The Investment Committee Prepares for a Pivotal Week 10/26/26

Anthropic

Across the shows: 50 speakers in other episodes, 35 bullish and 38 bearish calls, past 30 days

• Kate Rooney · CNBCBullish

  Anthropic's cost cuts and rising usage have offset pricing pressure so far; margins near 80%.

  Rooney says the labs are cutting token prices, and each new model comes with a discount. The question is whether usage can offset the price cuts. Anthropic will argue it can cut costs because it is more efficient, keeping margins around 80%, which is unprecedented for a tech company. She says that so far Anthropic has been Teflon from pricing pressure, and its cost cuts help keep enterprises from switching to open-source models. She notes its profit has not yet been fully disclosed.

  “It's a great point that we have seen evidence that they're cutting costs... The question is, can usage offset the price cuts? ... They've sort of been Teflon in some ways from the pricing pressure.”at 22:00

• Anastasia Amoroso · Partners GroupBullish

  Anthropic's customer count rising from 950 to 12,000 shows AI adoption still scaling.

  Amoroso says the top topic among her private portfolio companies is how to embed AI and automate operations, and it is a race. Capabilities improve daily, and more competition drives adoption. She points to Anthropic reporting 12,000 customers as of September 30, up from 950, as evidence the AI trade in public and private markets is still very much scaling.

  “Anthropic itself said they had 12,000 customers, as of, you know, September thirtieth of this year, which is up from 950. And that tells me that AI trade, public and private markets, is still very much scaling.”at 23:28

Alphabet

Across the shows: 13 speakers in other episodes, 11 bullish and 1 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBullish

  Alphabet is extremely cheap for its growth, AI use and cloud; a permanent compounder.

  Weiss says Alphabet's stock has been destroyed and is the most unloved mega cap. He thinks it is extremely cheap given its growth, how it is employing AI, and its cloud business. He expects the stock should rise if it reports an in-line quarter, and calls it a permanent compounder. He says he holds full positions in the mega caps.

  “That stock's been destroyed... So I think that's extremely cheap given their growth, given how they're employing AI, and given their cloud. ... I think the stock should go up. Look where it's come from. Right now, it's the most unloved of all the mega cap stocks.”at 6:19

Meta Platforms

Across the shows: 44 speakers in other episodes, 42 bullish and 20 bearish calls, past 30 days

• Steve Weiss · Short Hills Capital PartnersBullish

  Likes Meta: strong quarter and capex guidance was effectively flat, not raised.

  Weiss thought Meta had a really good quarter. He says the market commentary that Meta raised capex is wrong: Meta said capex would be flat, and it raised the midpoint of its range while the top end stayed the same. He says he still likes the mega caps and expects them to do well, and would buy Meta if it got crushed, even with full positions. He cannot say whether the next move will be lower.

  “Now in terms of the others, I also like Meta quite a bit... I thought really good quarter. They tempered CapEx even though the market... say, oh, they increased CapEx. It's not true. ... They said it's gonna be flat.”at 6:27

EQT

• Joe Terranova · Virtus Investment PartnersBullish

  EQT's Appalachia gas deal fits the AI power trade, since it feeds Northern Virginia's data center alley.

  EQT is buying Range Resources for $13B in an all-stock deal at a 20% premium. Terranova says the deal is about integration in Appalachia, which he calls critically important because it is the fuel source for Northern Virginia, known as Data Center Alley. He calls it incredibly important for AI and says the deal is almost part of the AI universe trade. He adds that EQT has outperformed for several years, spot gas aside, because it can power Northern Virginia.

  “The Appalachia is critically important because it is the fuel source for Northern Virginia, what is known as the Data Center alley. Incredibly important for AI, and this is almost part of that AI universe type trade.”at 39:42

Lockheed Martin

Across the shows: 3 speakers in other episodes, 3 bullish and 0 bearish calls, past 30 days

• Jim Lebenthal · Cerity PartnersBullish

  Likes Lockheed Martin: strong order book and market looking through margin pressure as production ramps.

  Morgan Stanley upgraded Lockheed to overweight and raised its target to $835 from $690. Lebenthal doubts the stock reaches that target but says he very much likes it. He points to the order book, including 850 F-35s over ten years ordered by the US government, and to missile production ramping. The market rose after last week's earnings despite coming margin pressure, which he reads as investors looking through the pressure because production is ramping. He expects estimates to keep rising.

  “I very much like Lockheed Martin right now. We see what the order book is doing. 850 [F-35s] over ten years being ordered by the US government.”at 41:15

Adobe

• Jim Lebenthal · Cerity PartnersUncertain

  Adobe is range-bound; he will decide after December 9 earnings, possibly taking a tax-loss harvest.

  Lebenthal owns Adobe, which has traded around $250 plus or minus $25 since the first-quarter software sell-off and recently set a higher low. He will report on December 9 and then decide. He is giving it one more shot to see if the market rewards good earnings. Otherwise he may use the position as a tax-loss harvest, because it is a loss in an otherwise good portfolio where he has realized gains this year.

  “They're gonna report earnings December 9. After that, I'm gonna make a decision, and I may well use this as a tax loss harvest because as I said, it's a wealth in an otherwise very good portfolio”at 44:26

Palantir Technologies

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

• Joe Terranova · Virtus Investment PartnersBullish

  Palantir looks like it's breaking out ahead of next week's earnings report.

  Terranova wants investors to focus on relative outperformance in software, with several earnings reports coming. He says Palantir looks like it is breaking out and reports next week. The case is a chart read and an upcoming catalyst, with no fundamental argument.

  “In the case of Palantir, looks like it's breaking out. They report next week.”at 45:03

Leidos Holdings

• Steve Weiss · Short Hills Capital PartnersBullish

  Picks Leidos: stock bounced off lows, still below highs, and the defense trade has room to run.

  Weiss's final pick is Leidos. He says the stock has bounced off its lows but is still off its highs, leaving room to recover. He agrees the defense trade has legs to continue. The case is brief and rests mainly on the sector trend.

  “I'm going with Leidos. The stocks had nice bounce off the lows, but still off the highs. I agree that the defense trade has got some legs to continue.”at 45:59

AI infrastructure & data centers

• Steve Weiss · Short Hills Capital Partners

  Stocks peak a year before capex; neoclouds face debt strain, and some won't survive.

  Weiss argues stocks peak about a year before capex spending peaks. He says Musk is right about neoclouds: some, like Lambda with its strong balance sheet, will survive, but others will not. Neoclouds must take on debt, and with rates rising, financing is much tougher to get. Weak neoclouds inform valuations across the group, though he notes neocloud valuations are still ridiculous while mega caps are not.

  “Stocks peak a year before capex spending peaks, not stops, but peaks. And when you're seeing like the neo clouds that I think Musk is absolutely dead on. Some will survive like a Lambda... but others won't.”at 5:22

• Anastasia Amoroso · Partners Group

  Fairly optimistic on hyperscalers reporting this week; their debt is manageable given strong interest coverage.

  Amoroso is fairly optimistic on hyperscalers reporting this week, provided they do not focus on upsizing capex, since that trade no longer works. She says she is looking for about $2.3 trillion in cloud revenue (figure as spoken), and that meeting it would be positive. The key is whether they can sustain their debt, and hyperscalers' interest coverage ratios are significant. Neocloud banks require interest-cost hedging, so rising rates should not suddenly deteriorate their finances. Markets are discerning who has debt under control, and she thinks hyperscalers do.

  “And I will tell you right now, we're looking for about... $2,300,000,000,000 in cloud revenue. So assuming those hyperscalers meet those expectations, I think that's positive... they can sustain the debt levels... if you look at the interest coverage ratios for hyperscalers, they're significant.”at 9:39

• Jim Lebenthal · Cerity Partners

  Funding for AI buildout is available, as SpaceX debt and Meta's offering show, removing a risk.

  Lebenthal says a major risk was answered today: whether funding would be available. SpaceX issued $40 billion of debt and Meta is coming to market for, he believes, $95 billion in securities offerings, with soft roadshows and bankers saying the funding is there. He says this removes a risk. He concedes the return on these investments is a real question, but says that is a 2028 discussion, not a 2026 one.

  “It's also SpaceX that issued $40,000,000,000 of debt. It's also that Meta's coming to market for, I believe, it's $95,000,000,000 in securities offerings... the bankers are saying that the funding is there. It removes a risk.”at 11:00

• Anastasia Amoroso · Partners Group

  Data center stocks have fallen, but 1% vacancy suggests a turnaround could follow the midterms.

  Amoroso says data center stocks are down quite a bit, but vacancy is only about 1%, which is tight supply. She suggests that once the midterm elections pass, the sector could turn around.

  “Data center is down quite a bit, but the vacancy is only 1%. Let's get past the midterms. Could be a good turnaround.”at 46:31

US stock market outlook

• Joe Terranova · Virtus Investment Partners

  Expects a strong November push and year-end rally, with the AI trade participating.

  Terranova finds it hard to believe the market, after vacillating but staying resilient, will fall apart toward year-end. He notes the market has rotated from equal weight back to market-cap weighted, building bridges between sectors to support its resiliency. He likes the deleveraging and watches sentiment and positioning. He expects a very optimistic, strong push in November and finds it difficult to believe the AI trade would not participate. He acknowledges price action looks weak for bulls and that strong earnings reactions are needed in the next few weeks.

  “I have a hard time believing that we're just gonna now fall apart as we move towards the end of the year. I think in November, we will have a very optimistic strong push to the end of the year, and I find it difficult to believe that the AI trade would not participate in that.”at 3:14

• Jim Lebenthal · Cerity Partners

  Expects markets to rally to new highs by year end, led by equal-weight rotation.

  Lebenthal cites growing GDP, good labor markets and excellent profit growth. He notes the equal-weight S&P 500 is outperforming the cap-weighted index year to date. Defensives led recently, but financials and industrials are now leading, which he calls the turn he is looking for. He admits this is only one day, but says the economy is strong and he feels equally certain the market will reach new highs by year end.

  “Underneath those risks, growing GDP, good labor markets, excellent profit growth... I feel equally certain that the markets will rally to new highs by year end.”at 11:00

• Steve Weiss · Short Hills Capital Partners

  Market isn't complacent: S&P near highs, but the average stock sits below its 200-day average.

  Weiss says the S&P 500 is only about 2% off its all-time high, but it has not hit a new high in months. He looks under the surface: the average stock is trading near lows and is not even above its 200-day moving average. He concludes the underlying technicals show a correction has already happened, so there is no complacency in the market.

  “I don't see the complacency in the market... We're only 2% off of an all time high on the S and P... if you take a look at the average stock... We're not even above the two hundred day moving average. So the technicals... don't show a market that's 2% off its high.”at 12:11

Middle East & Iran

• Steve Weiss · Short Hills Capital Partners

  Diplomacy won't work without a subpar deal; attacking oil would be a market disaster.

  Weiss sees the Middle East as the key factor for the market. Stocks are up today on hopes that diplomatic avenues are being pursued, but he argues those efforts have never paid off and never will unless a subpar deal is struck. He says that if the US goes after oil, as he says everyone expects, the market would face a disaster.

  “And for me, a lot of it comes back to what's going to happen in The Middle East... diplomatic avenues are being pursued, but they've never paid off. They never will pay off unless we take a [subpar] deal. But if you go after oil, which everybody says they're gonna do, including The US, then you've got a disaster in the market.”at 4:43

• Joe Terranova · Virtus Investment Partners

  Market is pricing in a Middle East deal; escalation sending oil to $150 is the unpriced risk.

  Terranova argues the consensus, including himself, does not believe the black swan event will happen. He thinks the market is priced for a deal, whether subpar or good. The event the market is not ready for is escalation, with oil spiking toward $150. He puts the odds of that spike at roughly 1-3%, but says investors tend to ignore such risks until they happen.

  “I think the market is priced in a deal, and the black swan event that the market's not ready for is escalation. Oil goes to [$150].”at 14:39

• Anastasia Amoroso · Partners Group

  The Gulf is shifting from a capital source to a direct investment destination in energy, AI and manufacturing.

  Amoroso says the Apollo–Mubadala deal repositions how the Gulf is treated globally. The region has long been a place to source capital, but now investors are moving to invest directly in countries like Abu Dhabi. She cites her firm's presence in Dubai and Abu Dhabi and a new Kuwait office. She sees significant opportunity from the region's technology commitment, its data center and AI push, the need to strengthen energy infrastructure, and manufacturing and digital services.

  “The move is actually to invest directly into the countries like Abu Dhabi... we do believe there's a significant investment opportunity in the region itself... the data center push, the AI push from Abu Dhabi, it comes from energy... So that's highly investable.”at 32:48

US growth & recession risk

• Jim Lebenthal · Cerity Partners

  US economy is strong: GDP projected near 3.5% and unemployment at 4.2%.

  Lebenthal cites GDP growth projected at 3.5% for last quarter and unemployment at 4.2%. He points to everyday activity, such as crowded airports and restaurants on a Monday night, as evidence of an economy that is hopping. He uses these data as the basis for his view that the market turn is coming.

  “GDP growth that right now is projected three and a half percent for last quarter, unemployment at 4.2%... This is an economy that's hopping. It's unquestionably hopping.”at 12:52

Enterprise AI adoption & AI software

• Steve Weiss · Short Hills Capital Partners

  AI usage is rising, notably in healthcare, sustaining the AI trade despite shallow-use reports.

  Weiss says there are many conflicting reports, including Apollo's and Alphabet's, that describe AI use as shallow. That does not trouble him. He expects a major uptick in how AI is used, and says it is already happening predominantly in healthcare, where companies are using it. He thinks this usage sustains the AI trade.

  “There are so many conflicting reports... They're saying, oh, it's so... You know, it's very shallow. That doesn't trouble me. You know, you're going to see a major uptick in how AI is used, and you're seeing it in health care predominantly. They're using it. So I think that sustains it.”at 24:50

Asset managers, brokers & exchanges

• Joe Terranova · Virtus Investment Partners

  Asset management is consolidating; scale matters, requiring cost efficiency, technology and distribution.

  Terranova links the Apollo–Mubadala stake to consolidation in the asset management industry. He says scale matters and requires cost efficiencies, technology and distribution. He also credits Apollo's foresight in moving into unique private market areas such as sports, entertainment and places outside the US, since US real estate has limits.

  “It speaks to the asset management industry that's going through significant consolidation, and scale matters. You have to have the scale. And along with the scale, the requirements are the cost efficiencies, the technology, and the distribution.”at 34:34

Pharma & biotech

• Joe Terranova · Virtus Investment Partners

  Large-cap pharma is working well, and tech benefits should lift their revenue growth over several quarters.

  Terranova says large-cap pharma is working incredibly well, citing Pfizer's 52-week high, Gilead, AbbVie and Amgen, with Eli Lilly reporting Thursday. He thinks the market sees health care as a defensive play, but he argues technology is beginning to benefit these large companies, and revenue acceleration will come in the next several quarters.

  “Large cap pharma, which Amgen is obviously part of, is working incredibly well. ... I also think that we're seeing technology beginning to benefit a lot of these large cap health care companies, and the revenue acceleration is only gonna come forward here in the next several quarters.”at 40:24

Defense

• Anastasia Amoroso · Partners Group

  Defense trade is bullish long term, backed by multiyear US government contracts and reindustrialization.

  Amoroso likes the defense trade, which has taken a back seat to midterm election worries. She cites US government commitments to multiyear contracts and a strong emphasis on reindustrializing and expanding the defense manufacturing base. She calls this bullish both near term and longer term.

  “The fact that the US government is committing to multiyear contracts, and there's this huge emphasis on reindustrialization and expanding the manufacturing base of defense, that's really bullish, not just near term, but longer term.”at 41:56

Software & SaaS

• Anastasia Amoroso · Partners Group

  Fear of software's death is overdone; earnings are solid and valuations have reset, with software 6% off highs.

  Amoroso says the fear of the death of software has been one of the most exaggerated fears this year. Software companies' earnings have held up well, they beat last quarter, and they likely beat this quarter. Valuations have reset nicely, leaving software about 6% below its highs. Longer term, she says the true beneficiary of AI is what can be done with the models, and software may succeed.

  “It's interesting because maybe the fear of the death of software has been one of the most exaggerated fears this year. And if I look at earnings, for example, for software companies, they've held up very nicely. They beat last quarter. They likely beat this quarter.”at 45:15