Will the AI Trade Resume? The Investment Committee Weighs in 10/21/26

Meta Platforms

Across the shows: 17 speakers in other episodes, 14 bullish and 6 bearish calls, past 30 days

• Jenny Harrington · Gilman Hill Asset ManagementBullish

  Meta's 21x earnings and reliable double-digit growth make it attractive, not the whole AI trade.

  Meta is very profitable and not a single company is using AI better, though it uses its operating cash flow for data centers. It trades at 21 times earnings with double-digit earnings growth ahead, which she sees as more reliable than other AI earnings. She expects roughly 24% earnings growth this quarter and says the AI trade must be assessed company by company.

  “I don't think that there's a single company out there that's using AI better... They should grow their earnings at 24% this quarter, so I'm looking for that.”at 17:14

• Steve Weiss · Short Hills Capital PartnersBullish

  Meta is a core holding; he expects a capex budget increase and a strong business narrative.

  Meta is one of his largest positions and a core holding he is keeping, while trading around an excess position. He says what has driven the stock is capex budget rather than earnings or revenue. He wouldn't be surprised if Meta increases its capex budget, and he expects the narrative around the business to be very good.

  “I wouldn't be surprised, let me put it this way, if they increase their capex budget. I would expect the narrative around how the business is doing to be very, very good.”at 19:44

NVIDIA

Across the shows: 24 speakers in other episodes, 20 bullish and 9 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBullish

  Nvidia at about 10x next year's EBITDA is preferable to pricier AI names like CoreWeave.

  He values AI names on cash flow, looking at EBITDA multiples. Nvidia trades at about 10 times next year's EBITDA, while CoreWeave, Anthropic and OpenAI have no EBITDA multiple to anchor them. He argues the market is rationalizing toward quality names in the portfolio, so he would rather own Nvidia than CoreWeave.

  “I also think there's been rationalization in terms of the quality of the names that you put in your portfolio. So do you want a core weave, or do you want an NVIDIA that's selling at 10 times next year's numbers”at 5:37

CoreWeave

Across the shows: 29 speakers in other episodes, 6 bullish and 21 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBearish

  CoreWeave has no EBITDA multiple to anchor value, so he avoids it.

  He prefers to see cash flow and values companies on EBITDA multiples. CoreWeave has no EBITDA multiple, unlike Nvidia at about 10 times next year. He prefers to miss high-momentum hype and stick with what will endure over multiple cycles, so he is avoiding CoreWeave.

  “I prefer to see cash flow. So I look at an EBITDA multiple... You don't have an EBITDA multiple on CoreWeave. You don't have one on Anthropic. You don't have one in OpenAI.”at 7:18

Anthropic

Across the shows: 32 speakers in other episodes, 21 bullish and 39 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBearish

  Anthropic's $750B funding need and lack of earnings make him avoid it.

  Anthropic has no EBITDA multiple to value it. It has said it will need 750 billion dollars over the next few years to fund itself, which he sees as a reason to avoid it. He will watch how Anthropic does in its IPO, along with rates and circular funding, as key signals for the AI trade.

  “What you do have is Anthropic saying we're gonna need 750,000,000,000 just over the next few years to fund. So I'm avoiding those.”at 7:37

Vertiv Holdings Co

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

• Joe Terranova · Virtus Investment PartnersBullish

  Vertiv's steady revenue growth makes it a non-high-beta AI name that should turn higher into November.

  Vertiv's revenue growth has been very consistent rather than volatile: 21.67% over three years, 26% over two years, 30% over the last year and 24% last quarter. He argues it is not high beta, and its underperformance came from political headlines and fears of a slowdown in the data center build. Power generation and cooling equipment will still be needed for data centers, so he expects the stock to turn higher as the market moves into November.

  “What's interesting about Vertiv is there's no volatility in the revenue growth... The revenue growth of Vertiv over the last three years, 21.67%.”at 11:30

Alphabet

Across the shows: 6 speakers in other episodes, 5 bullish and 1 bearish calls, past 30 days

• Joe Terranova · Virtus Investment PartnersBullish

  Alphabet is a strong long-term play; a catch-up phase on Gemini and cloud is due in 2027.

  Alphabet's diversified model makes it a very strong play, and Google Cloud results justify its spending. Gemini 3 is a fantastic product and very competitive with [Anthropic's] Claude. The stock has slowly underperformed this year after a prior nine to twelve months of relative outperformance, so he expects a catch-up phase in front of it in 2027.

  “I think that Alphabet is a very strong play because of the diversification of the model... Gemini three is a fantastic product. It's very competitive to what we see from [Anthropic's] Claude.”at 21:51

Netflix

Across the shows: 11 speakers in other episodes, 9 bullish and 6 bearish calls, past 30 days

• Joe Terranova · Virtus Investment PartnersBearish

  Netflix is no longer a growth story; its 18-19x valuation is not cheap enough for shrinking growth.

  Netflix was the premier growth story and the only growth story online, but its growth is reversing. A cheap-looking 18-19x valuation is not cheap relative to this earnings direction, and the stock is broken. He sold it in the past and sees significant content and cost challenges ahead, so he avoids streaming names.

  “And they're not gonna grow. They're going the other way... So that's why I sold it in the eighties.”at 24:35

The Walt Disney Company

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

• Joe Terranova · Virtus Investment PartnersBearish

  Streamers including Disney face content and cost challenges; he would avoid them all.

  Netflix's growth has reversed and he sees the same pressures across the streaming group. He thinks every streamer, including Disney, faces significant challenges related to content and costs in front of them, so he would avoid all of them.

  “I think you avoid all of them [including Disney] because I think they have significant challenges in front of them related to content and related to costs.”at 24:43

Valero Energy

Across the shows: 1 speaker in other episodes, past 30 days

• Joe Terranova · Virtus Investment PartnersBullish

  Valero's refining margins and diesel supply shortage justify holding; expects a historic quarter.

  Valero's results are about refining margins, and he has stayed anchored to the trade as it has moved higher. He sees overwhelming evidence of significant supply challenges in diesel, and as a result in gasoline. Valuation is in the high teens and the balance sheet is throwing off historic cash flow, so he expects a historic quarter when it reports tomorrow and advises staying in the stock with a trailing stop.

  “They're going to report earnings, and it really has been all about refining margins... I see in front of me this overwhelming evidence that's saying there are significant supply challenges as it relates to diesel and as a result of that to gasoline as well.”at 28:12

Marriott International

• Jenny Harrington · Gilman Hill Asset ManagementNeutral

  Marriott's 31x P/E and 2.5% FCF yield are too rich to add to; she is holding its compounder.

  Her fund has owned Marriott since 2013 and it has compounded strongly. It now trades at 31 times earnings with a free cash flow yield of 2.5%, which is a huge hurdle for them. But it grows at double digits, mid-teens consistently, so they are sticking with it but will not throw new money in.

  “it's trading at 31 times earnings right now, and the free cash flow yield, which is a huge hurdle for us, is down to two and a half percent. But you've got a company that grows, like, double digits, mid teens consistently.”at 29:27

Northrop Grumman

• Jenny Harrington · Gilman Hill Asset ManagementBullish

  Northrop trades at 18x with a near 5% FCF yield and reliable high-single-digit growth; attractive.

  Northrop trades at 18 times earnings with a nearly 5% free cash flow yield, and the stock is down five percent on the year. It has high single-digit earnings growth ahead rather than double digits, and it just raised its $110 billion pipeline. She thinks its earnings over the next five years are highly reliable.

  “So this one's trading at 18 times earnings with a nearly 5% free cash flow yield, down five on the year... not double digit earnings growth, but, like, high single digit earnings growth ahead.”at 30:00

Zoom Communications

• Joe Terranova · Virtus Investment PartnersBearish

  Software is challenged in 2026; Zoom is near target, so long holders should move to the sidelines.

  Oppenheimer upgraded Zoom to outperform, and Joe thinks the stock is close to its $130 price target, so longs should move to the sidelines. He says software is incredibly challenged in 2026. He explains the 16% rally by Zoom's 2023 investment of about $50 million in Anthropic, now a multi-billion stake, which he expects to be realized when Anthropic goes public.

  “Think where you're going to have to, if you are long Zoom, kind of move to the sidelines.”at 30:32

NextEra Energy

• Kari Firestone · Aureus Asset ManagementBullish

  NextEra would benefit if a change in Congress brings back sustainability policy support.

  Firestone calls NextEra a great utility. Her case is conditional: if the House changes hands and sustainability returns as a policy priority, that would help NextEra, which is a major renewable energy developer. The argument is brief and hinges on the political outcome, so it is a conditional bullish view rather than an unconditional call.

  “it's a great utility. And if we get a change in the house, bring back the word sustainability, which would help NextEra.”at 47:23

AI: overall outlook

• Joe Terranova · Virtus Investment Partners

  Hedge funds and managers have run for cover; AI positioning is light and will rebuild into November.

  Hedge funds, portfolio managers and mutual funds have run for cover from the AI trade, so positioning is incredibly light. Earnings growth will be there, so these investors will have to quickly rebuild positions as they move through early November, with optimism returning into the close of 2026. He wants the AI trade and the momentum factor now rather than waiting for the midterms to pass.

  “I want the AI trade because everyone has run for cover. They have run for cover, and the positioning is incredibly light.”at 2:24

• Jenny Harrington · Gilman Hill Asset Management

  AI trade now rewards discernment, company by company; the correction isn't over.

  Investors have become discerning about AI, which is why Palantir and Nvidia are only up 14% on the year while Micron is up about 200% and Oracle is down 30%. Skepticism about earnings is real across companies, which is why the S&P trades below its ten-year average multiple. She says the recent drop is not a slap and that they haven't seen anything yet.

  “take on AI, which is why you have a Palantir and an Nvidia only up 14% on the year... and why you have an Oracle down 30.”at 12:53

AI infrastructure & data centers

• Kari Firestone · Aureus Asset Management

  Hyperscaler capex is consuming cash flow; earnings must prove the spending is worth it.

  The trade is being retested on whether earnings are good enough, starting with Meta tonight. Capex has held back the trade because hyperscalers are spending so much that it uses up their cash flow. The top 10 S&P names hold about $30 trillion of market cap, so the market needs good earnings from them to move the index, and the S&P has not done anything for months.

  “We're gonna hear about CapEx, which is the big factor that has held back some of the trade because they're spending so much, and that's using up all their cash flow.”at 4:27

• Steve Weiss · Short Hills Capital Partners

  AI capex will peak about a year out, and sovereign funding for it will dry up.

  He sees the end of the spending cycle in capex a year out, when appetite will wane for companies that have to keep spending. Sovereign funds have been a primary lender and investor and have position limits, so that capital will dry up. Spending will peak like every other cycle, though infrastructure companies won't disappear. Markets historically discount a year ahead, so valuations will peak and come back down to earth.

  “But when I see the end of the cycle in terms of growth in spending, in CapEx, and I see that a year out, right, that the appetite for it is going to wane for these companies that just have to spend and spend and spend.”at 10:05

US elections & politics

• Steve Weiss · Short Hills Capital Partners

  Midterms won't clear risk; the Democratic House and Senate win is already priced in.

  He disagrees that the midterms will be a clearing event for risk. The Democrats taking both the House and Senate is already a faded trade, and he sees that playing out in defense stocks. The bigger drivers for AI are how Anthropic does in its IPO, rates, and the circular funding and weaknesses in the sector.

  “I don't think that you're going to see a clearing event with the elections... The election, if you look at Calhoun and the others, that's already a faded complete that the democrats are gonna take over both the house and the senate.”at 5:48

AI chips & semiconductors

• Joe Terranova · Virtus Investment Partners

  Semi equipment, memory and optics names lagging 10-12% should catch up as positioning narrows toward quality.

  Semi equipment, memory and optics names have clearly underperformed, by 10 to 12% over the last quarter, despite having earnings growth, so they should not be classed as high beta. Institutions and retail are rotating into large caps, and that narrowing toward quality will expand through the rest of the year to these other large-cap AI areas that have performed.

  “where there has been clear underperformance in the case of the three industrial names that I mentioned to degree of 10 to 12% over the last quarter.”at 8:34

China's economy

• Steve Weiss · Short Hills Capital Partners

  China's economy has underperformed for a long time, so it is better to avoid playing it.

  Weiss says the Chinese economy is not doing well and has not been for a while, which makes it difficult to invest in China-linked exposure. He says he sold his Alibaba position for this reason, and that it is better to stay away from China for now.

  “Basically, the Chinese economy is not doing well, hasn't been doing well for a while, so it's difficult to play on that. So it's just better to stay away.”at 41:17

Market sentiment, positioning & volatility

• Joe Terranova · Virtus Investment Partners

  Retail trading volumes were weak in Q3 but should return in Q4, benefiting active brokers.

  Terranova says active trading volumes were absent in Q3 and expects them to return in Q4. He links that recovery to active brokers, which earn revenue from trading activity. He presents this as a near-term driver for the brokerage business, though the argument is brief and relies on the expectation that volumes rebound.

  “What we didn't have in q three was active trading volumes. You're gonna see that return in q four that takes you into active brokers.”at 47:30