The AI Race Deepens as Access to Capital Shrinks: Your Next Move 10/22/26

Meta Platforms

Across the shows: 28 speakers in other episodes, 30 bullish and 10 bearish calls, past 30 days

• Rob Sechan · NewEdge WealthBullish

  Meta's heavy AI spending will pay off; core business shows AI monetization, so the sell-off is overdone.

  Meta's core business is firing on all cylinders and has shown proof of AI monetization. Rob is not worried about the negative free cash flow and the missing 2027 spending guidance in the short run. He argues Meta would not spend this much unless it believed it could monetize the spending. The stock's drop reflects fear about margins and financing, not the results, which include six straight quarters of revenue beats, 20%+ growth, and raised guidance.

  “I'm not that worried about it in the short run. The core business is firing on all cylinders. They've showed proof of AI monetization.”at 2:46

• Josh Brown · Ritholtz Wealth ManagementBullish

  Meta won't face the AI capital squeeze and can sell compute if needed, so the stock has upside.

  Josh expects a scarcity of capital for AI buildout, but not for Meta. The demand for AI is durable, and the question is who wins the economics of building data centers. Meta has built a lot and is under contract to build more. He says Meta can play a 'trick up its sleeve' by announcing it is in the cloud compute business, which would send the stock higher. He compares it to SpaceX's 10-gigawatt announcement, which drew a credit boost.

  “So I think there will be scarcity of capital, but not for Meta. And I think, the key thing here that hasn't changed and likely will not change, the demand side for AI.”at 6:35

• Malcolm Ethridge · Capital Area Planning GroupBearish

  Meta's cash-flow-negative spending will be punished; he is bearish and doubts its enterprise AI bet.

  The market now has a zero-tolerance stance toward hyperscalers going cash-flow negative, and Meta's earnings call showed this, with the stock down 5%. Malcolm also reads the early earnings-call timing as a sign of a coming debt or equity raise, and says Meta is betting the house that enterprises will choose its models over Anthropic and OpenAI. He says the outcome of that bet is still unknown.

  “I wish I shared you guys enthusiasm over Meta, but we've seen now there's a zero tolerance policy for companies, hyperscaler companies going cash flow negative.”at 10:45

Netflix

Across the shows: 13 speakers in other episodes, 9 bullish and 8 bearish calls, past 30 days

• Rob Sechan · NewEdge WealthBearish

  Netflix is a weaker grower and won't turn around soon; a likely tax-loss sale this year.

  Netflix's in-line quarter and weaker guidance will not be enough to turn the stock around in the short run. Engagement has failed to respond to rising content investment and leadership changes, and solutions will need patience and lower margins. Netflix is now a weaker grower than it has been in a long time, so Rob thinks it could be a tax-loss sale candidate later this year.

  “Holding now. However, kind of an in line quarter in weaker guidance are not gonna be enough to turn this stock around in the short run.”at 27:53

• Malcolm Ethridge · Capital Area Planning GroupBearish

  Netflix's turnaround is delayed by declining ad sales, despite the stock being near its worst.

  Malcolm has been defensive, thinking the story may be as bad as it gets and that downgrades have already come. The earnings figure that bothers him is declining ad sales. Netflix had got into ad sales well, so a decline in that number makes him question any turnaround anytime soon.

  “The one thing in the earnings that I really didn't love that is starting to make me question the stock turnaround anytime soon is the declining ad sales numbers.”at 28:16

• Josh Brown · Ritholtz Wealth ManagementBearish

  Netflix's falling engagement means its ad sales will disappoint, creating a major overhang.

  Netflix can't keep raising ad rates or inserting more ads when engagement is falling. Weaker engagement means the ad sales number will disappoint. Josh calls this a big overhang on top of the other problems.

  “You can't jack up the rates that you're selling ads or insert more ads if engagement is falling. And you're a 100% right. That is, I think, a big overhang in addition to all the other things.”at 28:54

Space Exploration Technologies

Across the shows: 25 speakers in other episodes, 18 bullish and 8 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBullish

  SpaceX will win the AI data center race because it is likely the best builder in the space.

  Josh argues that the right to the economics of AI goes to whoever can build out data centers at the lowest cost and fastest pace. SpaceX is the company he thinks will win that race, since it is possibly the best builder in the space. He cites its recent announcement of 10 gigawatts, which earned it credit, and the roughly $20 billion of contracted revenue per gigawatt.

  “We know SpaceX is gonna win. They might be the best builder in the space.”at 7:47

CoreWeave

Across the shows: 37 speakers in other episodes, 9 bullish and 29 bearish calls, past 30 days

• Malcolm Ethridge · Capital Area Planning GroupBearish

  CoreWeave's neocloud model is at risk if capital tightens and hyperscalers walk back commitments.

  If capital becomes scarce, the commitments made by hyperscalers and AI labs could be broken. Microsoft already backed away from a European data center project, leaving neocloud companies holding the bag. Malcolm sees this as the core question for CoreWeave, which must raise debt and equity to deliver in a high-rate environment.

  “I'll take it a step further and say what happens when we've gotta walk back some of those commitments. Who gets left holding the bag?”at 10:19

Lam Research

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

• Rob Sechan · NewEdge WealthBullish

  Lam Research's results are excellent; the drop reflects macro risk-off, not fundamentals.

  Lam Research posted record revenue and 74% year-over-year EPS growth, which Rob calls epic numbers. The stock and the wider semiconductor complex, which he says the fund owns a lot of, are down because of macro concerns and a risk-off trade. He doesn't think investors should give up these investments, since the fundamentals are strong and the market will eventually reevaluate.

  “even on Lam, their revenue was a record. Their EPS grew 74% year on year. These are epic numbers.”at 16:05

Cerebras Systems

• Malcolm Ethridge · Capital Area Planning GroupBullish

  Cerebras is a beaten-down AI chip stock with latency tech and cybersecurity upside; he is buying the dip.

  Cerebras has fallen to an all-time low of about $1.10, down 71% from its high, because most of its revenue is tied to OpenAI. Malcolm argues that Cerebras has already proven it can solve the latency problem inside data centers. That matters for agentic cybersecurity systems that run autonomously, where latency can decide whether an attack is caught. He expects more partners beyond CrowdStrike, which is its main partner so far, across a large cybersecurity TAM. He is adding to a full position at this discount.

  “So this is probably the most speculative name that I own personally, but I'm also looking at an opportunity to own a chip stock that I think it was at $1.80 the October 1.”at 16:54

International Business Machines

Across the shows: 6 speakers in other episodes, 3 bullish and 2 bearish calls, past 30 days

• Rob Sechan · NewEdge WealthUncertain

  IBM has not yet proven it can leverage AI rather than be disrupted by it; patient hold.

  IBM beat and raised, and Rob holds it. It was bought at about 12 times earnings and is more expensive now. He sees some evidence in the quarter that IBM can navigate AI effectively, but IBM still has to prove it can leverage AI rather than be disrupted by it. Rob is being patient with the stock.

  “they still have to prove that they can leverage AI versus being disrupted by it. And I do just do not think they're there yet.”at 20:17

Spotify Technology

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

• Josh Brown · Ritholtz Wealth ManagementBullish

  Spotify's results and guidance strengthen his conviction; it is breaking away from Netflix with room to run.

  Spotify beat estimates with 306 million paid subscribers. Josh expects 14% revenue growth, 33% gross margins up year over year, 788 million monthly active users (up 11%), and guidance for 818 million MAUs and 316 million premium subscribers, adding 10 million net payers. The business is doing great and the stock is decoupling from Netflix. It is still well below its earlier highs on weaker results, so Josh sees a lot of room in the move.

  “But what they had to say and what their guidance was going forward, I think, strengthened my conviction.”at 25:51

CrowdStrike Holdings

• Josh Brown · Ritholtz Wealth ManagementBullish

  CrowdStrike is the best stock in the world; AI spending will require more cybersecurity.

  Josh has been consistent for six years that CrowdStrike is the best stock in the world. He cannot imagine trillions of dollars of AI spending not being matched by stronger and stronger use of cybersecurity. He backs his bullish view on the Mizuho outperform rating and the target raise.

  “I think it's the best stock in the world. ... I can't imagine all of this trillions and trillions of dollars in AI spend not being accompanied with stronger and stronger and stronger use of cybersecurity.”at 29:21

Lockheed Martin

• Rob Sechan · NewEdge WealthBullish

  Lockheed is a great place to be: not expensive, with strong missile demand amid world tensions.

  Lockheed has rectified its F-35 issues. Demand for its missile systems is incredibly healthy, and there is a shortage of this type of product in the market. The stock is up year to date but still not expensive, making it a way to play global tensions.

  “This is a great place to be. The stock is up quite a bit year to date. It's still not expensive.”at 30:00

Union Pacific

• Rob Sechan · NewEdge WealthBullish

  Union Pacific has strong pricing power and is not expensive, a good place to hide.

  Union Pacific is levered to industrial volumes and should keep benefiting from pricing power, as an oligopoly. The stock has performed well but is not too expensive. Rob calls it another great place to hide, though it is sensitive to economic activity slowing sharply.

  “I think there's gonna continue to be quite a bit of pricing power here. ... I think it's another great place to hide.”at 30:42

IQVIA Holdings

• Josh Brown · Ritholtz Wealth ManagementBullish

  IQVIA is a data leader that will win AI drug discovery demand; the stock is working.

  IQVIA got hit in the SaaS apocalypse, but the data is more important than ever. Its quarter had revenue and earnings beats, with adjusted earnings up 12%. R&D bookings up nearly 20% signal it will be the go-to for AI drug discovery. The stock has higher highs and higher lows, up from about 155 in the spring, with room to run.

  “They beat on revenue. They beat on earnings. ... r and d bookings were up almost 20%, and that's your sign that this is the company that's going to be the go to for AI related drug discovery.”at 35:35

Alibaba Group Holding

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

• Rob Sechan · NewEdge WealthBullish

  Alibaba's valuation is reasonable; monetizing its cloud and e-commerce is the open question.

  Sechan's fund bought Alibaba in December 2023 and still holds it, up about 50%. He concedes it has given a lot back. Alibaba faces the same capital-intensity concerns as the rest of the sector. It has a growing cloud business and a dominant e-commerce business, so the key question is whether it can monetize them. He argues that the valuation is much more reasonable.

  “They're suffering from the same capital intensity concerns that you're seeing across the enterprise. They do have a growing cloud business and a dominant ecommerce business.”at 44:41

Anthropic

Across the shows: 40 speakers in other episodes, 23 bullish and 42 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementUncertain

  Anthropic's S-1 shows hundreds of billions in binding compute commitments to Google Cloud and Amazon.

  Brown reads the revised S-1 and says adding up the commitments shows the extent of the obligations. Whether or not Anthropic uses the compute, it will have to honor these deals. He describes hundreds of billions of dollars owed to Google Cloud, Amazon and others. Those contracts create fixed obligations regardless of usage.

  “you very quickly learned the extent of, like, adding up all these commitments. And these are... Whether you use the computer or not, you're gonna honor these deals. This is hundreds of billions of dollars worth of commitments that are gonna go to the Google Cloud, to Amazon”at 47:49

American Express Company

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

• Josh Brown · Ritholtz Wealth ManagementBullish

  A good AmEx print could extend the financials rally, given strong high-end consumer and business spending.

  Brown says AmEx's report tomorrow matters because of consumer spending and business spending. Expectations are for about $20B in revenue, up 9% year over year. If AmEx delivers that, with the usual performance, the high-end consumer looks good. He adds that Capital One's strong report two days earlier helps the case. If AmEx matches what he expects, there could be follow-through to the financials rally.

  “They're expected to do 20,000,000,000 in revenue for the quarter, which would be a 9% increase year over year. If they can do that and the usual, the consumer looks good from our end.”at 49:16

AI infrastructure & data centers

• Rob Sechan · NewEdge Wealth

  Rising cost of capital for AI buildout still leaves margin, since returns exceed the cost of capital.

  Rob agrees the weighted average cost of capital for AI spenders will rise. He argues that forward returns on that spending still leave a margin. The real risk is that expenses rise so much that they compress margins and returns while the cost of capital keeps climbing. He cites David Solomon's view that companies growing faster than their cost of capital will still find the money.

  “So the weighted average cost of capital is going to go up? No question. But the forward returns that they're earning on that, there's still margin in that.”at 5:28

• Jensen Huang · NVIDIA

  Neocloud demand is off the charts, but a capital shortfall is the bottleneck, and it will be solved.

  Jensen says neocloud demand is off the charts and their capabilities are extraordinary. The missing piece is working capital to fund that growth, because demand for capital across many AI sectors exceeds its availability. He expects this to be solved.

  “what is missing in the middle is the working capital to fuel that growth, to fund that growth... The demand of the capital is much greater than than the availability of the capital. That's gonna get solved.”at 9:17

Enterprise AI adoption & AI software

• Josh Brown · Ritholtz Wealth Management

  Enterprise demand for AI is durable; businesses need it to work regardless of who builds data centers.

  Josh argues that the demand side of AI doesn't care which data center its workloads run in. Enterprises have made these technologies central to their businesses and will use Claude, OpenAI, Gemini, or open-weight models. As long as that demand doesn't go away, the key question becomes who captures the economics, which goes to the lowest-cost, fastest builder.

  “The demand side doesn't care who builds the data center. ... As a business owner, as an enterprise, what I care about is that it works.”at 6:48

• Malcolm Ethridge · Capital Area Planning Group

  Enterprises are cutting AI token spend and shifting to cheaper open models, which threatens AI capex payoff.

  CFOs have finally gained control of corporate budgets and are telling teams to stop spending at all costs on AI and to cut token usage. JP Morgan is moving work from frontier models to cheaper open models. An exec there said staff were spending more on tokens than their annual salaries, which they realized was absurd. Companies are moving from experimenting to deploying AI responsibly, and that pullback raises doubts about whether hyperscaler spending will pay off.

  “The other side of that equation that we haven't talked about any at all, which is absolutely ludicrous, is what happens when the companies buying these products refuse to spend the money to buy the products anymore.”at 20:46

Pharma & biotech

• Rob Sechan · NewEdge Wealth

  Healthcare is an overweight that benefits from drug trends and from AI superintelligence usage.

  Rob's fund is overweight health care, which he calls an enormous beneficiary of secular drug trends. He also expects a forward benefit from the use of superintelligence. Health care is one of the places he has rotated to from AI infrastructure after strong early-year performance, and he still likes names like AbbVie.

  “Overweight sector. I think it's an enormous beneficiary of a lot of secular trends in drugs, obviously, but there's also the forward benefit that I think we're gonna see from the usage of superintelligence.”at 36:30

• Malcolm Ethridge · Capital Area Planning Group

  Healthcare is one of the most obvious places where AI deployment will start to make waves.

  Malcolm is warming up to health care after hearing CEOs talk about how AI is speeding up data use and generating growth. He thinks the sector is one of the most obvious places where AI deployment starts to show results, which bodes well for many of its names.

  “I think it bodes well for a lot of the names in the sector. ... I think it's one of the most obvious places that the deployment phase of AI starts to actually make waves.”at 37:38

AI: overall outlook

• Rob Sechan · NewEdge Wealth

  The AI trade underpins the whole economy, so any threat to it will cause market wobbles.

  Rob argues the AI or superintelligence trade, for better or worse, underpins the whole economy. Anything that threatens it will cause a wobble. He points to the current Meta share-class split and the financing pressure around it as one such threat that is playing out live.

  “For better or worse underlies the whole economy, and anything that's gonna be a threat to that is gonna cause a wobble.”at 3:06

AI bubble & tech valuations

• Rob Sechan · NewEdge Wealth

  AI giants' valuation premium has compressed; they still grow above market and will normalize higher.

  Rob expects a normalization period, but the companies will still grow faster than the market. Their valuation premium has compressed to about 9% over the S&P, which reflects higher rates, harder capital raising, and Meta's new share class for equity issuance. He expects investors to eventually decide whether that growth at that price is worth owning, relative to other sectors.

  “So I think there will be a normalization period, and these companies are still going to be growing in above market rates. ... They've rerated to a point where they're trading at a 9% premium, maybe today.”at 13:15

Space economy

• Malcolm Ethridge · Capital Area Planning Group

  Warming to space stocks; sees space as an obvious place where AI deployment starts to make waves.

  Ethridge says he is starting to warm up to the space sector because of what guests on the show have been discussing. He calls space one of the most obvious places where the deployment phase of AI starts to make waves. He offers no specific company data or numbers, so the case is thin.

  “Well, I like the space. I'm starting to warm up to the space based on what these guys are talking about. I think it's one of the most obvious places that the deployment phase of AI starts to actually make waves.”at 37:38

Power demand & the grid

• Josh Brown · Ritholtz Wealth Management

  Power and component suppliers at the tail of the AI capex cycle are exposed to any plateau in spending.

  Brown says suppliers of components and power sit at the tail end of the capex chain. They depend on more and more capex. Meta held its capex outlook rather than raising it, so the spending is levelling off rather than accelerating. Vernova and Vistra fell about 11% and 10%, which Brown ties to that dependence on continued expansion.

  “if you're at the tail end of the caboose, you're the companies supplying the components or building the power and counting on more and more and more and more CapEx as far as the eye can see.”at 45:34

Private credit

• Rob Sechan · NewEdge Wealth

  Private credit funds and banks say companies with solid contracts will get AI buildout financing.

  Sechan says that when he talks to private credit funds and investment banks, they say companies that need financing and have proper contracts will get it. Those lenders can underwrite the growth. He frames the market as a world of haves and have-nots, where contracted borrowers get funded and weaker ones do not. The view is based on conversations with lenders rather than on specific deal data.

  “when you talk to any of the private credit funds, when you talk to the the investment banks, they are saying that the companies that need it and have proper contract will get the financing. We'll be able to underwrite that growth.”at 47:06