Elon Musk made promises, Wall Street argued about them, and the actual number of driverless miles stayed small enough to ignore. In July, Tesla’s unsupervised fleet had logged about 380,000 miles in total.

That changed over the summer. Tesla now has a growth curve it can point to, and one of Wall Street’s bigger Tesla bulls says the curve just bent upward.

If you own Tesla, or an index fund where it ranks among the biggest holdings, this is the number the stock now trades on. Car sales still pay the bills, but the Robotaxi is what investors are paying for.

That makes the pace of growth, not just the promise, the thing worth watching. A service that adds a few thousand miles a month is a science project. One that doubles every few weeks starts to look like a business.

However, a less flattering detail sits a few pages deeper in the same research.

Tesla’s (TSLA) Robotaxi service “has hit an inflection point,” Bank of America analyst Alexander Perry wrote in an Oct. 22 research note reviewed by TheStreet.

He kept a Buy rating and a $460 price objective, about 19% above the $386.47 price the bank used, while trimming his 2027 earnings estimate to $2.26 a share from $2.47.

Tesla’s Robotaxi miles doubled in about four weeks

The bank’s math is simple. Unsupervised miles grew from 380,000 on July 22 to 1 million on Sept. 3, then to roughly 2 million by Sept. 30, Perry wrote.

Weekly growth sped up from 17% to about 20% after Tesla added the two-seat Cybercab to its Austin fleet, the note said. Cybercabs now make up 45% of the Texas fleet, according to the bank.

Tesla’s own executives described the same surge on the Oct. 21 earnings call. “Accumulative unsupervised miles 8x in the quarter, as we had weekly double-digit growth throughout the quarter,” said Chief Financial Officer Vaibhav Taneja.

Related: Tesla Robotaxi prices just jumped. Here is what riders pay now

Production is no longer the bottleneck, Tesla says. “Right now, we’re building at the rate that the Robotaxi service needs the vehicles,” said Lars Moravy, Tesla’s vice president of vehicle engineering.

Perry credited the software. “We believe TSLA’s comfort in scaling its robotaxi service more rapidly is being enabled by running on a more advanced version of FSD [Full Self-Driving] compared to the consumer fleet,” he wrote.

Why Tesla’s base business still matters

Under the Robotaxi story, Tesla’s quarter was mixed. Revenue was flat at $28.05 billion, while adjusted earnings of 48 cents a share beat estimates, Electrek reported.

The auto business did its job. Automotive gross margin, excluding regulatory credits, rose to 18.1% from 15.4% a year earlier, according to Electrek.

More Tesla:

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Here is what else stood out in the quarter, according to the bank and coverage of the results:

• More than 75% of North American buyers signed up for paid Full Self-Driving at delivery, up from more than 55% in the second quarter, according to the Bank of America note.
• Operating expenses jumped 39%, and research and development spending rose 69% to $2.76 billion, Electrek reported.
• Tesla cut its 2026 capital spending target to about $20 billion from $25 billion, Taneja said on the call.
• Also during the call, Musk said Tesla is “almost sold out of all Megapacks for 2027” as data centers buy its batteries.

The shares still slipped. Tesla was down about 1% in late-morning trading on Oct. 22.

The free cash flow bill arrives first

This is the part of the note I spent the most time on. Perry’s model has Tesla’s free cash flow turning negative, at about minus $4.6 billion in 2026 and minus $11.3 billion in 2027.

That is a sharp swing from the $1.53 billion Tesla generated in the third quarter alone, and from the $6.2 billion the bank shows for all of 2025. The model also has capital spending rising to about $25.4 billion in 2027 and Tesla adding $9.5 billion in debt that year.

In my analysis, that is the real trade-off investors are signing up for. Tesla is funding Robotaxis, Optimus robots, and AI chips at the same time, and the bank expects the cash to flow out well before Robotaxi profits flow in.

Electrek‘s Fred Lambert flagged a related problem. With only about $13 billion spent through September, he wrote, “either Q4 spending explodes, or the 2026 plan is quietly slipping into 2027.”

Waymo still has a huge head start

Two million miles is real progress, but scale matters. Waymo, owned by Alphabet (GOOGL), had driven 171 million fully autonomous miles by the end of 2025, according to Sherwood News, citing the company.

By that measure, Tesla’s total is a little over 1% of where Waymo stood 10 months ago. At 20% weekly growth, though, Tesla’s miles would double roughly every four weeks, which is why Perry sees the curve as the story.

Costs still have to come down. “Are we at our goal of $0.30 today? No,” Taneja said of Tesla’s target cost per mile, adding that the company sees “a path” to get there.

Regular Tesla owners will wait longer. Ashok Elluswamy, Tesla’s vice president of AI software, said “somewhere around Q2 next year” is when some customer cars could get unsupervised self-driving.

Optimus and Megapacks are the next catalysts

Perry sees the Robotaxi business turning into a real profit line within about 14 months, and he expects Tesla’s other new products to help along the way.

Optimus production has started on Fremont’s high-volume line, but reaching about 1 million units a year “will likely take at least a year,” he wrote. Megapack prices and margins should benefit in the fourth quarter and 2027 as demand outpaces supply, the note said.

Much will likely depend, however, on whether Tesla can keep the 20% weekly pace once the novelty fades. Growth from a small base is the easiest kind to post.

Perry’s verdict was clear. “We reiterate our Buy rating and $460 PO [price objective] as we see TSLA moving past early autonomy monetization, with Robotaxi a meaningful earnings driver by YE27 [the end of 2027].”

Related: Tesla stock gets a surprising SpaceX reset

What interests me most is how quickly a service like Netflix can go from being an occasional source of entertainment to something people rarely think about giving up. I remember once telling myself I was done watching TV series because I kept getting hooked. 

One episode would turn into another, and before I knew it, I’d spent hours on Netflix. So I decided to stick to movies instead. But even then, I often found myself looking for something else to watch. That’s the thing about Netflix: there’s always something pulling you back.

Also Read: Netflix’s content shakeup lands as Wall Street loses patience

Millions of people share that habit. Netflix (NFLX) now has more than 325 million paid subscribers, nearly double its closest rival, and an audience approaching 1 billion people, Netflix said in its shareholder letter. 

In its third quarter, reported Oct. 20, 2026, revenue rose 12% to $12.87 billion, operating margin hit 34.6% from 28.2% a year ago, and diluted EPS jumped 49% to $0.87 vs. $0.59 in Q3’25.

Pershing Square’s second-quarter fiscal 2026 investor letter mentioned that Netflix has “effectively won the streaming wars.” 

Founder Bill Ackman went further on CNBC’s Squawk on the Street, calling Netflix a “high-growth utility,” on Oct. 22. However, Netflix has cost Ackman dearly before, and not every number this quarter was perfect.

Ackman returns to Netflix after a $400 million loss

Back in August, my colleague Peace Longe covered Pershing Square when it disclosed a new Netflix position of 3.15 million shares, about 4.9% of its portfolio. 

Ackman bought more than 3 million shares in early 2022 and sold the whole stake about three months later, after Netflix reported its first subscriber decline in a decade. The loss was more than $400 million.

His reason then was predictability. Changes to Netflix’s business model made results too hard to forecast for a fund that runs a small number of large bets. Four years later, he sees a clear leader whose scale allows it to spend more on shows while maintaining strong margins.

More Netflix:

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He also says the price is right. Ackman said the stock trades near 18x earnings, one of its lowest valuations in history, with earnings growth he expects in the mid-to-high teens. 

He noted that the two now trade at similar multiples, whereas four years ago, the gap between earnings and cash flow was large. Netflix generated $2.88 billion in free cash flow in the third quarter, and operating income rose 37% to $4.46 billion.

What Netflix’s latest numbers show about its global customers

Growth is global. Revenue in the U.S. and Canada was $5.63 billion, up 11%. Europe, the Middle East and Africa brought in $4.11 billion, up 11% (9% excluding currency), Latin America $1.60 billion, up 17%, and Asia-Pacific $1.54 billion, up 12%.

India shows what that looks like on the ground. According to the Q3 report, Netflix had its largest quarter of paid net additions there, aided by a loyalty bundle with Flipkart, and revenue grew about 18% excluding currency. View hours rose 24%. Across the service, non-English content now makes up more than a third of viewing, up from under 10% a decade ago.

Related: Netflix Q3 2026 Earnings: Recap of $NFLX Earnings, Outlook

I find Netflix’s growing focus on international content particularly interesting. It’s appealing to see a global streaming platform finding stories from different cultures and languages, rather than just Hollywood productions. It helps explain why Netflix is attracting viewers far beyond the U.S.

Customers are sticking. Netflix said churn improved year over year globally and in the U.S., and that members responded to 2026 price increases as expected, with subscription revenue growth driven by more members and pricing. That matters to Ackman, who says it is hard to get someone to cancel and that he doesn’t know who would displace Netflix.

Netflix also repurchased 63.9 million shares for $4.8 billion, its largest quarterly buyback ever, which Ackman put at about 3% of outstanding shares.

Ackman sees disappointment as the opportunity

Not everything beats. Netflix cut its 2026 advertising revenue outlook to about $2.7 billion from about $3 billion, citing a slower rollout of ad product capabilities. Netflix says it plans to bring the ad tier to 15 more countries in 2027, starting in March across nine European, Middle Eastern and African markets, Colombia, Peru and New Zealand.

Ackman acknowledged the need for bigger hits like Squid Game, saying management is adjusting the team. In fact, he called management excellent. 

He argues that short-term investors are always looking for something to be disappointed about, and that a cheaper stock helps Pershing Square because Netflix then buys back more shares. He expects a return well into the 20s per year.

For investors, the story is the contrast. In 2022, a decline in subscribers was enough to make Ackman walk away. Now he is betting that a steadier, cash-rich Netflix can survive a few soft spots.

More Stocks News

• Bank of America resets Tesla forecast as Robotaxi miles double
• Netflix is losing ground to YouTube
• Goldman Sachs warns on the Hormuz crisis and rising fuel costs
• Seagate’s booming business comes with an unexpected twist

And even when I move files to the cloud, that information still has to live somewhere. Somewhere, a data center is holding those files, and demand for storage keeps growing.

Seagate (STX) closed fiscal 2026 with $12.2 billion in revenue, up 34%, non-GAAP EPS of $15.58, and a record $3.1 billion in free cash flow. In the fourth quarter alone, it earned non-GAAP EPS of $5.71 on $3.6 billion in revenue.

In the fiscal year 2026 report, CEO Dave Mosley said AI is speeding up data creation, giving the company “durable long-term demand for mass capacity storage.”

Seagate is well positioned to address strengthening exabyte demand through our Mozaic platform and differentiated HAMR technology roadmap, enabling customers to scale efficiently while supporting our ability to drive profitable growth and value creation.

He added that cloud data-center demand is driving results and that he sees the momentum continuing in 2027. However, one manufacturing hurdle could limit how much of that demand Seagate can turn into sales.

Also Read: Seagate Technology Holdings PLC Latest News

Seagate’s demand is running ahead of plan

In a note shared with TheStreet, Bank of America reiterated its Buy rating and raised its price target to $1,200 from $1,150. BofA says demand for nearline hard drives, the kind used in data centers and cloud storage, should stay above Seagate’s long-term target of mid-20% annual growth in exabyte shipments. 

BofA built the target on 16x fiscal 2028 EPS of $76.24, reflecting a stronger growth outlook and margins approaching peak levels. The bank expects favorable pricing and margins to persist into 2028.

The market has noticed already. Seagate shares have returned 133.94% this year, 200.36% over the last 1 year, and 922.11% over the last three, according to Yahoo Finance.

More Bank of America:

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• Bank of America just drew a line in the sand for the stock market

Seagate reports fiscal first-quarter 2027 results Oct. 27 after the close. Seagate guided to revenue of $4.1 billion, plus or minus $100 million, and non-GAAP EPS of $7.30, plus or minus 20 cents, including the dilutive impact of its 2028 exchangeable notes.

Bank of America expects $4.2 billion and $7.60 at the top of the revenue range, and above the EPS range. Consensus is $4.14 billion and $7.41. Seagate’s guidance assumes minimal impact from tariffs or the conflict in the Middle East.

Why AI is pulling Seagate’s prices higher

Pricing is doing much of the work. The bank forecasts revenue per terabyte to be up about 22% year over year in the first quarter and about 20% in the following quarters, and with sequential revenue and profit growth through fiscal 2027. It raised its fiscal 2027 revenue estimate to $18.7 billion from $17.5 billion and EPS to $36.53 from $32.06.

The fourth quarter showed a margin effect, with non-GAAP gross margin of 52.7% compared to 46.1% for the full year. Seagate retired $302 million in debt and returned $283 million to shareholders in the quarter.

Related: BofA sees more upside in Seagate’s AI storage trade

From my side of the screen, I see how quickly storage needs can grow. Between work documents, downloaded files, and everything I keep backed up. What once seemed like plenty of space doesn’t feel like much anymore. And I certainly know I’m not the only one noticing.

That demand is physical. Seagate is moving customers from conventional perpendicular magnetic recording drives to heat-assisted magnetic recording, or HAMR, which should lower the cost per terabyte and support margins. Its Mozaic platform is built to let customers scale efficiently, Mosley said, as AI makes data more valuable.

Here is the catch. Bank of America warns that Seagate’s growth could be limited by how quickly it improves production yields on its Mozaic 4+ platform. Yield is the share of drives that come off the line working, and a slow ramp would cap supply while demand stays strong.

Bank of America sees $1,200, but the chart calls for a little patience

My own read of the chart is that it’s not the time to strike yet. Seagate has printed three straight red bearish candles. This week is the fourth. I am sure you are not trying to catch a falling knife. It’s a deep pullback from its June 2026 all-time high of $1,145. 

It may find support around $560 on a weekly ascending trendline that has held since July 2025 and tested more than five times.

The relative strength index is at 42, still above the 30 level that signals oversold levels. In past tests of the 27-30 zone, going back to 2016, the stock bounced aggressively. 

A bounce around those key support levels, plus a strong Oct. 27 report, would strengthen the case, but that is a read of the chart. If bullish confirmations appear, I think it would be the best timing to buy your shares to maximize your returns.

For investors, Bank of America’s message is that demand is strong and pricing and margins should hold into 2028. The open question is whether Seagate can build enough high-yield drives to meet it. If the Oct. 27 report shows the yield ramp on track, the bank’s case holds.

More Stocks News

• Bank of America resets Tesla forecast as Robotaxi miles double
• Netflix is losing ground to YouTube
• Goldman Sachs warns on the Hormuz crisis and rising fuel costs
• Bill Ackman makes a striking claim on streaming giant he dumped at a $400 million loss

Sacks, the personal-finance creator behind the Mrs. Dow Jones brand, is pushing back on one of the most persistent assumptions in American financial culture: that owning a home is what responsible adults do.

She argues that although the pressure to buy is real, the math often is not, and that renting can be the smarter move for people who are honest about their circumstances.

“We all still have this idea in our head that when we own a home, that’s when we’re going to be an adult,” Sacks told Fortune. “But we have to rethink that, because many of us are never going to own a home.”

Also read: Jeff Bezos has a blunt answer for why housing is so expensive

The case against treating homeownership as a milestone

Sacks’ position is not that homeownership is bad. It is that buying a home because you feel like you are supposed to is a financial mistake, she said, according to Fortune.

She is waiting to reach a specific investment benchmark before she considers buying. Until then, the money that would go toward a down payment is going into the market. She sees that as the better use of capital for her situation right now.

“I would only buy as a lifestyle choice, never as an investment choice,” she said.

Her concern with the investment framing is that homes carry costs most buyers underestimate. The mortgage is the beginning. Property taxes, insurance, repairs, maintenance and renovations layer on top.

Sacks said that if she ever does buy, she expects “it’s going to be a money trap.” She was not ruling out homeownership. She was acknowledging that the costs of ownership do not stop at the purchase price.

How far home prices have outrun young buyers’ incomes

The numbers are not hard to find. Home values rose 30% in real terms between 2019 and 2024. Incomes for households under 40 went up 9% over the same period, according to Pew Research Center.

Zillow ran the numbers as of September 2026. Buying a typical home required household income of around $121,500, using a 10% down payment on a standard 30-year mortgage. To rent a comparable place, $77,300 was enough.

That gap does not close easily. It has been widening for years, and nothing on the horizon suggests a quick reversal.

That $44,000 spread is what is pushing buyers to wait, downsize, or give up on the idea altogether. For many people, the first home is no longer a question of when. It is a question of whether.

What renting actually buys you

The argument that rent is wasted money has been repeated so often it gets treated as a law. It is not.

A large down payment is capital that leaves the market. It cannot go into a retirement account, pay down higher-interest debt, or sit in an emergency fund.

For someone who lacks stable income, is planning to move within a few years, or lives in a market where prices are high relative to rents, keeping that capital liquid is not a consolation prize. It is a strategy.

More Real Estate:

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A home can build wealth. It usually does when the buyer has enough cash to cover the full cost of ownership and stays put long enough to make back the transaction fees.

Take either of those out of the equation, and the case for buying gets harder to make.

The risk of trying to close the affordability gap fast

Sacks had something to say about what happens when people feel priced out. Some start reaching for faster fixes. She named prediction markets as an example, arguing that platforms packaging speculative bets as financial strategy are selling something that sounds like investing but is not.

Fortune cited research from Northwestern University and the University of Chicago showing that when buying feels out of reach, some households start taking bigger swings elsewhere. They treat volatile assets as a backup plan for building the wealth a home was supposed to provide. Most of the time, that trade does not go well.

Steady saving and low-cost investing are not compelling content. They are, however, the approach that holds up when the shortcuts do not.

Questions to ask before you buy a home

For buyers who are close to a decision, Sacks’s framework comes down to a few practical tests.

• Can you cover the full cost of ownership without gutting your savings?
• Do you plan to stay long enough for buying to make financial sense?
• Is your income stable enough to carry a 30-year commitment through a downturn?

And underneath all of it, the question she keeps coming back to: Are you buying because you want the home, or because you feel like you are running out of time to be the kind of person who owns one?

The answer to that last question, she argues, should drive the decision more than any of the others.

Related: Goldman Sachs has a new warning for the housing market for 2027

Wall Street mostly bought it. At least 13 analysts raised their price targets after the report, yet the stock still fell sharply by midday on Oct. 22 as chipmakers and other big tech names slid alongside it. That gap between analyst enthusiasm and investor nerves is where the real story sits.

Bank of America raised its Meta price target to $845 from $810

Bank of America raised its price target on Meta Platforms to $845 from $810 and kept its buy rating. The new target implies an upside of roughly 21%, a strong vote of confidence in a company spending at a historic pace.

Also read: Meta Muse gives AMD and Intel investors a reason to cheer

The bank pointed to strong revenue growth driven by continued AI improvements in Meta’s core advertising business. It also argued that Meta’s base of about 3.6 billion users and 500 million enterprises gives it a running start in getting people to adopt new AI services. It added that growing visibility into AI monetization in 2027 should boost confidence in the returns on that spending.

Bank of America was far from alone.

JPMorgan lifted its target to $940 from $920, while UBS moved to $892 from $884, both keeping bullish ratings, with JPMorgan citing strong advertising, video growth and early momentum in Muse. Wells Fargo was a rare exception, trimming its target slightly even as it kept an overweight rating.

Not every firm moved in the same direction, but the overall tilt is bullish. MarketBeat puts the consensus at moderate buy, with an average target of $815.92. Bank of America’s $845 sits above that midpoint, with room still left before the most aggressive calls.

Meta third-quarter beat behind the upgrade

The optimism starts with the top line. Meta’s revenue rose 26% from a year earlier to $64.6 billion, beating expectations, and the company guided to $73 billion to $76 billion for the fourth quarter, according to Meta. Shares rose in after-hours trading as investors first reacted to the numbers.

Profit looked messier on paper. Meta reported earnings of $3.83 a share after taking a $9.89 billion legal charge tied to a settlement with 52 state attorneys general over teen mental health, according to Meta’s earnings release. Excluding that charge, earnings came in at $7.40 a share.

The ad engine is doing the heavy lifting. Ad impressions rose 10% from a year earlier, while the average price per ad climbed 14%. Rising prices suggest advertisers are willing to pay more for the sharper targeting that AI tools are increasingly making possible.

New products are adding to the case. Meta launched Muse on Sept. 8 as a personal AI agent with a free tier alongside paid subscriptions at $20 and $100 a month. The company is exploring commerce opportunities through it, and analysts expect the revenue payoff to come later, through areas such as agentic commerce and customer service.

Meta spending, dilution and legal bills

The price of all this ambition is steep. Meta narrowed its 2026 capital spending forecast to $135 billion to $145 billion and raised its full-year expense outlook to account for the legal charge, according to Meta. The company also said it plans to keep investing aggressively in AI next year.

Investors also have to think about a new class of stock. Meta will issue one nonvoting Class C share for each existing share, and it expects to sell Class C stock from time to time to raise capital, pay employees and fund acquisitions.

Entities tied to Zuckerberg and Priscilla Chan hold 56.1% of the voting power, so critics note that shareholders bear the economic burden of dilution while Zuckerberg retains control.

Even Bank of America acknowledged the friction. The bank said expense increases and potential capital raises will remain concerns, and it flagged Google’s agentic AI launch and OpenAI’s advertising ramp as risks. It still sees the valuation as attractive given the size of the AI opportunity.

More Meta:

• Meta Muse gives AMD and Intel investors a reason to cheer
• Meta and Microsoft just sent employees a memo about Anthropic
• Bank of America sends a stark message to Meta stock investors

Legal costs are another wild card. A New Mexico judge ordered Meta on Oct. 21 to pay the state $25 billion after a jury found it misled consumers about privacy on Facebook, and the company has said it plans to appeal the verdict. An appeal could keep that money tied up for some time.

What Meta investors should watch next

The new share class comes first. The Class C stock takes effect on Jan. 19, 2027, and Meta expects its Class A shares to trade roughly as if they had split two-for-one once the dividend is paid. Any sales of Class C stock after that will show how Meta plans to fund its buildout.

Next year’s spending plan is the second big test. Meta has not yet given a full-year 2027 outlook, but JPMorgan has already projected capital spending of $243 billion in 2027, well above Wall Street consensus, TheStreet reported. Investors will be watching closely for Meta’s own number, since heavy AI spending has been the central worry weighing on the stock.

Reality Labs is the other number worth tracking. The division is headed for an $18 billion to $19 billion loss this year, less than 2025 but still a heavy drag, with the tab since 2020 now closing in on $90 billion. Susan Li, Meta’s CFO, said regulators in several markets are still pressing on youth safety. Whether those bills grow or stabilize is what will ultimately test the conviction behind Bank of America’s upgrade.

Related: OpenAI makes development moves to counter SpaceX and Meta

That surprise could not come at a better time for home buyers. Mortgage rates had climbed for seven straight weeks to three-year highs, squeezing buyers’ purchasing power, before finally easing. Whether the relief lasts depends on what the Federal Reserve does next.

Traders pull back on Fed hike bets

The bond rally reflects a fast change of heart about the Fed, which meets on Oct. 28. Fed funds futures put the odds of an October hike at about 5%, down from 15% on Oct. 21 and 37% at the end of September, while traders now see roughly a 75% chance of a hike by December, as reported by Yahoo Finance. As recently as Oct. 21, a year-end move had been fully priced in.

Also read: Something shifted in the housing market, and sellers felt it first

Fed officials helped cool those expectations. Governor Christopher Waller, New York Fed President John Williams and Vice Chair Philip Jefferson have all signaled that the central bank could wait, according to TheStreet. Chair Kevin Warsh has also said he does not prejudge meetings.

The backdrop still leans hawkish. The Fed raised its benchmark rate by a quarter point to a range of 3.75% to 4% on Sept. 16, its first increase since 2023. The vote was unanimous, a clear sign that officials were united on the need to fight inflation.

Consumers are still feeling the energy shock in their wallets. Consumer prices rose 3.7% from a year earlier in September, slightly above forecasts, with gasoline up 34.2% over the same stretch. That is exactly why traders had been bracing for the Fed to keep tightening.

Why oil isn’t rattling bond investors

Here is the twist. The five-year breakeven rate, which compares regular Treasury bonds with inflation-protected securities to gauge expected inflation, points to price growth of about 2.4% a year over the next five years, unchanged from before the war. In other words, investors are not betting on a lasting inflation wave.

A weaker stock market is adding fuel to the rally. Investors have been moving money into government bonds as stock and tech markets cool, and a sharp drop in September housing starts added to the cautious mood. When money rushes into bonds, prices rise and yields fall.

The selling pressure on the other side appears to be fading too. Bloomberg strategist Cameron Crise saw signs that some large investors were scrambling to unwind bets on higher rates, and the rally held up through the afternoon sale of five-year inflation-protected Treasuries, according to Yahoo Finance.

Stable inflation expectations matter a great deal to policymakers. Waller has pointed to energy costs tied to the Iran war, AI-driven price increases and looming tariffs, and said his biggest worry is that higher inflation expectations become entrenched. If markets keep signaling they are not, the case for rushing into another hike weakens.

Mortgage rates ease as housing cracks show

Borrowers are already seeing a small benefit. The average 30-year fixed mortgage rate fell to 7.32% from 7.40% the previous week, and the 15-year rate slipped to 6.68% from 6.71%, according to Freddie Mac’s survey. Chief economist Sam Khater said the decline offered “some relief to prospective homebuyers.”

More relief could follow if yields stay lower. Zillow said earlier this month that “it’s not out of the question that rates will decline as rapidly as they rose,” which would draw buyers and sellers back into the market, TheStreet reported. For now, that remains a possibility rather than a forecast.

More Real Estate:

• Zillow, Redfin speak bluntly on mortgage rates, housing market
• Redfin predicts major housing market change over the next five years as debt-income ratios shift

The damage from the fall surge is plain to see. Pending home sales fell 7.3% in September to the lowest reading in the history of the index, with the National Association of Realtors chief economist Lawrence Yun blaming “fast-rising mortgage rates.” Yun added that rates “could be topping out” and that buyers and sellers may be holding back until they improve.

What borrowers should watch next

The Fed’s Oct. 28 decision is the next big test, and forecasters are not yet calling for a rapid rate cut. Fannie Mae’s October outlook sees the 30-year rate averaging 7.4% in the fourth quarter and 7.5% across 2027. That is a sharp jump from the 6.8% it projected for the quarter just a month earlier.

Buyers may still find room to negotiate. Sellers are increasingly offering concessions such as rate buydowns, while Jake Krimmel, senior economist at Realtor.com, noted that buyers have more negotiating leverage in more markets but that “a bigger negotiating advantage doesn’t always mean more affordability,” according to MPA Magazine. A rate buydown lowers the rate but not the purchase price, so buyers should read the terms closely.

About two-thirds of the 99 metros tracked now favor buyers outright or are moving that way. Still, Krimmel warned that buyer leverage and purchasing power are moving in opposite directions, meaning a lower rate alone may not be enough to revive demand right away.

Related: Goldman Sachs has a new warning for the housing market for 2027

First it was people making calls. Then it was phones streaming video, and most recently, it was data centers training artificial intelligence.

For most of the past decade, Nokia rode those waves from the back of the room. The brand that once ruled the phone in your pocket became a quieter business selling the gear that carries your calls, streams, and data.

AI has already handed Nokia a second act. Data centers need faster connections, and the company’s optical and internet networking units are growth businesses again.

Nokia’s chief executive now says the next user won’t be a person at all. It will be machines: robots, vehicles, and equipment that act in the real world and need fast, reliable networks.

If you own Nokia shares, or a fund that holds them, that pitch comes with a price tag worth understanding. It is the part of the Oct. 22 report I spent the most time on.

Nokia (NOK) CEO Justin Hotard made his case for physical AI in an Oct. 22 interview with CNBC, the same day Nokia reported a 35% jump in comparable operating profit to €605 million. In the same interim report, it lowered its free cash flow outlook.

Why robots need a new kind of network

Physical AI means software that senses and acts in the real world, from warehouse robots to self-driving cars. Hotard’s written statement put it plainly: “AI-native networks are moving into the physical world.”

The idea is that those machines will need fast, reliable wireless links, not just data center fiber. Nokia said in April that AI already accounts for about 20% of network traffic and that machine-to-machine traffic will eventually dominate, according to Fierce Network.

Nokia is building toward that with what it calls AI-RAN, radio networks that run AI directly on cell sites. Together with T-Mobile and Nvidia (NVDA), Nokia completed what Hotard called “the world’s first AI-RAN call in a live operator network,” according to the report.

Related: Nokia CEO’s ‘2x faster’ AI claim comes with a catch for investors

Early results are encouraging. Deutsche Telekom’s lab tests showed typical uplink speed gains of 10% to 15% from AI-based channel estimation, with field tests next, Nokia said in an Oct. 21 announcement.

The timeline is still long. Finnish carrier Elisa expects commercial services in 2027, and BT is preparing a live trial in Birmingham that same year, according to the announcement.

Joe Madden, lead analyst at Mobile Experts, told SDxCentral that Nokia is “betting the farm” on physical AI.

AI sales doubled while the outlook tightened

Today’s growth is still coming from data centers. Sales to AI and cloud customers rose 123% from a year earlier, and Nokia booked €1.5 billion in new orders from those buyers.

“In AI & Cloud, net sales more than doubled year-over-year and we secured EUR 1.5 billion in new orders,” Hotard said in the report.

More Artificial Intelligence:

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The cash side moved the other way. Nokia lowered its free cash flow conversion outlook to 35% to 55% of comparable operating profit, citing working capital investments “to secure supply and support the growth opportunity in 2027,” along with faster restructuring.

It now plans to invest an additional €400 million in working capital this year. Restructuring charges are expected to reach €1.1 billion, up from a prior €800 million estimate, according to Benzinga.

Reported operating profit, which includes those charges, fell 22% to €196 million.

Wall Street sold the beat anyway

The beat was clear. Comparable operating profit of €605 million topped the €453 million average in a company-compiled analyst poll, according to MoneyCheck.

The stock still fell. Shares were down 5.7% at $8.72 in premarket trading, according to Benzinga, and about 2% later on Oct. 22, MoneyCheck reported.

Here is what investors weighed against the beat, according to the company and coverage of the report:

• Nokia kept its 2026 comparable operating profit outlook at €2.1 billion to €2.6 billion instead of raising it, according to the interim report.
• Mobile Infrastructure sales grew 5%, partly because revenue was pulled forward from the fourth quarter, the company said.
• Nokia expects fourth-quarter sales to rise 20% to 24% from the third quarter, a steep climb, MoneyCheck noted.
• Hotard said on the earnings call that “we absolutely need the new fab to come online to support the demand that we’re seeing,” SDxCentral reported.

Free cash flow math points to a wide range

In my analysis, the cash guidance cut matters more than the headline beat.

Apply the new 35% to 55% conversion range to the €2.1 billion to €2.6 billion profit outlook, and 2026 free cash flow lands somewhere between about €735 million and €1.43 billion. That is a wide range for a company asking investors to trust a big growth year.

The order book does help. AI and cloud customers made up about 12.2% of sales, Benzinga reported, or roughly €629 million this quarter. The €1.5 billion in new orders is about 2.4 times that amount, which suggests the demand is still building.

Nokia is also still digesting Infinera, the optical networking company it acquired. It expects to finish that integration by the end of 2026, a year ahead of plan, with €200 million in net synergies, according to the report.

Two dates Nokia shareholders should watch

Expectations were already high going in. The stock had climbed about 48% this year before the report, MoneyCheck noted, so a beat alone was never going to be enough.

If you hold Nokia, the near-term payoff is modest. The board declared a €0.03-per-share dividend, with a record date of Oct. 27 and payment on Nov. 5, the company said.

The bigger question is whether the growth Nokia is paying for shows up. The company expects its combined optical and IP networking units to grow 25% to 30% in 2027.

I would watch two things on Jan. 28, when Nokia reports full-year results. First, whether fourth-quarter sales hit that 20% to 24% jump. Second, whether free cash flow lands near the top or bottom of the new range.

Robots may well drive the next wave of connectivity. The cash Nokia spends getting there decides whether you get paid for waiting.

Related: The $1 billion bet: how Nokia stake fits Nvidia’s AI roadmap

And while the company beat expectations and reported growing billed business, it is simultaneously preparing to eliminate thousands of jobs, potentially cutting more positions than it added during the previous two years.

The reversal comes after the credit card giant steadily expanded its global workforce in 2024 and 2025, even as it undertook smaller restructuring programs.

Now, the company says it needs to change how its teams operate to support future growth.

During its earnings call, American Express revealed plans to eliminate approximately 5% of its global positions as part of a $336 million restructuring.

The restructuring will affect about 3,500 jobs, according to Bloomberg, which cited CEO Stephen Squeri, who said the company has about 78,000 employees. 

In the earnings call, Squeri said the decision was intended to simplify the company’s organizational structure and accelerate decision-making.

Also read: Pepsi shuts down another U.S. plant as CEO admits soft drink slump

American Express plans layoffs after adding more than 2,000 jobs

The scale of the planned reductions stands out when compared with the company’s recent employment history.

According to its 2023 annual filing, American Express employed approximately 74,600 people worldwide at the end of that year.

More Layoffs:

• Disney cuts 300 jobs and major overhaul puts hundreds more at risk
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• Oracle layoffs top 2,500 workers as AI spending surges

That number increased to 75,100 in 2024 and reached 76,800 by the end of 2025.

The figures represent a net increase of 2,200 employees over two years, including 1,700 added in 2025 alone.

As TheStreet previously reported, the company had not announced major company-wide layoffs during 2024 or 2025, although it continued adjusting staffing in individual business areas. It had not announced a major company-wide round of layoffs during this period.

The news was especially comforting in an AI era where layoffs have become the new normal.

However, this newly disclosed reduction could exceed the net workforce growth recorded across those two years.

American Express has not identified which departments or countries will face the largest cuts, nor has it disclosed when the planned reductions will be completed.

American Express CEO explains why the company is cutting jobs

During the earnings call, Squeri explained that the company’s restructuring plans had been under consideration for months.

“We needed to become a more agile and efficient organization,” he said.

Earlier this year, Squeri instructed senior leadership to identify opportunities to streamline teams, reduce management layers, and concentrate resources on the company’s most important priorities.

The company is funding the restructuring using a portion of the proceeds from the sale of its investment in Global Business Travel Group.

The initiative is also considerably larger than the restructuring expenses American Express reported in recent years.

According to its 2025 annual SEC filing, restructuring expenses, primarily associated with severance charges, totaled:

• 2023: $179 million
• 2024: $123 million
• 2025: $96 million
• 2026: $336 million

The latest $336 million charge in a single quarter is three-and-a-half times the amount recorded during all of 2025.

American Express is restructuring despite record revenue

The workforce reductions are not taking place because of declining revenue or weaker growth.

According to its third-quarter earnings announcement, American Express generated record quarterly revenue of $20.1 billion, up 9% from the previous year.

Customer spending rose 8%, while the company continued investing in marketing, technology, and expanded card benefits.

However, operating costs remain an important consideration. Consolidated expenses increased 9% to $14.5 billion during the quarter.

American Express has also been expanding its use of artificial intelligence to improve productivity, including tools for customer service, marketing, and software development.

Rob Lalka, a professor of business at Tulane University’s Freeman School of Business, believes the restructuring reflects how companies are preparing for the future of artificial intelligence.

“What American Express described today isn’t really about current AI capabilities replacing 3,500 jobs; it’s a company restructuring itself to prepare for future applications of AI,” Lalka told TheStreet.

He described the move as a strategic bet on the technology’s future, rather than evidence that AI is already replacing those employees.

Squeri discussed those initiatives during the earnings call, but the company has not directly attributed the planned layoffs to AI.

Related: Golden Corral closes another restaurant as shutdowns mount

I know plenty of stocks where I see investors rush to buy or sell after a single earnings report, so seeing someone hold for nearly five decades and still expect more upside is remarkable.

He has been patient, and it has actually paid off over the years, and still is. Lilly is up 59.93% over the past 1 year, 121% over the last 3 years, and 451.38% over the past 5 years, according to Yahoo Finance. 

The business backs it up. Second-quarter revenue was $23 billion, up 48%, driven by Mounjaro and Zepbound volume, after full-year 2025 revenue of $65.2 billion, up 45%, Lilly reported. 

CEO David Ricks said Lilly is building for the future with retatrutide, new manufacturing capacity and acquired assets, and that its future “has never been brighter.” As I reported Sept. 22, he also said one-third of new oral GLP-1 patients are choosing Foundayo, Lilly’s once-daily pill.

However, when expectations run this high, a beat alone may not be enough.

Also Read: Eli Lilly CEO reveals astonishing shift in GLP-1 pill market

Eli Lilly stock rises into a beat everyone expects

Goldman Sachs expects another beat-and-raise when Lilly reports Oct. 29. The firm says magnitude is the focus. The Buy-rated note shared with me at TheStreet lifts LLY’s 12-month price target to $1,413 from $1,371.

Lilly’s own full-year revenue guidance is $85 billion to $87 billion, Q2 results noted. Consensus is already about $88.6 billion, and Goldman is at $89.8 billion, according to the note. Goldman’s investor conversations suggest the top end of a raise would need to clear consensus to satisfy bulls.

More Healthcare Stocks:

• BofA sees Eli Lilly’s overseas obesity sales topping the U.S.
• Eli Lilly’s Foundayo pill wins first European approval
• Novo Nordisk CEO resets expectations for Wegovy’s growth

Shares are up 18% this year versus 12.4% for both the S&P 500 and Goldman’s drug-industry benchmark, after two straight beat-and-raise quarters. Goldman expects third-quarter revenue of $23.1 billion, about 2.8% above consensus.

Do not be fooled by the earnings line. Goldman expects adjusted EPS of $5.63 against $7.03 consensus, because a $4.2 billion pretax charge for acquired research cuts earnings by $4.57 a share and is not fully in consensus. A headline miss could mask a strong quarter.

What’s driving Lilly’s numbers

Zepbound is the engine. Goldman estimates $5.3 billion (US $5.2bn), 5% above consensus, with prescriptions up 78% from a year ago to about 9.8 million. The Medicare program began July 1 and has reached 1.1 million patients, accounting for approximately 10% of Zepbound prescriptions.

Patients are paying less per prescription, not more. Medicare volume comes at $245 a month, while cash-pay prices run $299 to $449. Revenue per prescription should slip to about $526 from $565, but Goldman says volume should more than offset it. Commercial prescriptions grew 24%, while vials fell 59% as patients moved to the KwikPen.

When I look at Zepbound‘s pricing, I can’t help thinking about the people who actually need the treatment. A pill might sound more convenient than a weekly injection, but I imagine affordability matters just as much. After all, convenience means little if patients can’t afford to stay on treatment.

Related: Eli Lilly’s Foundayo delivers diabetes surprise in late-stage study

Outside the U.S., Mounjaro may be the bigger surprise. Goldman estimates $5.6 billion, 7% above consensus, which assumes just 1%-2% sequential growth. The note says IQVIA prescription data shows mid-teens growth in July and August. U.S. Mounjaro prescriptions reached 11.1 million, up 37%.

Foundayo is the one to watch. U.S. prescriptions jumped to about 535,000 from 169,000 last quarter, after a June commercial access unlock, the Medicare program, and a Sept. 1 price cut to $149, $149, and $199 for its three doses. 

Goldman puts Foundayo’s share of new prescriptions at about 30% against Novo Nordisk’s Wegovy pill. It estimates $228 million in revenue, slightly below the $246 million consensus, with U.S. lower and international higher at $85 million versus $63 million, helped by launches in Saudi Arabia, the UK and Mexico.

Goldman sees $1,413 if the raise is big enough

Next comes the Dec. 7 investor event. Two Phase 3 readouts are due next year: EMBER-4 in breast cancer and TRAILBLAZER-3 in preclinical Alzheimer’s. Lilly says 2027 guidance will come on its January call. Management has also highlighted larger acquisitions, including Centessa’s $7.8 billion acquisition deal.

Goldman’s target uses 28x forward earnings, based on quarters five through eight. It now models EPS of $32.77, $46.08 and $51.68 for 2026 through 2028.

For investors, expectations are high, but strong demand provides a solid foundation. If Lilly raises guidance toward Goldman’s $89.8 billion and gives a clear read on 2027, Goldman’s view is that the beat may be enough. If not, the stock rewarded for beating may start asking for more.

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Retirement savers feel that split most. A portfolio that is meant to last decades has different needs than a trade meant to pay off next quarter, and the debate comes down to Alphabet versus Apple. Both report earnings this month, so the timing is hard to ignore.

How the Alphabet and Apple gap opened up

Alphabet has lost about $860 billion in market value since its peak, close to Walmart’s $937.1 billion, according to 24/7 Wall St., citing an October 17 post by Charlie Bilello of Creative Planning that put Apple at an all-time high and Alphabet 17% below.

Apple is worth $4.95 trillion and Alphabet is worth $4.21 trillion. Apple leads the Magnificent Seven this year at 25.26%, against 6.47% for Alphabet, which has also fallen 4.84% in the past month.

Also read: Apple just made a surprising move with a popular product

Apple’s run is real. The stock touched an all-time high of $345.34 in September, weeks after John Ternus became CEO on September 1, and was up 25% for the year with a market value just under $5 trillion, according to TheStreet. The iPhone 18 lineup went on sale September 19 with prices raised by $100, and the $1,999 foldable iPhone Duo ships October 23.

Alphabet went the other way after July’s earnings. Revenue beat estimates and Google Cloud grew 82% to $24.8 billion, but the company lifted its 2026 capex outlook to $195 billion to $205 billion, up from $180 billion to $190 billion, and the stock sank.

The next test arrives on October 28. Alphabet brought in $119.8 billion in second-quarter sales, up 24%, yet Bank of America expects about $199 billion of capex this year and $301 billion in 2027, plus a $12.4 billion free cash flow loss in the third quarter. The bank also expects Search growth to cool from 17% to 14% while Cloud accelerates to 93%.

What Alphabet’s spending is doing to its cash

Alphabet spent $44.9 billion on capital expenditures in the second quarter, double the year-earlier amount, and posted its first negative free cash flow since going public in 2004, according to Axios, citing FactSet. Net income got a lift from roughly $99 billion in net gains on equity securities.

Alphabet was the first hyperscaler to report this season, Axios noted, so investors read its spending as a signal for the group.

To pay for the buildout, Alphabet announced plans to raise $80 billion in equity in June, including a $10 billion private placement to Berkshire Hathaway at $351.81 per Class A share and $348.20 per Class C share, Bloomberg reported. The company said demand for its AI services exceeds the supply it can deliver.

Plainly, Alphabet is funding growth partly with new shares rather than only cash from operations. For existing holders, that means dilution while the spending keeps climbing. A company known for generating its own cash substantially now turns to the market for funding.

That spending picture does not cancel out what Alphabet is actually building. Revenue climbed 24% last quarter and Cloud jumped 82%, according to Reuters. Investors are not questioning the growth. They are questioning when the bills stop growing faster than the returns do.

How Apple stays out of the spending race

Apple’s June quarter showed what its model delivers. iPhone sales jumped 22% year over year, according to TheStreet. Tim Cook said Apple had underestimated demand, while calling on-device AI a competitive weapon. The redesigned Siri was still in public beta and not yet a proven source of new revenue.

Apple is not skipping AI so much as sourcing it. It overhauled Siri in part by tapping Google’s AI technology behind the scenes. That arrangement helps explain why Apple’s capital spending sits far below Alphabet’s. Analysts say a successful Siri revamp by year-end could put Apple on even footing with Google’s Gemini assistant.

More Apple:

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Wall Street watched the strategy at the June 8 developer conference, where Apple unveiled Siri AI and deeper AI features across its devices. Bank of America had called the event an important marker for Apple’s AI future.

Apple also sells the hardware AI builders need. Meta’s newest model was optimised for Apple’s M5 Ultra chip. Apple shares slipped to $342.00 on October 15. Developers building AI tools need serious local hardware, so every purchase is revenue Apple books today.

What it means for a retirement portfolio

The two stocks have returned almost the same over twelve months, nearly 30% each. The difference is the path. Alphabet runs through larger bills, while Apple runs through iPhone demand and a valuation near 39 times earnings. A premium price leaves much less room for error.

A saver near retirement leans on the dependable payouts. Apple pays a $0.27 quarterly dividend. The dividend was raised 4% in May alongside a $100 billion buyback authorization. It also guided September-quarter revenue growth of 9% to 11%. That kind of cash return supports a steadier profile than a company spending beyond its free cash flow.

For a retirement account, the gap between these two companies is not just about AI. It is about what kind of risk you are paid to take. Both report within a day of each other this month. When the numbers land, the real question is whether the story each stock is telling still holds.

Related: The Fed has a new warning for Wall Street and the stock market

Happy Friday. Stocks were falling and oil prices were rising following a sharp tech sell-off in the previous session.

Markets closed mixed on Thursday, as a tech and AI-related selloff dragged down the S&P 500 and Nasdaq while the Dow finished essentially flat.

“Tech stocks got slammed amid fresh concerns about the outlook for artificial intelligence,” said Kyle Rodda, senior financial market analyst with Capital.com. “While fears about AI are nothing new, the flavor of this sell-off was starkly different. The concern pertains to capital expenditure. But rather than the risk that AI hyperscalers are spending too much, the proverbial script has flipped.”

Rodda said the perceived risk now is that they are spending too little, “or more precisely, that future capex could be lower than previously thought and the rate of growth in investment could be slowing down.”

“The volatility was stoked by yesterday’s first batch of Magnificent Seven results,” he continued. “Meta Platforms left unchanged its CAPEX guidance and provided very little color about future plans, and Tesla reduced its full-year CAPEX guidance by 20%.”

“The news stoked fears, long held by market participants, that the AI investment boom may have peaked, with the pessimism leading to a broad-based sell-off across the AI ecosystem.”

Rodda added that crude prices continue to hover around recent highs, as the several untenable conflicts in the Middle East risk global energy supply at a time the global energy supply chain is developing deeper cracks.

Shares of luxury goods holding company Kering, which owns such brands as Gucci and Saint Laurent, tumbled 12.4% in premarket trading after posting disappointing third-quarter earnings.

Technology’s underperformance may surprise you, given how often the media writes about artificial intelligence and how it’s on track to disrupt everything from manufacturing floors to store shelves to battle fields.

Yet, that’s always been a Wall Street truth: Once everyone is talking about it, the easy money has already been made.

Consider just how significantly the SPDR Technology ETF (XLK) has lagged other sectors since the summer.  It’s been essentially flat since June 30, while the SPDR Energy ETF (XLE) has gained 29%, bringing its year-to-date return to a rather remarkable 55.4%.

And look at the magnificent seven.

None of them (Nvidia, Microsoft, Apple, Alphabet, Tesla, Meta, and Amazon) is among the top 20 S&P 500 performers over the past 13 weeks.

Mag 7 takes a back seat

In 2023, when Nvidia (NVDA) surprised everyone with a massive beat-and-raise quarter that kicked off the AI cloud spending boom, nobody was talking about AI, and few had any idea who would likely be the biggest players.

Following a bear market drubbing, many were still shunning technology stocks, afraid of aftershocks. It took over a year for most to truly begin to believe AI spending would be durable or ultimately prove profit-friendly, and stock market returns could continue climbing.

Read More: Cathie Wood sells $16 million of surging tech stock

The result? Nvidia became a $5.1 trillion company that accounts for 7.4% of the S&P 500 on its own, and altogether, the mag 7 represent over one third of the benchmark.

This year, the backdrop is different. Just about everyone knows about AI, thanks to using Gemini, ChatGPT, or Claude at home or work. And most investors own the biggest AI players, including hyperscalers (Amazon, Microsoft, Alphabet) and picks-and-shovel providers, including AI chip darlings Nvidia, Micron, AMD, and Broadcom.

With so few still left on the sidelines to buy those stocks, it’s little wonder the mag 7 has taken a back seat to other stocks recently, including over the past few days. On October 22, the Roundhill Magnificent Seven ETF (MAGS) fell 3.4% while the less-tech-heavy
State Street SPDR Dow Jones Industrial Average ETF Trust (DIA) was up 0.4%.

“If you own semis or any of the Mags, it’s been a really ugly week. But if you own the others, you’re probably enjoying this market for the first time in ages,” wrote Helene Meisler on TheStreet Pro.

Energy sets the pace as geopolitics ignites crude

Energy has had fits and starts this year, but selling has been short-lived.  Those who have stuck with the basket since the U.S. removed Maduro from Venezuela’s government in January have been rewarded much better than the buy-and-hold AI stocks crowd.

The main reason for energy’s outperformance has been the relentless rise of crude oil amid growing global supply tensions, particularly in the Middle East. Since December, West Texas Crude oil prices have surged to $99 per barrel from about $57 exiting 2025, padding profits at producers less reliant on Middle East oil flowing through the Strait of Hormuz.

Consider ExxonMobil (XOM). The average Wall Street analyst expects it to report third-quarter revenue of $106 billion, up from $85.3 billion in the same period one year ago. Analysts are similarly targeting $4.03 in earnings per share. One year ago, ExxonMobil earned $1.88.

More Oil & Gas:

• Chevron CEO issues stark warning on depleting oil reserves
• World’s biggest oil CEO shares stark oil price warning as pressure builds and supplies run dry
• Bank of America resets its oil price target with strong warning

The situation is similar for Chevron (CVX), which is expected to see revenue surge to $61.7 billion from $49.7 billion last year, and Warren Buffett’s favorite oil stock, Occidental Petroleum (OXY), which is expected to see EPS jump to $1.45 from $0.64 last year in the third quarter.

It’s not just oil exploration and production stocks that are intriguing. Energy service stocks can benefit from uncorking Venezuelan oil fields, and eventually, rebuilding Middle East infrastructure.

Long-time value investor Bret Jensen sees Halliburton (HAL) and SLB (SLB) as two oil services stocks likely to win in that scenario.

“Both of these energy services names should benefit immensely once hostilities in the Middle East finally end. They should garner plenty of additional work to restore production in the region. As well as to rebuild inventories and strengthen energy security, wrote Jensen on TheStreet Pro.

Sector-wide, energy stocks within the S&P 500 will deliver 127.6% more in earnings per share than last year, according to FactSet.

That kind of step-up in sales and profits caught most investors off guard. I wrote in January that this would be the year of energy, given the geopolitical tailwind, especially since oil stocks accounted for just 3% of the S&P 500 index, suggesting they were significantly under-owned by Main Street and Wall Street.

It’s not all bad for tech, but it’s software, not hardware, winning

Looking at the top 20 S&P 500 stocks over the past 13 weeks, there are plenty of information technology stocks represented, simply not the ones you might think.

Instead of mag 7, it’s IT information services stocks like Accenture (ACN) and Gartner (IT), and software stocks like Palantir (PLTR), ServiceNow (NOW), Workday (WDAY), and Salesforce.com (CRM) that are setting the pace.

In late 2025 and early 2026, software stocks took a drubbing amid fears that AI would enable companies to build their own solutions rather than pay for seat licenses for tools like CRM, HR, and finance.

The iShares Expanded Tech-Software ETF (IGV) tumbled 36% from its November high to its April 2026 low, setting the stage nicely for a recovery as ‘existential’ industry fear dissipated. Since June, it’s been a different story. The IGV has risen 20%, with stocks like Palantir, ServiceNow, Workday, and Salesforce up significantly more over the past thirteen weeks.

Within technology, the argument is shifting for investors from how much money is being spent building out data centers with next-gen servers powered by super-fast chips to what companies will actually help businesses figure out how best to exploit AI to pay for all those tokens.

Outside of technology, it’s about what other than the mag 7 makes sense. So far, it’s been energy, but investors shouldn’t count healthcare out. Of the major sector ETFs, The State Street Health Care Select Sector SPDR ETF (XLV) trails only energy since June, returning 13.2%.

Overall, here are the top 20 S&P 500 stocks over the past 13 weeks, based on data from Fidelity as of 10/21/2026:

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It makes you wonder how airlines decide what passengers should pay and how much choice we really have as travelers.

What once seemed like an occasional frustration has become a much bigger issue for airlines in 2026. And I have a number that helps explain why.

Jet fuel averaged $3.90 per gallon for United Airlines (UAL) in Q3 2026, up a whopping 60.3% from $2.43 a year earlier, according to the company’s Q3 earnings release.

United’s total fuel bill for the quarter was $4.84 billion, $1.8 billion more than Q3 2025. The airline passed roughly 72% of that increase on to travelers through higher fares, according to CEO Scott Kirby’s CNBC interview on Oct. 21. Passengers actually absorbed it, and United carried a quarterly record of 49.5 million customers.

Also Read: United Airlines filed for bankruptcy 24 years ago — here’s why 

Why United Airlines is still profitable while most rivals are not

Kirby opened with a number that reframes the entire story.

“Fuel is up $8 billion year over year,” he told CNBC from Houston, where United is opening its biggest-ever lounge.

That $8 billion figure applies across the full airline, not just one quarter, and represents a structural cost shift that would have destroyed United’s profitability under its pre-pandemic cost structure.

It has not. Q3 total operating revenue hit $17.9 billion, up 17% year over year and a record for any quarter in the company’s history, according to the earnings release. Revenue per available seat mile grew 16%.

In fact, it’s the best quarterly unit revenue growth since the pandemic. Adjusted diluted EPS was $2.54, in line with guidance despite the fuel spike.

We're still solidly profitable even in this environment.

“It’s a testament to the structural changes in the industry and to decommoditizing air travel here at United,” Kirby continued.

Decommoditizing air travel is the strategic logic behind everything United has done over the past four years. When passengers choose airlines based on price alone, carriers are forced to compete on fares, putting pressure on profit margins across the industry.

But when loyalty, Wi-Fi, seat quality, and reliability influence those decisions, airlines like United gain pricing power. That helps explain how United can pass through 72% of higher fuel costs while still filling 83.9% of its seats.

The casualties United Airlines CEO sees coming and what that means for passengers

I come back to my earlier observation about domestic airfares when I read Kirby’s bluntest comment: “Six to ten U.S. airlines are going to lose money this year.”

Spirit’s bankruptcy earlier this year, which Kirby acknowledged “gave a stay of execution to a number of other airlines,” was the first visible casualty.

Kirby has an idea of what comes next: carriers that are losing money will eventually stop flying routes where they lose money.

That sounds like an operational efficiency story. For passengers in smaller markets served primarily by budget carriers, it means fewer flights and less price competition.

“Running an airline and being successful is simple. Don’t fly to places that lose money. It’s emotionally hard, but it’s logically easy,” Kirby noted.

The math driving those decisions is $3.90-per-gallon jet fuel with no near-term relief in sight. Kirby said he expects oil to stay elevated into 2027.

The Starlink tailwind that separates United from the rest

The most forward-looking element of Kirby’s interview was the competitive differentiation he sees arriving from Starlink. 

United had Starlink installed on more than 640 aircraft as of Q3, and available on approximately half of all flights, including regional service, according to the earnings release. The rollout is expected to reach 61% of the fleet by year-end 2026, 87% by June 1, 2027, and fleet-wide by year-end 2027.

“We already see customers moving from other airlines,” Kirby said. “It’s a unique tailwind.”

I recently covered Delta CEO Ed Bastian’s decision to reject Starlink in favor of Amazon’s Project Kuiper, and the social media exchange with Elon Musk that followed. To me, United CEO Scott Kirby’s latest numbers offer one of the clearest answers to that debate.

More Airlines:

• Another low-cost airline files for bankruptcy protection
• JetBlue, Southwest Airlines, and Allegiant make pricing move
• Southwest Airlines kills routes to multiple markets

According to my previous United coverage, customer satisfaction scores for Wi-Fi on Starlink-equipped aircraft are more than double those on its other planes. For a business traveler taking video calls at 35,000 feet or a family streaming movies on a long-haul flight, that’s a difference passengers can actually feel.

Q4 guidance calls for total operating revenue growth to accelerate beyond Q3 and set another record of over 20% year-over-year growth. The Q4 EPS range of $0.50 to $1.50 trails Street consensus of $1.75, with fuel costs the dominant variable.

If you’re a traveler, fares are still going up, and some routes may disappear.

As an investor, I think the carriers that can pass costs through and keep planes full are the ones worth watching. Kirby’s Q3 data shows United is one of them.

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Musk himself has called combining them “a good idea,” and a deal would dwarf anything Wall Street has seen.

The idea itself is not new. Wedbush analyst Dan Ives has put the odds of SpaceX eventually merging with Tesla at 80% to 90% by early 2027, viewing the SpaceX IPO as groundwork for a deal built on shared supply chains and the joint Terafab chip project.

What changed this week is that the two companies have finally started doing the homework.

Musk says SpaceX, Tesla form committee amid potential merger

Musk was careful about his own role, even while saying he thinks a combination would be a good idea, with gains from cooperating on AI software, chip design, robotics, and launching mass to orbit.

He said both companies set up special committees of independent directors at shareholders’ request, and because he is conflicted, he cannot take part in the talks, calling the setup “an odd kabuki dance.”

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Musk also tried to cool expectations. The committees have not agreed on terms, he said, and “there’s no guarantee that they will,” adding that treating a merger as a sure thing would be “overstating it.”

The vote is another hurdle. Musk pointed out that Tesla would need approval from 50% of all its shareholders, not just those who cast ballots, and he called that a high bar. Shares that never get voted effectively count as a no.

Investors still liked what they heard. Tesla shares rose a little less than 2% shortly after the call, the Wall Street Journal reported. The bump came just a day before Tesla’s own quarterly results, giving shareholders plenty to ask about on that call.

Gizmodo also noted, citing a Wall Street Journal report, that a merger could lift Tesla’s valuation enough to help Musk qualify for his $1 trillion pay package.

SpaceX brought a blowout quarter to the table

The merger news landed on top of a strong report.

SpaceX posted its first profitable quarter since its June IPO, earning $4.4 billion after a $1.1 billion loss a year earlier, while revenue of about $14.6 billion easily topped the $12.7 billion analysts expected, and it finished the quarter with more than $51 billion in cash and $38.6 billion in marketable securities, according to SpaceX’s SEC filing.

Look under the hood, and AI did most of the heavy lifting. SpaceX’s Super Intelligence unit brought in $7.6 billion, up from $813 million a year earlier. The connectivity side, home to Starlink, also grew, just not nearly as fast, landing at $5.2 billion. No wonder Musk keeps pitching the merger as an AI play.

That growth carries some risk, though. Anthropic and Google are the anchor customers for SpaceX’s computing business, but both contracts include 90-day termination clauses. A merger partner with its own heavy AI needs could make that capacity less dependent on outside buyers.

Tesla heads into its own report with some momentum. The carmaker delivered 486,532 vehicles in the third quarter, well ahead of the roughly 461,100 analysts had forecast, as reported by Quartz.

Its results on Oct. 21 will be the first chance for shareholders to press management on the merger.

The AI logic behind a combination

The two companies are already tangled together. Both are betting heavily on AI; they are partnering on Terafab, Musk’s chip factory project in Texas, and SpaceX has already folded in a potential breakthrough in chip fabrication but does not want to discuss the specifics.

Terafab alone shows the scale of the shared ambition. A May SpaceX filing put the first phase at $55 billion; Intel has signed on as an outside foundry customer.

SpaceX President Gwynne Shotwell said in September that the companies were integrating “faster than I thought” but were “not fully integrated yet,” TheStreet reported.

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The two companies already do plenty of business with each other. Over 2024 and 2025, SpaceX and its xAI subsidiary bought roughly $697 million in Megapack battery systems from Tesla, plus another $131 million in Cybertrucks last year, according to Reuters.

Tesla, for its part, put $2 billion into xAI in January. Fold everything into one company, and those side deals simply disappear.

Robotics is the other big piece. Tesla raised its 2026 capital spending guidance to $25 billion, with a large share going to turn old Model S and Model X capacity into Optimus robot lines.

Analysts do not expect Optimus to go on sale before late 2027. Musk sees those robots and SpaceX’s computing muscle as natural partners.

Plenty of questions remain before any deal gets done

Not everyone buys the merger story. Investor Ross Gerber has argued that a combination would look more like SpaceX “bailing out Tesla by buying them over, calling it a merger,” according to Benzinga. Analysts have flagged the stock swap terms, which company ends up as the parent, and possible dilution for retail holders.

Then there is the question of who ends up in charge. Jefferies figures Musk could hold on to roughly 55% of the voting power if the deal carried no premium, as reported by TheStreet. JPMorgan described the pairing as strategically coherent. BNP Paribas, which has an underperform rating on Tesla, was less convinced, warning that SpaceX’s cash burn could hold things up.

Some observers think the outcome is all but settled anyway. Gene Munster of Deepwater Asset Management put the chance of a deal within two years at 90% and said: “shareholders would support this,” Benzinga noted.

For now, Musk has offered no timetable, leaving the next move to the committees and, eventually, shareholders.

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Shares of Moderna fell 17.6%, while Merck (MRK) dropped 1.76%.

The sell-off came despite positive trial results for intismeran autogene, Moderna’s personalized mRNA cancer vaccine developed with Merck.

Moderna has been one of the S&P 500’s top-performing stocks this year, surging 587% year-to-date, mostly following its August announcement that the Phase 3 trial had succeeded. Merck shares have gained about 40% over the same period.

Moderna cancer vaccine data leaked ahead of conference

The Phase 3 INTerpath-001 trial evaluated intismeran autogene, a personalized mRNA melanoma vaccine, in combination with Merck’s immunotherapy drug Keytruda in patients with high-risk melanoma.

The study examined whether the combination could reduce cancer recurrence and distant metastasis compared with Keytruda alone.

The detailed results were scheduled for release on Saturday, Oct. 24, at a major medical conference in Madrid.

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However, Oncology Central, a cancer news website operated by publishing company Informa, prematurely published an article containing the embargoed data, MarketWatch reported.

Merck and Moderna subsequently released the trial results.

Wall Street analyst said Moderna sell-off was ‘a sell the news event’

Bernstein said the leaked results appeared to show “a strong result” for the combination treatment, The Fly reported.

The firm described the findings as a “strong Phase 3 result and meaningful validation of Moderna’s individualized neoantigen platform.”

Despite the positive data, Moderna shares fell sharply, which Bernstein is “interpreting as a sell the news event.” Bernstein maintained its Market Perform rating and $45 price target on Moderna.

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Wells Fargo also said concerns over the trial data “may be overdone.”

The firm noted that recurrence-free survival results exceeded investor expectations, while overall survival data are not yet mature.

Wells Fargo said it would buy Merck shares on weakness ahead of other potential catalysts, including upcoming Sac-TMT lung cancer data at the European Society for Medical Oncology conference.

The firm maintained its Overweight rating and $165 price target on Merck.

Both analysts’ price targets are below Moderna’s closing price of $202.63.

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The timing is interesting. Nvidia held up better than most chip names during last week’s AI sell-off, helped by second-quarter revenue that more than doubled from a year earlier, mostly on data center sales, as reported by TheStreet.

Now it wants to speed up the slowest part of the whole business: getting the buildings ready.

Nvidia’s plan to build data centers in weeks, not months

The DSX POD is a blueprint rather than a finished product Nvidia sells off the shelf.

It is a reference design for complete Vera Rubin AI factories that partners build inside modular containers, with all the cabling, piping, and testing handled at the factory before anything ships, according to Nvidia.

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The boxes are packed tight. Each container holds seven Vera Rubin NVL72 racks with 504 GPUs, plus roughly 20 kilometers of copper cabling and 17 kilometers of networking that arrive already installed and tested, The New Stack noted. That’s the kind of fiddly work that usually eats up weeks on a construction site.

The headline promise is speed. Nvidia says a DSX POD can be up and running in as little as 14 days, and Huang used the same stage to tell his audience that every country and company is building their own AI.

Vera Rubin is the engine inside. Back in July, Huang brushed off reports of manufacturing problems and said Rubin hardware was already in production, while Nvidia said Rubin-based products would reach partners in the second half of 2026 and its Vera CPU was in full production.

Why every week of delay costs money

“An AI factory creates value when it starts producing tokens,” Huang said, adding that the value does not come when construction wraps up. Nvidia says cutting deployment at a prepared site from six months to about two weeks gets customers to revenue sooner.

The sums involved are huge. Huang told the Berlin audience that each gigawatt data center costs about $50 billion to build, and he estimated that kind of capacity could bring in about $40 billion a year in revenue, as reported by Investing.com. Every month a site sits idle is money left on the table.

Demand is not the problem. Morgan Stanley analyst Joseph Moore believes Nvidia’s underlying demand is closer to 100% growth than the 70% it has guided for, while CFO Colette Kress warned that supply will “remain a bottleneck” through at least fiscal 2028, TheStreet reported.

There is a catch, though. The two-week timeline only works if the site already has power, cooling, and network connections in place. The container solves the inside of the building, not the grid outside it.

Power is still the bigger bottleneck

The grid is where most AI projects get stuck. Energy firm Currence estimates that 30% to 50% of the large data center capacity expected to come online in 2026 will be delayed, with electricity among the main obstacles, TheStreet reported. A faster container does not change that math.

Microsoft just ran into that wall. The company pulled out of a planned deal for capacity at Nscale’s AI data center in Loughton, England, after grid officials said power for the site may not arrive until the 2030s. Microsoft declined to comment on the withdrawal, and Nscale says it is exploring other power sources, including fuel cells, for the project.

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The site had been planned around roughly 23,000 Nvidia GPUs. Power used to be an assumption in data center planning. Now it is a constraint that shapes the entire project from the start.

Water is the other pressure point, and here the DSX POD helps. Because Vera Rubin can run on coolant as warm as 45 degrees Celsius, dry coolers can replace evaporative cooling towers in most climates.

Nvidia also estimates that this saves about 54 million liters of water a day for a 2-gigawatt deployment, though very hot climates may still need chillers on the worst days.

Partners line up for an early 2027 rollout

Nvidia has a long list of builders ready to go. Seventeen companies, including Anduril, Crusoe, Dell Technologies, HPE, Schneider Electric, Foxconn’s Ingrasys, and Vertiv, are signed on as partners, with worldwide deliveries targeted for early 2027, according to Nvidia.

Europe is clearly part of the pitch. A day before the keynote, the German government agreed to an AI partnership with Nvidia at a Berlin investment summit, with about a dozen German companies, including Siemens and Audi, expected to join.

Huang argued that countries should treat their data as a national resource to build a “national intelligence.”

Sovereign projects are already leaning on the same toolkit. A Japanese consortium called Noetra, backed by SoftBank, Sony, NEC, and Honda, plans an AI factory with about 27,500 Rubin GPUs built on Nvidia’s DSX framework.

If containers get factories like that running faster, Nvidia gets paid faster, too.

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What I realized was how much of the world’s cooling infrastructure depends on specialty chemicals most people have never heard of, made by companies that rarely make headlines.

Solstice Advanced Materials (SOLS) is one of those companies. It makes the refrigerants that keep buildings, vehicles, and data centers cool. It produces nuclear materials used in energy infrastructure. It supplies specialty chemicals for electronics manufacturing and healthcare packaging.

A sudden disappearance of such businesses would throw most of the supply chains into chaos. Yet, despite its importance, Wall Street still seems reluctant to hand it a valuation it deserves.

On Oct. 20, Starboard Value CEO Jeffrey Smith said exactly that out loud at the 13D Monitor Active-Passive Investor Summit in New York, CNBC reported. Solstice is “stupid cheap,” he noted, and he has the stake to back up the opinion.

SOLS is up 34.20% year to date, according to Yahoo Finance, but down roughly 28% from its all-time high of $90.80 reached June 30.

What Starboard is seeing in Solstice and why the discount exists

Starboard Value is not a fund that takes small positions and sends polite letters. The New York-based activist hedge fund, founded by Smith in 2002, targets companies it believes are poorly managed or undervalued. 

Then it presses boards and management teams for operational changes — cost cuts, strategic pivots, leadership reshuffles, and sometimes all three. Smith personally became chairman of Darden Restaurants after Starboard orchestrated a complete board replacement.

He diagnosed Solstice as undervalued, attributing the discount to the market losing faith in management’s ability to extract full value from the company’s core operations.

His prescription? Focus on the refrigerants and nuclear businesses — the high-growth, high-margin segments — and cut approximately $100 million in costs across the company.

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Solstice’s Q2 2026 results, reported July 30, showed net sales of $1.148 billion, up 11% year over year, with adjusted diluted EPS of $0.88, beating estimates of $0.77. Adjusted EBITDA was $290 million, representing a 25.3% margin. Nuclear revenue grew 27%. Electronic materials grew 15%.

The fundamentals are not the problem. According to Smith’s argument, the management execution and cost structure are the issue.

Solstice kept its response measured, saying, “We will review Starboard’s presentation carefully and look forward to engaging with the firm.”

For now, the company appears willing to hear Starboard out rather than push back publicly.

The Solstice deal collapse that created the opening

To understand why SOLS shares are trading 28% below their June high, we need to look at what happened in July and August.

On July 6, Solstice announced a $14.5 billion cash-and-stock deal to acquire specialty chemicals maker Element Solutions, betting the combination would benefit from growing demand tied to data centers and semiconductors.

Shareholders on both sides pushed back. A Reuters report shows the deal was canceled on August 27.

A failed deal of that size can shake investor confidence, even when the business itself is doing well. For Solstice, the concern was that management may have pushed too far with a major acquisition without fully understanding whether shareholders were on board.

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That narrative, more than any single financial metric, is what Smith is targeting. He is essentially arguing that the deal failure created an irrational discount on a business that is otherwise executing.

I think about the refrigerant supply chain when I consider Solstice’s position here. The demand drivers are structural and genuinely secular: Data centers require cooling, and AI infrastructure is accelerating that need. 

Nuclear energy’s resurgence is driving demand for Solstice’s nuclear materials. None of those tailwinds disappeared when Element Solutions fell apart.

The valuation gap Starboard believes the market will eventually close

Smith’s “stupid cheap” characterization has a specific mathematical grounding. According to Yahoo Finance data, Solstice’s forward P/E ratio is at 17 times, while the trailing 12-month P/E remains at around 44 times, reflecting the gap between current earnings and forward estimates.

For activist investors, that spread between current and forward multiples, combined with identifiable cost-reduction opportunities, is exactly the setup they look for. 

If Starboard is correct that $100 million in costs can be removed from the picture without damaging the core business, the EPS improvement from that alone would meaningfully compress the forward multiple.

Q3 2026 earnings report is scheduled for Nov. 4, according to Solstice. That will be the first significant data point to either support or undercut Starboard’s timing.

Smith has established his position. The question now is whether management moves toward his prescription or digs in, and whether the November data gives either side more leverage.

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Buyers are already backing away.

“Market conditions weakened in September due to fast-rising mortgage rates,” National Association of Realtors chief economist Lawrence Yun said as contract signings slid to a record low, Reuters reported.

That is the backdrop Goldman Sachs is staring at as it looks out to 2027.

Rates keep moving the wrong way

The climb this autumn was fast. Mortgage News Daily’s average rate started in September near 6.9% and was sitting around 7.6% by the end of the month. Freddie Mac’s weekly gauge hit its highest level since November 2023.

Forecasters have been forced to catch up. Fannie Mae now expects the 30-year rate to average 7.4% in Q4 2026 and 7.5% for 2027, up sharply from its September call. That is a gloomier path than Goldman’s, which sees rates easing to 6.4% by the end of 2027.

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The Federal Reserve has not helped. Policymakers raised their benchmark rate by a quarter point on Sept. 16 to a range of 3.75% to 4%, and the next decision lands on Oct. 28.

Another hike would push borrowing costs even further out of reach. And mortgage rates also depend on bond yields and market expectations.

For anyone still shopping, the damage shows up every month. Senate Banking Committee staff for Sen. Elizabeth Warren estimate a typical buyer now pays about $361 more per month than in late February, as reported by TheStreet. Owners sitting on 3% loans feel none of that pain.

Home sales are stuck in low gear

The latest numbers back up Goldman’s gloomy outlook. Existing-home sales ran at an annual pace of 3.99 million in September, slightly below a year earlier.

“August and September marked the two slowest months for home sales this year,” Yun said, according to the National Association of Realtors.

The pipeline looks even weaker. NAR’s pending home sales index fell 7.3% in September to its lowest reading since the series began in 2001, and contract signings dropped in all four regions of the country, Reuters reported.

Economists polled by Reuters had expected a drop of only 0.5%. Those pending contracts become the closed sales of the next few months.

Prices are barely budging. The median existing-home price rose just 1.3% from a year earlier to $417,500, even as unsold inventory climbed above last year’s level. That fits Goldman’s view that the big equity gains are mostly behind us.

Sellers are starting to bend. Concessions showed up in 44.7% of U.S. home sales in August, the highest August share since at least 2020, with many sellers paying to buy down a buyer’s mortgage rate instead of cutting the price, TheStreet reported.

2 very different millennial housing stories

NAR’s own economists see the split clearly.

“The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in,” deputy chief economist Jessica Lautz said, according to the National Association of Realtors.

First-time buyers made up just 21% of all buyers in NAR’s latest generational report, the lowest share since it began tracking in 1981. Older millennials sit firmly on the equity side of that line.

Younger adults are waiting far longer than earlier generations did. The median first-time buyer is now 40, up from 32 in the early 2000s. And only 38.3% of 28-year-olds owned a home in 2025, compared with 44.4% of baby boomers at the same age, according to Redfin.

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Renting is not getting any cheaper while they wait. Zillow found the typical U.S. rent rose 2.7% from a year earlier in September, the biggest annual gain since April 2025. Nearly 40% of Zillow rental listings offered a concession, but every month of rent remains a significant expense for households trying to save toward a down payment.

Some are moving home to close the gap. About 22% of first-time homebuyers lived with family before buying their first house, a strategy Lautz described as a way to help them afford their own homes later, as reported by TheStreet.

Their older peers, meanwhile, are trading up with equity they already have.

What could finally thaw the housing market

Few people in the industry expect a quick fix.

“Higher rates will definitely slow the housing market, and force those with much lower rates to stay put,” said Kevin Thompson, CEO of 9i Capital Group, who added that the market “will be at a standstill for some time to come,” according to Newsweek.

More supply is the long-term answer, but it will take years. The White House Council of Economic Advisers estimates the country is short about 10 million single-family homes, and the Senate passed the ROAD to Housing Act 89-10 to help address it. That vote came back in March, and new homes take time to build.

Until then, the divide is likely to harden. Goldman expects lock-in to fade only gradually after 2027. Zillow had warned that while the rates could fall as quickly as they rose, it is still unclear whether buyers and sellers would rush back or just wait until spring.

For millennials who are on the wrong side of that line, the wait keeps getting longer.

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The decline came as investors grew concerned about the social media giant’s aggressive spending on artificial intelligence.

The selloff extended beyond Meta. Intel (INTC) and Advanced Micro Devices (AMD) dropped about 6% and 7%, respectively, while Nvidia (NVDA) fell more than 4%. All other Magnificent Seven stocks fell.

CoreWeave (CRWV), the AI cloud provider whose debt-heavy balance sheet partly led the tech sell-off last week, also declined nearly 4%.

Tech stocks have become sensitive to headlines, with even strong earnings reports triggering sell-offs as investors grow more concerned about AI risks.

Meta beats Q3 revenue estimates, lifts AI spending 

Meta reported third-quarter revenue of $64.6 billion, beating analysts’ expectations of $63.41 billion.

Earnings came in at $3.83 per share, below the consensus estimate of $5.46, largely due to a $9.89 billion legal charge related to a settlement over teen mental health and social media.

Excluding the charge, Meta said earnings would have been $7.40 per share, while operating income would have reached $22.88 billion instead of the reported $12.99 billion.

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The company also issued an upbeat fourth-quarter revenue forecast of $73 billion to $76 billion, compared with Wall Street’s estimate of $73.75 billion.

Perhaps what’s rattling investors is that Meta lifted the lower end of its 2026 capital expenditure forecast to $135 billion to $145 billion from a previous range of $130 billion to $145 billion.

It also raised its full-year expense outlook to $175 billion to $179 billion.

“Our AI investments are already delivering substantial incremental advertising revenue through stronger engagement, better recommendations, and more efficient monetization,” the company said in a statement. 

Meta is pushing deeper into AI agents. In September, it launched Muse, a personal AI agent that can take actions on users’ behalf and help with daily tasks such as sending emails. The app has become one of the most popular personal AI agents since its debut.

Meta expects strong revenue growth to continue through 2027, although it has not provided a full-year revenue forecast. Still, Meta warned that returns from its newer AI initiatives will take longer to materialize than those from its core advertising business.

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Wall Street analysts reset Meta stock price targets

At least 15 analysts raised their price targets on Meta following its earnings report, according to The Fly.

JPMorgan analyst Doug Anmuth raised his price target to $940 from $920 and maintained an Overweight rating.

The firm pointed to Meta’s strong advertising business, supported by AI-driven improvements and video growth. JPMorgan also sees early momentum in Muse and enterprise products such as Meta Model API and Muse Code.

UBS also raised its price target to $892 from $884 while maintaining a Buy rating.

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The firm said Meta’s AI investments are beginning to improve advertising performance and product adoption. Faster monetization of Muse could provide additional upside to revenue forecasts for 2027 and 2028.

However, not all analysts became more bullish on Meta stock.

Wells Fargo analyst Ken Gawrelski lowered his price target to $995 from $1,000 while maintaining an Overweight rating.

The firm acknowledged Meta’s strong advertising performance but flagged uncertainty over the timing and size of potential capital raising, along with its 2027 operating expense and capital expenditure plans.

Meta stock traded at $651.47 as of writing, down 1.35% year-to-date. The S&P 500 Index gained 12% over the same period.

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The company supplied the electrical and cooling equipment that keeps high-density data centers running. Nvidia’s newest AI system requires large amounts of both, making those systems part of the buildout that has to be completed before expensive GPUs can start processing customer workloads.

Vertiv estimates that bringing the infrastructure online roughly 10 weeks earlier could produce up to 30% more cumulative AI token output during the first 12 months, assuming the same amount of installed computing capacity.

The figure comes from a modeled scenario. Vertiv’s model compares 317 productive days under the new approach with 245 days under a conventional process. Actual results will vary by project.

Vertiv (VRT) shares rose about 4% to around $212.51 in midday trading on Oct. 21 after closing at $203.56 the previous day.

The announcement comes a week before Vertiv reports third-quarter results on Oct. 28.

Vertiv’s model cuts 120 days of work to 48

Vertiv’s estimate breaks the infrastructure process into two stages.

• Design, configuration, and virtual testing: about 30 days under a conventional process, versus three days using pre-engineered designs.
• Power and cooling deployment: about 90 days conventionally, versus 45 days using factory-built infrastructure.

Together, those two stages fall from about 120 days to 48 days in Vertiv’s model. 

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The first step happens before equipment reaches a construction site.

Instead of designing the power and cooling systems for each AI facility from scratch, engineers can start with reference designs based on Nvidia’s Vera Rubin DSX AI Factory architecture. The proposed setup can then be tested in a digital model before construction begins.

The system also uses technology from the French industrial software company Dassault Systèmes to create a virtual model of the facility, allowing engineers to test how computing, power, and cooling systems work together before construction begins.

After the design is approved, Vertiv will shift more assembly and testing into a factory. Larger sections of the power and cooling infrastructure can arrive at the data center site preassembled rather than being assembled piece by piece during construction.

This is important for AI operators. GPUs generate revenue only after the facility has sufficient power, cooling, and networking to run customer workloads. Shortening the infrastructure schedule gives operators more days to use the computing equipment they have already paid for.

Vertiv CEO Giordano Albertazzi has described the goal as reducing the time from a project’s requirements to productive AI capacity.

The company has been building its relationship with Nvidia around the same constraint. Vertiv has developed power and cooling designs around Nvidia’s newer systems, including infrastructure capable of handling increasingly power-dense server racks.

A 41-megawatt Norway project is applying the approach

Data-center operator Polar Data Centers is using Vertiv’s factory-built deployment approach for the first 41-megawatt phase of an AI data center in Herøya, Norway.

The site is designed to scale to 100 megawatts. Vertiv will provide prefabricated power and thermal modules along with overhead infrastructure for power distribution, liquid cooling, and networking.

The project gives Vertiv a real site where the deployment approach can be used, but neither Vertiv nor Polar has reported that the Norway facility has already achieved the 10-week time saving or 30% token-output increase in Vertiv’s model.

How much time can actually be saved also depends on problems outside the equipment supplier’s control.

A data center can have preassembled cooling and electrical equipment ready to install and still wait for enough electricity to reach the property.

That problem hit Australian data center operator NextDC on Oct. 21.

NextDC shares plunged 41.7% after delays to electricity-network upgrades at its M3 Melbourne facility forced about A$140 million in contracted customer revenue to be pushed into a later period. The company said the next increase in grid supply at the site is now expected in 2028.

Microsoft ran into an even longer delay in Britain.

The company pulled out of an agreement to anchor an Nscale data center in Loughton, England, after the site’s expected power connection was pushed into the 2030s, Reuters reported. The planned facility was supposed to house 23,040 Nvidia GB300 GPUs and provide 50 megawatts of AI computing capacity.

Those cases involve grid connections that Vertiv’s factory-built deployment model cannot remove on its own. They also show why data-center companies are spending more money on ways to secure electricity sooner.

Vertiv is moving closer to the data center’s power source

Vertiv agreed in September to acquire UtilityInnovation Group for about $1.45 billion in upfront cash, adding technology designed to help data centers source and manage power before it reaches server racks.

UtilityInnovation Group builds microgrid controls, coordinates on-site generation, and designs so-called behind-the-meter power systems. Those systems can enable a data center to use local generation or energy storage when the utility grid cannot quickly provide enough electricity.

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The acquisition pushes Vertiv further upstream from the cooling systems and power-distribution equipment it already sells inside data centers.

Its existing equipment helps move electricity from the point where power enters a facility down to individual server racks. UtilityInnovation Group would add tools for deciding where that electricity comes from and how on-site generation can fill gaps when the grid is constrained.

Vertiv has also been expanding production capacity for equipment used in high-density AI facilities and developing systems around newer Nvidia rack designs. The company describes the broader strategy as connecting infrastructure from the power source down to the chip.

Vertiv’s financial growth already reflects the AI infrastructure buildout. Second-quarter revenue rose 24% from a year earlier to $3.27 billion, and management raised its full-year outlook.

The company’s next update comes quickly. Vertiv is scheduled to report third-quarter earnings before the market opens on Oct. 28, followed by an 11 a.m. ET conference call.

Polar’s 41-megawatt Norway project will provide an early look at how Vertiv’s factory-built approach works outside a company model. The remaining question is how much of the proposed 10-week savings survives once construction, permitting, and access to electricity are factored into the schedule.

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That’s what she’s been doing with Palantir Technologies (PLTR), selling shares as the stock rallies ahead of its third-quarter earnings report.

Last year, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. So far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 11.05% as of Oct. 21, while the S&P 500 surged 13.32%, Yahoo Finance data shows.

Wood gained a reputation after the Ark Innovation ETF delivered a rosy 153% return in 2020. But her style also brings painful losses in bearish markets, as seen in 2022, when the ETF tumbled more than 60%.

Those swings have weighed on Wood’s long-term gains. As of Oct. 21, her Ark Innovation ETF has delivered a five-year annualized return of -6.36%, while the S&P 500 has an annualized return of 11.26% over the same period, according to data from Morningstar.

Cathie Wood remains optimistic about AI and tech revolution

Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She believes these businesses have strong growth potential, but their volatility often causes fluctuations in the Ark’s funds.

Over the decade ended 2025, the Ark Innovation ETF wiped out nearly $5 billion in investor wealth, according to a report by Morningstar’s analyst Amy Arnott. That made it the fourth-biggest wealth destroyer among mutual funds and ETFs in the ranking. 

Wood defended her investment strategy after an audience member at a recent summit questioned ARK’s performance compared with the Invesco QQQ Trust (QQQ).

Related: Cathie Wood buys $11.8 million of tumbling tech stock

“I welcome the question. Investors deserve to understand both their returns and the decisions behind them,” Wood said in a post on X on Oct. 5.

She argued that the ARK Innovation ETF (ARKK) and QQQ are built differently. QQQ tracks the Nasdaq-100 Index, while ARK actively invests in companies it believes are driving disruptive innovation across industries including healthcare, financial services and transportation.

Wood has long been optimistic about AI, which she sees as a major driver of productivity, economic growth, and corporate profits in the years ahead. She has also pushed back against recent fears that AI could pose an existential threat to humanity.

In September, Wood reposted a post by David Sacks on X, saying he makes a good case that the “AI will kill humanity” headlines were orchestrated.

Meanwhile, she acknowledged that AI, like other technologies, can be used for harmful purposes. She said people such as Elon Musk who highlight AI’s potential risks are “doing us a great service,” adding that “half of the solution—including AI—is understanding the problem.”

In August, Wood said U.S. corporate profits remain unusually strong, with domestic profits before tax at 13.2% of GDP, a level she said is near multi-decade highs. 

Some of that strength came from the massive monetary and fiscal stimulus during the pandemic, but Wood believes another factor is helping sustain margins today: companies are leaning into AI and productivity gains to protect them.

“I think we’re still early in seeing how far that can go,” she said, adding that companies that use AI effectively will “separate themselves from the ones that don’t.”

Not all investors agree with Wood’s optimism. Over the past 12 months through Oct. 20, the Ark Innovation ETF saw roughly $1.64 billion in net outflows, according to data from ETF research firm VettaFi. 

Cathie Wood sells $16 million of Palantir stock

On Oct. 21, 20, 19 and 15, Wood’s Ark funds sold a total of 79,290 shares of Palantir Technologies Inc. (PLTR), according to Ark’s daily trading information sent to TheStreet. These shares were worth about $16 million based on the latest trading price of $201.72.

Palantir shares have rallied this week after falling more than 11% last week amid a broader tech selloff.

On Oct. 19, Palantir announced a partnership with Knox Systems to expand the use of its AI software across U.S. government and defense agencies. The stock also benefited from a rebound in tech shares and optimism ahead of its third-quarter earnings scheduled for Nov. 2.

Related: Cathie Wood buys $17.3 million of surging AI stock

Mizuho analyst Gregg Moskowitz recently raised his price target on Palantir to $245 from $215 while maintaining an Outperform rating, according to The Fly.

The firm updated its software stock targets ahead of third-quarter earnings. Moskowitz said Mizuho’s channel checks were “very healthy overall,” pointing to strong public cloud spending, consumption trends, and continued AI adoption.

On Oct. 8, Goldman Sachs analyst Gabriela Borges upgraded Palantir to Buy from Neutral with a $230 price target. The analyst expects Palantir to outperform through 2027, citing growing demand for sovereign AI, customized applications, and the company’s expansion into specific industries.

Borges said Palantir’s total addressable market “may be setting up for another step function change in depth.”

The firm also noted that Palantir was trading at a discount to companies with similar growth rates after underperforming earlier this year.

In August, Palantir stock saw a single-day rally of 29.45% on August 4, after it posted rosy second-quarter earnings and outlook. 

Also read: CoreWeave stock plunges 12%, but Wall Street analyst says buy the dip

Adjusted earnings came in at 41 cents a share for that quarter, ahead of analysts’ estimates of 35 cents. Revenue jumped 93% year over year to $1.94 billion, beating expectations of $1.80 billion.

“To my knowledge, no businesses at our scale has even grown half this much,” Palantir’s CEO Alex Karp said in a CNBC interview. He also predicted that the strong growth will likely “go on for at least another 18 months.”

Palantir also raised its full-year revenue guidance to between $8.15 billion and $8.16 billion, up from its previous outlook of $7.65 billion to $7.66 billion.

Wood has been active in trading Palantir stock. She greatly increased her position in 2024 and sold many of those shares in 2025 as the stock climbed. In June, she bought back some shares. Now she’s selling again, likely locking in some gains after the recent rally.

Palantir is not among the top 10 holdings in the Ark Innovation ETF. 

Top 10 Holdings in the Ark Innovation ETF by weight as of Oct. 21, 2026:

• Tesla (TSLA) – 10.22%
• SpaceX (SPCX) – 6.47%
• Tempus AI (TEM) – 5.13%
• Circle Internet Group (CRCL) – 5.11%
• OpenAI Group – 4.44%
• Coinbase Global (COIN) – 4.31%
• CRISPR Therapeutics (CRSP) – 4.25%
• Shopify (SHOP) – 3.41%
• Twist Bioscience (TWST) – 3.13%
• Robinhood Markets (HOOD) – 3.07%

Other than buying Palantir shares, Wood’s latest trades on Oct. 21 included selling Amazon (AMZN), Shopify (SHOP), Teradyne (TER), Elbit Systems (ESLT), DraftKings (DKNG), and Personalis (PSNL).

She also bought shares of Pacific Biosciences of California (PACB), Intuitive Surgical (ISRG), X-Energy (XE), Oklo (OKLO), Netflix (NFLX), Scribe Therapeutics (SCTX), Iambic Therapeutics (IAM), and Intuitive Machines (LUNR).

Related: Analysts revamp Super Micro stock price targets after 10% surge on revenue boost

Policymakers have clearly noticed. The Federal Reserve released minutes of its Sept. 15-16 meeting on Oct. 7, and the record gave borrowers little comfort. For anyone carrying a balance or an adjustable loan, the coming weeks deserve a closer look than a quick glance at a monthly statement.

Why December may matter more than Oct. 28

The Fed’s rate-setting committee voted 12-0 on Sept. 16 to lift its benchmark range by a quarter point to 3.75% to 4%. It was the first increase since 2023, and it cast further doubt on any prospect of near-term rate cuts and made clear that cheaper borrowing was not around the corner. Instead, households are being asked to plan for the opposite.

Also read: Redfin predicts major housing market change over the next five years as debt-income ratios shift

Officials have not locked in a date for the next step. Vice Chair Philip Jefferson has said policymakers can “proceed carefully” in assessing whether further increases are needed, and New York Fed President John Williams has said he wants to collect more data before committing to the next move.

The minutes also stressed that policymakers approach each meeting with an open mind, which leaves both remaining meetings this year in play.

Markets have swung with that uncertainty.

The odds of an October move jumped to roughly even after the September inflation report, then slipped to 28% by Oct. 15, according to TheStreet. Bank of America still expects a hike at the Oct. 27-28 meeting, while economists at Citi, UBS and Morgan Stanley point to December.

Producer prices climbed 6.3% from a year earlier in September 2026, the biggest annual jump since 2022, according to FT Portfolios. When wholesale costs run that hot, retailers tend to pass them along, and that is the dynamic the Fed is moving to stop before it takes hold.

Adjustable-rate borrowers have a cushion, for now

The good news for homeowners is that most adjustable loans are not moving yet. Of roughly 3.1 million active adjustable-rate mortgages, about a third have begun adjusting, and more than 90% of those taken out since 2022 remain in their fixed periods, according to HousingWire.

Home equity lines are different, since they track the prime rate and typically reset monthly.

Owners who refinanced during the pandemic are sitting on rates most buyers today cannot touch, and that gap has kept a lot of adjustable borrowers on the sideline. But lenders do not wait for the Fed to move before repricing, according to the Associated Press. One hike absorbed quietly can become three that are not.

Refinancing out of an adjustable loan is not a cheap escape either. Fixed mortgage rates follow Treasury yields rather than the Fed directly, and the 10-year yield hovered around 5% after the September decision, TheStreet reported. Comparing several lenders and weighing closing costs matters more than usual in that setting, because small differences add up over decades.

Timing is the other piece of the puzzle. The Fed’s own projections released Sept. 16 show most policymakers expect at least one more increase before the end of 2026. If your loan or credit line resets early next year, budgeting for a rate at least that much higher is a sensible starting point.

Card balances feel the squeeze first

Variable-rate cards move fast. A borrower carrying the second-quarter average of $6,610 does not have to wait long before the next statement reflects a rate change, citing TransUnion. That extra line item reads like rounding error at first glance, but it compounds.

Most of the cards carry variable rates tied to the prime rate. So a quarter-point Fed increase usually adds about a quarter point to your APR. A 0% balance transfer card or a direct request to your issuer for a lower rate can also blunt the hit. Asking costs nothing more than a phone call.

Waiting for prices to cool before tackling a balance carries its own risk. Firms in several Fed districts said they expect prices to keep rising in the coming months, according to Reuters, in a report published Oct. 14. The more of the monthly budget that lands on plastic, the more each increase stings.

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Homeowners weighing a HELOC to consolidate card debt should remember that its rate floats too, even if it starts far below a typical card.

J.P. Morgan economist Michael Feroli expects one more hike in December rather than a long tightening cycle, and the earliest pressure falls on variable-rate cards and borrowers whose student loans carry variable rates.

Savers finally have some leverage

Higher rates do not sting everyone equally. The national savings rate average is just 0.38%, meaning money sitting in a standard bank account is effectively losing ground as prices rise around it.

Online high-yield accounts also make sense for money you need to reach quickly, while CDs are worth using more carefully, without locking up more than you can spare or picking a term you cannot see through. Money market accounts are another option for anyone who will want check-writing access.

UBS Wealth Management expects one more increase in December and views it as measured normalization rather than an economic derailment. With savings and CD rates able to drift higher alongside the Fed, savers who shop around before Oct. 28 stand to gain the most, while those who stay put may keep earning next to nothing.

Related: Zillow predicts major mortgage rate, housing market change

Digital wallets, payment apps and connected banking services have stripped most of the friction from everyday transactions. Moving money is faster, more accessible and more integrated into daily life than it was a decade ago.

That shift has produced a problem the industry has not resolved: how much financial information people give up each time they use those services.

Also read: Kevin Warsh sends a strong warning sign on rates to Wall Street

Every digital transaction can reveal something about the person behind it. Spending patterns can indicate where someone lives, which businesses they frequent and how much they earn.

When banks, payment processors, digital wallets and data brokers each hold portions of that information, individual transactions can combine into a profile that travels further than most customers realize.

The convenience comes with a data trail

The risks compound with routine activity. A single payment reveals limited information. A record of hundreds of transactions, drawn from multiple services, tells a more complete story.

Ermo Eero, managing director of IronWallet, told TheStreet that the exposure builds gradually rather than through any single event. “The biggest risk isn’t one dramatic breach. It’s the quiet build-up of data: every fast, one-tap payment leaves a trail that wallets, payment processors, banks and data brokers can combine into a detailed picture of someone’s life, including where they go, what they buy and what they earn.”

Open banking connections and third-party integrations extend that trail. Each link that makes it easier to move data between platforms also introduces another point where that data can be retained, shared or used in ways customers did not specifically anticipate.

Financial institutions collect transaction data for legitimate reasons: detecting fraud, verifying payments and meeting regulatory requirements. The problem is that the same infrastructure serving those functions can expose information that both individuals and institutions would prefer to keep private.

Consent agreements typically disclose how data is used. Accepting terms does not mean customers understand every downstream use of their information. That gap is likely to widen as financial services become more automated.

When financial records are public by design

Some digital financial networks record transactions on shared ledgers visible to any participant. That transparency supports verification. It also creates confidentiality problems that conventional banking systems were not built to solve.

An account identifier on such a network does not automatically reveal its owner. But once it is linked to a real person or organization, its full transaction history becomes accessible. For businesses, that can expose trading positions, treasury movements and commercial relationships to competitors.

Exposure matters more as financial activity expands across shared digital infrastructure. Whether institutions adopt these systems more widely may depend in part on their ability to protect sensitive information while using them.

Guy Itzhaki, CEO of Fhenix, told TheStreet the issue is about control, not concealment. “Privacy is increasingly becoming less about ‘having something to hide’ and more about having basic control over who can see what.”

Verifying without revealing

Several technologies are being developed to let financial systems run checks and process data without exposing the underlying information. Fully homomorphic encryption, multi-party computation and zero-knowledge proofs each approach the problem differently.

Fully homomorphic encryption allows computation to run directly on encrypted data. Multi-party computation enables computations among multiple participants without requiring each party to have full access to all inputs.

Zero-knowledge proofs allow someone to demonstrate that a condition is met, such as having sufficient funds or having passed an identity check, without disclosing the underlying details.

In financial services, those capabilities could allow systems to verify transactions and assess positions while limiting what each participant in a transaction can see.

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“A financial system should be able to execute rules correctly without requiring every underlying input to be public,” Itzhaki added.

On Oct. 21, Fhenix launched its CoFHE encrypted-computation coprocessor on Ethereum and Arbitrum, allowing smart contracts to process financial data without exposing the underlying values. The release includes a Consensys Diligence security audit and two design partners, Fluton and Alpha Engine, developing confidential financial applications on the network.

The technology still carries trade-offs in cost, performance and implementation complexity. Privacy protections also need to work alongside financial regulations. Anti-money laundering requirements and customer identity checks remain in force regardless of how underlying data is encrypted.

Building privacy into the product, not onto it

Technology does not fix the data exposure problem on its own. Financial services providers also have to decide what information they collect, how long they retain it and who can access it.

Those decisions are most effective when made at the product design stage. Collecting less data by default, shortening retention periods and giving customers usable controls over their information can reduce exposure before any encryption layer is introduced.

Eero said the choices providers make about data will shape how consumers and regulators judge them. “In finance, trust is the real currency, and a service that is convenient but careless with data will eventually lose both its customers and its regulators’ goodwill.”

For technology companies, building privacy into the underlying product rather than treating it as a compliance feature could open access to institutional customers. Banks and asset managers need to demonstrate control over what is visible and to whom before committing sensitive financial activity to shared infrastructure.

Digital payments will continue to get faster and more connected. The industry’s next question is not whether to collect transaction data, but how to limit what gets exposed and to whom.

Related: Michael Burry buys another beaten-down forgotten fintech stock

That habit has been worth a fortune to the cable companies that wire American homes. For decades, the choice in most neighborhoods came down to one cable provider, and it priced its plans accordingly.

That grip is slipping. Charter Communications (CHTR), which sells internet under the Spectrum brand, lost 172,000 broadband customers in the second quarter, Light Reading reported July 24.

Comcast (CMCSA) shed 167,000, according to Broadband Breakfast on July 23. Optimum lost another 40,000, Fierce Network reported Aug. 10. The company said it was also exiting some low-density markets in its West footprint, the same report showed.

Charter has mostly pinned its losses on fiber and fixed wireless rivals rather than satellites, Light Reading reported.

Charter’s average residential broadband customer paid $70.16 a month, down 1.5% from a year earlier, Light Reading reported. Now Elon Musk’s SpaceX (SPCX) has put a number right beside it.

On Oct. 20, SpaceX said Starlink’s average consumer paid $69 a month as the service added 1.6 million subscribers in the third quarter. Total revenue jumped 161% to $14.6 billion, according to Quartz.

SpaceX’s $14.6 billion quarter ran on two very different engines

The headline number came mostly from artificial intelligence. SpaceX’s Super Intelligence segment brought in $7.6 billion, up 830%, while its connectivity business grew 69% to $5.2 billion, Quartz reported Oct. 20.

The company also swung to a $4.4 billion profit from a $1.1 billion loss a year earlier. Revenue topped the $12.87 billion analysts expected, and adjusted earnings of 35 cents a share beat the 13-cent forecast, according to Investing.com.

Shares rose 6.6% after hours to $157.59 on Oct. 20, the same report showed. Check the live quote before you act, because that move was still settling on Oct. 21.

In my analysis, the AI number grabs attention, but connectivity is the part that touches your household budget. That is the business now competing for the same monthly payment your cable company counts on.

Why Starlink’s subscriber gain matters for cable companies

The comparison needs one caveat up front.

Starlink’s 1.6 million additions are global consumer subscribers, which Chief Financial Officer Bret Johnsen said came mostly from “more developed markets.” The cable losses are U.S. figures.

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Even with that gap, the trend is hard to ignore. Starlink ended June with 12 million subscribers, as TheStreet reported in Bank of America’s wireless reality check on SpaceX, and reached 13.6 million by the end of September.

Charter had 29.38 million broadband customers at the end of June, Light Reading reported. That means Starlink’s consumer base is already close to half the size of the company behind Spectrum.

The two bills are also moving in opposite directions. Starlink’s average bill rose 5% from the prior quarter, Johnsen said on the call, while Charter’s fell 1.5% from a year earlier. I ran the math, and the gap between them is now $1.16 a month.

Here is what the latest round of filings and calls shows about where this goes next:

• Starlink Mobile: The service passed 22 million monthly users, up 37% from the prior quarter, President Gwynne Shotwell said.
• New spectrum: SpaceX is buying Grain Management’s nationwide 800 MHz spectrum for Starlink Mobile, Telecompetitor reported Oct. 19.
• Carrier ambitions: The spectrum “will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.,” Shotwell said.
• Cable keeps the door open: On satellite wholesale deals, Charter CEO Chris Winfrey said, “If it’s going to be material, it’s certainly something we would think about,” Fierce Network reported.

Spectrum and Comcast bosses say their networks still win

The cable companies are not conceding. Asked whether Starlink would be the main rival in urban and suburban markets, Winfrey said, “Do I think it will be the competitive solution for those? No,” according to Broadband Breakfast.

Comcast was just as blunt. “In reference to fixed wireless and satellite, our network far exceeds what they have,” said Steve Croney, chief executive of Comcast’s connectivity business, the same report showed.

Related: T-Mobile pushes back on SpaceX’s bid to take its customers

Winfrey did concede one thing. Charter’s rural builds were increasingly reaching homes that already had Starlink, which slowed its sign-ups there, Broadband Breakfast reported.

I think the cable executives have a point in dense neighborhoods, where a coaxial or fiber line carries far more traffic than a satellite beam. The risk sits at the edges of their maps, in rural homes where Starlink is now there first.

How the satellite race could lower your internet bill

Do not expect Starlink to start a price war. It raised consumer plan prices by $5 to $10 a month in May, as TheStreet reported in its look at a troubling Starlink pricing trend, and its average bill rose again last quarter.

Your savings come from the pressure Starlink and fiber put on everyone else. Optimum just rolled out a customer appreciation program with giveaways and perks, Telecompetitor reported.

That gives you bargaining power at renewal time. Call your provider, name the alternatives in your ZIP code, and ask for the promotional rate.

Musk is aiming much higher than your monthly plan. He said SpaceX sees “a clear path to several hundred billion dollars a year in connectivity revenue.”

For scale, Charter’s $13.52 billion second quarter works out to about $54 billion a year, based on Light Reading‘s figures. Musk’s target is several times Charter’s entire business, and the phone service tied to that new spectrum isn’t expected until early 2028, Shotwell said on the call.

The next test arrives fast. Comcast reports third-quarter results on Oct. 22, and Verizon follows on Oct. 26.

Watch the broadband line in both reports. If the losses keep coming while Starlink keeps adding, your next renewal call gets a lot more interesting.

Related: SpaceX has a plan to make your phone carrier obsolete

Back in May 2025, Wedbush analyst Dan Ives projected more than $3,000 as a possible price for an iPhone made in the U.S., as reported by Business Insider, compared with $799 for a standard iPhone 16.

Mark Cuban thinks that framing misses the point. In his view, the real contest is machine against machine, and he is not just speaking in theory.

His drug company opened a Dallas plant that uses “advanced robotic and AI computer vision technology,” which gives his argument a little more weight than a typical social media hot take.

Mark Cuban’s drug plant puts his automation argument to the test

Cost Plus Drugs was built to strip out the middlemen. Cuban co-founded the company in 2022, and it sells generic medicines at the manufacturer’s cost plus a flat 15% markup, along with pharmacy and shipping fees, skipping pharmacy benefit managers entirely, as reported by Fierce Healthcare.

The company then pushed into making drugs itself. Its 22,000-square-foot Dallas facility, built for $11 million, started with commercial batches of epinephrine and norepinephrine for intensive care patients, with pediatric chemotherapy drugs to follow. Those are cheap, essential medicines that often run short.

Also read: Mark Cuban has strong words on taxes and wealthy Americans

Automation is the selling point. CEO Alex Oshmyansky said the plant could switch from one drug to another “in principle within four hours,” letting it make whatever product is running short, and he described the generic drug supply chain as extremely brittle, as reported by Fierce Healthcare.

That kind of flexibility is exactly what Cuban means when he says better robots and software could tilt the math back toward American factories.

Skeptics see bigger hurdles than fees. Not everyone thinks robots solve the problem. Rosenblatt analyst Barton Crockett has said U.S. iPhone production is a long way off, naming construction lead times, Apple’s exacting quality bar, and weak American demand for that kind of work.

Cuban’s read is that smarter machines eventually close most of that distance.

China already has a head start on robots

The trouble with Cuban’s plan is that China is running the same race, and faster. Morgan Stanley analysts expect humanoids and robots to become the next key engine of China’s export machine over the coming five to 10 years, comparing the push to the rise of its electric vehicle industry, as reported by Bloomberg.

The early numbers back that up. Morgan Stanley estimated Chinese manufacturers made up roughly nine in 10 of the humanoid robots shipped worldwide last year, while American and Japanese rivals were still mostly building prototypes.

That is the gap Cuban says America has to close.

Tesla is America’s loudest bet on catching up in robotics. The carmaker raised its 2026 capital spending guidance to more than $25 billion, funding a major push into AI automation, with a significant share going to convert Model S and Model X capacity into Optimus robot lines, according to The Motley Fool. Analysts expect Optimus revenue to remain limited until 2029.

China’s robot boom has its own cracks, though. Unitree, the country’s best-known robotics company, has dropped 45% from its all-time high since listing in Shanghai, and regulators have reportedly made it harder for humanoid makers to go public.

At least six more Chinese humanoid makers are still said to be lining up listings. But a head start is not the same as a finished race.

America’s AI chip edge is getting squeezed

Cuban’s other condition, staying ahead on AI, looks shakier inside China. Nvidia’s share of the country’s data center AI chip market slid to 34% in the first half of 2026, while Huawei climbed to 28%, with U.S. export controls limiting Nvidia’s supply, according to Reuters.

That erosion started before this year. In 2025 Nvidia still commanded about 55% of China’s AI accelerator market. Bernstein now puts its share at roughly 8% by year-end, according to TheStreet, a collapse driven in large part by Beijing’s push to replace foreign chips with homegrown ones.

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Memory is the next front. CXMT says it has made key progress on a new memory cell design and plans to launch a server memory product using it by the end of 2026. The layout squeezes each cell into about a third less space than mainstream chips at the same line width.

Wall Street noticed. Micron shares fell about 3% on Oct. 12 and were headed for a weekly drop of more than 10%, partly on worries about competition from CXMT.

Some analysts argued the selloff was overdone, pointing out that CXMT has not yet matched the high-bandwidth memory used in AI servers.

Washington plans to guard its AI lead

The White House sees the race the same way Cuban does. Speaking to reporters on Sept. 26, Trump said he would rather not combine American and Chinese AI efforts “because we’re leading by a lot,” adding that “when you’re leading, you don’t open it up to each other,” according to Al Jazeera.

That leaves the tougher half of Cuban’s formula for companies to solve. Building factories in America still takes patience.

When work began on Cost Plus Drugs’ Deep Ellum facility in 2021, it was scheduled to be finished by late 2022. Its first drugs did not come off the line until March 2024.

Still, his core idea is easy to follow. If American robots, software, and AI can match or beat what China puts on its factory floors, labor costs matter far less. Cuban has even predicted that within five years there would be no more shortages of sterile injectable drugs.

Whether the rest of corporate America follows his lead is the question that will decide the race.

Related: Mark Cuban just sent a strong message to America’s workers

That routine shaped the brand for years, and it cost the company dearly. Shoppers learned that full price was optional, and the stock spent much of the past few years being priced like a mall chain in decline.

The company is now trying to break that habit. Victoria’s Secret & Co. posted second-quarter net sales of $1.61 billion, up 10%, according to its earnings release filed Sept. 3.

“We have made a deliberate decision to reduce our reliance on promotion and increase regular price selling,” CEO Hillary Super said on the earnings call, according to Investing.com’s transcript.

However, that strategy is now reaching the products shoppers want most, right as the holiday season starts.

According to a Bank of America research report reviewed by TheStreet, Victoria’s Secret is keeping merchandise featured in its 2026 Fashion Show out of promotions. The bank found the items selling out in a Los Angeles store a few weeks after they arrived.

What Bank of America saw inside a Victoria’s Secret store

Bank of America hosted a store tour in Los Angeles after the Oct. 18 Fashion Show, which the brand held at Sony Pictures Studios in Culver City and streamed on YouTube, Hello! Magazine reported.

Inside the store, the analysts found a noticeable pickup in traffic ahead of the show and frequent sell-outs of Fashion Show-branded merchandise. Runway pieces carried special tags and had dedicated displays styling key looks.

Those tags matter for your wallet. Tagged products are excluded from promotions, which the bank called “an example of how the company continues to pull back on promos,” wrote BofA analyst Mary Sport in the Oct. 20 note, titled “Store tour highlights strategic changes to drive stronger margins.”

Read more: Victoria’s Secret closes 38 stores as customer tastes change

I see those tags as the clearest sign yet that the discount era is ending at the top of the assortment.

The company’s own numbers back that up. Comparable sales rose 9% in the second quarter, according to the earnings release, and Super said regular-price selling grew at a low-double-digit rate.

“The regular price selling continues to be where all the growth is coming from,” Chief Financial Officer Scott Sekella said on the call.

Wall Street wasn’t impressed at first. Shares fell 13% to $73.78 in premarket trading on Sept. 3 after revenue missed estimates by about $10 million, Investing.com reported. They closed at $89.84 on Oct. 19, according to MarketBeat, a rebound of roughly 22% by my math.

Holiday gifts and Gen Z shoppers give the brand an opening

The timing works in the company’s favor. Deloitte expects holiday retail sales to rise 4% to 4.8% this season, to between $1.70 trillion and $1.71 trillion, according to its holiday forecast released Sept. 10.

“Consumers continue to place importance on making the holidays special for their friends and families,” said Natalie Martini, Deloitte’s U.S. retail and consumer products leader, in the release.

Victoria’s Secret is aiming its holiday push at gifts. The bank’s analysts found sleep gift sets already showcased at the front of the store, with the full holiday collection arriving over the next few weeks, and associates pitching beauty products on clean ingredients and scent notes.

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Both categories have momentum. Beauty delivered its 12th straight quarter of sales growth, and sleep grew by a mid-teens rate, Super said on the call. For more on that push, see TheStreet’s look at how Victoria’s Secret is chasing Bath & Body Works with fragrance.

Younger shoppers are a big part of the bet. Collaborations with LoveShackFancy and the K-pop group TWICE are pulling in a younger customer, Sport wrote, and comfort-focused bras such as FlexFactor keep selling at a higher average price per item.

“We definitely see Gen Z wanting a store experience even more than other groups of customers,” Super said on the call.

Given that backdrop, it’s easy to understand why Bank of America thinks the Fashion Show buzz can carry sales and traffic through the holidays.

Why fewer discounts could mean fatter retail margins

The bigger prize is profit. Bank of America sees operating margins climbing beyond 10%, helped by remodeled stores that have posted double-digit sales gains in less space, thanks to better traffic and conversion.

Management wants half of its global fleet remodeled by the end of what the bank labels fiscal 2027, “leaving a significant amount of whitespace remaining,” Sport wrote.

The bank’s model shows how steep that climb is. BofA forecasts the operating margin will reach:

• 8% for the fiscal year ending in January 2027, up from 6.1% a year earlier
• 9.7% the following year
• 10.3% the year after that

BofA’s $95 price objective is based on 15 times its fiscal 2027 earnings estimate, between mall-based apparel peers at 11 times and high-growth consumer names at 18 times.

For the current year, the bank expects $4.67 a share, near the top of the company’s own adjusted guidance of $4.45 to $4.70, according to the September release.

Other banks have turned more bullish this month, too. Morgan Stanley raised its target to $104 from $101 on Oct. 19, and Needham started coverage with a Buy and a $106 target on Oct. 16, MarketBeat reported.

Much will likely depend, however, on whether shoppers who were trained to wait for a sale keep paying full price once the runway buzz fades. The company guided to just $10 million to $20 million in third-quarter operating income, so the holiday quarter has to do most of the work.

The note flags the same pressure. Downside risks include “overseas digital retailers taking share by offering lower-priced alternatives,” Sport wrote, a real threat when your phone can find a cheaper bra in seconds.

In my analysis, the practical takeaway for shoppers is simple. If a runway piece is on your holiday list, I wouldn’t count on it going on sale.

For investors, the bank’s verdict is clear. “We maintain our Buy rating as we think continued sales momentum supports significant OM [operating margin] expansion and double-digit EPS growth,” Sport wrote.

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The surprise came from a chain most people had written off. Kohl’s has spent the year shrinking expectations, and it still expects full-year sales to decline between 3.5% and 4%. Yet when the deal week was over, it was Kohl’s, not the giants, that had posted the biggest jump in store visits.

Kohl’s posted the biggest traffic lift of the week

The numbers come from foot traffic tracker Placer.ai. On its sale days, Kohl’s visits ran 9.6% above its recent average for the same weekdays, the largest lift among the chains Placer tracked, while Target managed about 2%, Walmart about 1%, and Best Buy came in slightly below normal.

Also read: Kohl’s drops prices on key items as customer interest fades

Against last year’s numbers, Kohl’s held its position. Visits were up 4.5%, with Target the only chain ahead at 6%. Walmart fell 0.9%, and Best Buy dropped 2.2%.

Target’s edge looks different once you factor in that it ran just two days this time, versus seven the prior fall. The Placer.ai figures measure foot traffic only, not what people spent once inside.

One day stood out above the rest. On Oct. 9, Kohl’s traffic jumped 22.3% above normal, due to it being the first day shoppers could redeem the Kohl’s Cash they had earned during the sale, Placer.ai reported. The reward program did exactly what it was built to do.

The promotion ran Oct. 5 through 8 and stacked rewards on top of markdowns. Shoppers earned $10 in Kohl’s Cash per $50 spent and got an extra 25% off at checkout.

Seasonal items were discounted by as much as half, and web orders went out free. After the sale ended, the Cash balance gave customers a concrete reason to come back.

A rare win for a chain still fighting to grow

This is not a company riding a hot streak. Kohl’s comparable sales slipped 0.9% in its second quarter, and CEO Michael Bender said customers are becoming “increasingly choiceful, actively seeking value in every purchase,” according to TheStreet. Its core low- and middle-income shoppers have been trading down to cheaper house brands.

Still, the traffic trend had been quietly improving before October. Placer.ai data showed Kohl’s store visits fell 1.4% in the second quarter, a far smaller drop than the 7.7% decline it suffered in the first quarter. The deal week suggests that recovery may be picking up speed.

The chain also heads into the holidays lighter than it was a year ago. It closed 27 stores in 15 states during 2025, and Bender has said the company has no plans to cut further. Among the roughly 1,150 stores still open, more than nine in 10 are making money. Each location that survived the cuts is pulling more of its own weight.

The backdrop remains tough, though. Bender has pointed to a “challenging macroeconomic environment,” with rising prices for everyday costs such as gas and food squeezing his shoppers. That is partly why Kohl’s leaned so heavily on discounts this month.

Why the retail giants looked flat

Target is the closest thing to a second winner here. CEO Michael Fiddelke took over in February 2026 after a rough 2025, when net sales fell 1.7%, and Target expects sales to grow in every quarter of 2026, according to Retail Dive.

Its traffic gain over last year hints that the turnaround is starting to show up in stores.

Walmart spread its event across a full week, from Oct. 5 through Oct. 11, which may have spread foot traffic too thin for a standout daily number. Hurricane Isaias also made landfall on the Gulf Coast on Oct. 9, and Placer.ai noted the storm may have kept shoppers away from Walmart and Best Buy that day.

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Walmart’s customer mix has been shifting, too. CEO John Furner said the majority of its recent market share gains came from households earning more than $100,000, while those making under $50,000 are managing spending paycheck to paycheck, according to Retail Dive. Those stretched households may simply have had less to spend this month.

Best Buy was up against a tough comparison.

A year earlier, it posted 2.7% comparable sales growth in the quarter that included its 2025 sales push, with analysts on the earnings call calling it the best growth in more than four years, even as CFO Matt Bilunas said appliances were “probably the most difficult” category, according to Best Buy. Placer.ai said that a strong “Techtober” event left Best Buy with a high bar to clear this October.

What Kohl’s strong week signals for the holidays

The National Retail Federation (NRF) expects holiday sales to top $1 trillion for the first time, but much of that spending is coming from wealthier households.

“We definitely see it being a tale of two cities,” NRF Chief Economist Mark Mathews told the Boston Globe, noting that consumers with money are spending, while lower-income families are pulling back.

The typical Kohl’s shopper sits right in the middle, with a median household income above $95,000, according to Placer.ai. That puts the chain squarely in the group most likely to spend if the deals are right. The deal week showed that those shoppers will still show up for a sharp enough discount.

Foot traffic is not revenue, and one deal week will not close the gap on a difficult year. Kohl’s is still guiding for a meaningful full-year sales decline, and those visitors need to leave with full carts for October to show up in the bottom line.

What the data does show is that the discount-and-reward formula still works when shoppers are watching their spending closely.

Related: Walmart gets unexpected boost from stubborn inflation

Western Digital makes high-capacity hard drives used by hyperscalers, cloud providers, and other enterprise customers to store large amounts of data.

BofA analyst Wamsi Mohan expects Western Digital’s fiscal first-quarter exabyte shipments to increase 21% from a year earlier, below management’s longer-term target of roughly 25%. Exabyte growth measures the amount of storage capacity the company ships.

At the same time, BofA expects Western Digital’s average price per terabyte to rise 24% from a year earlier. Demand for hard-drive storage continues to exceed available supply, giving manufacturers room to charge more for each unit of storage capacity, according to the bank.

Western Digital shares rose 3.89% to close at $378.51 on Oct. 21.

The company will report fiscal first-quarter results after the market closes Thursday, Oct. 22. BofA expects revenue of $4.22 billion and adjusted earnings of $4.29 per share, slightly above Wall Street estimates of $4.16 billion and $4.11, respectively.

Higher hard-drive prices lift BofA’s earnings outlook

BofA expects tighter HDD supply to keep supporting Western Digital’s prices and profit margins.

The bank forecasts a 56.4% fiscal first-quarter gross margin, slightly above Western Digital’s own guidance range of 55% to 56%. It expects the benefit from higher pricing to continue into the December quarter, when BofA sees gross margin approaching 59%.

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Western Digital’s latest results have already shown how much margins have expanded. Fiscal fourth-quarter revenue rose 44% to $3.75 billion, and adjusted gross margin reached 54.4%, up sharply from a year earlier.

BofA raised its fiscal 2027 earnings estimate to $22.37 per share from $19.17. The increase helped push the bank’s price target to $800.

The valuation itself actually became more conservative. BofA now applies a 16-times earnings multiple, down from 19 times previously. Higher earnings estimates were large enough to push the target higher, even with the lower multiple.

Part of the slower near-term capacity outlook comes from Western Digital’s transition to newer, higher-capacity drives.

The company’s 40-terabyte ePMR hard drive has qualified with two customers and is entering volume production, according to BofA. The bank expects the product transition to help exabyte shipment growth accelerate during the second half of fiscal 2027.

That marks progress from February, when Western Digital said its 40TB UltraSMR ePMR drive was still undergoing qualification with two hyperscale customers, with volume production planned for the second half of 2026.

Toshiba’s expansion could pressure Western Digital’s pricing

Western Digital and rival Seagate Technology (STX) have recently faced a different concern: whether new industry capacity could weaken the pricing power now supporting their earnings.

The stocks sold off earlier this month after reports that Toshiba planned a major expansion in hard-drive production capacity. Investors worried that additional HDD supply could eventually narrow the gap between customer demand and the drives available to ship.

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BofA’s industry checks have yet to show that pressure.

The bank said pricing discussions with hyperscale customers remain constructive, despite Toshiba’s planned expansion. BofA expects strong HDD pricing and margins to continue well into 2028.

Other analysts have also pushed back on the idea that the current HDD cycle is about to end. Morgan Stanley maintained its Overweight rating on Western Digital this week after the recent sell-off, arguing that demand, customer growth, and pricing remain supportive heading into earnings.

BofA still identifies several ways the call could go wrong. A slowdown in cloud or data-center spending, weaker HDD pricing, delays in Western Digital’s higher-capacity products or market-share losses to Seagate could reduce the earnings growth behind its $800 target.

Western Digital’s fiscal first-quarter results will give investors their next read on the two numbers behind BofA’s call: how quickly the company is shipping more storage capacity and how much customers are paying for each terabyte.

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You write it in October. You fund it in November. Then you pay for it, sometimes with interest, well into January.

Every line on that list is a small promise to someone you love, and for most of 2026, those promises have been getting more expensive to keep.

Overall consumer prices rose 3.7 percent over the 12 months ending in September, up from 3.4 percent in August, according to the Bureau of Labor Statistics. Gasoline alone jumped 9.1 percent in September and accounted for more than half of the monthly increase, the agency reported on Oct. 14.

Gas is the pain you notice every week at the pump. The next one shows up once a year, in the aisle full of bright boxes and blister packs. It rarely makes headlines, because it only matters for a few weeks a year.

Toy prices rose 4.2 percent from August to September on a seasonally adjusted basis and 6.6 percent from a year earlier, according to the same BLS report. The agency’s own one-month analysis table flags that 4.2 percent move as the largest ever for its toy index.

That spike lands just as you start drafting the list.

The toy index just set a record nobody wanted

I went through the BLS detail tables line by line, and the toy number stands out for a simple reason. Most goods barely moved in September, with the index for commodities excluding food and energy up just 0.3 percent, the BLS reported.

Toys rose 14 times faster than that. A broader special index covering toys, games, hobbies and playground equipment climbed even more, up 5.1 percent for the month, according to the BLS.

Related: U.S. consumers start holiday shopping early, leaning on buy now, pay later

There is one caveat worth knowing before you panic. Toy prices fell 2.3 percent in August, per the BLS, so part of September’s jump is a rebound.

Even after netting the two months, my analysis shows toys finished about 1.8 percent higher than in July. That is a steep climb for a category that has never moved this fast in a single month.

Why oil and old tariffs end up on the price tag

Most toys are made of plastic, and most plastic starts as petroleum. That ties your kid’s action figure to the same energy shock you see at the pump, with the BLS energy index up 20.4 percent over the past year and gasoline up 34.2 percent. It also explains why gas prices didn’t fall with oil for so many drivers this fall.

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Fitch Ratings senior director David Silverman, who covers retail and consumer companies, tied the two cost drivers together. “Those dual issues appear to be showing up in pricing,” Silverman said, according to Reuters on Oct. 15. He added that the Iran conflict’s hit to commodity and shipping costs will persist for the next several quarters.

Tariffs are the second force, and they work on a delay. Jay Foreman, CEO of Basic Fun, the Florida company behind Tonka trucks and Care Bears, told Reuters the industry used last year’s higher tariff rates to price the toys hitting shelves this fall.

Foreman said lower tariffs should bring toy prices down over time, but only if wars stop pushing up fuel and raw material costs. That is a big condition for a holiday season that starts in a few weeks.

Here is how the cost stack built up:

• U.S. tariffs on Chinese goods started at 145 percent and fell to 30 percent in May 2025, according to Reuters.
• The U.S. and China reached a late-September agreement to cut tariffs on $30 billion of goods in each direction, Reuters reported.
• Mattel (MAT) reported that tariff-related costs squeezed its margins, and CFO Paul Ruh said on an August earnings call that the company was “seeing some moderate inflationary pressures associated with events in the Middle East,” according to Fox 10 Phoenix.
• Hasbro (HAS) CFO Gina Goetter said in July that the company absorbed higher input costs, Fox 10 Phoenix reported.

What parents will pay at the register this season

The index is an average, so I ran the numbers on what it means for your cart. If your list held $300 of toys last year, the same list at 6.6 percent inflation runs about $320 today. A $500 list becomes roughly $533.

In my analysis, the bigger risk is the individual price tag, not the average. Last holiday season, Dean Smith, co-owner of the JaZams toy stores in Princeton, N.J., and Lahaska, Pa., estimated that wholesale prices on 80 percent of his inventory rose five percent to 20 percent, according to The Associated Press.

A doll that sold for $20 to $25 the year before was priced at $30 to $35 at his stores, Smith told AP. Those were 2025 prices, and this year’s shelves carry that tariff math plus a fresh oil shock.

Demand isn’t helping you either. Toy dollar sales jumped 17 percent in the first half of 2026, the industry’s best first half in six years, according to Circana data cited by Retail Dive. Shoppers have also been trading up to higher-priced toys, Retail Dive reported.

Strong demand gives sellers little reason to mark down early. Some retailers are pushing the other way, though, with Kohl’s adding Toy Towers of items under $10 to its stores this year.

Smart ways to protect your holiday gift budget

Here is the hard truth. Waiting for prices to fall probably won’t work this year, because the energy costs Silverman described are expected to linger well past December.

The squeeze is already showing up in paychecks. “Americans are seeing their pay totally wiped out by inflation,” Navy Federal Credit Union chief economist Heather Long wrote in emailed comments, according to Retail Dive.

Forty-five percent of consumers describe their household finances as insecure heading into the holidays, and more than 70 percent say saving money will be a priority, according to an Ibotta report cited by Retail Dive.

That leaves you with choices, not magic. Price your list now and set a hard dollar cap for each child before you shop, so trade-offs happen at the kitchen table instead of the checkout.

Buy the one big gift early, because high-demand items are where markups and stockouts bite hardest. Leave small plastic add-ons for last, since they quietly stack up.

Compare prices across retailers, as TheStreet did in last year’s holiday price check of Amazon, Walmart and Target. For younger kids, consider secondhand toys or swaps with other families.

Finally, think hard before financing the haul. Higher prices hurt once at the register, but carrying the balance makes you pay for them again in interest.

Where prices could head after the Nov. 10 report

The BLS will publish October’s inflation report on Nov. 10, which will show whether September’s toy surge stuck or partly reversed.

Retailers are betting you will spend anyway. The National Retail Federation expects November and December sales to rise 4.2 percent to $1.013 trillion, Reuters reported.

My take is that a lot of that growth is simply higher prices. With overall inflation at 3.7 percent and toys at 6.6 percent, you could spend more this year and still bring home fewer boxes.

This season, the smartest gift you can give your family may be a list with a number at the top.

Related: Vanguard economist says sticky inflation will test your patience

But I often wonder how much longer these vehicles can remain affordable for the people who depend on them. And looking at General Motors’ latest numbers, I think they’re expensive now.

GM’s average transaction price climbed above $52,000 in the third quarter of 2026, up from $50,500 a year earlier, CFO Paul Jacobson’s said in an Oct. 20 appearance on CNBC.

I think that’s not a small jump for someone buying a truck to make a living. Yes, the vehicles may be getting better, but they’re also becoming harder to justify financially.

That tension between a company that is genuinely executing well financially and customers feeling the pressure of higher prices ran through GM’s entire Q3 2026 earnings presentation. 

In fact, the company beat on both revenue and earnings. But the stock fell 8% anyway, as of the afternoon of Oct. 20.

That drop has pushed General Motors Company (GM) stock down over 4.5% year to date, according to Yahoo Finance, and a one-year return is fairly strong at 34%.

Also Read: GM wants drivers to be able to text and drive

The $20 billion move and what it says about where GM thinks its stock is valued

The headline from the Oct. 20 earnings was not even the beat but the buyback. GM’s board approved a new $20 billion multi-year share repurchase authorization after completion of an earlier $6 billion program, according to GM’s Q3 earnings announcement. 

The new program has no expiration date. Jacobson had a few words to say about the logic in his CNBC interview. 

We have one of the lowest price-to-earnings multiples on the street and a double-digit free cash flow yield. We know that buying back shares is a really strong investment for our shareholders.

The CFO is simply saying that his GE stock is cheap. GM’s forward P/E ratio on Macrotrends read 6.67 as of Oct. 20, 2026. According to a report by TheStreet’s Tony Owusu, BNP Paribas analysts viewed General Motors’ stock drop after the Q3 earnings as a buying opportunity.

The numbers behind the claim are solid. GM has reduced its fully diluted share count by 37% over the past three years, repurchasing an average of $7.5 billion annually over four years. 

As of Sept. 30, GM had 849 million shares outstanding, down from 995 million at the end of 2024 and 1.2 billion at the end of 2023, according to GM’s earnings release.

The capital allocation framework Jacobson described is to invest in the business first ($10 billion to $12 billion this year), protect the balance sheet second, then return capital. “This is a cyclical industry,” he noted, and the balance sheet protection reflects hard-won lessons from 2008.

The GM earnings that funded the announcement

Q3 2026 revenue was $50.02 billion, up 2.9% year over year and beating consensus expectations of $48.21 billion, according to the GM’s earnings release.

Adjusted EPS was $3.70, up 32.2% year over year. Adjusted EBIT was $4.11 billion with an 8.2% margin. Global wholesale volume reached 1.03 million vehicles.

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Full-year adjusted EPS guidance was narrowed to $12.75 to $13.75, up from an earlier range of $12.00 to $14.00 — the second guidance raise of the year, according to Jacobson.

That brings me back to my earlier concern about affordability. Interestingly, Jacobson said Q3 pricing was flat to slightly lower year over year, with a $200 million decline. 

Higher average transaction prices instead reflected a shift toward more expensive trucks and fewer heavily incentivized EVs following the expiration of consumer tax credits.

The hybrid gap GM investors are watching and the Q4 headwinds that spooked them

The 8% stock drop on a beat quarter came from two specific concerns Jacobson addressed.

First, GM plans to cut fourth-quarter pickup truck production by roughly 37,000 wholesale units as plants shut down and reopen to prepare for redesigned 2027 models, he told CNBC. The redesigned full-size trucks represent a major product cycle, but the changeover creates an inevitable sequential earnings step-down.

Second, commodity and logistics inflation has added approximately $400 million in pressure over the last two months of the quarter, with full-year headwinds now projected at $1 billion to $1.5 billion from higher steel, aluminum, and logistics costs.

“The team is digesting it,” Jacobson said, noting that GM held its full-year guidance despite that new pressure.

Another key issue CNBC’s Phil LeBeau pressed Jacobson on was hybrids, which now account for nearly 20% of the U.S. market, while GM has just one offering.

Jacobson acknowledged the success of rival hybrid manufacturers and said hybrids “are coming” to GM, but gave no specific timeline. “We understand how hybrids are growing, and we’re continuing to adapt,” he said.

For buyers who depend on affordable, fuel-efficient trucks to make a living, GM’s next move may matter more than its buyback. For investors, both affordability and shareholder returns deserve attention.

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The rally comes after a difficult week for AI stocks. Investors have been concerned about the massive cost of building data centers, particularly as companies such as CoreWeave (CRWV) rely heavily on debt to finance their expansion.

Super Micro works closely with chip makers like Nvidia (NVDA) and builds ready-to-use server hardware that supplies major cloud players like Microsoft (MSFT) and Amazon (AMZN). It also creates liquid and air cooling systems.

The company now expects fiscal first-quarter revenue of $18.5 billion to $19.5 billion, up from its previous forecast of $14.5 billion to $15.5 billion. The midpoint of the new guidance of $19 billion is roughly 27% above Wall Street’s previous consensus estimate of $14.99 billion.

Super Micro also raised its gross margin forecast to 12% to 12.5%, up from its earlier outlook of 10.4% to 10.8%, citing better customer mix and product mix.

The company is scheduled to report its full quarterly results on Nov. 3.

Wall Street reacts to Super Micro’s stronger AI demand

Bank of America raised its price target on Super Micro to $38 from $33 following the announcement, but maintained its Underperform rating, according to The Fly.

The bank remains cautious about the company’s profitability, citing pricing pressure in the AI server market, rising component costs and lower margins typically associated with large deals.

Still, BofA sees the stronger revenue outlook as an encouraging sign for competitors Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE), suggesting that demand for AI infrastructure remains healthy.

Citi maintained its Neutral/High Risk rating and $45 price target for Super Micro stock.

Also read: Intel stock surges on JPMorgan upgrade after 14% weekly plunge

The bank noted that Super Micro’s updated outlook implies approximately 280% year-over-year revenue growth, compared with roughly 195% under its previous guidance.

Citi also estimated that the stronger revenue and margin forecasts could put quarterly earnings per share roughly 60% to 70% above previous expectations.

“Overall, we view the announcement as constructive for the broader server OEM ecosystem, including Dell and HPE,” Citi analysts wrote in a research note sent to TheStreet.

The firm said AI infrastructure is increasingly shifting from individual servers toward integrated rack-level systems, creating opportunities for companies that provide liquid cooling, networking and other data-center equipment.

Super Micro still faces questions over profitability and cash flow

Despite the stronger outlook, Wall Street remains focused on whether Super Micro can turn its rapid revenue growth into sustained positive cash flow.

Citi said investors can focus on the durability of AI demand, particularly among neocloud customers, as well as financing conditions and deployment timelines.

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“We believe a key investor debate remains the timing and magnitude of free-cash-flow inflection,” Citi analysts wrote.

The bank also pointed to working capital and cash conversion as key issues heading into Super Micro’s Nov. 3 earnings.

Super Micro stock trades at around $35 and is up 22% year-to-date as of writing. 

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Then came a twist few people saw coming. Just days after that admission, Zuckerberg publicly thanked Apple, the company whose rules cost Meta so much, for helping one of its new AI models run on Apple hardware. The two moves tell the same story about where Meta wants to stand in the AI era.

Muse Wonder is the first real test of the spending

The payoff Zuckerberg was waiting for arrived on October 12. Meta’s Superintelligence Lab released Muse Wonder and a stronger version called Muse Wonder Full, its first serious shot at a frontier model since Alexander Wang reorganized the company’s AI work in August 2025.

Also read: Mark Zuckerberg says Meta found a way to make more money

Meta is pitching memory as the standout feature.

The company says its own testing puts the models alongside leading rivals and highlights what it calls “active memory,” the ability to hold on to and combine information users share over time, as reported by TechCrunch. Both models will power Meta’s Muse agent, and they were trained at its Prometheus data center in central Ohio.

That training did not come cheap. Wang said building a frontier model now costs “tens of billions of dollars,” and Meta’s performance claims still need independent results to back them up, according to TheStreet. For now, investors are mostly taking the company’s word for it.

Early demand looks encouraging, though. Meta’s Muse personal assistant app logged 2.8 million downloads in its first 12 days, according to TechCrunch. Citi thinks the app could eventually add at least $27 billion in annual revenue by fiscal 2030.

The bill keeps getting bigger

The cost of owning everything is showing up in Meta’s books. When it reported second-quarter results on July 29, Meta raised the low end of its 2026 capital spending forecast by $5 billion, while free cash flow sank 91% from a year earlier to just $784 million. Some investors are already comparing the splurge to the costly metaverse push.

Zuckerberg used that same call to sketch a way out. He said businesses have offered to run their own AI projects on Meta’s capacity at a meaningful premium to what it cost to build, but added that “there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly,” as reported by Reuters. In other words, renting out servers is a side gig, not the plan.

Hyperion shows how quickly the price tag can swell. In July, Meta said its Richland Parish campus in Louisiana would grow to 5 gigawatts of computing capacity from an original design of 2 gigawatts, pushing the cost above $50 billion from a prior estimate of $27 billion, Quartz reported. It will be Meta’s largest data center.

Investors have flinched more than once. On September 25, a Goldman Sachs note argued that the largest U.S. AI spenders need roughly $300 billion in annual AI revenue just to break even, and Meta shares slid about 4% that day. Zuckerberg’s own fortune dropped by billions in that single session.

Old Apple wounds shaped the go-it-alone strategy

The scars from Apple’s privacy change run deep. In February 2022, then-CFO Dave Wehner called the hit from App Tracking Transparency “a pretty significant headwind for our business,” admitted the $10 billion figure was only an estimate and watched the stock sink 23% in extended trading.

Wehner also took a pointed swipe at Apple’s search deal with Google, which he suggested was treated differently under the same privacy rules. “The incentive clearly is for this policy discrepancy to continue,” he said, as reported by CNBC. It was a reminder of how little say Meta had over the platform carrying its apps.

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The mood has softened lately. On October 15, Zuckerberg thanked Apple’s chief executive, John Ternus, for helping Meta’s Muse Spark Open model run on Mac Studio computers, in what appeared to be the first public partnership between the two companies in years. Neither side disclosed financial terms.

The power balance may be shifting, too. Bank of America analyst Wamsi Mohan warned on September 29 that AI agents could capture shopping, referrals and payments that now flow through Apple’s ecosystem. If agents become the new front door, owning the full stack could leave Meta holding a much stronger hand.

Wall Street wants answers on October 21

Analysts are mostly upbeat heading into Meta’s October 21 earnings report. Bank of America’s Justin Post wrote that Meta is “back on offense with AI” and said recent launches have strengthened confidence in Meta’s AI execution, though he flagged the risk that heavier AI investment could pressure 2027 earnings, according to Yahoo Finance.

JPMorgan has also come around. Analyst Doug Anmuth upgraded the stock to Overweight in September, arguing Meta is still early in rolling out frontier models and AI products beyond advertising, while projecting capital spending well above Wall Street’s consensus for the next two years. He also noted that the Muse app hit No. 3 in the U.S. App Store on its second day, TheStreet reported.

The harder question is what happens to the ad machine. Bank of America has listed competition from AI-native platforms for users’ attention as one of Meta’s key risks, noting that advertising still accounts for most of its revenue. Zuckerberg is betting that owning every layer gives Meta the best shot at controlling where those eyeballs go next.

Related: Mark Zuckerberg sends bold message to Meta investors after Muse

For most of the last decade, that distinction barely mattered in tequila. Americans could not get enough agave, and a celebrity name on the label looked like a shortcut to the top shelf.

George Clooney and Rande Gerber proved the model when Diageo (DEO) agreed in 2017 to pay up to $1 billion for Casamigos, the tequila they co-founded with Mike Meldman. Dwayne Johnson, Kevin Hart and dozens of other stars followed with bottles of their own.

Then the boom stalled. U.S. sales of tequila and mezcal slipped 4.1% to $6.4 billion in 2025 after years as the industry’s fastest-growing segment, according to the Distilled Spirits Council data.

The pullback has hit the brand that started the celebrity rush hardest. Yet one of the younger names in the pack is posting its best numbers ever.

Kendall Jenner’s 818 Tequila is on pace for its biggest sales year since its 2021 launch, 818 Spirits President Lanay Jacobs said in an interview with Food Dive published Oct. 15. My read of the numbers is that the gap has less to do with Jenner’s fame than with where the bottles sit and how big they are.

Sazerac gave 818 Tequila the shelf space it lacked

Sazerac, the private company behind Fireball and Buffalo Trace, announced a minority investment in 818 on April 28 and took over the brand’s exclusive U.S. sales and distribution. Financial terms were not disclosed.

“Tequila continues to be a bright spot in spirits, driven by strong consumer interest across a growing range of occasions and price points,” Sazerac Chief Marketing Officer Sara Saunders said in the announcement. “818 Tequila stands apart due to its cultural relevance and commercial momentum.”

Jenner called the deal “the perfect next step as we continue to accelerate,” in the same release.

Jacobs says the partnership is already paying off. 818’s volume sales grew 73% in the four weeks ending Sept. 5, while the over-$25 tequila category declined 0.4%, according to NielsenIQ data cited by the company in Food Dive’s report.

That made 818 the fastest-growing tequila brand priced above $25, Jacobs said. She credits more in-store displays from Sazerac’s sales force, plus brand events at Coachella and college tailgates.

Related: Beloved vodka brands wants to takeover tequila market

“As a leadership group, we were ready for the next step, and that was to start scaling the brand in a big way,” Jacobs told Food Dive. “Sazerac was the perfect partner to do that.”

One caution on that 73% figure: It covers four weeks, comes from the company, and starts from a far smaller base. Impact Databank puts 818 above 100,000 cases a year, according to Shanken News Daily, while Casamigos moved about 1.9 million cases in 2025, according to The Spirits Business data.

Casamigos shows how fast a celebrity brand can fade

Casamigos sits at the other end of the chart. Its U.S. net sales fell 27.7% in Diageo’s fiscal year ended June 30, with depletions down 23.1%, according to the company’s annual report filed with the Securities and Exchange Commission.

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Don Julio, Diageo’s other big tequila, slid 19.2%. The company blamed “a softer category, increased competitive intensity, and tough comparatives,” adding that “both brands lost share.”

The squeeze reaches well past one company:

• U.S. tequila and mezcal revenue fell 4.1% in 2025, according to the Distilled Spirits Council, as reported by CNBC.
• Diageo’s U.S. tequila net sales dropped 21.1% in fiscal 2026, according to its SEC filing.
• 87% of tequila buyers will not pay more than $55 for a blanco, and bottles above $100 fell 18% in late 2025, according to The Tequila Report.
• Tequila prices across the category are down between 1% and 2% as drinkers trade down, according to Brown-Forman CEO Lawson Whiting on the company’s earnings call.

Brown-Forman (BF.B) owns Herradura and El Jimador, so Whiting sees the price fight up close. “If you look at the different price points within tequila, over $30 is tough,” he said on the company’s first-quarter earnings call, as TheStreet’s Daniel Kline reported on Sept. 25.

That puts 818, which retails for $30 to $50, according to Shanken News Daily, right in the tough zone. So why is it growing?

Why small bottles matter when Gen Z drinks less

I think the answer is bottle size. 818 sells 750-milliliter, 375-milliliter and 50-milliliter bottles, and Jacobs told Food Dive that people often do not want to pay a premium when they are trying something new.

That is the same playbook behind Jack Daniel’s. A fan with a $20 bill “would rather buy a smaller size bottle than have to go to a cheaper brand,” Whiting said on the same call.

Small formats solve a specific problem for 818. Fewer young adults drink at all, with only 50% of Americans ages 18 to 34 saying they drink, down from 58% in 2023, according to Gallup.

The ones who still drink lean toward spirits. Liquor is now the preferred drink for 38% of young adults, edging out beer at 36%, Gallup found in its July survey.

That makes the first sip worth fighting for. Jacobs said 66% of 818’s customers last quarter came from outside tequila, often from vodka or whiskey.

Once tequila drinkers settle on a brand, they tend to keep it. 90% of engaged tequila drinkers stick with a single go-to bottle, according to The Tequila Report’s 2026 research.

A 50-milliliter bottle is a low-cost way to win that loyalty before a rival does.

“Consumers are being more discerning about their choices and when they drink, and they’re choosing brands that resonate with them,” Jacobs told Food Dive.

The Fireball maker is buying its way to younger drinkers

818 is one piece of a larger Sazerac plan. The company has bought or invested in ready-to-drink brands BuzzBallz, Dirty Shirley and SipMargs, which skew young, and has added Svedka vodka and Dalho soju, according to Food Dive.

That bet tracks with the market. Spirits-based ready-to-drink cocktails grew 30% in value in the 12 months to March 2026, even as core spirits fell, according to SipSource data reported by The Spirits Business.

Diageo is seeing the same shift. Its U.S. ready-to-drink and cocktail sales jumped 35.1% in fiscal 2026, led by canned and ready-to-serve Casamigos drinks, according to the company’s filing.

Even Casamigos is seeing growth outside the standard bottle, suggesting drinkers have not quit tequila so much as changed how much they buy at once.

The next test for 818 comes over the holidays, when big bottles and gift sets usually carry spirits sales. Diageo has also flagged a “price repositioning” for Casamigos in its annual report, which could put a cheaper celebrity tequila right next to Jenner’s on the shelf.

If 818 keeps growing after that, it will say more about Sazerac’s trucks and those tiny bottles than about the name on the label.

Related: Jack Daniel’s fans show their loyalty

Both of those screens now feed the same business, and it is growing far faster than the stores that made Walmart (WMT) famous.

Walmart’s global advertising business grew 46 percent to nearly $6.4 billion in its fiscal year ended in January, the company said in its fourth-quarter earnings release. That includes Vizio, the TV maker it bought in December 2024.

The pace hasn’t slowed. Walmart’s advertising business “continues to grow at a 40% clip on a much higher base,” CFO John David Rainey said on the company’s Aug. 20 earnings call.

What has shifted is who is paying for those ads. Retail ads have traditionally been bought by brands already sitting on the store’s shelves, from cereal makers to shampoo companies.

According to a Bank of America research note dated Oct. 19 and reviewed by TheStreet, Walmart is now winning marketing dollars from “non-endemic” advertisers, meaning brands that don’t sell their products in Walmart stores at all.

Walmart Connect is pulling in brands it doesn’t sell

The note followed a meeting Bank of America hosted in New York with Ryan Mayward, senior vice president and general manager of Walmart Connect U.S. Analyst Christopher Nardone wrote it with the bank’s media and entertainment team.

Its title spells out the shift: “Walmart Connect meeting highlights non-endemic advertising opportunities.”

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Walmart Connect “is increasingly capturing marketing dollars that previously flowed to other retailers given growing capabilities and Walmart’s differentiated dataset,” wrote Nardone. He put that dataset at about 150 million customers who shop Walmart in stores or online each week.

Walmart’s own numbers back up the momentum. Walmart Connect in the U.S. grew 43 percent in the quarter ended July 31, excluding Vizio, while global advertising grew 38 percent, according to PPC Land’s review of the results.

The rest of the business grew far more slowly. Walmart’s total revenue rose about 5.9 percent to $187.9 billion, and U.S. comparable sales rose 2.6 percent, excluding fuel.

The television piece is central to the non-endemic push. Walmart estimates it sells more than half of the TV units in the U.S., and Vizio’s operating system was the leading U.S. smart TV system as of February, according to the company, the note said.

That gives Walmart a screen in millions of living rooms, plus ad inventory on Vizio’s free streaming service WatchFree+, to sell to advertisers, such as insurers or streaming services, that never needed a Walmart shelf.

Why marketplace sellers pay up for ads

The other growth engine is the third-party marketplace, where Walmart is “adding tens of thousands” of sellers, Bank of America said. U.S. marketplace sales grew 52 percent in the latest quarter, PPC Land reported.

Those sellers are the most valuable ad customers Walmart has. Here is how the note sizes the gap:

• Marketplace sellers typically spend about 10 percent to 12 percent of their gross merchandise value on advertising, Bank of America estimates.
• Traditional Walmart suppliers spend roughly four percent to six percent, the bank estimates.
• Amazon’s ad revenue grew 26 percent to $19.8 billion in its second quarter, outpacing 15 percent growth in its online stores, according to EcomCrew’s breakdown of Amazon’s results.
• Vibe.co, which Walmart closed on Aug. 4, gives small businesses a self-service way to buy streaming TV ads, Walmart confirmed.

By my analysis, that ad spending is a cost of doing business, and costs like that tend to show up somewhere. If a small seller pays 12 cents of every sales dollar to be seen, that money comes out of its margin or, eventually, out of its prices.

For shoppers, the practical takeaway is simple. The first product you see on Walmart.com is often the one that paid to be there, so scroll past the sponsored slots and compare unit prices before you add something to your cart.

Amazon offers the closest preview. Its ad revenue grew faster than its online store sales in the second quarter, and the same dynamic is now building inside Walmart’s marketplace.

Related: Walmart’s CEO tells BofA where his retail chain is headed next

Given that backdrop, it’s easy to see why Nardone thinks small businesses “could represent a multibillion-dollar advertising opportunity for Walmart longer term.”

Vibe “makes streaming TV advertising simple and accessible for businesses of all sizes,” said Mayward when the deal closed.

What Bank of America expects next from the ad arm

Sam’s Club is next in line. Walmart is moving the Sam’s Club U.S. ad platform onto Walmart U.S.’s technology, and advertising there is “currently representing only a small business today,” the note said.

The bank sees room for brands to stretch one ad budget across Walmart U.S., Sam’s Club, and Walmart’s international markets.

Artificial intelligence is the wild card. Walmart has its own shopping assistant, Sparky, and works with outside agents, including Meta’s Muse, which the bank said makes Walmart “a relative winner” if agentic commerce spreads. “The number of customers using Sparky is up 70% from last year,” CEO John Furner said on the August call.

Still, management told the bank “it remains early to assess how Muse may reshape the advertising landscape,” the note said. Much will likely depend, however, on whether AI agents still show sponsored results when they shop for you, a question nobody has fully answered yet.

If an agent picks the cheapest or best-rated item instead of the sponsored one, part of the ad model built for human scrolling loses its punch. If it doesn’t, Walmart’s ad business could get even bigger.

I’d watch the advertising line in Walmart’s next quarterly report more closely than the comparable sales figure. That is where the margin story lives now, and a slowdown there would matter more to the stock than a soft month in groceries.

Bank of America’s $126 price objective implies about 6.1 percent upside from Walmart’s $118.81 price in the note. It rests on 40 times the bank’s fiscal 2028 earnings estimate, above Walmart’s two-year average of about 36 times.

Nardone, for his part, kept his Buy rating. The premium multiple reflects “WMT’s leading edge on deploying technology to drive consistent share gains and operating income growth nearly double the pace of sales growth,” he wrote.

Related: Walmart takes aim at Costco with a new shopping perk

I’ve followed Bank of America’s weekly iPhone lead-time tracker since preorders for the iPhone 18 Pro opened in September. This week’s update is the first one with real data on Apple’s foldable, and it holds a useful surprise for buyers.

Demand for new iPhones is not the question. Apple (AAPL) reported $109.4 billion in revenue for its June quarter, up 16 percent, with iPhone sales up 22 percent to $54.3 billion, according to MacRumors.

“This is the most powerful and most popular iPhone lineup we’ve ever had,” then-CEO Tim Cook said on the company’s July 30 earnings call.

However, the supply side of that story looks very different, depending on where you order.

According to a Bank of America Global Research note dated Oct. 19 and reviewed by TheStreet, the iPhone Duo’s wait on U.S. carrier websites averages about 50 days, roughly half the 102 days Apple’s own store is quoting across all storage sizes and colors.

Duo shoppers face two very different waits

Bank of America tracks ship dates on Apple’s website and on major carrier sites every week. As of Oct. 19, the global weighted average wait for the iPhone Duo stood at 82 days, the note said.

Outside the U.S., the picture is uniform and slow. China, Japan, the U.K., Germany, France and Australia all showed a 95-day wait for every storage size, which pushes delivery to about Jan. 22.

U.S. carrier sites were noticeably faster across the board:

• The 256GB Duo showed an average wait of 53 days, according to the Bank of America tracker.
• The 512GB model was at 48 days and the 1TB version at 50 days, the note showed.
• The top 2TB model, which costs $3,199, showed the shortest wait at 47 days, based on pricing reported by TheStreet.

Analyst Wamsi Mohan, who wrote the note titled “iPhone Duo lead times extend to next year; Pro and Pro Max broadly stabilize,” offered a simple explanation for the gap.

Availability on U.S. carrier sites “appears to be much better than Apple’s own website,” which “could be due to varying allocations of inventory,” wrote Mohan.

Related: Bank of America flags surprising iPhone 18 pre-order trend

The in-store picture is tighter still. The Duo shows no in-store availability for its Oct. 23 launch day, and Apple’s site is telling shoppers to check again on Oct. 24 for pickup, the note said.

There is a catch for your wallet. Buying through a carrier usually ties the phone to that carrier’s installment plan, while Apple’s own iPhone Upgrade Program starts at $57.99 a month on a 24-month lease, TheStreet reported.

A shorter wait is only worth it if the carrier terms fit your budget.

China lead times flash a warning on iPhone 18 Pro demand

The Duo grabs the headlines, but the iPhone 18 Pro, one of just three new iPhones Apple launched this fall, is where wait times keep shrinking.

The global average fell to eight days from nine a week earlier and from 14 days in the first week of preorders, according to Bank of America.

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China moved the most. Pro lead times there dropped to four days from 11 the week before, “indicating a meaningful improvement in availability,” wrote Mohan. That is now the shortest wait among international regions, where the Pro averages about 11 days.

The Pro Max is a different story. Its global wait held at 15 days, and the note said availability “remains comparatively tighter” for the bigger model.

By my analysis, a sudden drop in China wait times can mean two things: Apple caught up on supply, or buyers there are cooling off. The backdrop makes the second reading hard to dismiss.

China’s smartphone shipments fell 15.4 percent from a year earlier to 57.9 million units in the third quarter, and Apple’s shipments slipped 4.3 percent, according to preliminary IDC data reported by TechNode. Huawei led the market and was the only major vendor with double-digit growth.

IDC blamed higher memory and component costs, which pushed retail prices up and stretched out how long people keep their phones, TechNode reported. Apple raised starting prices for the iPhone 18 Pro and Pro Max by $100, to $1,199 and $1,299.

Given that backdrop, it’s easy to see why the Pro data deserves a closer look than the Duo sellout. Apple told suppliers to cut October component orders for the Pro models by at least 15 percent, Nikkei Asia reported, as TheStreet noted on Oct. 12.

Fewer orders and shorter waits can point to the same thing.

What Bank of America expects before the Nov. 2 report

For now, Mohan reads the week as normalization, not trouble. The Pro data points to “continued normalization,” he wrote, while Pro Max supply stays tighter and initial Duo store inventory “appears to be sold out.”

The next real test is Nov. 2, when Apple reports results for its September quarter, according to MacRumors. Apple guided for revenue growth of nine percent to 11 percent and mid-teens iPhone growth for that period.

That guidance also came with a warning. “For September, we expect to pay even higher memory costs,” Cook said on the July call.

Much will likely depend, however, on whether the Duo’s long wait reflects demand or a thin first production run. Apple hasn’t said how many units it had for preorder, and a 95-day wait can come from either.

Bank of America’s price objective of $370 implies about 7.7 percent upside from Apple’s $343.46 price in the note. It rests on 37 times the bank’s calendar 2027 earnings estimate of $9.98 a share, above Apple’s five-year range of 19 to 35 times, the note said.

That is a rich multiple to pay for a company whose flagship Pro phone is seeing shorter waits. I’d want to see the Nov. 2 iPhone number before treating the Duo sellout as a growth story.

If you are trying to buy a Duo, the practical move is simple: Check your carrier’s site before you settle for Apple’s January date.

Mohan, for his part, is sticking with the stock. He reiterated a Buy rating “on strong capital returns, eventual winner on AI at the edge and optionality from new products/markets.”

Related: Apple extends iPhone Duo delivery, disappointing eager customers

Many AI stocks have since rebounded, but the sharp swings show how sensitive investors remain to news about AI spending and financing.

For the past few years, the AI boom has been a race to build powerful language models. Companies have spent billions of dollars on data centers, advanced chips, and computing infrastructure, betting that demand for AI will continue to grow.

But the next phase of AI may be less about building bigger models and more about how people interact with the technology in the physical world.

That’s where Ramin Hasani, co-founder and CEO of Liquid AI, sees potential.

In an exclusive interview with TheStreet at Qualcomm’s Snapdragon Summit in September, he discussed where he sees the next opportunities in AI; how AI could move beyond chatbots and data centers into cars, smartphones, and other everyday devices; and whether soaring AI valuations have gone too far.

AI isn’t just about chatbot models

Liquid AI was founded by a team from the Massachusetts Institute of Technology, and it develops AI models that run across various hardware types.

Unlike companies building consumer-facing chatbots, Liquid AI focuses on supplying technology to businesses that want to integrate AI into their own products.

Hasani said there is an important distinction between the consumer AI market, where companies compete to build apps and agents, and the enterprise market, where manufacturers need the underlying technology to make those products work.

Also read: CoreWeave stock plunges 12%, but Wall Street analyst says buy the dip

“If you just look at the model layer, you will see no differentiation,” Hasani said, referring to the growing number of AI models available from companies in the U.S. and China.

He argued that the real differentiation comes from combining models with the software systems needed to enable more sophisticated AI behavior.

For example, a carmaker that develops an intelligent assistant needs more than a language model. The system must understand users’ voice commands, process information from cameras, and access vehicle functions while responding quickly.

Liquid AI provides models and supporting software, developing a platform that enables businesses to customize and improve their AI systems. The idea originated from Hasani’s study of how neurons exchange information in small animal brains.

“Liquid means flexibility,” Hasani said, explaining that the goal is to build AI models that are adaptable after training.

Why the next AI battleground could be your car

Liquid AI is working with Mercedes-Benz on an AI-powered in-car assistant that Hasani expects to roll out in North America by the end of 2026.

Hasani said his company provides an AI system that runs inside a Mercedes vehicle on Qualcomm (QCOM) chips, allowing drivers to communicate with their cars more easily. Its software can access vehicle functions that traditional smartphone assistants cannot.

Hasani used Apple’s (AAPL) Siri as an example.

“What if you ask Siri to open my window?” he asked.

Related: Qualcomm CFO talks AI, data centers, and next big bet on robots

Siri generally cannot control a vehicle’s windows without the necessary integration yet.

“When we work directly with OEMs (Original Equipment Manufacturer), we also get all the access inside the car,” Hasani said. That access could enable thousands of vehicle functions through human-language commands.

The auto industry is moving toward vehicles that can gain new features through software updates. That shift could create a growing market for chips and AI software designed to run inside cars.

Liquid AI is also partnering with Qualcomm (QCOM) to bring its AI models to Snapdragon-powered devices, allowing more AI tasks to run directly on the hardware rather than relying on cloud-based data centers. (Snapdragon chips integrate CPU, GPU, AI Engine, and connectivity systems on a single computer chip.)

Businesses might cut costs, not AI usage

Consumers may tolerate waiting several seconds for a chatbot to answer a complicated question. Businesses processing millions of requests often cannot.

Hasani pointed to Liquid AI’s work with Shopify (SHOP) as an example. Requests made through Shopify’s Shop app can be processed using a Liquid foundation model. The company needs to handle large volumes of requests while maintaining extremely low latency.

“You want to conclude a job that is coming in 20 milliseconds with an AI model…. There aren’t that many options in the world that can do that,” Hasani said.

Liquid AI’s approach involves optimizing models for the hardware on which they run.

For many businesses, a smaller model that responds quickly and costs less to operate may be more attractive than a larger model with stronger benchmark results. As AI becomes more widely deployed, efficiency could become as important as raw computing power.

Related: Micron stock tumbles despite analyst calls semiconductor selloff overblown

Hasani expects businesses to become more selective about AI spending as they look for better returns from the technology.

“There’s a gap between the capabilities of a model and the value that they’re creating,” he said.

He believes companies will find ways to reduce AI costs without necessarily using the technology less.

“Enterprises are getting smarter about the expenditure on AI, so they’re definitely gonna cut that cost, but that doesn’t mean that they’re gonna cut usage,” Hasani said.

How Liquid AI makes money

Liquid AI makes money primarily by licensing its models and software to manufacturers, generally charging an annual per-device fee in addition to development costs. It also charges enterprise customers based on token usage when customizing models.

Hasani has an ambitious target: “We want to be on 50% of all the devices on the planet.”

He said potential annual licensing revenue could range from less than $1 to hundreds of dollars per device, depending on the application, though the company has not disclosed revenue forecasts.

Liquid AI remains privately held, and Hasani said a potential IPO is on his mind, although the company is still too young to pursue one immediately. The company faces challenges including competition, hardware limitations, and the difficulty of securing large-scale commercial deployments.

There are senseless valuations in AI

As investors debate whether the AI boom resembles the dot-com bubble, Hasani sees a distinction between the technology’s potential and the prices investors pay for it.

“There are senseless kinds of valuations that are coming on,” he said. “I can totally see from a traditional economic sense, we would be in a bubble, like that’s how you would define a bubble. It exactly looks like that.”

But from a technological perspective, Hasani believes AI’s biggest breakthroughs are still ahead.

“The promise of this technology is much, much bigger than what it was before,” Hasani said. 

One area he is particularly excited about is healthcare. Hasani pointed to recursive self-improvement, a process in which AI systems help develop more advanced versions of themselves.

He believes that could lead to breakthroughs in cancer research, longevity, and other areas of medicine.

“If you say slow down the pace of innovation in finding out how to cure cancer, I’m not gonna slow down because people are losing time,” Hasani said.

Beyond healthcare, Hasani sees opportunities for AI to help scientists answer fundamental questions about physics and the universe.

Still, Hasani pointed to some risks of developing “increasingly powerful” AI technology.

He said he has discussed AI safety with other foundation-model executives and found that researchers across the U.S. and China recognize the need for safeguards, even as competition between companies and countries intensifies.

He warned that some people could misuse AI and stressed the importance of keeping AI under human control. One priority, he said, is making AI outputs verifiable so that humans can understand and check the results.

“AI has to stay under control of humans … as long as we can make sure that’s the case, we should be fine,” he said.

Despite those concerns, Hasani remains optimistic about AI’s long-term potential.

“I am definitely worried,” Hasani said. “But you have to be cautiously optimistic.”

Related: Cathie Wood buys $11.8 million of tumbling tech stock

On the anniversary of the worst single day in market history, Jim Cramer told his “Mad Money” audience that the AI trade may be repeating an old mistake, one where prices stop listening to the businesses behind them, CNBC noted.

The timing makes his warning hard to ignore. Chip stocks spent most of last week sliding, while talk of an AI bubble grew louder on trading desks. For investors holding the market’s favorite names, the real question is whether the pain points to cracks in the companies or simply a crowded trade coming apart.

Also read: Jim Cramer sees something Wall Street may be missing in Broadcom

How the recent AI stock sell-off turned into a 1987 trapdoor

Thirty-nine years ago, on Oct. 19, 1987, the Dow Jones Industrial Average lost 508 points in one session. That 22.6% plunge gave Wall Street its worst one-day percentage drop ever, as reported by TheStreet, on a day that became known as Black Monday.

Much of the blame landed on portfolio insurance. As reported by TheStreet, it was an automated strategy that used stock index futures to hedge large portfolios. When prices slipped, the system sold futures to limit losses.

That works for one fund, but it backfires when dozens of big players are wired to sell at the same moment.

The product had been heavily promoted by smart traders in the years before the crash, and when markets turned, the result was herd-like panic selling that wiped out hundreds of billions in market value in a single session.

No one had to make a fresh judgment about any company for the selling to continue. Each new drop simply triggered more of the same orders.

Cramer’s reading of that day is what ties it to the present. He recalled that the automatic selling wrecked share prices even though the businesses underneath stayed healthy, and he called the collapse a spectacular buying opportunity in hindsight.

That gap between price and value is the thread he now sees running through the AI trade.

Chip and data center stocks fell together

The damage from last week was hard to miss. The Nasdaq Composite and the S&P 500 both posted sharp weekly losses in the stretch ending Oct. 16. Higher interest rates and growing worry over AI debt hung over the whole tech group.

Chip stocks got it worse. A closely watched semiconductor index fell for a seventh straight session on Oct. 16 and logged its steepest weekly loss since April 2025, Reuters reported. These are the companies building the hardware behind AI, and they slid almost in lockstep.

The spark came from the economy rather than from earnings. A hotter consumer inflation report pushed Treasury yields higher and revived concerns about how the AI boom is being financed, Capital.com analyst Daniela Hathorn said, according to TheStreet.

She added that investors are now asking whether future AI profits can justify rich valuations and pricier borrowing at the same time.

CoreWeave became the face of that fear. The AI cloud provider plunged 12% on Oct. 16 and was on pace to lose about a quarter of its value for the week as its debt financing costs climbed, as reported by TheStreet.

Even so, analysts argued the selling reflected financing worries rather than weaker demand, noting that nearly all of CoreWeave’s 2027 capacity is already sold.

Why forced selling may be driving the drop

Cramer suspects the Oct. 16 slide was made worse by a hedge fund being forced to dump stock. No such liquidation has been confirmed.

Still, he argued that some data center names are trading with little connection to their fundamentals, rising in bunches and falling in unison.

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He has seen this movie before. Leopold Aschenbrenner’s Situational Awareness, which had peaked at roughly $45 billion in assets, slashed its listed stock positions in a matter of weeks, after a sharp momentum reversal set off margin calls and compulsory sales, TheNextWeb noted.

The fund had loaded up on chip, data center, and power names while betting against software, so both sides lost money at once.

That unwind hit stocks that had done nothing wrong. Cramer said the liquidation, along with selling from investors who had copied the fund’s trades, flooded the market with AI infrastructure shares, although that would need to be assessed company by company.

What happened next is the part he wants investors to remember. Once the forced seller was gone, tech stocks ripped higher because there were no large sellers left to stand in the way, and Cramer described the episode as a clearing event.

If last week carried the same fingerprints, the bounce could come just as quickly.

Green Monday brings early relief for tech

Oct. 19 offered a first sign that the panic may be fading. The Nasdaq rose about 1.1% by the closing bell, and the S&P 500 added 0.41%, while the Dow finished roughly flat. That was the Green Monday Cramer had in mind.

Some of last week’s hardest-hit names led the bounce. CoreWeave climbed after analysts flagged the dip as a buying opportunity, and the days ahead bring earnings from Netflix, Tesla, and Meta that could decide whether the rebound sticks.

Before hitting the sell button, Cramer wants investors to ask one question: Is the stock falling because the business is getting weaker, or because of forces outside the company’s control, such as money managers who took on too much risk?

The first deserves caution. The second, as 1987 showed, can become a rare chance to buy.

Related: Jim Cramer sees something Wall Street may be missing in Broadcom

Whenever I look at the bank’s turnaround efforts, I ask how much improvement it will take before Wall Street finally gives Citi some credit.

That tension was even more relevant on Oct. 13, after Citigroup reported its Q3 2026 earnings. Citi continues to perform better than its reputation suggests, yet Wall Street still seems reluctant to give the bank the credit it deserves.

Citigroup (C) reported Q3 2026 net income of $5.2 billion, up 17% from a year earlier. Revenue rose 7.9% to $23.8 billion, beating Wall Street’s $23.74 billion consensus, while earnings per share jumped to $2.85 from $1.86 a year ago, according to Citi’s Q3 earnings release.

Despite those strong results, Citigroup shares fell 6% to close at $124.53. C now trades at $121.69 as of the Oct. 19 close, up 5.86% year to date and 28.02% over the past year, according to Yahoo Finance.

Also Read: Citi spots troubling 1970s warning for U.S. stocks

Citi’s earnings were strong, but the market reaction was puzzling

“[We saw] the best third-quarter revenue in a decade,” CEO Jane Fraser said in the earnings release. Fraser noted 10 consecutive quarters of year-over-year positive operating leverage and full-year ROTCE guidance raised to above 11%, ahead of the original 10% to 11% target. 

The efficiency ratio is now expected to be below 60%. Services delivered another standout quarter of revenue up 15%. Equities are up 14%, and Wealth Management is delivering returns above 14%, according to Citi’s Q3 earnings release.

Still, the stock dropped 6%.

Related: This bank has more upside than JP Morgan: Stocks to buy after earnings

Morgan Stanley’s note, shared with me at TheStreet on Oct. 14, described the reaction as “puzzling” and said the bank and several investors were similarly confused. The firm reiterated its Overweight rating and $164 price target, implying roughly 32% upside from the then-current levels.

The note is worth taking seriously because of the specific concern Morgan Stanley raised. It explains the gap between what Citigroup reported and how the market priced it.

The real tension on Citi is the sequential decline before the next catalyst

Morgan Stanley identified three overlapping reasons for the sell-off, none of which individually justifies a 6% decline, but which together created a vacuum of near-term catalysts.

First: Q4 ROTCE is expected to decline sequentially from Q3, with management flagging market seasonality that could push revenues down more than 20% quarter over quarter. 

Citigroup’s fixed-income trading business is larger relative to its equities business, and the recent environment has favored equities. This structural mix mismatch weighs on trading revenue when conditions shift.

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Second: New lower capital targets, which Morgan Stanley had expected to arrive in January 2027, are now likely to be announced in July 2027. The reason is procedural; Citigroup wants to see how the first stress test runs under the revised Basel III and GSIB surcharge framework before disclosing updated targets, rather than announcing them before it has confirmed results. 

The direction of travel — toward a 12% CET1 ratio over time, down from the current 13.1% target — has not changed, but the timing has.

Third: Oct. 14 was a risk-off session driven by global macro concerns. Citigroup’s significant international exposure often leaves its shares more vulnerable to outsized declines when investors turn risk-averse.

I keep coming back to the same question I raised earlier. How much progress does Citi need to make before Wall Street finally gives it credit? The capital catalyst moving six months further out isn’t necessarily bad news, but it gives investors another reason to wait.

Citi is delivering on execution, yet the market still wants a clear timeline for removing the uncertainty hanging over the stock.

What the medium-term story still looks like

Morgan Stanley’s base case for Citigroup projects $13.20 in earnings per share for 2027, with ROTCE continuing to improve toward the 14%-15% range management has outlined as a long-term target. The $164 price target applies a 12.5x earnings multiple to those 2027 estimates, according to the note.

The wealth management business is gathering net new investment assets at an 8% trailing rate. Banking is capturing market share in large-cap corporate M&A. Fraser also noted that Citi participated in Q3’s six largest equity capital markets transactions. Services, which handles global payments, remains a top-two player globally and grew 15% year over year.

Citigroup returned more than $4 billion to common shareholders in the quarter through dividends and buybacks, according to the earnings release, while simultaneously pulling forward approximately $500 million in investment spending into the second half of 2026.

“We expect to exceed this year’s return target, even as we pull forward investments toward our 11-13% near-term goal,” Fraser said, describing a bank choosing to invest in its own improvement while simultaneously beating the targets it set at the beginning of the year.

That brings me back to my original question. How much more progress does Citi need before Wall Street gives it credit? Judging by its third-quarter results, the bank may be closer to earning that recognition than the 6% sell-off suggests.

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Those nerves have already shown up on the screen. On October 16, the S&P 500 technology sector dropped more than 3% as concerns about AI financing costs and heavy debt loads at data center operators rippled through the market.

Now, a short phrase from the Fed chair is adding to the unease.

What Warsh meant by a “dose of accommodation”

The Federal Reserve raised its benchmark rate by a quarter point on September 16, lifting the range to 3.75% to 4%. It was the central bank’s first hike since 2023, and the vote was unanimous, according to the Fed. The decision marked a sharp turn from earlier in the year, when officials had been debating whether conditions warranted a move at all.

At his press conference, Warsh said the Fed had removed a “dose of accommodation.” He used that phrase three times while speaking with reporters, as reported by The Motley Fool.

The wording suggests he and his colleagues do not see current policy as tight, which leaves room to pull back more support if inflation stays stubborn. In plain terms, the Fed is easing off the accelerator and applying more pressure to the brakes.

Also read: Kevin Warsh and the Fed send stern warning to Americans

Warsh did not soften the message. He said inflation was simply too high and pointed to too many price categories rising faster than 3%.

The Fed’s projections showed a strong majority of policymakers expecting at least one more hike before the end of the year above the newly announced range.

The minutes released on October 7 backed up that hawkish tone. Every participant supported the September hike, and most officials said another increase would likely be appropriate by year-end. Fed staff also projected that inflation will remain above the 2% goal until 2029.

Inflation data gives the Fed little room

The latest numbers have done little to ease those worries. Consumer prices rose 3.7% from a year earlier in September, up from 3.4% in August. Energy and gasoline led the way, with the Iran conflict still pushing costs higher across airfares and other services.

Wholesale prices sent an even louder signal. The producer price index jumped 6.3% from a year earlier in September, the biggest annual gain since 2022, according to the Bureau of Labor Statistics. Price pressure at the producer level often works its way to consumers over the following months. That is a pace the Fed cannot easily ignore.

Also read: Ed Yardeni spots major S&P 500 shakeup

Fed Governor Christopher Waller has named the forces keeping inflation elevated. He pointed to energy costs tied to the Iran war, AI-driven price increases in tech goods, and looming tariffs. His biggest worry is that higher inflation expectations become entrenched, according to TheStreet.

The AI effect is no longer a footnote. Bank of America noted that September’s price gains spread across both goods and services, making them harder to dismiss as a one-off.

Why higher rates threaten the AI trade

Warsh has already linked AI spending to the bond market. He said hyperscalers borrowing heavily to fund data centers partly explain rising Treasury yields, adding that the competition for capital is real. Morgan Stanley estimates AI-related global debt issuance will approach $570 billion this year, as reported by TheStreet.

That borrowing has been building for months. Hyperscalers and related companies such as Nvidia had issued about $225 billion in bonds by the middle of the year, Fortune reported. Hidden obligations such as long-term data center leases add even more to the tally.

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Higher rates make every dollar of that debt more expensive. After the hot inflation report on Oct. 14, the 10-year Treasury yield climbed to about 5.28% as traders priced in the chance of another Fed hike. Technology was the worst-performing sector that day. Growth stocks that depend on cheap financing tend to feel that pressure first.

Wall Street is starting to adjust. Goldman Sachs strategists said investor positioning is turning increasingly defensive, while JPMorgan strategists argued that stabilizing bond yields could do a lot to support stocks. In other words, the path of rates may decide how long the AI rally can run.

All eyes on the Fed’s late October meeting

Warsh kept his cards close at the IMF and World Bank meetings in Bangkok on Oct. 16. He said he does not prejudge meetings and that the economy had broadly matched the Fed’s expectations since September. He also called AI a massive investment surge but warned the transition is likely to be very bumpy, according to the Wall Street Journal. The comments came just before the Fed’s quiet period ahead of its next meeting.

Markets are split on timing. Odds of a hike at the October 27-28 meeting jumped to about 50% after the September inflation report, then slipped back to 28% by Oct. 15. Waller, New York Fed President John Williams and Vice Chair Philip Jefferson have signaled the Fed could wait.

Bank of America still expects an October hike, while Citi, UBS and Morgan Stanley economists see the next move in December. J.P. Morgan Wealth Management does not see this as the start of an aggressive tightening cycle. Whatever the timing, Warsh’s three words suggest the rate-hiking cycle is far from finished.

Related: Economist warns Fed, Warsh on track for big surprise

For most Americans, though, the scoreboard isn’t in Tehran. It is on the sign at the corner gas station, which is why a sanctions fight over Iranian banks still reaches your budget.

That is the bet behind Operation Economic Outcast, the sanctions campaign the Treasury Department launched on Aug. 24. Since then, it has designated well over 100 Iran-linked targets across aviation, shipping, gold, autos, and rail, according to law firm Morgan Lewis.

The oil side of the squeeze is already severe. Iran’s seaborne crude exports fell to zero in the second week of September and were still at zero on Oct. 5, Reuters data showed, as a U.S. naval blockade choked off shipments.

That left Tehran leaning on the money it already has and the banks willing to move it. On Oct. 15, Treasury went after those banks.

Also read: Chevron CEO disagrees with Scott Bessent’s take on the economy

“The noose is tightening around Iran’s economy, and not even Iran’s so-called allies can save it,” Treasury Secretary Scott Bessent said in a statement released by the Treasury Department. He added that Treasury will keep going until the regime’s coffers are empty.

Oct. 15 Iran sanctions round hits banks, not barrels

The centerpiece is the International Development Bank for Investment and Finance, an Iraq-based lender Treasury says gave Iran a door into the global financial system while supporting Iran’s proxy militia groups, according to the Treasury Department.

In total, the round named 16 individuals and 10 entities. They include two Iranian offshore banks tied to Bank Mellat and Bank Shahr, a Hong Kong trading company, four Iranian exchange houses, and an oil intermediary, Sayyed Ruhollah Razavi, who Treasury says moved millions of barrels a month for Iran’s national oil company before the blockade.

The dollar amounts are not small.

One exchange house, Najafzadeh Exchange, processed transactions worth hundreds of millions of dollars for Iranian financial institutions, while two others each facilitated tens of millions of dollars in payments, Treasury said.

Seven employees of Farab Sorough Qeshm, an affiliate of Bank Shahr, were also named for coordinating foreign-exchange transactions through shell companies in Hong Kong and the United Arab Emirates, according to ANI’s report on the action.

Any assets the targets hold in the U.S. are now frozen, and foreign banks that knowingly handle significant transactions for them risk losing their U.S. correspondent accounts, Treasury said. For a bank in Baghdad or Hong Kong, that is the threat that counts.

The State Department separately designated Cuba-based Banco Internacional de Comercio for serving Iran’s Karafarin Bank since at least 2022, ANI reported. Earlier this month, Treasury also barred dealings with Russia’s A7 payment platform, Morgan Lewis noted.

I’ve followed this campaign since its Aug. 24 launch, and the target list has steadily moved from Iran itself to the countries and payment systems around it.

By my analysis, that map is the real message in Bessent’s “so-called allies” line. The money is moving through Iraq, Hong Kong, the United Arab Emirates, Cuba, and Russian payment rails, and the Treasury is now naming each route.

Why the money trail still matters for oil prices

Iran isn’t selling crude at sea right now, so this round won’t pull new barrels off the market.

The bigger lever on prices is the Strait of Hormuz, where Iran’s Revolutionary Guard navy still says only ships it authorizes may pass, according to a Trading Economics market note from Oct. 18.

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There is some relief on the supply side. U.S. Energy Secretary Chris Wright said Persian Gulf oil flows had recovered to around 80 percent of pre-war levels, though refined-fuel shipments remain tight, Trading Economics noted on Oct. 19.

Iraq is the exception worth watching. It is OPEC’s second-largest producer, and any move that rattles its banking system or its ties to Washington touches a country whose barrels the market still counts on.

Here is where energy markets stand as Treasury tightens the screws:

• Brent crude traded around $108.65 a barrel on Oct. 19, up roughly 78 percent from a year earlier, according to Trading Economics.
• Flows through Hormuz averaged 11.62 million barrels a day in the week to Oct. 13, against a pre-war baseline of 17.15 million, Trading Economics reported.
• West Texas Intermediate crude settled at $95.09, and crude inventories fell 8.6 million barrels to about three percent below the five-year average, according to AAA.
• The 10-year Treasury yield sat near 5.10 percent on Oct. 16, close to a 24-year high hit the week before, Benzinga noted.

What Bessent’s squeeze means for your wallet

You feel this at the pump first. The national average for regular gas was $4.3344 on Oct. 15, compared with $3.0674 a year earlier, according to AAA.

That gap is about $1.27 a gallon. On a 15-gallon fill-up, you are paying roughly $19 more than you did last fall, and if you fill up once a week, that adds up to nearly $990 a year.

Related: HSBC sets new Chevron price target amid Iran tensions

Where you live matters even more. California drivers paid $6.23 a gallon on Oct. 15, while North Carolina drivers paid $3.70, AAA’s state data showed.

The second hit is quieter. Energy prices feed inflation, and inflation keeps long-term rates high. Futures traders priced an 85.1 percent chance the Federal Reserve holds rates steady in October, Benzinga reported, citing CME FedWatch. That means relief on mortgage and car-loan costs isn’t coming soon.

For your own budget, plan around today’s price, not the drop you hope for. If an extra $19 a week pinches, that is the line to trim elsewhere until tanker traffic recovers.

I don’t expect this round of sanctions to move gas prices on its own. What it does is lengthen the standoff, and a longer standoff means Hormuz, not Treasury, keeps setting the price you pay.

Next moves to watch as Treasury tightens the noose

Treasury has been naming new targets almost weekly, and its Oct. 5 alert warned foreign banks that keep serving Iran that they risk losing access to the U.S. financial system, Morgan Lewis reported. The next round could reach bigger banks in bigger economies.

Watch two numbers: the AAA national average and daily Hormuz traffic. If ships begin moving freely again, your fill-up gets cheaper fast, whatever happens to Iran’s banks.

Until then, budget for $4 gas as the baseline. Bessent says the noose is tightening, and drivers are feeling the squeeze, too.

Related: Bessent has a warning for anyone helping Iran sell oil

The employee had initially suspected the request might be a phishing attempt. The call removed that suspicion, and the employee transferred roughly $25 million.

The attackers had not cracked a password or exploited a software vulnerability. They had built convincing digital replicas of people the employee recognized. Standard fraud controls were not designed to detect the difference between a genuine video call and a fabricated one.

Financial institutions are now weighing what verification should look like when a voice, face, or digital identity can be replicated with AI tools.

World, a digital identity company co-founded by Sam Altman, brought a suite of products for banking and finance to Money20/20 on Oct. 18, positioning human verification as part of the answer.

Also read: Michael Burry just made another bold move on Wall Street

Where AI-driven impersonation finds its opening in banking

Most financial security systems check whether someone holds valid credentials. A correct password, a registered device, or a one-time code confirms that someone controls an account. Those checks do not independently confirm that the person behind the credentials is who they claim to be.

The gap persists because credentials are proxies. A password, a registered device or a one-time code confirms that someone controls an account. It cannot confirm whether the person using those credentials is the account’s legitimate owner.

The gap creates two distinct exposures. For individual customers, a fraudster who takes over an account can initiate transfers that the system processes as legitimate.

For enterprises, stolen credentials can be used to access confidential financial data or authorize payments without triggering standard controls. The 2024 Arup transfer cleared existing security systems without flagging an alert.

Deloitte estimated that AI-enabled fraud losses in the United States could reach $40 billion by 2027, up from roughly $12.3 billion in 2023. The estimate reflects how AI tools have lowered the cost and technical barrier to producing convincing impersonations.

The push to add a human layer on top of existing security

Financial institutions have begun exploring verification approaches that go beyond confirming credentials and check whether a specific, verified human is present. The shift reflects a broader recognition that the credential layer was not built to catch impersonation at the level AI tools now make possible.

At Money20/20 on Oct. 18, World co-founder Alex Blania announced World ID for banking and finance, a suite that combines an identity wallet for storing verified human proofs, a video verification tool for confirming whether a meeting participant matches a previously enrolled identity, and a framework for delegating verified proofs to AI agents acting on a person’s behalf.

More than 18 million people hold a Proof of Human credential through the World network.

Ajay Patel, head of World ID at Tools for Humanity, told TheStreet that the standard for high-stakes interactions needed to shift. “Knowing that an account is authenticated is important; having confidence in the human behind it should become part of the foundation, rather than an exception reserved for when something looks suspicious,” he said.

World is not the only company working in this space. Digital identity verification has drawn increased investment as financial institutions contend with fraud that existing controls were not designed to catch.

Bain Capital, VanEck Funds, and OpenExchange are among the organizations exploring how proof-of-human technology applies to banking use cases.

Why proving someone is human is only part of the answer

Yuannan Yang, a security engineer at CertiK, said the threat has grown beyond what identity verification alone addresses. “The biggest threat goes beyond deepfakes or voice cloning,” Yang told TheStreet. “What’s more concerning is how AI is making social engineering more convincing, personalized, and scalable.”

The 2024 Arup case illustrated that point. The employee who authorized the $25 million transfer had been alert to phishing before joining the call.

What overcame that judgment was a fabricated social environment. The video appeared to include colleagues the employee recognized. Confirming that the participants were genuine, verified identities would have caught the fraud. Yet confirming only that they were live humans would not have been enough on its own.

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Proof-of-human verification addresses one layer of a larger problem, he said. “Even if a bank successfully verifies that a real person is initiating a transaction, that person could still be acting under fraudulent instructions or being manipulated by a scammer.”

A full response to AI-driven fraud requires combining identity verification, device authentication, transaction monitoring, and independent authorization within a risk-based framework, Yang said.

The goal is not only to establish that a real person is present but to confirm the person’s identity and that the action they are authorizing is legitimate.

What banks will need to see before adopting at scale

Banks evaluating proof-of-human technology will consider whether the security benefit justifies the integration work. The approach needs to fit into existing identity, authorization, and compliance systems without requiring institutions to replace them or build new centralized biometric databases.

Banks will also weigh the user experience. Verification steps that slow legitimate customers down can reduce adoption of digital services. Any proof-of-human check will need to deliver stronger assurance without adding meaningful friction beyond what users already expect from standard authentication.

Regulatory attention to the problem has been growing. In October 2025 remarks reported by American Banker, Federal Reserve Governor Michael Barr cited the rapid growth of AI-driven impersonation as a threat to banks of all sizes.

The sector has not previously required proof-of-human checks at scale, and no institution has yet produced performance data from a broad deployment.

Adoption will depend on whether early pilots demonstrate that the technology reduces fraud losses without adding friction that legitimate customers notice.

Related: Nvidia, Palantir, and Alphabet send waves through Wall Street

What interests me is that while my money sits there earning next to nothing, the bank can put those deposits to work. That relationship becomes even more interesting when interest rates start moving, especially for a bank like Wells Fargo as it tries to strengthen its earnings.

The bank’s scale showed up in the third quarter, reported Oct. 13, 2026. Wells Fargo (WFC) earned $5.95 billion and diluted EPS of $1.87, two cents above the $1.85 consensus, on revenue of $21.87 billion, slightly short of the roughly $22.15 billion to $22.31 billion Wall Street expected.

Our third quarter results reflect broad-based growth, higher earnings, and stronger returns.

Scharf added that average loans and deposits both increased 11% from a year earlier, while the bank continued to attract new primary checking customers, according to its third-quarter report.

Wells Fargo also repurchased $2.5 billion of stock and raised its quarterly dividend to $0.50 a share. However, one slow-moving number is still holding back the bank’s earnings engine.

Also Read: 174-year-old bank closing more branches

Wells Fargo’s small miss hides a deposit question

Morgan Stanley shared its take in a note shared with me at TheStreet on Oct. 14. Morgan Stanley said, “Modest Miss Does Not Change the ROTCE Improvement Story.” 

The firm kept an Overweight rating and Top Pick status, trimming its price target to $101 from $102, based on 12.5x 2027 earnings. Morgan Stanley sees the stock as undervalued at about 1.6x 2027 tangible book value and not priced for returns rising to 17%-18%.

The shares haven’t felt that optimism yet. Wells Fargo is down 10.79% year-to-date on a total return basis, according to Yahoo Finance, though it is up only 0.36% over one year and 113.64% over three.

Related: Wells Fargo’s new S&P 500 call signals trouble ahead

The miss itself was small. Net interest income, the profit from lending money above what the bank pays for deposits, came in about 1% short of consensus. But the margin on those loans held steady at 2.43%. Credit stayed clean, with provisions of $1.03 billion and net charge-offs of $983 million, both below expectations.

Wells Fargo also reported broad-based revenue growth, with Wealth and Investment Management up 12%, Commercial Banking up 6%, Consumer Banking up 5%, and Corporate and Investment Banking up 3%.

Why cheap deposits matter to Wells Fargo’s profit

Here is the catch. Wells Fargo wants more noninterest-bearing deposits, the checking balances that cost the bank little or nothing. Average balances fell about $3 billion, or 0.9%, in the quarter. Morgan Stanley said it would have liked stronger growth, and it models just 2% average growth in 2027. It calls that growth critical to its 7% NII forecast.

I can see why attracting those deposits isn’t easy. I like having money readily available in my checking account, but leaving too much there feels like a missed opportunity when my investments offer better returns. Convenience matters, but so does making my money work harder.

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Morgan Stanley says lower-cost balances should follow consumer account growth and the buildout of treasury management and payments, which take time. Interest-bearing deposit costs rose 6 basis points to 2.05%. 

But core interest-bearing deposits grew about $22 billion, more than funding the quarter’s asset growth. Corporate deposits, a proxy for pricier non-core funding, fell about $15 billion to $95 billion, according to the note.

That is why the fourth-quarter guidance matters. Wells Fargo guided to about $13 billion in net interest income, 1.4% above consensus, with the core banking book doing more of the work as fixed-rate assets reprice and loans grow. Annualized, the guide implies about $52 billion, roughly 4% above the $50 billion full-year guide.

Fixed-income financing balances grew 18% from the prior quarter on a gross basis. Morgan Stanley sees room for more balance-sheet netting, which lifts margin optically but can raise return on assets as clients do more on the same balance sheet.

Morgan Stanley sees a path to 17% to 18% returns

Morgan Stanley models NII growth of about 7% in 2027, with the net interest margin expanding to 2.48% by the fourth quarter of 2027. It trimmed 2027 and 2028 EPS by 1% and 2% to $8.07 and $9.58, on mostly lower buyback assumptions, while raising 2026 to $7.20. It now sees buybacks of $12.6 billion in 2026 and $15.0 billion in 2027, still 15%-20% above the Street.

Capital remains at 10.0% despite a 38-basis-point hit from higher rates. That hit also mechanically lifts return on tangible common equity, or ROTCE, by about 100 basis points in the fourth quarter. Morgan Stanley models 17.1% in 2027 and 18.4% in 2028, but says its thesis rests on earnings growth from NII, fees, card seasoning and efficiencies.

Its bull case is $124, on faster capital markets growth and loan expansion. The bear case is $63 in a mild recession with aggressive Fed cuts.

For investors, the verdict is that a modest miss doesn’t change the story, so long as deposits cooperate. Lower funding costs and steady loan growth could help Wells Fargo deliver those returns.

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On the Sept. 14 episode of “Mad Money,” he called the stock “too cheap to ignore” and said the company was “still on track to put up some incredible growth,” arguing that investors were grouping it unfairly with weaker AI names, TheStreet reported. 

Cramer has long held that Broadcom sits in a different category from the speculative AI names, given its actual contracts with paying customers rather than bets on future adoption.

By early October, Broadcom had climbed back to the level where it reported earnings in early September, erasing most of the drawdown for investors who stayed in.

Also read: Jim Cramer doubles down on his stock market stand

Broadcom’s Q3 results drove the initial rally

The September report gave investors a lot to work with. Broadcom posted third-quarter revenue of $29.6 billion, up 86% from a year earlier, as AI chip sales tripled. 

CEO Hock Tan guided fourth-quarter AI semiconductor revenue to $21.7 billion, up 236% year over year, a figure that made Broadcom one of the largest beneficiaries of the AI build-out outside of Nvidia, according to Broadcom.

The fourth-quarter guidance came in at about $34.8 billion, modestly below the roughly $35 billion analysts had projected. Shares slid about 3% in extended trading on the guidance miss, though they recovered in the following sessions, Nasdaq reported.

That kind of snap-back after a guidance-driven dip suggested the market viewed the miss as a rounding error rather than a signal about demand.

The long-term AI targets underpin Wall Street’s confidence

Broadcom’s broader AI roadmap has kept analysts bullish even through the near-term noise.

The company projected AI revenue of $115 billion in fiscal 2027, rising to $230 billion in fiscal 2028, forecasts that reflect its growing custom chip business with hyperscalers including Alphabet, Meta, and Anthropic, Reuters reported.

Broadcom deepened its relationship with Anthropic in October, agreeing to lend the AI company up to $42 billion to finance chip leases in what Reuters described as an unusual arrangement that made Broadcom both Anthropic’s chip supplier and its financier, Reuters reported.

JP Morgan analyst Harlan Sur raised his price target on Broadcom to $580, the most bullish call among analysts who updated their views after the Q3 report.

Sur asked on the earnings call whether Broadcom’s 18-month AI backlog could reach $200 billion, a figure Hock Tan declined to confirm, though he said the company would “exceed very easily $100 billion” in fiscal 2027, as demand continues to mount, Nasdaq reported.

Analysts are nearly unanimous in their view of Broadcom

Wall Street has maintained its confidence in Broadcom through the volatility. Of 50 analysts covering the stock, 40 rate it a strong buy, with an average 12-month price target of about $527, according to Stock Analysis. 

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That consensus reflects a view that Broadcom’s AI revenue ramp is durable, not dependent on a single customer or product cycle.

At about 21 times forward earnings, the stock trades well below Nvidia and closer to the broader market. Some analysts call that a disconnect, given that Broadcom’s profit growth is running at a pace that matches or exceeds what Nvidia is expected to deliver.

Rothschild flags the concentration risk

Not everyone is comfortable with the setup.

Robert Leitao of Rothschild said there is “quite a concentrated bet right now on two companies being able to generate enough revenues to support all the financing that’s happened,” Reuters reported.

This serves as a warning about the reliance of the broader AI infrastructure boom on a handful of hyperscalers. That risk applies directly to Broadcom, whose AI revenue pipeline runs primarily through Alphabet and Meta.

Cramer has pushed back on that concern. The Anthropic financing deal and Broadcom’s chip contracts with other hyperscalers show the customer base is getting broader, he argued, which takes some of the edge off the concentration risk.

What the recovery means for investors who stayed in

Investors who stayed in have gotten back to where they started. Cramer held his charitable trust’s position through the dip because he thought the stock was worth more than the market was pricing it, and a full exit would have left him on the sidelines when sentiment turned.

Getting back to earnings-level pricing also matters technically. When a stock retraces a post-earnings drop, it usually means sellers exhausted themselves and buyers showed up at a price they were willing to own. For Broadcom, that price was tied to the AI revenue story, which never really changed during the pullback.

Where the stock goes from here depends partly on whether Broadcom’s next earnings report backs up the AI revenue trajectory Hock Tan has been laying out. Cramer’s view is that the sell-off had nothing to do with Broadcom specifically; it got caught in a broader pullback across AI names. 

Sentiment moves fast in both directions, and a stock at 21 times forward earnings with locked-in hyperscaler contracts is not the same animal as the speculative names that drove the fear.

Related: Broadcom CEO echoes Warren Buffett with warning for investors

Returns like that aren’t common, but despite a four-year bull market that has sent the S&P 500 up about 119%, there’s reason for optimism, according to CFRA strategist Sam Stovall.

In a research note shared with me, Stovall, who has helped professionals make sense of the stock market since the 1980s, points out that it’s historically hard to derail a bull market after four consecutive years of gains.

“The average gain in the fifth year of bull markets since WWII was nearly 21%. Only one of the bulls that lasted four years did not survive until its fifth anniversary,” wrote Stovall.

S&P 500 rides earnings coattails to a lower-than-average valuation

When I was on the sell-side in the late 1990s, my mentor used to remind me, “stocks follow earnings over time.”

That’s certainly been true this time around, thanks to AI optimism following the 2022 bear market and historically high earnings growth.

Also read: Goldman Sachs sends a stern warning to stock market investors

S&P 500 companies saw earnings tumble 12.7% in 2022. Since then, they’ve risen 11.4%, 9.2%, and 16.87% in 2023, 2024, and 2025, respectively, according to Multpl. The S&P 500 has climbed by 24.2%, 23.3%, and 16.4% in those years.

The earnings trend has accelerated in 2026, fueling additional upside.

According to FactSet, S&P 500 earnings growth will clock in at 29% year-over-year in the third quarter, marking “the third-straight quarter of earnings growth above 25%.”

So far, the S&P 500 is up 12.35%.

The tailwind for stocks isn’t lost on Stovall, who points out that the index’s forward price-to-earnings (P/E) ratio has fallen as earnings growth has outpaced price returns.

“The S&P 500’s P/E on forward 12-month EPS stands at 19.8x, a 0.4% discount to its 10-year average,” wrote Stovall.

Stovall says S&P 500 has more room to run

The stock market faces a headwind from higher interest rates, with 10-year Treasury yields firmly over 5%, making them increasingly competitive to stocks. Higher Fed interest rates to crimp inflation are also a headwind for economic activity.

Still, Stovall notes that despite the jump in the 10-year yield this year, the current 5.24% yield only ranks in the “middle of other fourth-year bulls.”

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CFRA doesn’t necessarily expect the S&P 500 to deliver a fifth consecutive year of double-digit gains in 2027, though, given that returns this bull market have been higher than usual.

“This is the only bull market since WWII that posted double-digit advances in each of the first four years. Even though the average price change for fifth-year bull markets is nearly 21%, chances are slim that a double- digit gain will be recorded in year five,” said Stovall.

The reality is that double-digit gains have only happened in one five-year stretch of a bull market, and that was 1995 to 1999 during the dot-com boom.

Still, if history rhymes, stocks may still provide investors with a reason to stick around.

The S&P 500 earnings season gets into the swing of things this week with 77 member companies reporting results. Stovall expects a strong showing that will help full-year earnings growth clock in over 30%, with additional profit upside in each of the next two years.

“For full-year 2026, S&P 500 EPS are projected to have risen 31.7% Y/Y and are expected to be followed by a 16.8% increase in 2027 and +16.9% in 2028,” noted Stovall.

How much more room could the S&P 500 run based on history?

“Bull markets that [have] lasted this long remained alive for an additional 34 months and enjoyed an average total gain of 232%,” said Stovall.

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The caution stands out from a bank that has been calling for the S&P 500 to reach 8,000 by year-end, a target built on strong profit growth and heavy AI spending.

The timing gave the warning an extra bite. On Oct. 16, the date on equity strategist Ben Snider’s report, the S&P 500’s technology sector fell more than 3%. And the Nasdaq lost about 2%, while energy stocks climbed as oil prices rose.

Leadership, in other words, was already wobbling before the report reached clients, according to Reuters.

Also read: Michael Burry doubles down on his stock market bet

A narrow rally leaves momentum trades exposed

Goldman has been sounding this alarm for weeks. In a late September note, the bank said breadth had fallen to its weakest level since the dot-com bubble, even as strength in AI stocks kept the S&P 500 steady.

It added that the index’s forward price-to-earnings ratio had slipped from 22 to 19 times, partly because of rising interest rates, according to Investing.com.

The same lopsidedness shows up in profits. The top 10 contributors are projected to generate roughly 68% of third-quarter earnings growth. Micron and Nvidia alone account for more than a third of the total. Information technology and energy were projected to deliver nearly 80% of the increase between them.

That leaves a wide gap between the index and the typical stock. Goldman projected the S&P 500 could post 27% earnings growth for the quarter, CryptoBriefing noted, while the median company was expected to grow profits by roughly 9%.

For momentum strategies crowded into recent winners, that gap is where the reversals tend to start.

Investors have reshuffled fast. Goldman’s own equities trading revenue jumped 72% in the third quarter as clients adjusted their positions amid volatile markets. Those same forces are now testing the market’s most crowded positions.

Earnings still carry the market, but the pace is cooling

The early numbers support Goldman’s view of strong but slowing growth. With 9% of S&P 500 companies reporting by Oct. 16, the blended third-quarter growth rate stood at 29.0%, slightly below the prior week’s reading after a mixed start to the season, as reported by FactSet.

That would mark a third straight quarter of earnings growth above 25%.

Much of that growth rides on one spending cycle. Hyperscalers are expected to pour about $754 billion into capital spending this year. Goldman has said AI infrastructure accounts for roughly half of S&P 500 earnings growth.

A pullback by even a few of those big buyers would thin out the profit gains powering the index.

The payoff is harder to see outside the builders. About half of S&P 500 companies tied AI to efficiency on recent calls. Yet the measured earnings impact remained small.

Goldman also did not expect a repeat of the large mega-cap investment gains that flattered the second-quarter results, removing another source of support.

Higher borrowing costs are the other brake. Fed Chair Kevin Warsh has said heavy bond issuance by hyperscalers helps explain rising Treasury yields, and strategist Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400 after the recent climb in yields, TheStreet reported.

Higher yields make bonds more competitive with stocks and weigh on growth expectations.

Why Goldman is warming to beaten-down consumer names

The consumer call hinges on energy. Goldman’s consumer researchers noted earlier this year that the lowest-income households spend roughly four times as much of their after-tax income on gasoline as the top earners do. That is why cheaper fuel matters so much to the bank’s case for stronger real income growth among those households next year.

That burden has grown heavier this fall. The energy index in the consumer price report jumped in September, led by gasoline. Bank of America noted that higher energy prices after the Iran conflict also pushed up airfares and rental car costs. Any easing in fuel prices would land first with lower-income families.

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The risk is that inflation proves stickier than Goldman assumes. Fed staff projected inflation would not return to the 2% goal until 2029. Governor Christopher Waller cited energy costs tied to the Iran war and AI-driven tech prices as forces stalling progress, according to TheStreet. Either one could delay the relief consumer stocks need.

Light positioning could help if the call proves early. Goldman’s broader positioning gauge, which tracks hedge funds, mutual funds, and other institutions, had fallen to its lowest reading since March by September, Snider said.

Less crowded exposure tends to leave less to unwind when markets turn lower.

What investors should watch from here

Goldman’s read on this market hasn’t changed much since June.

Back then, its strategists said the ride would stay rough but that earnings should pull stocks higher. They penciled in about $1 trillion in buybacks for 2026. Narrow leadership was already on their list of things that could shake things up.

The coming weeks will test that view. Capital.com analyst Daniela Hathorn said upcoming Big Tech earnings must show that heavy AI investment is turning into enough revenue and cash flow to justify the cost, as reported by TheStreet.

Those reports will help show whether market leadership broadens or simply rotates.

The Fed meets Oct. 27 and 28, and Bank of America hasn’t backed off its call for a rate hike after last month’s inflation numbers came in hot.

Goldman’s takeaway through all of it: K eep exposure, but shift attention away from the crowded trades toward companies with more staying power.

Related: Jim Cramer doubles down on his stock market stand

That’s been Berkshire Hathaway’s role for decades. For a while, though, it looked like the company had lost its pull without Warren Buffett in the corner office.

After Buffett told shareholders at the May 2025 annual meeting that he would step down as CEO, the shares fell more than 14% over the next three months as investors worried Berkshire would lose the premium that Buffett’s name had commanded, CNBC reported. Greg Abel took over as CEO on Jan. 1, 2026.

That premium is coming back.

Berkshire’s Class B shares (BRK.B) closed at $532.02 on Friday, Oct. 16, and Class A shares (BRK.A) closed at $798,000, both their highest closes since the May 2025 announcement, according to CNBC’s Warren Buffett Watch.

Each class now sits just 1.4% below its all-time closing high: $539.80 for the B shares and $ 809.35 for the A shares.

The rally came on a rough day for stocks

Friday was a rough day for most investors. The S&P 500 fell 1.1% to 7,659.44, and the Nasdaq Composite dropped 2.1% to 26,140.03.

More on Berkshire Hathaway:

• Abel reversed Buffett’s two biggest convictions in six months
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Berkshire rose more than 1% anyway. The gain came right after a ten-session winning streak, Berkshire’s first since January 2018, ended on Thursday, Oct. 15, CNBC reported. That streak started Oct. 1 and added about 5% to the stock, Benzinga reported.

The comeback shows up in the year-to-date numbers too. Berkshire’s B shares trailed the S&P 500 by 17.5 percentage points on June 1, and that gap had shrunk to 6.0 points as of the Oct. 16 close, according to CNBC.

Why investors are buying Berkshire right now

CNBC pointed to several forces behind the rally:

• Interest rates: Keefe, Bruyette & Woods analyst Meyer Shields said higher short-term rates help, because Berkshire earns more on its cash. He called the cash pile “a good symbol of continued patience under the new CEO.”
• Insurance: A quiet hurricane season has helped Berkshire’s insurance operations.
• Energy: Berkshire’s roughly $19 billion Chevron (CVX) stake closed at an all-time high after rising almost 36% since early July.
• Coca-Cola: Berkshire’s $37.6 billion Coca-Cola (KO) holding also closed at a record, up 34% this year.
• Rotation: Investors are moving out of high-flying AI and tech names and into older-economy businesses.

Here’s the math on the first point. Berkshire held $365.5 billion in cash and Treasury bills at the end of June, according to its second-quarter report. In my analysis, every quarter-point move in short-term yields is worth roughly $900 million a year in interest on a pile that size, before taxes.

Abel’s newest bet is already paying off

Abel is putting that cash to work. Berkshire agreed to buy 10 million newly issued shares of Bending Spoons (BSP), the Milan-based owner of apps like Evernote, at $33 apiece in a private placement, the company said on Oct. 14. The $330 million deal comes on top of the $600 million Berkshire invested at Bending Spoons’ July IPO and lifts its stake to 4%. Bending Spoons expects it to close in the fourth quarter, according to a regulatory filing.

That brings Berkshire’s investment to about $930 million for roughly 4% of the company. CNBC estimates that the stake holds about 30.7 million shares worth more than $1.4 billion at the $47.07 close on Oct. 15. 

By my count, that’s a paper gain of more than $500 million in a few months. It’s small next to a $1.14 trillion company, but it shows Abel is willing to buy outside Buffett’s traditional comfort zone.

Not everyone is satisfied. Many Berkshire holders would like to see the company put more money into stocks, Barron’s Andrew Bary wrote.

How a stock like this fits your portfolio

If you own an S&P 500 index fund, you own a lot of the AI and tech trade, whether you meant to or not. Berkshire’s rally is a reminder of what a different kind of holding can do on days like Friday.

Berkshire isn’t cheap insurance against every sell-off. Its B shares trade at about 13 times trailing earnings, CNBC reported (link), and the stock lagged the market badly for more than a year after the Buffett announcement.

I’d look at it the way many long-term investors do: as a single stock that gives you insurance, railroads, utilities, energy and a giant cash buffer in one place. That mix tends to matter most when the rest of your portfolio is falling.

Earnings and an all-time high come next

Berkshire typically releases third-quarter results on the first Saturday of November. Investors will look for three things: how much cash Abel deployed, whether buybacks continued after $4.5 billion in the second quarter, and how insurance profits held up after a quiet storm season.

The other test is the all-time high. B shares need to rise about 1.5% from Friday’s close to top $539.80.

Berkshire didn’t need a headline to climb this time. It needed a bad day for everything else, and that’s exactly when a company like this earns its place in your portfolio.

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You may be asking how a bank that size could let such a serious compliance issue slip through the cracks, especially when customers trust it to safeguard their money.

The $1.2 billion fine landed in a quarter when BofA (BAC) still brought in $30 billion in revenue, up 3% from a year ago but short of the $30.58 billion analysts expected. Reported earnings were $0.91 per share for the third quarter of fiscal 2026.

“We put lots of resources against this. Thousands of extra teammates,” Moynihan said, adding that the bank lowered its reporting thresholds and the penalty went through last quarter. He said the bank is “deep into remediation activities,’ as I highlighted previously.

However, investors want to know whether the fine and the fee miss–-meaning, according to a Morgan Stanley note shared with TheStreet, non-interest fee income coming in lower than Wall Street consensus expectations for the third quarter of 2026–-are the last surprises.

Also Read: Bank of America sees another interest-rate surprise 

Bank of America’s fine and fee miss rattle the stock

Morgan Stanley’s answer is a cautious maybe. The firm kept an Overweight rating but cut its price target to $61 from $67, 18% above the $51.39 share price, according to the note.

Morgan Stanley wrote that the OCC and FinCEN investigation fine and the fee miss added noise, but that BofA’s stock’s drop suggests it is “closer to being de-risked.”

Shares have slipped 5.36% this year through Oct. 16 on a total return basis, according to Yahoo Finance, and Morgan Stanley says they trade at 9.7 times 2027 earnings. It cut its target multiple to 11.5x from 12.25x. It also trimmed 2027 EPS by 3% to $5.28 and 2026 EPS by 1% to $4.59 on lower fee income.

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According to its Q3 fiscal 2026 report, adjusted earnings of $1.08 a share missed consensus by about 1%, primarily due to weaker trading. Fixed income revenue fell 17% as clients pulled back after a sharp move in interest rates, particularly in credit, mortgages and municipal bonds. Equities still delivered a record third quarter, with revenue up 10%.

The miss was not a surprise to everyone. Management had warned in September that the quarter would be softer, and it does not expect as much of the usual fourth-quarter seasonal slowdown.

On the fine, management said the technology and people needed for remediation are already funded and in the expense run rate. It confirmed no asset cap is in place, meaning regulators have not limited the bank’s growth, and said the work will not crowd out investment elsewhere.

Why the Bank of America’s earnings engine is still running

The stronger story is net interest income (NII), the gap between what the bank earns on loans and pays on deposits. 

Third-quarter NII rose about 8% from a year ago and 3% from the prior quarter, as stronger margins offset smaller earning-asset balances. Management guided to 8% growth or more in 2027, versus the 6.4% consensus expected, and Morgan Stanley models 8.6%, according to the note.

Related: Bank of America sees 40% upside in AI’s next bottleneck

Rates are only a small part of it, the bank says. Deposit growth is normalizing, customers are moving into higher-cost deposits more slowly, loans continue to grow, and fixed-rate loans and securities are repricing higher. 

Management expects the core banking book to be stronger in 2027 than in 2026, though Morgan Stanley trimmed its NII estimate about 1% due to more conservative balance assumptions.

Behind the discipline are people. Total headcount fell despite additions to sales teams, as automation and work simplification reduced replacement hiring, management said, even as the bank continues to spend on technology, AI, and client acquisition.

Morgan Stanley sees 18% upside if Bank of America delivers

Positive operating leverage should return in the fourth quarter, management said, and it maintained its 200-300 basis-point medium-term framework. A specific 2027 guide is due later this year or with fourth-quarter results in January. 

Morgan Stanley models about 260 basis points in 2027, with revenue up 7.6% and expenses up 5.1%, taking the expense ratio to 58.7%. Extra NII should increasingly reach the bottom line.

The scenarios range from $39 in a bear case at 10x earnings to $90 in a bull case at 13x.

For investors, Morgan argues that the bad news is mostly in the stock price. It says that delivering NII growth and operating leverage should reverse some of the recent multiple compressions. The fine may linger, but the bank’s verdict is that it no longer has to drive the story.

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The rebound came after a difficult week for tech investors. Intel stock tumbled more than 14% last week amid a broad tech sell-off, partly driven by CoreWeave’s (CRWV) debt-heavy balance sheet, which raised concerns about financing for AI infrastructure and pressured the semiconductor sector.

Intel shares have surged about 151% so far in 2026, benefiting from renewed investor confidence in its turnaround and growing demand for processors used in AI data centers.

While Nvidia (NVDA) dominates the market for AI accelerators, Intel is benefiting from demand for traditional server CPUs, which are essential for running data centers and handling increasingly complex AI workloads.

JPMorgan sees more upside potential for Intel stock

JPMorgan just upgraded Intel to neutral from underweight while maintaining its $85 price target.

The firm said in a research note that the stock’s recent pullback has created a more balanced risk/reward outlook. Intel shares have fallen about 36% from their June peak.

Also read: CoreWeave stock plunges 12%, but Wall Street analyst says buy the dip

JPMorgan pointed to progress under Intel CEO Lip-Bu Tan, particularly in Intel’s data center business and next-generation chip manufacturing.

“Since Lip Bu Tan’s appointment to CEO, we believe the team’s execution and competitiveness in their core client/datacenter compute market has improved,” analyst Harlan Sur wrote. “The team’s execution on next-gen manufacturing has significantly improved.”

The analyst also sees room for earnings estimates to rise as demand for AI computing continues to grow.

“Despite near-term concerns on AI infrastructure spending sustainability, we believe increasing Agentic AI workloads (CPU intensive) and a very tight supply chain for leading edge silicon should drive continued positive EPS revisions in the upcoming earnings season and through CY27,” Sur wrote.

Intel earnings are coming on Oct. 29

Intel is scheduled to report its third-quarter 2026 financial results on Oct. 29.

For the quarter, Intel expects adjusted earnings of 38 cents per share on revenue between $15.8 billion and $16.8 billion. Analysts have expectations of 27 cents per share and $15.1 billion in revenue, according to CNBC.

Three months ago, Intel reported better-than-expected second-quarter results, posting its fastest quarterly revenue growth since 2011.

The chipmaker reported adjusted earnings of 42 cents per share, more than double analysts’ expectations of 21 cents. Revenue rose 25% year over year to $16.1 billion, beating estimates of $14.42 billion.

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“AI is driving unprecedented demand for compute,” Intel CEO Lip-Bu Tan said in the statement. “As we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise.”

Still, Intel’s rally has raised expectations for its upcoming earnings report. Investors will be watching whether the company can sustain its revenue growth and whether there’s stronger demand for its chips.

According to TipRanks, Wall Street analysts have an average price target of $114.04 for Intel, with a high forecast of $155 and a low of $80.

Intel shares traded around $92 as of writing.

Related: Cathie Wood buys $11.8 million of tumbling tech stock

That arrangement is coming apart, and one of the clearest signs is who now pays to make a buyer’s loan cheaper. Home sellers gave concessions in 44.7% of U.S. sales in August, the highest share for that month since at least 2020, according to Fortune.

Money got more expensive, and buyers felt it fast. With rates climbing well above 7%, a seller who chips in on the loan can actually do more for a buyer’s budget than a small trim to the asking price.

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Rising rates are handing buyers leverage

Freddie Mac’s weekly survey tells the same story. The average 30-year fixed rate held at 7.40% as of Oct. 15, compared with 6.27% a year earlier, Freddie Mac reported.

That gap of more than a full percentage point has reshaped what a typical household can afford, leaving many would-be buyers on the sidelines.

Fewer people are even applying. Mortgage applications dropped in the week ending Oct. 9 as rates pushed higher, and purchase loans fell right along with refinancing. More borrowers have also opted for adjustable-rate loans, pushing that share to its highest since October 2025.

The monthly cost of that climb is easy to see. Senate Banking Committee staff for Sen. Elizabeth Warren (D-Mass.) estimated that a typical buyer now pays about $361 more a month than in late February, TheStreet reported.

Sellers are adjusting their asking prices, too. A record September share of active listings had a price cut in the four weeks ending Sept. 20, according to TheStreet, which reviewed Redfin’s data.

Denver led the major metros for cuts, while San Francisco, buoyed by wealth from the AI boom, posted the smallest share.

How a seller-paid buydown actually works

Here is how it plays out at the closing table. A lump sum goes to the lender up front, and the borrower gets a lower rate in return, sometimes only for the first year or two and sometimes for the life of the loan.

If the seller writes that check, the buyer’s payment shrinks, and the buyer never pays for the discount.

There is a tradeoff buyers should understand before signing. A seller-funded buydown does not lower the agreed purchase price. Compared with a deal struck at a lower price, the buyer walks away with a smaller payment but starts out owing more on the loan.

Redfin counts rate buydowns alongside money for repairs and closing costs when it tracks seller concessions. Roughly 15.8% of homes sold in August came with a price drop in addition to a concession, a record for that month. In other words, a meaningful slice of buyers is now getting help on both fronts.

Experienced sellers are building that help into their math before a sign goes up. New Orleans investor Dominique Gunderson plans each flip around a sale price that already assumes two price cuts and a $10,000 closing-cost concession.

She said on the BiggerPockets podcast that today’s buyers have become extremely picky about price and finishes.

Builders are setting the bar for everyone else

Homebuilders have leaned on these tools for well over a year. In July, more than a third of builders cut prices and nearly two-thirds offered sales incentives to keep transactions moving forward, a measure that has stayed above 60% for 16 straight months, TheStreet reported, citing National Association of Home Builders survey data.

Those deals put real pressure on resale owners nearby. Builder buydowns and closing-cost credits can push the monthly cost of a new home below that of a comparable existing house, and most individual sellers lack the financial margin to match a full builder package.

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Even generous incentives have not fixed weak demand. Builders sold fewer new homes in the first half of 2026 than in any comparable stretch since 2017, Zillow found, according to TheStreet. Zillow senior economist Orphe Divounguy pointed to higher mortgage rates, softer hiring and sticky inflation as the main drags on household formation.

Agents say buyers have noticed the shift and are pressing their advantage. A Dallas-based Redfin agent said house hunters are asking for every concession they can think of, especially on newly built homes, as reported by Redfin. Eight of the 10 metros where concessions are most common sit in the Sun Belt.

Relief on rates may be slow to arrive

Buyers hoping to simply wait out high rates may be disappointed. Fannie Mae’s October forecast calls for the 30-year rate to average 7.4% in the fourth quarter of 2026 and 7.5% through 2027, while the Mortgage Bankers Association expects slightly lower readings that still stay above 7%.

That outlook makes negotiating skill more valuable than timing. Redfin senior economist Asad Khan said the sellers moving homes quickly are getting savvier about pricing right from day one. Redfin also noted that homes sitting on the market for more than a month may justify offers below asking.

The next big test comes at the Federal Reserve’s policy meeting on Oct. 27 and 28, which could move Treasury yields and the mortgage quotes tied to them. Until borrowing costs ease, a seller-paid buydown may remain the quickest path to a payment buyers can live with.

Related: Americans are souring on the economy as housing gets harder again

That gap between wealth and liquidity is easy to overlook when investments are performing well. It becomes harder to ignore when an investor faces a major financial decision, whether that means funding a new venture, meeting a tax bill or dividing assets during a divorce.

For executives and private equity professionals, the challenge is not simply how much they own. It is how much of that wealth they can access, when they can access it and what obligations might come with it.

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The value on paper is only part of the story

Unlike publicly traded stocks, private equity interests do not come with a market price that changes throughout the trading day. Their valuations can depend on the performance of the underlying business, the assumptions used by the fund, or the timing of a potential sale.

Even when a valuation is credible, it does not necessarily mean an investor could sell the interest for that amount today. Private investments are often designed to be held for years, and investors may have limited opportunities to exit before a fund or company completes a sale.

Compensation can add another layer of uncertainty. Private equity professionals may receive carried interest, which gives them a share of investment profits when specified conditions are met. The potential payout can be significant, but it depends on the fund’s performance and the terms of the arrangement.

This is why a person’s net worth can tell an incomplete story. Someone may have substantial wealth tied up in investments but relatively little cash available to cover immediate expenses or unexpected obligations.

When dividing a fortune gets complicated

The distinction becomes particularly important when a relationship ends and a couple has to account for investments that cannot easily be sold or transferred. A private equity stake cannot always be divided in the same way as a cash account, and the fund’s governing documents may restrict who can own an interest.

Eric J. Broder, a Connecticut-based family law attorney who works with high-net-worth clients, said in an interview with TheStreet that private equity investments can make divorce proceedings more complicated and complex due to the difficulty in valuing a party’s interest.

“Resolving divorce cases involving private equity often requires the parties being more creative and willing to consider a variety of outcomes due to the lack of liquidity, predictability and future commitments such as capital calls,” Broder said.

The challenge extends beyond establishing a valuation. A fund or private company may not permit an investor to transfer part of an ownership stake to a former spouse, even when a settlement requires the investment’s economic value to be shared. Broder said, “In those circumstances, an agreement usually requires a party to hold the investment in a constructive trust with annual reporting requirements to ensure that the recipient is paid the appropriate amount. That arrangement necessitates clear terms covering how the payments are calculated, what documentation must be shared, and how taxes and expenses are deducted. Unfortunately, the parties are still linked together in the future in a manner more complex than alimony or child support.”

Without adequate disclosure, the recipient may struggle to verify whether the payments accurately reflect the investment’s performance.

The timing of those payments matters, too. An investment may take years to generate meaningful proceeds, leaving someone with an agreed financial entitlement but no immediate cash. That is a very different proposition from receiving a fixed sum at the time a settlement is reached.

The fine print can carry a financial burden

Future obligations can complicate matters further. Private equity investors sometimes commit a total amount to a fund but contribute the money over time when the fund requests it through capital calls.

Consider an investor who commits $1 million but has contributed only $800,000. A later capital call could require the remaining $200,000. Any agreement that accounts only for the amount already invested risks overlooking a substantial future obligation.

Distributions can also come with strings attached. Under certain fund arrangements, investors may be required to return money that was previously paid out if the fund later determines that a distribution exceeded what was ultimately due.

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These provisions can make an investment’s true value harder to assess. A large distribution may look like a windfall until the investor considers the possibility of a repayment obligation. Similarly, an asset’s estimated value may look attractive until outstanding commitments are factored in.

For anyone assessing a private equity portfolio, the headline valuation is only one part of the calculation. Outstanding commitments, possible repayments, taxes and the timing of distributions can all affect how much economic value an investor ultimately retains.

A fortune needs a plan, not just a valuation

The same issues matter beyond divorce. An executive preparing to leave a company, an investor planning for retirement or a founder considering a new venture may discover that valuable private holdings are less flexible than cash or publicly traded shares.

Understanding the terms before a major decision becomes urgent can help investors avoid unpleasant surprises. They need to know whether their interests can be transferred, when they can expect distributions and whether they could be asked to contribute more money. They also need to consider how private investments fit into their wider financial position, particularly if they have substantial wealth concentrated in a small number of assets.

Some investors assume that illiquid private equity holdings can be kept out of a divorce settlement. That assumption does not always hold. A post-nuptial agreement can offer some protection, but negotiating and enforcing one introduces a separate set of legal and financial considerations.

The point is that one agreement cannot solve every problem. Rather, ownership arrangements and legal agreements need to be considered alongside the financial realities of an investment. An attorney can help assess contractual and ownership restrictions, while an accountant or financial adviser can examine tax consequences, cash flow and future funding obligations.

Private equity can create considerable wealth, but it does not eliminate the practical limits of owning assets that are difficult to sell. For investors, understanding a fortune means looking beyond its estimated value to the conditions attached to it, the cash it can generate and the obligations that may follow.

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