Doubt but No Fear, SpaceX Reports, Netflix Cleans House, AI Bond Vigilantes, Bending Spoons

Netflix

Across the shows: 4 speakers in other episodes, 2 bullish and 2 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBearish

  Netflix has a attention problem and is losing the engagement race; he trimmed his position.

  He sold half his position around $70 after the stock fell from about $100. Netflix is financially strong, but it has a problem keeping public attention. The concerns are the shows, competition, the firing of the head of content and the head of studio, about 1,000 layoffs, and the decision to stop reporting engagement hours except once a year. He argues the conversation has shifted to Netflix versus TikTok, Instagram and YouTube, which he thinks it cannot win. Netflix is not down enough for him to buy back in.

  “Financially, they're doing great, but they clearly have a problem with keeping the public's attention.”at 3:42

• Michael Batnick · Ritholtz Wealth ManagementBearish

  Netflix's growth is decelerating and YouTube is eating its lunch; he sold his stake.

  Revenue growth was 11.8% year over year, the slowest since 2023 and the fourth straight quarter of deceleration. Guidance came in 0.2% below the midpoint, and 2026 ad revenue is now expected at $2.7B, down from about $3B. Engagement charts keep getting worse because YouTube is taking share, and the content is increasingly short-form. He says the company cannot win that narrative, so he sold the stock at a roughly 20% loss.

  “It's a maturing company. We don't expect the growth to be accelerating... four straight quarters of deceleration, not great on the revenue side. 11.8% year over year, the slowest since 2023.”at 5:31

Space Exploration Technologies

Across the shows: 9 speakers in other episodes, 4 bullish and 4 bearish calls, past 30 days

• Michael Batnick · Ritholtz Wealth ManagementUncertain

  Musk's $500B–$1T revenue target by 2027 is doubtful, but it only needs to seem believable.

  He relays Musk's view that SpaceX annual revenue could land between $500B and $1T by the end of 2027. He says he doesn't know whether it will hit that, but the target only needs to get people to believe it is possible and good enough. The reasoning is mostly about how the target is framed to investors, not the company's fundamentals. The quarter's $14.6B revenue, up 161%, was largely in the superintelligence category.

  “I don't know if he's gonna hit it or not, but by the end of twenty twenty seven have to hit it. He just has to get people to believe that it's possible, and it's good enough.”at 9:12

• Josh Brown · Ritholtz Wealth ManagementBullish

  SpaceX has become a data center business, which undercuts bears who value it as Starlink or aerospace.

  He argues SpaceX became a data center business before its IPO, which changes the story from Starlink and satellite launches. Quarterly revenue reportedly went from $2.5B to $7.5B, and about $14.6B for the quarter was up 161%, with much of it in the superintelligence category. Musk launches new categories and executes enough that investors can envision the TAM, as with Tesla robots. Bears who compare SpaceX to aerospace, defense or AT&T and Verizon are missing where the story is going.

  “It de facto became a data center business, when heretofore people were thinking of it, for the most part, as a combination of Starlink and launching satellites.”at 9:52

Anthropic

Across the shows: 27 speakers in other episodes, 16 bullish and 36 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBullish

  Anthropic's revenue growth is outpacing expenses, the IPO-ready story; losses are largely accounting.

  The headline is about roughly $80B of first-half losses, but he says much of that is accounting, and Michael puts about 80% of it on fair-value changes in convertible notes and other instruments. The losses come from spending to capture fast revenue growth, not from unsold products. Revenue growth outpacing expense growth is what the company needs to show before its IPO in a few weeks. The S-1 shows hundreds of billions of GPU rental and data center commitments, some guaranteed, such as the AWS contract. The company needs to go public and raise money to honor them, and nothing he heard suggests that is off track.

  “Their revenue growth is starting to outpace their growth in their expenses, which is like exactly what they need to show in order to float this thing in a couple of weeks.”at 13:33

Bending Spoons S.p.A.

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

• Josh Brown · Ritholtz Wealth ManagementUncertain

  Bending Spoons' acquisition-driven growth is funded by debt; its leverage and weak organic growth are the bear case.

  He describes the model: buy declining consumer apps cheaply, cut staff, add AI, and pass the cash flow to the parent. Revenue and operating income reportedly doubled last year, and adjusted EPS rose 57%. He then lays out the bear case: consensus hold, Q2 organic growth of only 3%, growth reliant on acquisitions funded by debt, about $5B of long-term debt, interest expense tripling to about 29% of adjusted operating income, and 2.4x leverage. He calls it a wacky business and does not commit to a view.

  “That growth is funded with debt. The company carries almost 5,000,000,000 of long term debt, and their interest expense in q two was a 109,000,000, which is, tripled year over year.”at 35:31

Walmart

Across the shows: 4 speakers in other episodes, 2 bullish and 2 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBullish

  Walmart is taking the opposite approach to Amazon by welcoming AI shopping agents, which is smart.

  Many companies are blocking agentic chatbots from crawling their sites or transacting, and Amazon has said its shopping experience works fine without a helper. Walmart is going the other direction and will take the ecommerce that AI agents such as Instinct or Muse send its way. Josh calls this 'zigging while Amazon's zagged' and says Walmart 'doesn't give a shit' about the agents' traffic, implying Walmart is positioned well for agent-driven commerce. The support is brief and mostly contrastive, so the view is lightly evidenced.

  “Walmart is going in the other direction from Amazon. ... And, they'll take all the ecommerce you wanna send their way with Instinct or Muse. They don't give a shit. Bring it. We'll do it.”at 37:27

US stock market outlook

• Josh Brown · Ritholtz Wealth Management

  Rising oil and rates hurt small caps, but money rotates into mega caps, holding the index up.

  When rates or oil spike, nervous investors sell small, low-value stocks and buy Apple and Microsoft. The flows go into the large caps, which hold up, so the S&P 500 looks fine even as the market's breadth weakens. He calls this perverse and says it explains why bulls are unsatisfied and bears are not getting their outcome this fall.

  “the high oil and high interest rate thing is, like, the best thing for the stock market. Because when people get nervous, they sell all the little stocks that don't matter, and they buy Apple... and Microsoft, which make the market go up.”at 19:06

• Josh Brown · Ritholtz Wealth Management

  Low breadth predicts higher volatility, not lower forward returns, so breadth is a volatility gauge.

  Adam Parker's analysis uses a McClellan summation index regressed over a rolling ten-year window against forward S&P 500 returns. It finds breadth is not a good forward-return predictor. But the same index regressed against market volatility is statistically significant and negative, so low breadth goes with high volatility. Josh says a better use is to expect higher volatility over the next month when many stocks are not participating. That is not a reason to sell large caps like JPMorgan, Berkshire or Cisco.

  “So he says breadth is actually good at predicting volatility, which makes more sense... low breadth is associated with high volatility, and high breadth is associated with low volatility.”at 22:12

• Michael Batnick · Ritholtz Wealth Management

  Good breadth helps stock pickers but not index owners; more breadth doesn't mean the index rises.

  He cites recent strong breadth days, including 378 and 304 S&P 500 stocks up, while the index barely rose. He argues that more breadth being bullish for the index is intuitive but not true, since the good breadth has mainly helped stock pickers. Most people want the index to go up, and that has not been the result.

  “in plain English that [good breadth] has been good for stock pickers. It has not been great for index owners.”at 23:27

AI: overall outlook

• Josh Brown · Ritholtz Wealth Management

  AI usage demand is intact; the feared price war has not happened and nothing signals a demand problem.

  Eisman had worried about a price war in which labs cut consumer AI prices and set off a spiral. Josh says that has not really happened, and nobody is suggesting usage is falling. The contrast is with Netflix, where people are not turning the product on, which is a demand problem. Demand for AI is not in question, so as long as the labs go public and raise money and hyperscalers keep growing their cloud revenue, the AI trade should be fine.

  “There's no demand problem for AI anywhere in sight.”at 17:12

• Michael Batnick · Ritholtz Wealth Management

  The AI trade is all-or-nothing; if it fails, it could take down the whole economy.

  Taking away his main point from the Eisman interview, he says AI either works or doesn't, and nobody knows which. Given the spending involved, the stakes are the whole economy. He does not give a specific view on the probabilities.

  “It's either all gonna work or... none of it's gonna work and nobody knows. Like, you better hope this holds up because it's the whole economy.”at 24:18

Credit markets

• Josh Brown · Ritholtz Wealth Management

  Widening spreads on AI borrowers like CoreWeave and Oracle are healthy market discipline, not a crisis.

  Credit spreads are widening for riskier AI issuers, such as CoreWeave and Oracle, and their borrowing costs are rising. He reads this as bond vigilantes pricing good and bad AI risk, which deflates the bubble without bursting it. He says he would own Meta bonds but would own fewer CoreWeave bonds. The fight to quality in corporate bonds also pulled Treasury yields lower. He calls this healthy and the discipline the market should show.

  “And they are enforcing market discipline where no one else will... I think it's healthy too.”at 26:20

• Michael Batnick · Ritholtz Wealth Management

  Speculative-grade AI credit spreads blowing out is welcome; the market is pricing AI risk appropriately.

  He compares speculative-grade credit spreads in an AI-related basket with those of similarly rated non-AI credit. The AI spreads are blowing out. He sees that as the market sobering up and pricing risk appropriately. It is also a signal to the investment banks that advise the issuers to chill out and not keep pushing deals.

  “So speculative grade credit spreads in the AI related basket and non AI of similarly rated credit... The light blue line blowing out. I think this is such welcome news. The market is sobering up. The market is pricing risk appropriately.”at 28:01

AI infrastructure & data centers

• Michael Batnick · Ritholtz Wealth Management

  Rising rates on CoreWeave debt will slow new capital formation for the AI buildout.

  Semiconductor equipment names fell mainly because of interest rates. Supply coming to market is pricing at high yields, with CoreWeave's debt and the lowest-rated bonds going up to 17%. He says the Eisman discussion pointed to a slowdown in new capital formation as a result, which would constrain the AI buildout's financing.

  “with interest rates on [CoreWeave's] debt and the shittiest rated bonds going up to 17%... You're probably going to see a slowdown in new capital formation.”at 16:26

US Treasuries & yields

• Josh Brown · Ritholtz Wealth Management

  The recent rise in US bond yields mostly reflects better-than-expected economic growth.

  The hosts' shared thesis is that the rise in Treasury yields is mostly about stronger growth. He cites the AI credit market, where a flight to quality in corporate bonds stopped the rise in Treasury yields. He presents that as confirmation of the thesis.

  “This confirms our thesis and Michael Batnick's thesis that the recent rise in US bond yields mostly reflects better than expected economic growth.”at 27:46

Consumer AI products

• Josh Brown · Ritholtz Wealth Management

  Agentic chatbots aren't useless; blocked by companies, they must make deals and will generate revenue.

  Many companies are denying agentic chatbots access, refusing to let them crawl sites or transact. Amazon says its shopping experience works fine without a helper, and airlines, banks and brokerages have also refused. Josh argues this is not a sign that agents are useless. It means they now have to play politics and make deals with these gatekeepers. Once those deals are struck, he expects agents to generate revenue, which he states flatly without a timeline.

  “And so it's not that they're useless now. It's that now they have to play politics, and they have to make deals. ... Now they have to do revenue, and they will.”at 37:15