Tech Earnings Weigh on the AI Trade 10/29/26

Alphabet

Across the shows: 28 speakers in other episodes, 21 bullish and 10 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementUncertain

  Chatbots now pose real search competition for Alphabet, but the monetization answer is unresolved.

  Brown says the early fear that users would bypass Google for Claude, ChatGPT and Perplexity did not play out at first, since Alphabet leaned into Gemini and AI summaries. He now thinks cannibalization may be arriving, because ChatGPT and Claude have larger user bases and Google faces competition in search for the first time. He does not call it catastrophic and says the market has not decided. He notes query growth is at a five-year high, so people still use Google. But he says AI Mode queries monetize at a lower absolute dollar level, and Google has to find a new model to monetize answers as well as it monetized clicks to sites like Expedia.

  “And maybe now that we've got a larger user base on ChatGPT, on Claude, maybe all of a sudden it's becoming apparent. Hey. Look. Google has competition for the first time in search in its entire history.”at 1:58

• Rob Sechan · NewEdge WealthBullish

  Market is reacting too early on Alphabet; patience pays since it can fund AI from its legacy cash cow.

  Sechen says the market is shifting from rewarding AI spending to demanding proof of AI monetization, and he thinks that shift is a little early for Alphabet. He calls Alphabet the only company that has financed its AI build-out from a legacy business effectively, and the only one combining compute, internal chips, AI models and users. He says Google Cloud was a bright spot, up 103%. He argues the best companies build a second engine to disrupt the first, and Alphabet has had time to figure out AI monetization. The bet on Alphabet failing to monetize AI was a bad one. He also says investors should be ready to stick out the ebbs and flows and would trim on multiple expansion. He notes the desk had reduced to neutral earlier in the year.

  “I think we're in a place where the entire market is moving from where you're getting rewarded for spending on AI to where you're having to prove that you're monetizing AI. I actually think it's a little earlier than it should be personally, and I think it's gonna pay to be patient with Google.”at 4:18

• Liz Thomas · SoFiBullish

  Incumbents that own the customer, like Alphabet, will adapt to AI; don't abandon them yet.

  Thomas argues that companies that own the customer still have the opportunity, so she would not jettison them yet. She compares the AI cycle to the internet, when it took ten to fifteen years for brick-and-mortar companies to monetize online sales, but they were not killed off. She expects Alphabet to morph its business model, which is lumpy and will not happen in one quarter, but she would not bet that large cash-rich incumbents disappear. Scott Wapner pushes back that disappear is too strong a word.

  “It's those companies that own the customer that still have the opportunity, and I wouldn't jettison them yet. Not at all. Because they do own the customer.”at 9:22

• Jim Lebenthal · Cerity PartnersBearish

  Alphabet is underweight: search narrative and negative free cash flow will keep the stock stuck for quarters.

  Lebenthal cut Alphabet to about 3.5% versus a 5.5% S&P 500 weight. He expects the negative search narrative to persist for several months with no visible catalyst to change it. He also points to negative free cash flow from heavy AI spending as a drag. He sees real positives, including TPUs and Google Cloud growing over 100%, and says search can be fixed, for example by truncating AI Mode so users must click through to sources. As a portfolio manager, though, he wants to redeploy into names that can move within a few months, so he expects Alphabet to sit stuck for the next couple of quarters. He adds that a 14% search growth print next quarter would forgive the stock, but a further underperformance would extend the penalty box.

  “Taking it further down underweight to the market. So about three and a half percent is my weighting. S and P five hundred is about five and a half percent. Here's why. I just don't think the negative narrative is gonna change anytime soon.”at 11:22

• Josh Brown · Ritholtz Wealth ManagementBearish

  Alphabet is going free-cash-flow negative and selling stock instead of buying back, with no clear playbook.

  Brown says a raised buyback would be the obvious move in a normal environment, but that is not the environment now. He argues these companies are deliberately going free-cash-flow negative to fund AI spending. After spending a decade buying back stock, they are now issuing stock and going to the market for a reason. He says the at-the-market offerings act like a shelf that caps any rally. He says he does not know what the executive playbook is, and notes this was the second or third consecutive quarter with no buyback announcement.

  “We're not in a normal environment. These companies are deliberately going free cash flow negative. They spent ten years buying back stock. Now they're selling stock.”at 16:20

• Bryant VanCronkhite · Allspring Global InvestmentsBullish

  Alphabet's search news is overblown in the long run, an opportunity for a stock picker.

  VanCronkhite says the Google news was shocking to many people and may be a big opportunity. He thinks the reaction is a bit overblown in the long run. Volatility gives stock pickers inefficiencies to exploit, and he sees Alphabet as a case where differentiation is possible. He argues the market has been trading thematically, and now is a chance to pick stocks. He is also finding opportunities in hyperscalers.

  “We think the Google news is a bit overblown in the long run. We need to rush back into it today, but in the long run, it's overblown.”at 36:24

Microsoft

Across the shows: 29 speakers in other episodes, 24 bullish and 4 bearish calls, past 30 days

• Rob Sechan · NewEdge WealthBullish

  Microsoft is firing on all cylinders: Azure accelerated to 48%, and Office is irreplaceable.

  Sechen says there are some questions about earnings quality because part of Microsoft's revenue is tied to OpenAI, which was a bit of an issue. He is not surprised by lighter capex. But he says Microsoft had a very strong operational quarter, with Azure accelerating from 42% to 48%. He calls it a company that can fire on all cylinders. He also says Office has proved irreplaceable and benefits from the ecosystem, positioning it better than Alphabet, which has had search trouble.

  “it had a very strong quarter operationally. Azure, 42 to 48%, so accelerating. You know, this is a company that can fire on all cylinders, and it is.”at 18:09

• Josh Brown · Ritholtz Wealth ManagementBullish

  Microsoft is reading the room on AI capex by not stacking more spending on top of prior plans.

  Brown says Microsoft did the same thing Oracle did by holding spending steady rather than going further out on capex. The capex number was lower than expected because the delivery timing on a data center slipped. Ignoring that noise, he says Microsoft is not adding another large tranche on top of prior commitments, and he credits the company with reading the room.

  “Ignoring all that noise, what they're not doing anymore is throw 20,000,000,000 on top of 27. They're reading the room.”at 19:00

• Kevin Simpson · Capital Wealth PlanningBullish

  Microsoft's report is strong and Azure is great, but free cash flow fell and expectations are high.

  Simpson says the CapEx delay of about $5 billion is not that imperative in the scheme of things, though it sounds like a big number. Free cash flow was down, and he notes that. He says management is saying all the right things and he is thrilled with the report, looking at the Azure number. He adds that Azure growth sets the bar high for what AWS must deliver the next night.

  “that CapEx delay was only 5,000,000,000... But free cash flow was down. ... They're saying all the right things, and I'm thrilled with the report.”at 19:52

Booking Holdings

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

• Kevin Simpson · Capital Wealth PlanningBullish

  Booking Holdings is oversold on AI disintermediation fears; a cheap starter buy.

  Simpson says Booking has been destroyed by the disintermediation trade, as AI agents could route travel around the company. He sees an opportunity. He looks at the stock fundamentally: 17 times trailing and about 13.5 times forward earnings, with a dividend increase and management buying back shares. He asks whether the company could be disintermediated and says it is possible for any of these names, but he thinks the market is throwing out the baby with the bathwater, because Booking is integrating AI to absorb agent traffic. He has a starter position and reports earnings next week, so he would not follow him in a big way.

  “I think [Booking Holdings] has been destroyed and with this disintermediation play with AI, and I think there's an opportunity here.”at 27:53

• Josh Brown · Ritholtz Wealth ManagementBullish

  Booking can keep working; hotel inventory is hard to secure, so agentic AI will likely partner with booking firms.

  Brown understands the disintermediation argument, but says it has been made in prior eras for different reasons. He argues it is really hard to secure hotel room inventory. A startup cannot simply spin up a list of hotels with available rooms and become Expedia. He thinks agentic AI products will play nice with the companies that have been booking travel for decades. He calls consumer experiences the best part of consumer spending and agrees with Kevin Simpson's play.

  “I think both can continue to work. I understand the argument about disintermediation, but that argument has been made in prior eras for different reasons. In the end, it's really hard to secure hotel room inventory.”at 28:59

Amazon.com

Across the shows: 21 speakers in other episodes, 16 bullish and 5 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementUncertain

  Amazon's blocking of outside shopping bots is a real concern, but its own Rufus bot may defend it.

  Brown says Amazon is blocking outside personal bots from hitting the site or completing transactions. He thinks that concern is absolutely true, but he does not know how big it is or how quickly it will show up in the numbers. Amazon's answer is Rufus, its shopping bot in the site and app. Brown says he is not sure Amazon cannot match or partner with outside agents if users pick a better one, so the threat is not settled.

  “Well, Amazon, basically is blocking other people's personal bots from hitting the site or completing transactions because I think that is absolutely true. That is a concern. I don't know how much of a concern it is or how quickly, like, it'll show up in the numbers.”at 21:21

Expedia Group

• Josh Brown · Ritholtz Wealth ManagementBullish

  Expedia can keep working; AI agents will need its hotel inventory, so disintermediation fears are overdone.

  Brown says he had favored Expedia, and he thinks both Expedia and Booking can keep working. He understands the argument that AI agents will disintermediate travel sites, but argues securing hotel inventory is hard for any new entrant. He expects agentic AI services to work with the established booking companies, which have decades of relationships with hotels and airlines.

  “I favored Expedia, but I do think that... I think both can continue to work.”at 28:59

ServiceNow

Across the shows: 6 speakers in other episodes, 5 bullish and 2 bearish calls, past 30 days

• Rob Sechan · NewEdge WealthBullish

  ServiceNow's selloff is a multiple reset, not fundamental damage from AI; a good time to buy.

  Sechen says ServiceNow is still a wonderful business, up about 60% since the last print. The multiple moved from 20 to 30 and has been rerated back to about 25. He calls this a story of good not being good enough, not fundamental deterioration. The company is still a strong grower with strong free cash flow and is investing in its AI business before seeing monetization. He says it is not being destroyed by AI and it is probably a time to buy.

  “It is still a wonderful business. ... This is a story of good not being good enough, not fundamental deterioration. It's still a strong grower. It's still a strong free cash flow.”at 30:15

Fortinet

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

• Rob Sechan · NewEdge WealthBullish

  Fortinet's selloff on guidance and margins is sympathy; its end-to-end hardware-plus-software model is stickier.

  Sechen says Fortinet was down on a light guidance and gross margin miss, but he thinks many cyber names are down in sympathy and he would be surprised if the reaction is as large as the stock move suggests. Josh Brown argued Fortinet would not win if enterprises consolidate on one platform vendor. Sechen counters that Fortinet is the only company providing end-to-end security, combining software and hardware, which provides a stickier customer base and makes it hard to take over.

  “I think it's tough to take over. They are the only one that provides end to end. The combination of software and hardware provides a stickier base.”at 31:32

RTX

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

• Bryant VanCronkhite · Allspring Global InvestmentsBullish

  Raytheon (RTX) is a favorite; aerospace and defense look more attractive in general.

  VanCronkhite says he likes Raytheon, now part of RTX, a lot right now. He says aerospace and defense in general look more attractive. He pairs the view with his earlier comment that he sees opportunity in defense stocks and aerospace a year from now, reflecting an earnings and macro-driven opportunity set.

  “Aerospace, I like Raytheon a lot right now. Although I would say that aerospace and defense in general is looking more attractive.”at 37:03

Okta

• Josh Brown · Ritholtz Wealth ManagementBullish

  Okta is the incumbent identity pure play; agentic AI makes identity permissioning a must-own trade.

  In an agentic AI future, enterprises and governments will struggle to decide which agents get access to which systems and how to monitor their behaviour, so cybersecurity shifts from defending a perimeter to permissioning and monitoring. Okta is the incumbent identity pure play, with about 20,000 customers, including two-thirds of the Fortune 100. Security vendors have been buying identity assets in 2026, including Palo Alto's $25 billion CyberArk deal, Cisco's SailPoint purchase, and ServiceNow. Okta's roughly $39 billion enterprise value is small next to Palo Alto, which makes it a plausible takeover target, though he says he knows nothing about any M&A. Technically, he sees a potential breakout above $2.35 from about $2.17, with $1.90 as the line where the thesis breaks. He also notes the stock held up against bad news from Fortinet, which he reads as a sign of buyer strength.

  “if you believe in the agentic AI future, and I definitely do, then the one thing that's really obvious is businesses, companies, enterprises, governments, we're gonna have a really difficult time deciding who is who and who is supposed to have this level of access”at 38:10

US Treasuries & yields

• Rob Sechan · NewEdge Wealth

  Fixed income is as attractive as ever as a shock absorber against equity volatility.

  Sechen says one of his two bets is that the shock absorber investors get from fixed income is still as attractive as it has ever been. He pairs this with the view that the AI spending theme will not go away. In the current volatile tech environment, bonds provide a cushion against equity swings.

  “There's two bets I'm making. Number one, the shock absorber that you get from fixed income right now is still as attractive as it's ever been.”at 22:52

• Liz Thomas · SoFi

  Treasuries are a really good alternative to equities in the current lumpy tech market.

  Thomas agrees with Sechen that fixed income, and treasuries in particular, offer a really good alternative to equities. She says she has been pounding the table on treasuries for about a month. Her broader point is that the AI trade is lumpy and no longer rewards anything labeled AI, so investors should be careful where they put dollars and treasuries provide a sound alternative.

  “fixed income, particularly treasuries, which I've been pounding the table about for the last month or so, are offering a really good alternative.”at 24:40

AI infrastructure & data centers

• Rob Sechan · NewEdge Wealth

  Contracted demand for data-center and fiber buildout is far out; a long-term theme that will spend more.

  Sechen looks at the private investment landscape and sees strong demand for products used in data centers, including fiber, with contracted demand stretching far out. He calls this a long-term secular theme that will not go away and says the spending will continue. He admits the next stretch will be tough as the market digests the news, but on the other side it will be explosive. He is positioned as a broadening-out bet on this theme.

  “When we look at the private investment landscape and we see the amount of demand for product, whether it be for fiber or anything that goes into data centers and is supporting this ecosystem, the contracted demand is so... It's far as far out as the eyes can see.”at 22:52

US stock market outlook

• Liz Thomas · SoFi

  Investors are rotating into value, quality and low volatility; momentum has been left for dead.

  Thomas points to the factors investors have rotated into this year. Momentum has been all but left for dead, while value, quality and low volatility are leading. From this she argues investors should be careful where they put their dollars and focus on high-quality, sometimes low-volatility companies. She expects the market to remain lumpy through the end of the year and into 2027 because AI is no longer a blanket buy.

  “If you just look at the factors that investors have rotated into, momentum has been all but left for dead. We've got value. We've got quality. We've got low vol leading that.”at 24:40

AI: overall outlook

• Liz Thomas · SoFi

  AI is early in its innings, with a long way to go before it is integrated into the economy and profitable.

  Thomas separates AI as a technology from AI as an investment theme. She thinks AI is still in the early innings and has a long way to go to be integrated into the economy and businesses, creating profitability for many sectors if not every single sector. On the market side, investors are now more discerning, and simply saying AI no longer makes a stock go up.

  “I think we have to separate the conversation AI as a theme and a technology, which I do still think is in the early innings, and it has a long way to go to be integrated into our economy and businesses and create profitability for a lot of different sectors.”at 24:40

Cybersecurity

• Rob Sechan · NewEdge Wealth

  Cybersecurity selloff is a one-off, not a rewrite, since security is not losing priority in the AI ecosystem.

  Asked whether the reaction is the all-clear to short cyber, Sechen says he believes it is a one-off, not a full rewriting of the sector. Security cannot take a back seat to anything given what is happening in the AI ecosystem. But a rising tide does not lift every boat, so investors need to be selective. He says the software and cyber names should not be treated equally, and he is focused on specific names.

  “I believe it is a one off. I don't believe that this is a full rewriting of the...”at 32:20

Defense

• Bryant VanCronkhite · Allspring Global Investments

  Defense and aerospace stocks offer opportunity over the next year.

  VanCronkhite says the team is finding opportunities in defense and aerospace, and he expects those opportunities to pay off looking back a year from now. He notes that the healthcare sector also looks good. The view is based on the current macro environment and earnings season, which give room to put capital to work.

  “we look back a year from now, seeing opportunity in defense stocks and aerospace.”at 35:38