Tech’s Record Rally, Assessing Amazon’s Valuation, Global Energy Uncertainty 10/7/26

Amazon.com

Across the shows: 3 speakers in other episodes, 0 bullish and 2 bearish calls, past 30 days

• Laura Martin · Needham & CompanyBullish

  Amazon is undervalued; AI agents reach only about 20% of its traffic, with the rest staying in-app.

  Martin argues only about 20% of Amazon's total traffic is exposed to agentic commerce such as Muse or OpenAI Shopper, because the rest comes through the Amazon app, bookmarks or direct search, which AI agents can't reach. She says 67% of users now use AI to search on Amazon's own site, which improves its product. She also argues AI concentrates winners among the largest players with the most complete tech stacks and infrastructure, which she sees as Amazon's advantage.

  “only 20% of its total traffic is exposed to agentic commerce like Muse or OpenAI Shopper. ... The rest are all in app. People just type in Amazon or they have Amazon in their bookmarks or they have the Amazon app and that's where they shop. Those aren't exposed to AI agents.”at 20:35

• Laura Martin · Needham & CompanyBullish

  Amazon is now a cloud company: cloud growing 40% at 35% margins, funded by low-margin e-commerce.

  Martin argues Amazon's economics have shifted to cloud. The cloud is growing 40% at 35% margins, while e-commerce earns about 1% margins and is capital intensive. E-commerce's cash flow funds the cloud build-out. She sees Amazon as becoming more capital light relative to earnings power, since it turns physical data center assets into high-margin businesses, a core competence compared with Google and Meta's shift to heavy capex.

  “Amazon is now a cloud company. The cloud is growing 40% at 35% margins. The e commerce business is funding that because it's a cash cow, but it has 1% margins and it's really capital intensive.”at 22:07

Paramount Skydance

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

• Laura Martin · Needham & CompanyBearish

  Skydance's 7x leverage requires asset sales; public equity is most at risk if the deal fails.

  Martin says Skydance starts at seven times leverage against investment grade at 2.5 times, and has committed to 3.8 times in two years. She can't see how it gets there without selling assets, despite $6 billion of synergies that take years to realize. The public float is only about $5 billion of a roughly $50 billion equity base and a $110 billion enterprise value, so the equity behaves like a levered call option. If it works, value flows to equity holders, but a black swan or rising rates would hurt public shareholders most. She suggests selling or leasing excess real estate and duplicative corporate offices.

  “They must sell assets, in my opinion, because every... Everything they're talking about, like 6,000,000,000 of synergies, synergies take years, plural. And they start at closing today, they have seven times leverage. Investment grade is 2.5 times.”at 23:19

Dr. Ing. h.c. F. Porsche

• Phil LeBeau · CNBCBullish

  Porsche's pivot to fewer, pricier models is smart, backed by brand equity and high-end buyer demand.

  Porsche is moving to be more exclusive and restrictive: fewer model variants, a focus on performance and sports cars, and price increases of about 20%, copying Ferrari's playbook of scarcity pricing. LeBeau calls this smart because Porsche has huge brand equity that resonates with high-end buyers. He notes the problems: the China market that used to drive sales has faded under local competition, and Porsche's exclusivity is thin, since a Macan's difference from BMW or Mercedes competitors is small. The strategy is sound but depends on restoring that exclusivity.

  “That's a smart move. It's got huge brand equity. It is a brand that resonates especially with high end buyers.”at 36:49

Chevron

• David Parkinson · MS NOWBearish

  Isaias could knock out Chevron's 369,000 bpd Pascagoula refinery for an extended period.

  Hurricane Isaias is forecast to strengthen toward category two and make landfall near the Gulf Coast, with the European model clustering tracks on the western side of the cone. That track runs over offshore oil platforms and directly over Chevron's Pascagoula refinery, which processes about 369,000 barrels per day. Parkinson argues that if the refinery goes offline in 100 mile-per-hour winds, it will not restart the next day and will take a while to return, so the storm could hit refining output as well as offshore production.

  “This is Chevron's Pascagoula refinery. It handles about 369,000 barrels of oil... Per day. And so the problem here is that if this one comes offline and you have 100 mile an hour wind, it's not coming back online the next day. It's gonna take a while.”at 42:04

US stock market outlook

• Eric Johnston · Cantor Fitzgerald Asset Management

  Tech stocks are set to break out after a sharp outperformance; he turned bullish on tech in August.

  Johnston says Cantor turned bullish on tech in August and tech has sharply outperformed as a flight to perceived safety, while other assets sold off on rates, oil and a slower IPO calendar. He says he is not selling stocks broadly, only some, and expects the next move up to be a breakout, with a more correlated move across stocks, despite a large wall of worry led by rates.

  “Selling stocks? Yeah. No. Some stocks? I think we're going to break out and it's gonna be somewhat of a more correlated move. So we turned bullish in tech in August, and we've gotten a sharp outperformance. It's almost been a flight to almost perceived safety while everything else has been sold around related to interest rates, related to oil, and related to a slower IPO calendar. But I think that the next move up, I think we're actually going to break out.”at 2:51

• Eric Johnston · Cantor Fitzgerald Asset Management

  S&P 500 is far less rate-sensitive than in 2022 because earnings now ride on AI capex.

  Johnston argues the 2026 S&P 500 differs from 2022, which was before ChatGPT and the AI capex cycle. Most S&P 500 earnings contributions now come from companies selling into the AI capex build-out, which he expects to be largely unaffected by the long end of the curve. He concedes housing and the consumer will feel higher rates, and says a 100bp move above the three-year average of 4.3% on the 10-year is not very significant for spending. Overall, the index's sensitivity to the long end has fallen significantly, with wealth effects offsetting some pressure.

  “the 2022 S&P 500 is very different than the 2026 S&P 500. ... the contributors to earnings are all coming from selling into this CapEx build [out] ... that's likely to be unaffected by the long end of the curve.”at 13:16

US rates & the Fed

• Eric Johnston · Cantor Fitzgerald Asset Management

  Peak Fed hawkishness is already priced in, with markets pricing three hikes by June.

  After the Fed minutes pointed to another hike by year-end, Johnston argues the peak in Fed hawkishness is now in market pricing, with markets pricing about three hikes between now and June. He points to inflation trends: four-month annualized core CPI at 2.1% and super core at about 1.6-1.8%, with wage growth under some pressure. He says the long end of the curve is doing some of the work needed to bring inflation down, so the rate path is probably close to peak.

  “I think the peak Fed hawkishness is now priced in. So the market's pricing in, you know, three hikes basically between now and June. I think the long end of the curve is doing some of the work that was, you know, was necessary to try to bring down inflation.”at 7:25

US Treasuries & yields

• Kim Parlan · Chi Wealth

  Long-end yields will keep rising on refinancing and hyperscaler debt supply; breaking point roughly 20bp away.

  Parlan argues every input into long-end yields points higher. Less international buying and inflation pressure are part of it, but the biggest drivers are the five-to-seven-year refinancing wave for bonds issued in 2020-2021, which creates a tidal wave of supply, and crowding out from hyperscaler debt funding capex. He sees a catch-22: a more concentrated equity market tied to capex adds stress to equity CDS. He says the back end is about 20bp from breaking things, and the speed of the move matters more than the level. A wall-of-worry rally can persist near term, but a sudden 20bp move along the curve would break things quickly.

  “If you look at every single factor that would go into the input of the long end of the curve, every single one points to continued increase in the back end of the curve.”at 8:56

Credit markets

• Kim Parlan · Chi Wealth

  Corporate and sovereign credit default swaps breaking out; a buyer's strike is raising risk premium.

  Parlan says that over the last month, credit default swaps have been breaking out across corporate and sovereign credit, and this is a sign of rising risk premium. He reads it as investors demanding more compensation for taking on risk, a buyer's strike. He notes French bond stress as a sign this is spreading internationally, and says this is something to watch closely because the back end of the curve is starting to break things.

  “We are seeing that. Credit default swaps in the last month across the board, whether it's corporate or sovereign, are starting to really break out. That is a sign of risk premium increase, and that is a basically a buyer's strike.”at 9:59

US elections & politics

• Eric Johnston · Cantor Fitzgerald Asset Management

  Midterms won't shock markets; no veto-proof majority, and post-midterm six-month returns historically strong.

  Johnston says a Democratic House is widely expected and the Senate is up for grabs, but the market will not be shocked and there won't be a veto-proof majority, so legislation is limited. Republicans keep the White House, so noise and investigations will rise, but he doesn't see a broad impact. He cites 19 midterms since 1950, with the market up six months later and average and median returns of about 14% over that window. He expects the result to be a clearing event where AI-related noise also falls, and government shutdowns have only mattered for a few days.

  “The market will not be shocked, and there won't be a veto proof majority. ... Since 1950, there's been 19 midterm elections. Six months later, the market's been green. Average and median performance has been about 14% over that six month period.”at 14:44

Oil & fuels

• Helima Croft · RBC Capital Markets

  Ukraine's refinery strikes are worsening the diesel shortage; no Russian refining turnaround soon.

  Croft says she has been following this story since summer because it is central to the diesel market. She notes that the White House has repeatedly asked Ukraine not to target Russian energy infrastructure, because refinery attacks are contributing to diesel problems. She says Russian refining assets have been heavily hit, with about 50% reportedly affected and possibly offline, so a turnaround in Russia's refining sector is not likely anytime soon.

  “because the refinery attacks are contributing to the diesel problems that we're facing here.”at 29:05

Russia & Ukraine

• Helima Croft · RBC Capital Markets

  Ukraine shows no sign of halting strikes on Russian energy despite Washington's requests.

  Croft argues Ukraine is disregarding Washington's requests to stop hitting energy infrastructure. Reduced US assistance has pushed Kyiv to try to defund Russia's war effort by hitting its energy sector. She sees no indication of Ukraine pulling back, and notes Russia has retaliated by offering a mutual halt only if Ukraine stops, so both sides remain locked in. She expects energy to stay in the line of fire.

  “And Ukraine took the position that if you're not gonna fund us, we have to at least try to defund Russia's war ATM. So there's no indication that Ukraine is pulling back on these attacks.”at 30:08

Shipping, trucking & logistics

• Helima Croft · RBC Capital Markets

  Shipping has become a crisis; freight costs make paper oil prices understate what refiners really pay.

  Croft argues the oil market is now a shipping crisis. Refiners face exorbitant freight costs and crew costs, with some captains demanding $100,000 a month to sail through Hormuz because crews fear for their lives. She says barrels are still moving, but the question is at what cost. The paper price doesn't reflect what is happening in the physical market, because sourcing refiners pay more for the physical barrels, even if the futures price falls.

  “This is now a shipping crisis, and this is the challenge again when we think about the price a refinery has to pay, exorbitant shipping costs, exorbitant costs for crews. Some ship captains are commanding a $100,000 a month to sail through Hormuz.”at 31:20