks the stock will keep moving up, extending the momentum from that quarter's execution.

  “UnitedHealthcare that's moved up since they execute well in the quarter, I think continues to move higher.”at 47:16

AI infrastructure & data centers

• Joe Terranova · Virtus Investment Partners

  Expects an AI capex slowdown in 2027, so investors should reprice allocations and temper earnings expectations.

  Joe argues the recent pullback signals an AI capex slowdown in 2027. He says investors have to reprice their allocations toward the AI trade accordingly and moderate their earnings expectations, and that the market is already doing this.

  “I think this signals in 2027, you have an AI CapEx slowdown. So I think you have to reprice your allocations in the direction of the AI trade accordingly... you have to moderate.”at 2:14

• Jim Lebenthal · Cerity Partners

  Expects upcoming hyperscaler earnings to show spending isn't slowing near term and demand is supply-constrained.

  Jim expects hyperscaler reports in the next two weeks to say spending isn't slowing, that any slowdown is not on the near-term horizon, and that growth is still constrained by compute supply. He also expects them to show payback on data-center builds, as Amazon's Andy Jassy indicated last quarter, and says the largest scaled players differ from the neoclouds.

  “Number one, spending isn't slowing down. Of course, at some point, it is going to slow down, but they're likely to say that it's not on the near term horizon. Number two, what they're also likely to say is that the growth rate is still constrained by the supply of compute.”at 7:23

• Bill Baruch · Blue Line Capital

  Remains overweight core hyperscalers as the AI trade is still early, despite recent momentum loss.

  Bill keeps core hyperscalers in the overweight alongside semiconductor manufacturers. His view rests on the AI trade being in early innings. The recent selloff came from an OpenAI revenue shortfall and then a hotter CPI, which pushed some foreign money out of US tech. He does not think this undermines the hyperscaler position, but he is trimming at the margins.

  “We still like the overweight semi manufacturers and core hyperscalers, ... but we want to be trimming at the margins.”at 42:18

AI: overall outlook

• Joe Terranova · Virtus Investment Partners

  Still bullish on the AI trade; the recent shakeout is working off extreme ownership, not ending the trend.

  Joe says the AI-oriented selloff over the past week was a favourable shakeout. He rejects the view that the market is moving back to broadening, arguing ownership in AI names got extreme and is being worked off, with CoreWeave's unsecured debt as the catalyst. He thinks investors should be bullish on the AI trade.

  “I don't carry that perspective. I still think the AI trade is in place. I think you wanna be bullish on it. I think the degree of ownership got extreme.”at 3:22

• Bill Baruch · Blue Line Capital

  The AI trade is in early innings despite tarnished momentum; he is trimming at the margins, not exiting.

  Bill still believes the AI trade is early. Momentum weakened over the past two weeks after Nasdaq 100 record highs. An OpenAI revenue shortfall hit the group hard. Then a stronger-than-expected CPI print led to a partial unwind of foreign investment in US tech, which carried unhedged currency risk as the dollar moved. He says this will not kill the AI trade. The fund is still overweight semiconductor manufacturers and core hyperscalers but is trimming at the margins and managing risk in case the trade keeps deteriorating.

  “So we still believe the AI trade is in the early innings, but we cannot deny that some momentum has been tarnished over the last two weeks.”at 41:54

AI bubble & tech valuations

• Jim Lebenthal · Cerity Partners

  AI buildout is nowhere near late-1990s telecom speculation; no Y2K-style cliff and no dark-fiber excess.

  Jim draws a parallel to the late-1990s tech and telecom boom but argues key elements are missing. Unlike 1999, there is no Y2K-style upgrade cliff, and the current build is nowhere near the speculative fiber buildout where about 90% of capacity was dark. He says the data centers coming online are being pulled by demand that executives say would be there with more capacity.

  “I can't help but draw the parallel to the tech telecom boom of the late nineteen nineties... you're nowhere near the speculative investment... 90% of which were dark when they were laid.”at 12:29

• Jim Lebenthal · Cerity Partners

  AI and tech are a buying opportunity; fundamentals, valuations and earnings do not need to catch down.

  Jim says the sharp rotation has done real damage, with individual stock volatility running about three times the market's. He argues the AI and mega-cap tech trade doesn't need to fall back to the rest of the market, because fundamentals, valuations and earnings support it. He agrees with the view that the next selloff is a time to add risk.

  “AI and tech is a buying opportunity right here, that it's not something where those stocks need to catch down to the rest of the market. The fundamentals support it, the valuation support it, The earnings support it.”at 22:44

Market sentiment, positioning & volatility

• Joe Terranova · Virtus Investment Partners

  Hedge funds cutting semiconductor exposure is healthy; seasonal strength into November-December favours rotation.

  Joe says hedge funds lightening semiconductor exposure does not worry him. Mid-October is seasonally weak, while November and December are seasonally strong. He argues that if speculators anchored to semis for three years rotate into defensive Magnificent Seven names, that sets up well for the market.

  “I don't think it's a problem at all. I actually like the fact that we are seeing hedge funds lighten up their exposure to the semiconductor trade... On the other side, November and December seasonally is a very strong period.”at 20:57

• Joe Terranova · Virtus Investment Partners

  Expects momentum to lead into November and December, since it is 2026's best trade and was crushed since June.

  Joe says he wants to own the momentum factor for November and December. He argues momentum has been the best trade of 2026, and that it has been badly damaged since Micron reported at the end of June, which sets up a rebound.

  “guess what I wanna own? The momentum factor. I think in November and December, what has been the best trade of 2026, I think we go out with that being the strength.”at 25:15

US stock market outlook

• Joe Terranova · Virtus Investment Partners

  Last week's broadening was defensive, not genuine; oil at $102 and high yields keep him skeptical of a broad rally.

  Joe is skeptical of commentary that the broadening trade is back. He says last week's broadening went into defensive areas like health care and into energy on high oil prices, not into the cyclical areas he wants to see, such as Caterpillar or utilities. With oil at $102 and Treasury yields stubbornly high, he is not sure he wants to push in that direction.

  “Where I struggle is a lot of the commentary that I heard last week... I don't know if I see the evidence in front of me that I could get behind that... it broadened into defensive like health care, and it broadened into energy because of high oil prices.”at 23:05

Tariffs & trade policy

• Jim Lebenthal · Cerity Partners

  Tariffs on steel are unlikely to fall below 25% from 50%, and it will take a long time to get there.

  Responding to the concern that tariffs could fall from 50% to zero, Jim says he would be very surprised by any drop below 25% under Section 232. Even if it happened, hot-rolled coil prices would not return to $800 a ton. He also notes tariffs have been a headwind for Cleveland-Cliffs, through its Canadian Stelco operation, so the effect cuts both ways.

  “Your point is well made. First off, I would be very surprised. I think the world would be surprised if we took tariffs from 50% under section two thirty two to anything less than 25%.”at 30:58

AI chips & semiconductors

• Bill Baruch · Blue Line Capital

  Remains overweight semiconductor manufacturers, trimming only at the margins after recent weakness.

  The fund is overweight semiconductor manufacturers because it still sees the AI trade as early. Recent weakness after the OpenAI revenue shortfall and a hotter CPI print, plus an unwind of foreign investment in US tech, led it to trim some positions. It does not see this as a reason to exit the group, and it is managing risk so it can reduce exposure gradually if the trade keeps deteriorating.

  “We still like the overweight semi manufacturers and core hyperscalers, ... but we want to be trimming at the margins.”at 42:18