That’s a massive question. If demand remains tight for years rather than quarters, and Micron can lock more business into long-term agreements, the company could start to look less like a volatile commodity producer and more like a business with durable earnings power.

Veteran D.A. Davidson analyst Gil Luria believes the market is still underestimating that shift, as reported by TheFly.

“Micron is on a growth trajectory for the next 3-5 years, which is what the market has not yet acknowledged,” he said.

His thesis rests on a simple shift in AI economics, as he expects a major demand-supply imbalance while raising a bigger question for investors: whether Micron’s earnings should still be valued as temporary.

D.A. Davidson sees a 3-5 year Micron growth story

Luria argues that AI has effectively transformed memory from a highly cyclical commodity into a “mission-critical” component of AI infrastructure.

Consequently, Luria bumped his Micron price target to $3,000 from $2,100 while reiterating a Buy rating, pointing to roughly 187% upside as per the latest closing price.

He believes Micron is on a three- to five-year growth trajectory that investors haven’t fully incorporated into the stock’s valuation and expects memory demand to outstrip supply through both 2027 and 2028.

According to him, “early in their journey of understanding MU’s value,” arguing that this process should ultimately result in a materially higher earnings multiple.

Read more: Morgan Stanley revisits Micron stock price target amid stellar growth

To break things down, Micron’s thesis is basically straightforward, where more capable AI systems need enormous quantities of fast memory.

Luria’s note argues that additional memory can enable larger context windows, faster processing, and better AI performance. That changes the economics of memory because GPUs and custom accelerators aren’t particularly useful if the systems around them cannot feed those processors data quickly enough.

Micron itself has been making essentially the same argument.

Reuters reported that its president and COO, Manish Bhatia, recently described memory as “the chief constraint in AI” as data centers become the world’s largest market for memory and storage.

Moreover, Micron expects memory supply-and-demand conditions to become even tighter in fiscal 2027 and 2028 than in 2026, as reported by TrendForce.

Also, the numbers behind Luria’s thesis are substantial. 

Micron’s fiscal Q4 sales jumped to $54.23 billion from $11.32 billion a year earlier, while adjusted EPS reached $33.42. Full-year fiscal 2026 revenue hit $133.19 billion, with adjusted EPS of $75.52. 

Management also guided to about $61.5 billion in first-quarter revenue, above Wall Street’s $57.02 billion consensus. More importantly, long-term supply commitments rose to $32 billion from $22 billion, while remaining performance obligations climbed to roughly $150 billion from $100 billion. 

That backs up Luria’s view that longer-term contracts could make Micron’s historically cyclical business more predictable. Even “de-specing” may not be bearish if using less memory ultimately hurts AI performance and pushes customers to buy more later.

Micron’s biggest AI opportunity may also be its biggest risk

What stands out to me is how quickly AI is turning memory from a supporting component into a major infrastructure cost. 

Bank of America estimates that memory now accounts for roughly 35% of AI infrastructure spending, giving Micron a much larger share of every dollar flowing into AI data centers. 

That said, the opportunity comes with an obvious risk: If memory prices climb too far, customers could reduce specifications or slow purchases. Yet BofA has become more bullish, and, as I covered following Micron’s latest results, the firm raised its fiscal 2027 revenue estimate to $275.4 billion from $230.3 billion.

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BofA also increased its fiscal 2028 estimate to $317 billion from $244.1 billion. Its EPS estimates jumped to $171.78 and $197.90, respectively.

I think the more revealing comparison is the pricing setup. 

D.A. Davidson’s $3,000 target values Micron at roughly 19 times fiscal 2027 earnings, implying about $158 per share. BofA actually forecasts higher earnings at $171.78, yet carries a much lower $1,550 target. 

That tells me the debate is increasingly about what Micron’s earnings are worth. With 26 strategic customer agreements and more than 75% of fiscal 2027 output already committed, Micron may be becoming less cyclical. The question is whether that change is durable enough to justify a permanently higher multiple.

Micron looks cheap on earnings, but the market still doubts the cycle

There’s little you can take away from or question about Micron from an AI-demand standpoint. The real question is whether its earnings visibility has improved enough to justify paying something closer to a broader-market multiple for profits investors have historically treated as temporary. 

That tension shows up in the valuation data. 

Seeking Alpha lists Micron at just 5.94 times forward non-GAAP earnings, compared to a 23.74 times sector median, which is unusually inexpensive.

Still, I would not call the stock cheap based on those multiples alone. Memory companies often look cheapest near cyclical peaks, and Micron’s forward enterprise value to sales multiple of 4.05 times is actually above the sector median of 3.63 times.

Luria clearly thinks this cycle is different.

If AI demand, long-term supply agreements, and tighter memory markets make earnings more durable, then the multiple itself may need to reset higher.

If Micron’s current trajectory really lasts another three to five years, I feel that the $3,000 target is not just a bet on another memory-price spike. It is a bet that Wall Street will eventually stop valuing Micron as it did in the previous cycle.

Related: Nvidia stock flashes massive signal as Wall Street leans in

Bank of America estimates that the GDP-weighted two-year yield across emerging Asia is 174 basis points, or 1.74 percentage points, below the two-year U.S. Treasury yield, according to a note shared with TheStreet. A broader bond-market measure also puts Asia’s yield discount to Treasuries at its widest in more than 20 years.

That kind of gap would normally favor the dollar. But BofA said lower-yielding currencies, including the South Korean won, Chinese yuan, and Singapore dollar, have held up better in 2026 than higher-yielding currencies such as the Indian rupee, Indonesian rupiah, and Philippine peso.

The bank sees another set of flows pulling the region apart: North Asian exporters are bringing in dollars from booming technology shipments. At the same time, oil importers need more dollars to pay energy bills as Brent trades above $100 a barrel.

Brent remained above $100 on Wednesday, Oct. 7, as investors weighed threats to global supply.

Also read: ‘Bond King’ issues stunning warning to stock market investors

Why a 20-year yield gap isn’t sinking all Asian currencies

Higher U.S. interest rates still give investors an incentive to hold dollar assets.

But BofA says bond yields are no longer the only force driving currencies. Cross-border equity flows, investors’ currency hedges, and exporters converting dollar revenue back into local currencies are playing a bigger role.

BofA also says some of the extra yield offered by developed-market bonds reflects higher fiscal and inflation risk.

The export effect is particularly visible in South Korea and Taiwan, where technology shipments have surged.

Chip exports are giving Korea and Taiwan an FX cushion

South Korea exported a record $120.9 billion of goods in September, up 83.5% from a year earlier, Reuters confirmed.

Semiconductor shipments rose 262.8% to $60.3 billion as AI infrastructure spending fueled memory demand and chip prices.

Those exports generate dollar revenue. When Korean companies convert part of those earnings into won, they sell dollars and buy the local currency, helping support the won.

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Taiwan has a similar source of support.

BofA said Taiwan’s current-account surplus reached about 24% of GDP in the second quarter, and the bank expects higher prices for technology exports to keep supporting export revenue.

Taiwan’s September consumer prices, released on Oct. 7, added another piece to BofA’s argument. CPI increased 2.73% from a year earlier, above Taiwan’s 2% policy rate.

BofA states that stronger inflation gives Taiwan’s policymakers more reason to tolerate currency appreciation, because a stronger Taiwan dollar can lower the local cost of imported goods.

The bank therefore suggests shorting offshore yuan and long Taiwan dollar trade.

But it doesn’t mean that the yuan must fall against the U.S. dollar. China still faces a softer inflation backdrop, and Taiwan is receiving more support from strong technology exports and a large current-account surplus.

Oil above $100 squeezes Thailand, the Philippines, and India

Energy importers face the other side of the dollar flow.

Higher crude prices force countries that buy oil from abroad to spend more dollars on the same fuel. The added cost can also push domestic inflation higher.

The latest data show that pressure clearly:

• Philippines: September inflation reached 7.2%, compared with a 5% central-bank policy rate.
• Thailand: September inflation reached 2.82%, compared with a 1% policy rate.

Philippine inflation accelerated from 6.1% in August. Transport prices rose 14.6%, and housing, water, electricity, gas, and other fuels increased 8.4%.

Thailand’s inflation increase was driven partly by higher fuel and food prices.

That leaves policy rates below inflation in both countries. On BofA’s measure, real policy rates are about -2.2% in the Philippines and -1.8% in Thailand, reducing the interest-rate cushion for their currencies.

India raised rates on Oct. 7 as higher oil prices added to inflation and pressure on the rupee.

The Reserve Bank of India increased its repo rate by 25 basis points to 5.5%, its first hike in nearly four years, and shifted its policy stance toward calibrated tightening.

The rupee still fell to 96.845 per dollar, close to its record low of 96.96. High oil prices, foreign portfolio outflows, and elevated global rates have continued to pressure the currency, despite RBI intervention.

BofA prefers to be short the Thai baht against a basket of the Indian rupee and Malaysian ringgit.

The bank expects India’s rate increases to provide the rupee with some support, while Malaysia’s status as a net energy exporter gives the ringgit more protection from expensive oil.

Taiwan’s September export figures are due on Oct. 8. Another strong report would add evidence that technology shipments continue to bring dollars into the economy.

For oil importers, Brent staying above $100 would keep pushing in the opposite direction.

The next test is whether export dollars can keep supporting North Asian currencies as high U.S. yields draw capital toward the dollar and expensive oil increases dollar demand among the region’s importers.

Related: Scott Bessent sends clear signal to bond market investors

After a few thoughts and comments, Ryan came up with another one. He looked at me and asked, “Where does it remember everything?”

The answer is NAND flash storage. And the company that has become the world’s most important supplier of that storage for AI systems is SanDisk (SNDK).

If you didn’t know, SanDisk is the best-performing stock in the S&P 500 this year, up 599.49% year-to-date and 1,270% over the past year, according to Yahoo Finance.

On Oct. 5, Mizuho analyst Vijay Rakesh raised his SanDisk price target to $2,050 from $1,875 and reiterated a Buy rating in a note shared with TheStreet. Rakesh ranks 10th among 12,519 analysts on TipRanks with a 68% success rate and an average return per rating of 74.50%.

His verdict? Agentic AI is creating a storage-demand cycle that the market hasn’t fully priced.

Also Read: SanDisk Corp Latest News and Stories

The agentic AI shift and why storage demand is accelerating again

For three years, the dominant AI storage narrative was about training. That is massive datasets, enormous model weights, petabytes of content that had to be ingested, processed, and stored before a model could be deployed.

Agentic AI changes the demand profile in a specific way. Meta’s Muse, released Sep. 8, and OpenAI’s Dots, unveiled at DevDay on Sep. 29, are persistent systems that run autonomously, managing workflows, scheduling, and executing multi-step tasks, even when you close the app.

Muse reportedly surpassed 5 million users in just 22 days, faster than ChatGPT’s early adoption, according to a Forbes report. Dots is being positioned as an enterprise counterpart — essentially, an agent that works continuously on behalf of professionals.

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Every user interaction these agents process creates data that must be stored, retrieved, and kept within low-latency reach for the next inference call. The technical term is KV-cache: the key-value pairs that allow an AI agent to maintain context across long, complex tasks. 

Rakesh specifically highlighted “solid inference and KV-cache demand” as durable drivers for SanDisk’s storage products.

He expects AI workloads to drive 22% of NAND demand by 2030. The agentic CPU total addressable market alone is projected to reach $80 billion by 2030, growing at a 123% compound annual growth rate over four years. 

Every agentic workload running on a server CPU also creates storage demands that grow as the workloads scale.

The SanDisk numbers make the bull case stronger

If Rakesh’s thesis sounds like forward-looking speculation, SanDisk’s fiscal year 2026 results show it is already playing out.

• Fiscal Q4 2026 revenue was $8.97 billion, up 51% sequentially and 372% year over year
• Full-year revenue was $20.25 billion, up 175% YoY
• Adjusted EPS hit $39.25
• Gross margin expanded from 26.4% to a remarkable 84.6%
• Data center revenue doubled sequentially to $2.98 billion in Q4 alone, representing 437% growth for the full fiscal year.
  • Source: SanDisk’s Fiscal Year 2026 Earnings.

For Q1 fiscal 2027, SanDisk guided revenue of $10.30-$10.80 billion, with non-GAAP diluted EPS of $44.00-$46.00. Those numbers are delivered; it would represent another sequential step-up.

Rosenblatt analyst Kevin Cassidy added his own conviction separately, assigning a Buy rating with a $2,400 price target, as TheStreet previously reported. He argues that new AI computing platforms are turning NAND into a “system-critical component of AI infrastructure.” 

His statements — “favorable bit-cost curve” — refer to SanDisk’s technology trajectory, where improving density reduces cost per bit even as demand rises, making the business economics structurally better, not just cyclically stronger.

Where SanDisk fits in the AI stack, and what HBF could mean

Understanding where SanDisk sits helps explain why both Rakesh and Cassidy, among other analysts, are confident the demand is durable rather than a one-time surge.

Nvidia and AMD GPUs provide computing power. SanDisk provides the flash storage that keeps model weights, datasets, and user context within immediate reach. 

SanDisk is also developing High Bandwidth Flash technology targeting read bandwidth comparable to High Bandwidth Memory with eight to sixteen times the capacity, though commercial validation is still ahead.

At $2,050 and $2,400 from two separate analyst teams, both targets imply meaningful upside from current levels even after the 599% year-to-date run. The storage layer of the AI stack has been underappreciated for most of the AI investment boom. Agentic AI running at scale is changing that.

Ryan’s uncle’s phone predicting what he wants to type offers a consumer-level glimpse of what millions of enterprise AI agents could soon be doing simultaneously. SanDisk is where that memory lives.

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The company completed the largest IPO in history, as reported by Reuters, pricing shares at $135 before closing its first day at $160.95. They later slid to $108 in early August before recovering toward $159 by early October.

For investors who bought into Musk’s newest public-market story, that tremendous choppiness has made the coming earnings report about much more than one quarter.

That said, in a note shared with me, Goldman Sachs has refreshed its view of SpaceX ahead of the company’s Q3 2026 earnings report, with particular attention to its fast-growing AI operation.

The issue is no longer simply whether Musk can build enormous amounts of compute. Goldman’s analysis centers on whether SpaceX can monetize that capacity at attractive rates while navigating a whole host of issues.

For shareholders, earnings may begin to separate the scale of Musk’s ambitions from the economics that support them.

Goldman sees AI becoming SpaceX’s next major growth engine

Goldman Sachs is heading into SpaceX’s Q3 earnings with a Buy rating and a $230 price target, up from $220, implying 45% upside from the stock’s recent price of $158.96.

The highlight of the report, though, is how aggressively Goldman has reset its expectations for what SpaceX could become beyond rockets and Starlink. 

Goldman raised its total sales forecasts to about $51.6 billion for 2026, $127.5 billion for 2027, and $205.6 billion for 2028, increases of roughly 8%, 19% and 14% from its prior estimates. EPS forecasts also moved higher, to $1.30, $3.96, and $7.01, respectively. 

The core driver is AI. 

Goldman now expects SpaceX’s AI segment to generate roughly $27.3 billion in 2026, $90.4 billion in 2027, and $146.7 billion in 2028. The bank believes the company can reach about 2.4 gigawatts of terrestrial compute capacity by year-end 2026, then scale toward 7 GW in 2027 and 10.6 GW in 2028. 

In my view, that clearly makes AI less of a side business and critical to the SpaceX investment case. 

Goldman is not abandoning the original pillars, either. It still sees major long-term opportunities in launch, connectivity, and AI, potentially spanning trillion-dollar markets over five-plus years.

Starlink remains critical as Sensor Tower data compiled by Goldman showed monthly active users up 21% year over year, while app-download growth accelerated to 59% in September. 

The bigger question heading into earnings is whether SpaceX can monetize its rapidly expanding compute footprint as effectively as Goldman now assumes, while keeping Starlink and launch growth moving alongside it.

Musk says AI could eclipse SpaceX’s core businesses as Starlink targets telecom

Musk’s own view of SpaceX’s future is perhaps even more aggressive than Goldman Sachs’ latest forecast. 

In an August all-hands meeting, Musk called AI an “extremely important part of SpaceX’s future” and predicted that the company’s “AI revenue will exceed all other SpaceX revenue probably in September.” 

That’s a bold call, to say the least, as AI was still smaller than Starlink just one quarter earlier. SpaceX reported $7.81 billion of Q2 revenue, including about $2.56 billion from AI and $4.29 billion from Connectivity, which includes Starlink. 

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AI revenue nevertheless grew roughly 247% year over year, driven primarily by new infrastructure contracts. 

What stands out to me is that Musk isn’t positioning AI as merely another SpaceX business; the model looks tightly interconnected.

Starship lowers launch costs, Starlink supplies global connectivity, and SpaceX’s terrestrial and eventually orbital infrastructure supplies compute. Goldman now expects AI to become the company’s largest revenue segment, with hosting alone potentially generating $40 billion to $45 billion annually in 2027-28. 

Starlink, meanwhile, is beginning to challenge a much older industry.

On SpaceX’s Q2 call, management said AT&T (T), Verizon (VZ), and T-Mobile US (TMUS)  generate roughly $600 billion annually combined. They also argued that Starlink Mobile could take customers from them.

Musk said SpaceX believes its system can provide connectivity “probably better and higher bandwidth than what is currently available from cellular providers.” 

Starlink added more than 1.7 million consumer subscribers in Q2, held a monthly ARPU of around $66, and ended June with roughly 10,200 operational broadband and mobile satellites. 

I think that combination is critical to the investment case. SpaceX is no longer asking investors to value rockets, satellites, and AI separately. Musk is increasingly building them as parts of the same infrastructure platform.

SpaceX stock needs execution to justify the premium

I feel that SpaceX stock isn’t cheap enough for investors to ignore execution risk, even with the growth Goldman Sachs expects.

At Goldman’s reference price of $158.96, SpaceX trades at roughly 122 times 2026 earnings, 40 times 2027 earnings, and 23 times 2028 earnings. EV/EBITDA falls from about 55-times in 2026 to 25-times in 2027 and 15-times in 2028.

In other words, the valuation only starts to look more reasonable if SpaceX delivers the steep earnings ramp embedded in current forecasts. Free cash flow is also expected to remain negative through 2028, reflecting enormous capital spending.

That is why I would focus less on whether Q3 simply beats expectations and more on three things: AI monetization, Starlink growth, and the pace of compute buildout.

If management shows that hosting demand remains strong, Starlink continues to add users, and power/GPU constraints ease, I think the premium can be defended. If any of those weaken, the stock’s valuation leaves little room for disappointment.

Before earnings, I see SpaceX as a high-expectation stock where execution matters more than narrative.

Related: Nvidia stock flashes massive signal as Wall Street leans in

Some investors were also worried because of the company’s issues with grid operators, Simply Wall St reported.

Now a new decision from Washington could turn the stock’s situation around. The U.S. Department of Energy plans to lend Vistra about $4.2 billion to produce more electricity from the nuclear plants it already owns.

The government wants to supply AI data centers with steady, uninterrupted power, and the Vistra loan fits directly into that plan.

Inside the Department of Energy’s $4.2 billion loan to Vistra

The DOE’s Loan Programs Office is funding the upgrade of three of Vistra’s four nuclear stations, according to the U.S. Department of Energy.

Two of them, Perry and Davis-Besse, are in Ohio, while the third, Beaver Valley, is in Pennsylvania. The money will pay for what the industry calls “uprates.” Uprates are upgrades that permanently increase a plant’s maximum power output.

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It can take more than 10 years to build a brand-new reactor. It could also cost billions, so uprates seem like a better option for Vistra.

Uprates work by improving the equipment that is already present in running plants. They also shorten the time needed to obtain approval from the Nuclear Regulatory Commission.

For a company that makes money by selling electricity, getting more power from the plants it already owns means more revenue without having to go through years of construction.

Why Washington is backing nuclear upgrades right now

The PJM Interconnection, which supplies power for about 67 million people across the Mid-Atlantic and parts of the Midwest and South, has warned about a supply shortage. Most of that shortage pressure comes from AI data center demand for large amounts of electricity.

Vistra CEO Jim Burke told investors on the company’s second-quarter earnings call that the company is observing a “structurally improved demand environment,” due to record-breaking electricity usage across the power grid.

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The White House also wants to quadruple U.S. nuclear capacity by 2050.

According to Bloomberg‘s report on the Vistra deal, cheap federal loans are crucial to achieving that goal because they reduce the cost of adding clean power that runs 24 hours a day.

How the loan changes Vistra’s financial picture

Vistra already has a lot of debt, and some analysts have been cautious because of it. However, because this time the company is borrowing from the DOE at government rates instead of banks and bond markets, it could save a lot of interest costs over time.

Related: Wolfe Research sees nearly 100% upside in crashing energy stock

The increased output capacity also means the company could get more long-term power deals with companies that are looking for clean electricity to run their data centers.

Julien Dumoulin-Smith, a Jefferies analyst who has covered power producers for more than 15 years, has called Vistra’s nuclear fleet a strategic asset that stands to gain from rising tech-driven demand.

What VST stock investors should watch next

VST closed near $140 on Friday, Oct. 2, down from a 52-week high of $217.10. After investors heard the news about the loan, the stock increased by about 6% during pre-market trading, which pushed the shares toward $148.

However, the loan terms are not yet final. Vistra’s pricing issues with PJM also remain unresolved, and the nuclear upgrades will probably still take a few years before they can add new megawatts to the grid.

Morgan Stanley and some other large firms have set their price targets well above the current share price, with some going as high as $298. However, those high targets assume Vistra signs long-term tech contracts with big companies and doesn’t encounter any regulatory problems.

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Major indexes keep closing at record highs even as Treasury yields climb to levels not seen in over two decades. That combination has traditionally meant trouble for expensive growth stocks, not fresh records.

Jim Cramer says there is a clear explanation for the disconnect. It comes down to just three companies carrying far more weight than their size alone would suggest.

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Cramer says a few stocks are masking the real picture

“Mad Money” host Jim Cramer said Nvidia, Microsoft and Meta are propping up the broader market even as surging Treasury yields pressure nearly everything else on Wall Street. “Here, I think there’s tremendous distortion caused by some very big winners, namely Nvidia, Microsoft and Meta,” he said.

The numbers back up his point. The Nasdaq Composite closed at a fresh record on October 5. Nvidia climbed roughly 2.1 percent to secure its first record close since May. Meta rose about 1.9 percent. Microsoft added 1.5 percent, according to CNBC.

Cramer’s Charitable Trust, the portfolio run by CNBC’s Investing Club, owns shares of all three companies.

Nvidia’s advance pushed its market value to roughly $5.7 trillion, cementing its position as the most valuable public company in the world. Some measures of market breadth remained weak beneath the headline gains, according to Reuters. The S&P 500 also advanced, though it remained just below its own all-time high reached earlier in the year.

Cramer’s broader argument is that this concentration makes the bond market an unusually important signal. If rising yields eventually catch up to even Nvidia, Microsoft and Meta, the record highs could prove far less durable. So much of the recent gains rest on so few names.

The Treasury yield surge behind the unusual pattern

The yield move underpinning Cramer’s warning has been dramatic. The 10-year Treasury yield climbed to roughly 5.32 percent on October 5. The 30-year yield pushed to around 5.67 percent, according to TheStreet.

That climb has been building for weeks. Just days earlier, the 10-year yield touched its highest level since 2002. The 30-year reached its highest point since July 2002, pushing long-term Treasury yields to levels unseen since before the 2008 financial crisis.

Analysts say the move is not simply about Federal Reserve policy anymore. Elevated real yields, heavy government borrowing and growing competition for capital are combining with a higher term premium. That dynamic goes beyond what a single rate decision could explain.

Even a surprisingly weak jobs report has done little to calm the bond market. September payrolls grew by just 29,000, well below the roughly 90,000 economists expected. That pulled the odds of an October Fed rate hike down sharply.

Yet even with hike odds falling, the 10-year yield remained stubbornly near 5.25 percent. Forces beyond monetary policy are now driving the long end of the curve.

Why concentration in a handful of stocks worries Wall Street

The reliance on so few stocks to carry the market has not gone unnoticed. The four biggest AI spenders, Meta, Microsoft, Amazon and Alphabet, are on track to spend roughly $725 billion on capital expenditure this year. That is up 77 percent from last year’s already record total, according to Yahoo Finance.

That concentration cuts both ways. An investor who has never bought shares of Nvidia or Microsoft may still carry heavy exposure to both through index funds. The market’s apparent strength and its underlying vulnerability are increasingly tied to the same small group of names.

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Nvidia itself is leaning into the moment. Cramer said he is closely watching how the chipmaker trades as it begins executing on its expanded buyback authorization. He reads it as the company using its scale to support its own shares even amid broader market jitters.

Not every part of the AI trade is participating equally. Several stocks and sectors that had previously lagged have struggled even as Nvidia, Microsoft and Meta climbed. Cramer has generally favored established market leaders through this divergence. He has also argued that former leaders can become attractive again after falling behind the broader market.

What investors should watch from here

Cramer’s framing leaves investors with a fairly direct takeaway. The bond market, not the stock market’s headline numbers, may be the better gauge of underlying risk right now.

As long as yields keep climbing, the gains concentrated in a handful of mega-cap names could prove more vulnerable than the record closes suggest.

Several catalysts in the coming days could reshape that picture. Minutes from the Federal Reserve’s September meeting are due. They will offer fresh clues about how officials are weighing persistent inflation against a softening labor market. A fresh mortgage rate reading is already sitting above 7 percent, its highest level in several years.

Until yields show clear signs of stabilizing, Cramer’s message is that investors should watch the bond market closely. The stocks responsible for those record closes represent a narrower slice of the market than the headlines imply.

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The blockbuster film starring Margot Robbie and Ryan Gosling turned a toy-aisle staple into a cultural moment. For a while, it looked like Mattel had cracked the code on turning toys into entertainment.

However, that glow has slowly faded.

Sales of Barbie and other toys have declined, and the company has struggled to turn its business around, CNBC reported.

The stock is down 20% in 2026 and trades 66% below all-time highs.  

Now, one of Mattel’s biggest investors is saying out loud what Wall Street has been whispering. And the timing could not be more awkward for the company’s brand-new boss.

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Mattel’s turnaround plan asked investors to wait

On Sept. 15, then-CEO Ynon Kreiz and CFO Paul Ruh took the stage at the Goldman Sachs Global Consumer and Retail Conference. 

The executives explained that the toy industry was growing at a double-digit pace, and Mattel expected to hit its full-year guidance.

Related: Goldman Sachs turns bearish on Barbie maker

But there was a catch. Mattel had chosen to spend heavily in 2026, and the payoff was still a year away.

Analysts tracking Mattel stock forecast free cash flow to decline by 52% year over year to $197 million in 2026. However, FCF is projected to improve to $535 million in 2028. 

“As a whole, we do see 2026 as an investment year where we proactively took some of our earnings and put [them] back in the business to drive growth, but we will see a return on these investments in 2027 and beyond,” Kreiz said. 

Basically, Mattel asked shareholders to be patient, and some of them may be running out of patience.

Soon after, Mattel named Roger Lynch as its new CEO and chairman. He took over from Kreiz, who had led the company for eight years.

Ariel Investments urges Mattel to explore a sale

Ariel Investments, a major Mattel shareholder, sent a letter to the company’s board arguing that Mattel should consider a sale to the right buyer, CNBC reported.

“By our estimates, a strategic buyer would pay a significant premium to your current share price,” Ariel Chairman John Rogers wrote, according to CNBC.

Rogers said Mattel would appeal to entertainment companies and private equity firms. He laid out a range of options, from a “divestiture of significant assets, a merger and/or an outright sale of the company.”

Ariel is among Mattel’s largest shareholders, based on ownership data from TIKR.com. 

• It owns 15.41 million shares, or about 5.4% of Mattel’s outstanding stock. 
• The stake is worth $245.6 million. 
• Ariel added 1.85 million shares in Q2, an increase of 13.6%. 
• It is now the fourth-largest shareholder, behind EdgePoint Investment, PRIMECAP Management, and BlackRock.

Notably, Ariel was buying more Mattel stock, while BlackRock and two Vanguard funds were trimming their positions. Mattel also makes up nearly 2% of Ariel’s equity portfolio.

“We appreciate Ariel Investments’ longstanding investment in Mattel and their continued engagement,” a Mattel spokesperson told CNBC.

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“Our Board of Directors and management team are committed to acting in the best interests of all shareholders and will consider the views expressed in Ariel Investments’ letter, as well as the views of Mattel’s other shareholders,” the spokesperson added.

A few days back, brand licensing firm Authentic Brands expressed takeover interest in Mattel, CNBC reported. The Wall Street Journal also said Authentic privately discussed an offer that could value Mattel at more than $20 per share, or about $6 billion.

At the time of writing, MAT stock is priced at $15.93, valuing the company at a market cap of $4.4 billion. 

A person familiar with the talks told CNBC that discussions are still in the preliminary stage.

The source said the interest makes sense because Authentic wants entertainment properties, especially ones aimed at kids.

What a Mattel sale could mean for shareholders

Lynch now walks into a tricky first test.

Management’s plan says the real rewards arrive in 2027, which Kreiz called a “high growth year” for the company. A buyer, meanwhile, could offer shareholders a premium right now.

If Mattel stock is priced at 13x forward FCF, which is in line with the three-year average, it could surge over 50% within the next 18 months. 

Out of the 10 analysts covering Mattel stock, six recommend “Buy,” two recommend “Hold,” and two recommend “Sell.” The average MAT stock price target is $18, which is 14% above the current price.

Mattel’s own track record gives both sides ammunition.

The company has bought back about $1.5 billion in stock since 2023, Ruh said at the Goldman Sachs conference. That equals about 23% of its float.

Supporters of the turnaround could point to that cash power, and Ariel could argue it proves the business is worth more to someone else.

Either way, the Barbie maker’s next chapter may not be written by management alone.

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That’s what she just did with Meta Platforms (META), buying shares after the social media giant surged about 17% over the past month.

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 14.80% as of writing, while the S&P 500 surged 13.97%, 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. 6, her Ark Innovation ETF has delivered a five-year annualized return of -3.66%, while the S&P 500 has an annualized return of 12.37% 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).

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

Related: Cathie Wood buys $81.5 million of surging semiconductor stock

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.

On Sept. 12, Wood reposted an X post from David Sacks, saying that he made a good case that the “AI will kill humanity” headlines were orchestrated.

At the same time, Wood 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.”

Some investors agree with Wood’s optimism. Over the past month through Oct. 5, the Ark Innovation ETF saw roughly $2.3 billion in net inflows, according to data from ETF research firm VettaFi. 

Cathie Wood buys $7.8 million of Meta stock

On Oct. 6, Wood’s Ark funds bought a total of 10,789 shares of Meta Platforms (META), according to Ark’s daily trading information sent to TheStreet. These shares were worth about $7.8 million based on the latest trading price of $724.97.

The social media giant is pushing deeper into AI agents. In September, it launched Muse, a personal AI agent. The app has now become one of the most popular personal AI agents since its debut, climbing to the top of Apple’s App Store ahead of ChatGPT, CNBC noted.

Related: Qualcomm CFO says look beyond the Apple deal

Meta described Muse as a “widely available personal AI agent” designed for everyday users that can take actions on their behalf and help with daily tasks.

“It can handle tasks, like sending an email or booking travel, and it can take on big, audacious goals,” Meta said in a statement.

After rolling out Muse, Meta is also working with companies such as Walmart and Stripe to bring AI agents further into the business world. The group is developing a “personal agent protocol,” an open standard that defines how AI agents interact with businesses, CNBC reported. 

However, Amazon (AMZN) has blocked Meta’s agents over concerns about website scraping. 

Shares of Meta have gained more than 17% over the past month as of writing. Still, Meta shares are up 9.8% year to date, underperforming the S&P 500 index.

Wells Fargo analyst Ken Gawrelski recently raised the firm’s price target on Meta Platforms to $1,000 from $796 and kept an Overweight rating on the stock. 

The analyst said the enthusiasm around the Muse product cycle was “warranted,” according to The Fly’s reporting on Oct. 6, StockTwits noted.

However, Wells Fargo expects Meta’s third-quarter earnings call to offer some caution for investors who are expecting Muse to make a financial contribution in 2027.

Gawrelski also expects Wall Street’s 2027 EPS to likely fall due to higher operating expenses.

Meta is not a top-10 holding in the Ark Innovation ETF. 

Top 10 holdings in the Ark Innovation ETF by market value and weight as of Oct. 7, 2026:

• Tesla (TSLA) – 9.59%, $903.5 million
• SpaceX (SPCX) – 6.94%, $653.8 million
• Tempus AI (TEM) – 5.10%, $480.7 million
• Circle Internet Group (CRCL) – 4.61%, $434.3 million
• Coinbase Global (COIN) – 4.32%, $407.0 million
• CRISPR Therapeutics (CRSP) – 4.28%, $403.3 million
• Robinhood Markets (HOOD) – 3.74%, $351.9 million
• Twist Bioscience (TWST) – 3.61%, $340.5 million
• Shopify (SHOP) – 3.54%, $333.0 million
• Nvidia (NVDA) – 3.11%, $293.0 million

Other than buying Meta shares, Wood’s latest trades included buying Archer Aviation (ACHR), CoreWeave (CRWV), Kratos Defense (KTOS), Symbotic (SYM), Joby Aviation (JOBY), Aurora Innovation (AUR), AeroVironment (AVAV), Amazon (AMZN), Block (XYZ), and Veracyte (VCYT).

She also sold shares of Robinhood (HOOD), SpaceX (SPCX), Teradyne (TER), Tempus AI (TEM), 10x Genomics (TXG), Twist Bioscience (TWST), DraftKings (DKNG), and Personalis (PSNL).

Related: Cathie Wood buys $19.2 million of tumbling AI stock

Businesses must choose what those agents can see, what they can do, and how to monitor their behavior as they move from testing AI to allowing autonomous agents to access corporate data and carry out tasks.

According to Melius Research, Microsoft (MSFT) may benefit from that issue.

Melius analyst Ben Reitzes upgraded Microsoft to Buy from Hold and raised his price target to $665 from $465, according to Barron’s. Reitzes argued that rising demand for AI security and governance could strengthen Microsoft’s position as companies look for trusted systems to manage models and agents.

The theory extends beyond Microsoft’s current position as a leading provider of cloud computing capacity.

With Azure, Microsoft 365, and its cybersecurity technologies, Microsoft is already present in many major corporations. These current connections may increase in value if companies desire a single platform to control how AI interacts with their data and personnel.

This gives investors another opportunity to profit from the AI boom: helping businesses maintain control over the technology after they implement it.

Microsoft could turn AI complexity into an advantage

The availability of improved models and sufficient processing power to run them was a major factor in the early stages of the artificial intelligence boom.

Businesses may now choose models from many developers, and AI agents can access databases, analyze documents, and take actions with less direct human intervention. Although this flexibility increases the technology’s usefulness, it also raises additional concerns about security, compliance, and authorization.

According to Melius, Microsoft is in a good position to act as a mediator between business clients and such AI systems.

Instead of granting individual AI suppliers direct access to critical systems, businesses may use a platform that decides which models perform certain tasks, while controlling what agents are allowed to access.

Reitzes believes requirements like these might strengthen Microsoft’s corporate position and increase its pricing power, Barron’s noted.

The company is already developing products based on that concept. Microsoft said Agent 365 extends existing identity, security, management, and governance controls to AI agents. Just two months after launch, nearly 40 million agents had been registered across tens of thousands of companies.

This provides a quantifiable operational environment for the Melius thesis.

For every business endeavor, Microsoft does not necessarily need to have the best AI model. Instead, it may become the system that businesses use to handle a variety of models.

Additionally, the business may connect a number of its goods around that function. The computer infrastructure is provided by Azure, workplace apps are managed by Microsoft 365, identity is managed by Entra, and risks and access are monitored by Microsoft’s security solutions.

Customers may have additional incentives to purchase numerous Microsoft products rather than assembling disparate services from various providers as those systems become more linked.

Because of these factors, corporate AI’s increasing complexity may become a competitive advantage for Microsoft, rather than just another technological obstacle.

Azure gives Microsoft another way to capture AI spending

With significant demand now flowing via Azure, Microsoft is moving into the next stage.

Azure and other cloud-services revenue increased 43% in Microsoft’s fiscal fourth quarter ended June 30. Microsoft Cloud revenue rose 27% to $59.3 billion, while Intelligent Cloud revenue increased 32% to $39.3 billion, according to a Microsoft statement.

The demand has been high enough to surpass Microsoft’s present computer capability.

According to Microsoft, throughout the quarter, customer demand for Azure remained higher than available capacity. To increase capacity online, the corporation has been making significant investments in data centers and other infrastructure.

Melius anticipates that growth will contribute to yet another acceleration.

The firm forecasts Azure growth of more than 50% by Microsoft’s fiscal fourth quarter of 2027, according to Investing.com. Melius also raised its fiscal 2027 and fiscal 2028 earnings estimates following the upgrade.

These projections are significant because investors have been questioning whether Microsoft’s massive infrastructure expenditure can provide sufficient returns for the majority of the AI boom.

The company’s current backlog indicates that demand is still high.

By the conclusion of the June quarter, Microsoft’s commercial remaining performance obligation had increased by 84% to $678 billion. The metric includes contracted commercial income that has not yet been recognized.

Notably, Microsoft claimed that clients outside of frontier-model businesses were the source of all sequential increases in that backlog. The remaining performance requirement rose by 25% when OpenAI was excluded.

This implies that Microsoft’s cloud potential extends beyond the expenditures of a few major AI developers.

Security and governance might further expand it.

Microsoft may be able to track expenditure at many levels of the AI stack if companies use Azure more often to manage how agents interact with corporate systems in addition to running models.

Microsoft’s AI strategy is moving beyond infrastructure

Businesses are also adopting the platforms and apps that Microsoft’s cloud infrastructure sits atop.

Microsoft CEO Satya Nadella informed investors that Microsoft 365 Copilot has well over 30 million paid seats, and that net seat additions more than doubled sequentially during the June quarter.

In contrast, Microsoft Foundry now has 100,000 users, and platform income has more than quadrupled from the previous year. Using various models, Foundry enables companies to create and manage AI agents and apps while integrating them with corporate data and controls.

These figures contribute to the explanation of the importance of security and governance in the investment argument.

As AI becomes increasingly integrated into routine company processes, agents will more frequently interact with sensitive data and systems. Businesses will need methods for managing permits, conducting audits, and enforcing current security regulations.

Microsoft already sells many of those tools.

Instead of considering AI as a separate product category, the announcement presents a chance to link AI expenditure with the company’s well-established enterprise software division.

According to Microsoft, Agent 365 aims to give agents access to the governance, identity, security, and management frameworks that businesses already have. Additionally, the business said that more than 50 billion Copilot contacts had been inspected for compliance reasons using its Purview platform.

As companies give AI systems greater freedom, such goods may become more crucial.

That may also help Microsoft’s higher-value corporate products.

Customers have begun using the company’s E7 suite, which includes Copilot, E5, Entra, and Agent 365. During the first two months of the product’s release, hundreds of business clients bought millions of seats.

Melius is simply pointing out that opportunity.

Microsoft offers businesses more than just access to AI. It is progressively offering the solutions that businesses may need to control artificial intelligence when they integrate it into their routine tasks.

Wall Street sees another Microsoft growth lever

The Melius upgrade reframes one of the main concerns about Microsoft shares.

Investors are already aware of the company’s significant investments in AI infrastructure. They are also aware that Azure is profiting from the rising need for processing power.

The less-explored portion of the narrative is what happens when businesses begin overseeing a sizable number of AI agents inside their companies.

That may immediately capitalize on Microsoft’s current advantages.

Microsoft has been cultivating connections with business IT departments for decades. For many of those clients, its solutions already manage workplace apps, cloud infrastructure, identity, data, and cybersecurity.

AI agents add an additional layer that requires management.

Melius believes that as AI develops, Microsoft’s enterprise position may improve rather than deteriorate. The company’s confidence that it can convert that position into better profitability and stronger Azure growth is reflected in its $665 price objective.

How quickly corporate AI expenditure will result in profits is still up for debate, especially given Microsoft’s ongoing significant infrastructure investments.

However, the company’s most recent statistics show demand in several areas. Azure revenue grew 43% in the June quarter. Microsoft Cloud generated $59.3 billion in revenue. Microsoft 365 Copilot surpassed 30 million paid seats, and Agent 365 registered nearly 40 million agents within two months.

Taken together, these numbers demonstrate Microsoft’s progress beyond providing AI processing power.

Additionally, it is attempting to become the platform that businesses use for technology deployment, monitoring, and control.

Melius’ upgrade differs somewhat from a traditional positive bet on AI growth because of its focus.

The company contends that maintaining the security and corporate management of more powerful systems, one of AI’s new challenges, may be another factor driving businesses to increase their spending with Microsoft.

Related: Microsoft cutting off popular software with no extension Oct. 13

The debt he had in mind was mostly owed by governments. But Dimon has long argued that the pain lands somewhere else.

In a 2025 Fox Business interview, he said bond market volatility hurts the people raising money, small businesses included. He admitted he could not tell whether trouble was six months or six years away. This time, he named the next group in line.

Also read: Scott Bessent just made a bold move on the bond market

Dimon says corporate borrowers will start to squeeze

Speaking on the sidelines of a JPMorgan event in London on Oct. 6, Dimon said the worldwide scramble for capital could begin to squeeze corporate borrowers, Bloomberg reported. Investors will keep asking for more, he said. At some point, that feeds into corporate debt and credit spreads.

A credit spread is the extra interest a company pays over what a government pays to borrow. When spreads widen, refinancing an old loan or raising a new one costs more.

Dimon’s advice was to move early. “The best thing to do with any of these things is deal with it before it becomes a crisis,” he said. If it does become one, he added, it will still get dealt with, only in a much less pleasant way.

His comments land in the middle of a global bond sell-off. It began after the start of the war in Iran, which pushed inflation materially higher.

The benchmark 30-year Treasury yield recently climbed past levels last seen in 2007. The U.S. economy’s strength and the AI boom’s demand for capital have added to the pressure.

Riskier debt is already showing the strain. In the credit default swap market, the cost of insuring U.S. junk bonds against default has widened sharply, according to LSEG data compiled by Yardeni Research.

Distressed loans hit a pandemic-era high

JPMorgan’s own strategists have put numbers on the problem. Leveraged loans trading below 60 cents on the dollar reached $65 billion. That is up from $40 billion a year earlier and the most since March 2020.

The wider pool of troubled loans is larger still. Loans priced at or below 80 cents on the dollar total $139.8 billion. That is nearly 90% more than 12 months ago and just $4 billion short of the peak set in May 2020, as reported by Bloomberg.

Technology is the weak spot. The sector makes up 39% of the distressed total, or $54.4 billion. In all, 141 issuers have loans trading below 80 cents, which is 35 more than a year ago.

The bank expects more companies to miss payments. Its strategists see the high-yield bond default rate rising to 2.75% in 2027, up from a projected 2.25% this year. Defaults on leveraged loans are expected to reach 4.50% in 2027 as well.

Bonds rated CCC, the lowest rung of junk, already yield 15.58%, the highest since November 2022, according to Bloomberg.

Why money is getting more expensive

Dimon’s explanation starts with supply and demand. In May, he said the world had moved from a savings glut to a shortage of savings. He warned that interest rates could climb far above where they stood. The 30-year Treasury yield had by then reached levels not seen since 2007.

He pointed to three forces: high oil prices; worries about government spending in Japan, the U.K., and the U.S.; and growth driven by AI. He also noted that $30 trillion of that debt carried an average rate of 3.5%, with about $2 trillion due to be refinanced this year, Bloomberg reported.

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The U.S. debt load adds another layer. Federal debt had reached $39 trillion by the time Dimon spoke in Norway on April 28.

He cited the 2022 U.K. gilt crisis as a case study: Yields surged within days, and the Bank of England was forced to intervene. His point was that these things move fast.

Inflation rounds out the picture. Dimon’s April 6 shareholder letter called it “the skunk at the party.” His concern was that prices would move up rather than down through 2026, with energy costs pushed higher by the war in Iran.

What borrowers and investors should watch

For companies, Dimon’s test is a plain one. Leveraged or not, any business that has to refinance or borrow should ask whether it is ready for higher credit spreads. That goes for healthy balance sheets as much as stretched ones.

So far, the damage has stayed contained. After the Federal Reserve raised rates in September, Dimon told Yahoo Finance that borrowing costs could keep rising. But the job market’s relative strength showed those costs had not yet turned into broader economic stress.

He does not expect that calm to hold forever. It has been a long time since the last credit recession. When one arrives, “it would be worse than people think,” Dimon said in April.

That warning carries extra weight, given the size of what is now at stake. The private credit market alone is worth about $1.7 trillion, and that number has only grown.

Related: Scott Bessent just made a bold move on the bond market

Delta Air Lines CEO Ed Bastian has watched that habit fade. He believes it’s why Delta can keep growing profits, even when jet fuel gets expensive.

Wall Street is less convinced. Over the past two months, analysts have steadily lowered what they expect Delta (DAL) to earn this quarter.

That sets up a real test when the airline reports its September quarter results on Oct. 9, 2026.

Delta’s premium strategy, explained

For more than a decade, Delta has tried to sell an experience, not just a seat.

Every Delta jet has at least three classes of service, and many have four, Chief Marketing and Product Officer Ranjan Goswami said at TD Cowen’s Future of the Consumer Conference on June 3.

Also Read: Delta Air Lines quietly ends 17 routes while adding new flights

Goswami said Delta earns a 15% unit revenue premium over the rest of the industry, a lead it has held “for well over a decade.”

Bastian, who joined Delta almost 30 years ago, described the shift on the airline’s second-quarter earnings call on July 10.

“If you ask someone why they picked a specific airline, at least 80% of the time it’s whoever had the lowest price. Today, if you ask a consumer why did they choose Delta, they’ll tell you, it’s because it’s Delta.”

Premium cabins power Delta’s growth

Customer loyalty showed up clearly in Delta’s second quarter, according to the earnings call.

• Revenue soared to a record $17.7 billion, up 14% from a year earlier.
• Premium and loyalty revenue each grew nearly 20%.
• Corporate sales rose more than 20% in core and coastal hubs, with Los Angeles and Boston closer to 30%.
• The American Express partnership is expected to pay Delta $9 billion this year, up 10%.

Delta barely added premium seats, which grew in the low single digits. Simultaneously, it cut Main Cabin seats by 2% to 3%, Chief Commercial Officer Joe Esposito said.

The math is simple. Delta is flying about the same number of seats but charging more for each one. 

And more of its premium seats are going to travelers who paid for them, rather than to frequent flyers getting free upgrades.

Travelers are also booking directly. Goswami said Delta had 65 days this year with more than $100 million in cash sales through its app and website, compared with just 19 last year.

Wall Street lowers its Delta forecast

Now look at what analysts expect for DAL stock in Q3 of 2026.

The average estimate from 19 analysts calls for third-quarter earnings of $1.88 per share, according to Yahoo Finance data. That’s up from $1.71 a year earlier.

But the consensus estimate has been sliding. Sixty days ago, it was $2.23, and just a week ago, it was $1.94.

Revenue forecasts point to $18.91 billion, a 13.4% gain, based on eight analysts.

Related: Delta Air Lines CEO signals major shift in what travelers pay

Delta’s guidance is higher on both counts. CFO Erik Snell told investors to expect earnings of $2 to $2.50 per share and revenue growth in the mid-teens.

In other words, Wall Street sits below the low end of what Delta promised during its Q2 earnings call.

The gap is wider for the full year. Delta affirmed earnings of $6.50 to $7.50 per share, while the consensus stands at $5.83.

Delta has matched or topped earnings estimates in each of the past four quarters, beating by more than 11% twice.

Why Delta could beat Q3 estimates

Delta began raising fares in March to cover higher fuel costs. But by then, many summer trips were already paid for. Esposito said April flights were about 70% booked before the new prices kicked in.

So for much of the second quarter, Delta was flying passengers who had bought tickets at the old, lower prices.

The trend changes in the third quarter. Most of those tickets were bought after the fare increases, so Delta should collect the higher prices on far more of its seats.

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“Our exit rate on TRASM was significantly higher than our entry rate,” Esposito said. TRASM, or total revenue per available seat mile, measures how much Delta earns for each seat it flies one mile.

Put simply, Delta ended the quarter earning far more per seat than it did at the start.

Esposito added that cash sales improved “across the entire booking curve” in both premium and Main Cabin.

Delta is also slicing its premium cabins into Basic, Classic, and Extra fares this quarter, giving customers more choice and Delta more ways to sell an upgrade.

Fuel remains the biggest risk for Delta

Nothing about this is guaranteed.

Delta expects third-quarter fuel expense to run about 40% higher than last year. Bastian also said fuel was 50% higher than it was at the start of the year.

Delta’s refinery outage will also cost it 5 to 7 cents per gallon in the third quarter, Snell said.

Those pressures likely explain why analysts have grown cautious.

Still, Bastian made it clear where Delta is betting.

“We’re no longer competing on price as much as we’re competing on value and experience and service, and that’s where Delta wins,” he said.

If premium travelers keep paying up, Wall Street’s lower bar may prove easy to clear.

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At a World Economic Forum energy dinner this week, oil executives kept circling back to one topic: barrels in storage. 

Everyone is watching tankers shuttle through the Strait of Hormuz and counting how much oil is left in tanks as winter approaches.

Saudi Aramco’s CEO has pointed to less than six billion barrels of commercial inventories remaining, a CNBC anchor noted.

For drivers, truckers and families heating their homes, this number is quite significant. 

Think of it as the spare tire of the global energy system. So when Chevron’s top executive was asked how fragile things are, his answer stood out.

How oil inventories protect consumers

Oil gets stored in three main places. Companies keep some on hand, governments save some for emergencies, and some sit on sea tankers for sale. 

The stored oil helps fill the gap when supply is cut off. It also keeps gasoline and diesel flowing until supply stabilizes.

Also Read: HSBC sets new Chevron price target amid Iran tensions

In a CNBC interview, Chevron (CVX) CEO Mike Wirth explained:

“We came into this year with high inventories, high inventories in commercial stocks held by companies, high inventories in strategic stocks held by governments around the world, and actually significant inventories on the water.” 

Most of that oil on the water was sanctioned by the U.S. or the European Union and struggled to reach markets.

Chevron CEO says energy buffers are drained

Then, one by one, the cushions disappeared. Here’s what Wirth says happened over the past several months:

• Companies drew down their commercial inventories.
• Governments released strategic stocks.
• Sanctioned barrels were allowed to reach buyers.
• The G7 moved to release another 100 million barrels as diesel prices spiked.

“Those are all buffers in the system that have bought us time, but they’ve been drained,” Wirth said. “And so we’re at much lower levels of inventory right now, and it makes the system more vulnerable to disruption.”

He called it “a very serious situation.”

Wirth supports the policy moves from the U.S., the EU, and the G7. Releasing strategic stocks during a real supply risk is precisely what they were built for, he said.

But Wirth was clear about the limits. “They all buy time,” he explained. The real problem is “constrained flows out of some of the biggest producing areas in the world.”

Put simply, emergency supplies can delay a shortage but can’t replace oil that isn’t flowing.

Why oil prices could swing both ways

Wirth isn’t calling for a price spike. 

A resolution in the Middle East could send oil prices sharply lower. Chevron CFO Eimear Bonner said in September that oil prices had moved roughly $35 in a single month.

“We can’t control where the price goes. We can’t predict where the price goes. I’ve learned to be humble about our ability to predict the future,” Wirth said.

His playbook is old school. Keep a strong balance sheet, invest with discipline, and focus on operational efficiencies. 

Notably, Chevron hit record oil and gas production and record refinery utilization this year.

Related: Who owns Chevron? Understanding who controls one of the world’s largest energy companies

Chevron bets big on Venezuela and the Permian

Chevron is also adding supply where it can. Bonner laid out the plan at Barclays’ 40th annual energy and power conference on Sept. 8.

Venezuela remains a key region where Chevron produces about 280,000 barrels a day and expects to reach 600,000 by 2031. It plans to invest $7 billion over five years in the South American country, where total costs run under $20 a barrel. 

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The Permian Basin shows what the long-term playbook looks like. Chevron grew output from about 450,000 barrels a day in 2019 to roughly 1 million. It now drills twice as fast as it did two years ago.

Chevron also completed $3 billion in structural cost cuts six months ahead of schedule and Bonner said 70% came from efficiency gains.

What Chevron’s warning means for investors

The volatility is shaping how Chevron returns cash.

Chevron raised its dividend again this year, extending a 39-year streak. But it is holding its buyback steady within a $10 billion to $20 billion range until prices settle.

“It’s not a matter of if, it’s a matter of when,” Bonner said of returning excess cash to shareholders.

Wirth has seen this movie before. Good times, he said, “are followed by very challenging times.”

With the world’s spare tire running low, investors may find out sooner than expected what comes next.

More on Chevron & its stock: 

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• History of Chevron: Company timeline & facts
• Is Chevron a good long-term investment? Its buy-and-hold prospects explained
• What does Chevron mean? A look inside its corporate logo

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The power chipmaker closed its acquisition of Claros on Tuesday, Oct. 6, 2026, according to a company filing. Claros makes integrated voltage regulators that handle the final power conversion right at an AI processor, sometimes directly beneath it.

Chief Executive Chris Allexandre was blunt in the release, saying power is now the bottleneck for AI. Navitas calls it the “power wall” and argues that faster, more efficient power delivery is the main path to more AI computing.

Investors shrugged. Navitas shares ended the session lower.

The deal was confirmed in August, and Navitas has pegged Claros as a growth accelerator for 2028 and 2029. Markets rarely pay up early for a payoff that far out.

Read More: AI racks are outgrowing old power: 2 chipmakers have a strategy

Claros puts Navitas at the processor’s front door

Before Claros, Navitas’ AI pitch rested on gallium nitride and silicon carbide chips that convert power further upstream.

An update on its chips for Nvidia’s (NVDA) 800-volt design sent the stock soaring last October, Barron’s reported. Claros covers the final stretch into the processor.

The company expects the deal to more than double its serviceable addressable market to over $8 billion by 2030, according to the filing. That is the market Navitas thinks it can chase, not the revenue it expects to book.

Trailing revenue is about $37 million, according to Stock Analysis, so I treat the $8 billion figure as a map rather than a forecast.

Here is what I think most coverage misses. If power is the real constraint, every watt lost as heat near the processor is a watt an operator paid for and never used. Efficiency at the last inch then works like new capacity, which makes this corner of the chip market more strategic than it looks.

Shareholders are already funding the power bet

The deal was valued at up to about $233 million, with roughly $216 million due at closing in cash and stock. The rest comes in shares only if Claros hits milestones over two years.

I like that structure because the full price depends on Claros delivering. The catch is that success itself creates more shares.

Navitas’ share count rose about 20% over the past year, according to Stock Analysis. Reuters reported earlier this year that a $125 million stock sale could help fund potential acquisitions.

The upside is about $557 million in cash and almost no debt, according to Stock Analysis. That buys time to prove Claros works, even if profitability remains a downstream milestone.

With dilution rising and immediate profits still absent, the market is taking a “show-me” approach.

Wall Street rates Navitas stock a Hold for good reason

Navitas is a power chip designer worth about $3.1 billion, according to Stock Analysis. For investors, it is one of the purest bets on AI power delivery, which cuts both ways.

Its 52-week range runs from $6.85 to $34.17. That June 2026 peak also marks its all-time high, a long climb from the $1.52 all-time low set in April 2025, as The Motley Fool reported. Barron’s tied the recent bounce to a U.S. Army award after a steep slide from those highs.

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Eight analysts rate Navitas a Hold on average, with a $14.08 price target, according to Stock Analysis. Only two of them rate it a Buy or Strong Buy, and targets range from $8 to $21.

Morgan Stanley reiterated its bearish rating on Tuesday, Sept. 29, 2026, with a $13 target. That spread shows how divided the Street is.

At more than 80 times trailing sales, Navitas remains a watchlist stock rather than an immediate buy.

Two dates could change my view. According to the filing, Navitas will walk through Claros’ technology in a webinar on Tuesday, Oct. 20, 2026. Its next earnings report is expected on Monday, Nov. 2, 2026, according to Stock Analysis.

Named hyperscaler customers for Claros would make the valuation look less like a leap of faith.

The AI power race is moving onto the chip itself

In my view, the bottleneck in AI hardware keeps shifting, from processors to memory and now to power. Pricing power tends to follow the constraint, and that is the real prize in this deal.

That is why a deal this small matters beyond Navitas. Power chips have long been a supporting act in the AI story. If the power wall is as real as Navitas says, whoever owns the last millimeters before the processor could gain outsized say over AI hardware.

The Oct. 20 webinar is the first public test of whether Navitas can claim that ground.

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One of Wall Street’s biggest banks thinks that gloom has gone too far.

JPMorgan strategists are telling clients the recent selloff looks overdone. They are pointing to specific data to back up a call for stocks to rebound into year-end. Here is the full case they are making, and what it means for where to put money next.

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JPMorgan sees bonds and stocks as oversold

JPMorgan strategists led by Mislav Matejka argue equity sentiment has turned overly bearish. They say the fundamentals driving the selloff look less threatening than the price action suggests.

For most of the year, equities absorbed rising yields without much trouble. Yields climbed about 100 basis points year to date, even as stocks posted double-digit gains. Risk assets finally succumbed to the pressure in recent weeks, as reported by Investing.com.

The team also pointed to history as a reason for calm. The start of Fed tightening cycles has historically confirmed the economy was strong rather than served as a signal to sell. That is a pattern investors should keep in mind, given how sharply sentiment has shifted.

Bonds themselves look close to oversold territory by JPMorgan’s own measures. Fed funds futures, which have repriced nearly 200 basis points higher this year, have stopped climbing. Strategists note that more than three additional rate hikes are already priced in and inflation expectations remain anchored despite soft wage growth.

The earnings and growth case for a rebound

Q3 earnings are days away. JPMorgan’s base case is that companies deliver. Revisions are expected to remain positive across most regions, despite a market that has been quicker to punish misses.

That earnings confidence is being reinforced by stronger economic data out of Europe. The S&P Global Eurozone Composite PMI rose to 53.1 in September from 52 in August. That is its highest level in almost three and a half years, signaling the fastest pace of private sector growth the region has seen since early 2023, according to Reuters.

Germany’s numbers backed that up. The Ifo Business Climate Index hit 89.9 in September, a tick above August’s 88.8 and the highest it has been since May 2023. Five months of improving sentiment, even with energy bills climbing, according to Reuters.

The improvement has not been limited to sentiment surveys alone. Eurozone services activity expanded for a third straight month and manufacturing output also accelerated. Activity returned to growth in both Germany and France, even as inflation in the bloc jumped to 3.8% on soaring energy costs.

Oil risk and where JPMorgan wants exposure

Oil has no clean answer right now. JPMorgan’s working assumption is that the worst of the pressure holds off through October. Midterm season tends to make policymakers cautious, and that caution usually means fewer moves that light energy prices up.

The long end of the Treasury curve has stayed especially stubborn through this stretch, with the 10-year yield hovering around 5.2%. That held even after a disappointing September payroll report reduced expectations for another Fed hike in October, according to CNBC.

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The bank has stuck with a contrarian playbook on Middle East risk. JPMorgan has argued since March that investors should treat bouts of Iran-related weakness as buying opportunities. Anyone selling into de-risking episodes risks getting whipsawed as the conflict eventually de-escalates.

That framing lines up with JPMorgan’s broader bond market research. The bank’s work shows that the pace and cause of Treasury yield moves matter for equities, with gradual increases generally easier for the S&P 500 to absorb. The bank has separately flagged that AI-driven momentum names remain vulnerable to further swings in Treasury yields, according to TheStreet.

On sector positioning, JPMorgan expects cyclicals such as financials, industrials and commodities to lead any recovery alongside a rebound in technology. Semiconductors are its top pick, followed by hyperscalers. The bank remains more cautious on AI-exposed software and services names specifically.

JPMorgan does not see the bond-driven unwind in crowded momentum trades as a warning sign. The bank reads it as a reset, one that clears the way for stocks to push higher once positioning gets cleaner.

What investors should watch going forward

JPMorgan is leaning toward emerging markets over developed ones. The UK is among the names the bank keeps coming back to. Valuations are cheap relative to peers, and the dividend yield is the highest of any major market. France is a different story. The political noise there has made broader Eurozone exposure a harder sell.

Investors should watch whether upcoming earnings actually deliver the positive revisions JPMorgan expects. A disappointing start to the reporting season would weaken the bank’s argument that fundamentals remain stronger than recent price action suggests. The bank has acknowledged that risk in prior notes warning that AI-exposed names face a harder math as discount rates rise, according to TheStreet.

The clearest signal to watch may simply be the bond market itself. JPMorgan’s own research has shown that extreme yield spikes tend to precede weak equity returns before conditions normalize. A moderation in the pace of the increase could make the environment easier for stocks to digest.

Jamie Dimon himself warned separately that inflation may not yet be fully contained and that interest rates could remain substantially higher than investors expect. That complicates the very recovery JPMorgan’s equity strategists are calling for.

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This is a company most Americans will never think about, but whose work shapes daily life in ways that are impossible to ignore when it stops.

I think about that when I found Jim Cramer’s Oct. 2 Lightning Round call on Quanta. 

I still think it is a buy. I think there is still a buildout. Right now, because of the election, it looks like things aren't going to go well. I think when that's over, you're going to see more building going on. I like PWR.

Midterm elections are scheduled to be held, in large part, on Nov. 3, 2026, U.S. Vote Foundation noted.

Yes, the election uncertainty Cramer references is temporary. But the structural demand for what Quanta does is not.

Also Read: Quanta Services Inc. Latest News

What Quanta Services actually does and why AI depends on it

There is a sequence that almost nobody in the AI investment world talks about enough. Before a data center can house a single GPU, before a single training run can begin, before a hyperscaler can serve a single inference request, someone has to build the substation, run the transmission lines, and connect the facility to power.

That is overwhelmingly likely to be Quanta Services or one of its operating companies, or Eaton, as covered previously for TheStreet.

Quanta is the largest specialty contractor in North America for electrical infrastructure, renewable energy construction, and underground utilities, with more than 69,000 employees at year-end 2025, according to the company’s August 2026 investor presentation. 

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In fact, more than 80% of its work is self-performed. That means Quanta’s own crews do the actual work rather than farming it out to subcontractors. When you buy a Quanta project, you are getting Quanta’s certified linemen, training infrastructure, and labor deployment model.

And remember, Quanta was named the top U.S. solar solutions provider by Solar Power World for 2026, having installed more than 6,100 megawatts of domestic solar capacity in 2025 alone, according to Quanta‘s announcement. In fact, it was the third time in four years.

The technology and load center market — data centers, advanced manufacturing, and facility automation — represents an $885 billion total addressable market in Quanta’s 2026 to 2030 forecast, according to its investor presentation.

The broader infrastructure TAM the company addresses is estimated at $2.4 trillion.

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Quanta Services Q2 results show the buildout is already here

Cramer’s comment about “more building going on” after the election sounds forward-looking. But the data from Quanta’s Q2 2026 earnings release shows the building has already been happening.

• Revenue was $9.56 billion in Q2, up from $6.77 billion in Q2 2025 — a 41% increase in a single year. 
• Adjusted diluted EPS was $4.24, up from $2.48 YoY.
• Total backlog reached a record $53.4 billion. 
• Free cash flow was $900 million for the quarter alone.
  • Source: Quanta Services Q2 Fiscal 2026 Results

The company raised its full-year 2026 revenue guidance to $39.3-$39.7 billion, with adjusted diluted EPS of $16.45-$16.95 and free cash flow of $2.0-$2.5 billion. Moody’s upgraded Quanta’s senior unsecured notes from Baa3 to Baa2 in the same quarter, according to its Q2 report.

Four acquisitions — Phalcon, Enerfab, Percheron, and PSD — were completed for approximately $1.24 billion in upfront consideration and are expected to contribute $1.2 to $1.4 billion in revenue in fiscal year 2026.

Quanta also formed a joint venture with Hyosung HICO in Pennsylvania to manufacture domestic high-voltage circuit breakers up to 800 kV, addressing a supply chain vulnerability that has been slowing data center and grid construction nationally.

What Cramer is actually saying on Quanta Services and the one risk worth watching

Cramer’s “election” comment is just about near-term sentiment, not the underlying thesis.

That thesis is infrastructure spending. Grid modernization, renewable buildout, and data center electrification have had bipartisan support across multiple administrations. The $53.4 billion backlog does not disappear based on an election result.

The more substantive risk you should monitor as a Quanta investor is labor availability. A 25% 10-year adjusted EPS compound annual growth rate, according to the investor presentation, requires consistent execution across thousands of projects simultaneously. 

Quanta has invested more than $250 million in training infrastructure over the past decade, including its ownership of Northwest Lineman College and a 2,300-acre training center, according to the same presentation.

That investment in its own workforce is the structural advantage that keeps it ahead of a market where skilled craft labor is the real scarce resource.

On performance, PWR is up 70.62% year-to-date and 68.33% over the past year, according to Yahoo Finance. The three-year return stands at 318%. At 70% year-to-date, PWR has rewarded investors generously.

And the $53.4 billion backlog suggests the work has not run out yet.

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The buyers will pay $32.05 per share in cash, valuing Option Care at about $5.8 billion, including debt. The offer represents a roughly 37% premium to the stock’s Oct. 5 closing price.

McKesson (MCK) will not take control of the company when the deal closes. CD&R will own the majority, and McKesson will start with a minority stake under a structure that could eventually give it a path to acquire CD&R’s interest.

The investment gives McKesson a foothold in a nationwide network for delivering complex infusion therapies in patients’ homes and outpatient facilities.

McKesson is starting with 49% of Option Care

The ownership structure splits Option Care between McKesson and CD&R:

• CD&R: About 51%, giving the private-equity firm majority ownership.
• McKesson: About 49%, for an investment of roughly $1.4 billion.
• Future ownership: The agreement creates a framework for McKesson to acquire CD&R’s interest later, subject to specified conditions and regulatory approvals.

Option Care will remain a separate company led by its existing management team after the transaction closes.

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McKesson plans to use the equity method to account for the stake. That means it will record its share of Option Care’s net income or loss instead of combining all of Option Care’s revenue and expenses with McKesson’s financial statements.

The companies have not disclosed a price or timetable for McKesson to acquire CD&R’s future stake.

McKesson therefore gets an economic stake in Option Care without taking full ownership at closing, with the possibility of increasing that ownership later.

Option Care gives McKesson a network outside the hospital

Home infusion allows patients to receive intravenous drugs at home. Option Care also administers therapies at ambulatory infusion centers and other nonhospital locations.

Option Care says it served more than 315,000 patients in 2025. Its network is in-network with the 10 largest payers and reaches about 96% of insured lives, according to the company’s investor materials.

Those payer relationships are important because insurance coverage helps determine whether a patient can receive therapy through the network and how Option Care is reimbursed.

McKesson already has a large specialty-care business. Its Oncology & Multispecialty segment generated $14.2 billion of revenue in its latest quarter, up 33% from a year earlier, driven by provider solutions and specialty distribution, including acquisitions.

Option Care adds a nationwide system for administering therapies after drugs move through the distribution chain.

McKesson CEO Brian Tyler said the deal fits the company’s push to expand access to complex therapies in lower-cost community settings, at or closer to home. McKesson also cited continued growth in specialty, rare, and orphan therapies as a reason that alternate infusion sites are becoming more important.

Option Care estimates the U.S. home-infusion industry could grow at a high-single-digit annual rate, driven by therapy growth, pressure to lower healthcare costs, and patient preferences, including aging at home. The forecast comes from Option Care management and is not guaranteed.

For McKesson, buying part of Option Care connects its specialty-drug business more closely with the places where some of those medicines are administered.

Slower growth puts Option Care’s takeover premium in focus

Option Care’s recent revenue growth has been modest. Second-quarter revenue increased 1.9% to $1.44 billion from a year earlier.

Three months earlier, CEO John Rademacher said management was not satisfied with the company’s revenue growth momentum after a mixed first quarter.

The $32.05 offer nevertheless values Option Care well above Monday’s closing price.

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McKesson and CD&R are buying an existing national infusion network with broad payer access at a time when both companies expect more complex treatments to move into home and outpatient settings.

The premium puts a price on more than Option Care’s near-term sales growth. The buyers are also paying for its clinical network, relationships with insurers, and position in a part of healthcare they expect to expand.

Option Care’s deal still needs shareholder and regulatory approval

The acquisition is expected to close in the first half of 2027.

Before that can happen, Option Care shareholders must approve the transaction, and the buyers must receive required regulatory approvals. Option Care will become privately held, and its shares will stop trading on Nasdaq after the deal closes.

The company’s next quarterly report will look different as a result.

Option Care plans to release third-quarter results on Nov. 4, but it will not hold its usual live earnings call. It also withdrew its previous 2026 financial guidance after announcing the acquisition.

For Option Care shareholders, the near-term outcome now depends largely on whether the $32.05 cash deal clears those approvals and closes on schedule.

For McKesson, the longer-term test is whether owning part of the network where specialty drugs are administered creates enough value to justify moving further into Option Care later.

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Yet his personal wealth may still be moved by hundreds of millions of dollars in a single trading session by the firm he spent decades developing.

Buffett was forced back into an elite club as a result of that.

On Oct. 1, Forbes estimated Buffett’s net worth at about $142 billion, up nearly $500 million from the previous close and enough to make him the world’s 10th-richest person on its real-time billionaire ranking.

Buffett surpassed Amancio Ortega, the creator of Zara, whose wealth decreased by around $1.8 billion to $140.1 billion after Inditex shares declined 1.6%. Forbes reported that Inditex had dropped around 7.7% from the previous month.

The disparity serves as a reminder of how rapidly billionaire rankings may fluctuate when a significant portion of an individual’s fortune is linked to publicly listed businesses.

The achievement is particularly noteworthy for Buffett.

After leaving his position as CEO of Berkshire at the end of 2025, he became chairman emeritus in September, transferring the chairmanship to Howard Buffett while continuing to serve on the board, CNBC confirmed.

Buffett may have abandoned the titles, but the business that brought him fame is still intimately linked to his fortune.

Buffett moves back into the world’s top 10

It didn’t take a tremendous rebound for Buffett to return to Forbes’ top 10.

Berkshire Hathaway (BRK.A) shares only edged higher on Oct. 1, but that modest move was enough to lift Buffett’s estimated fortune as Ortega moved in the opposite direction.

With a wealth close to $160 billion at the time, Forbes ranked former Microsoft CEO and Los Angeles Clippers owner Steve Ballmer one position ahead of Buffett.

These rankings are not long-term rankings, but rather glimpses.

Billions of dollars might conceivably emerge or vanish from a billionaire’s estimated wealth without any shares ever changing hands, since Forbes adjusts the value of public holdings in response to changes in stock prices. During the trading day, their real-time rating updates public holdings.

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Buffett’s ascent is especially appropriate in light of his success.

Most investors connect with the idea of disregarding short-term fluctuations in stock prices. However, they still have the potential to alter Buffett’s position on the world wealth leaderboard.

He has also donated significant portions of his fortune over the course of decades. According to Forbes, he has contributed more than $72 billion and promised to donate over 99% of his wealth in the future.

Even after such contributions, he is among the wealthiest people on the planet because of Berkshire, whose shares still drive Buffett’s net worth.

Even after giving up day-to-day management of the firm, Buffett may still move up or down the billionaire rankings based in large part on Berkshire’s stock performance.

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As of the Forbes report, Berkshire Class A shares had risen more than 80% over the previous five years, although they were down slightly for the year. The company still has a valuation of over $1 trillion.

It is challenging to distill its scope into a single industry. In addition to owning a sizable portfolio of public shares, Berkshire owns companies in various industries, including manufacturing, energy, insurance, railroads, and consumer activities.

Even when Greg Abel took over as CEO from Buffett, that portfolio has kept changing.

In the second quarter, after a protracted period of selling, Berkshire became a net purchaser of equities for the first time. It bought $23.5 billion of equities while selling $3.7 billion, according to Reuters.

Berkshire also increased its Alphabet stake significantly, making the Google parent its third-largest publicly traded stock holding behind Apple and American Express.

Berkshire shareholders are interested in that action because the move away from Buffett has raised a question that Wall Street will probably pose for years: How much will Berkshire’s investing approach shift if Buffett doesn’t make all of the key choices?

Berkshire keeps making big moves after Buffett steps back

Berkshire has hardly become passive under its new leadership, according to one recent investment.

In late September, Berkshire continued to purchase Lennar (LEN) shares.

An SEC filing shows Berkshire-associated entities bought 660,410 Lennar Class A and Class B shares from Sept. 28 through Sept. 30, including more than 638,000 Class A shares on the final day at a weighted average price of $81.59.

With the acquisitions, Berkshire now owns around 26 million Class A shares and 553,000 Class B shares.

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Berkshire’s recent acquisitions further complicate its increasing exposure to U.S. housing.

In addition to owning Clayton Homes, the corporation finished acquiring Taylor Morrison this year. The $8.5 billion Taylor Morrison merger was finalized in July after Berkshire announced it in May.

Buffett’s own billionaire status is simply one aspect of the tale, as the housing investment demonstrates.

Warren Buffett continues to serve as chairman emeritus, while Greg Abel has taken over as CEO and Howard Buffett as chairman of Berkshire.

The use of capital is ongoing. People are still purchasing stocks. Additionally, Berkshire is still big enough that even small changes in share prices may have a significant impact on the paper wealth of its most well-known shareholder.

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Buffett’s fortune tells a bigger stock-market story

Buffett’s return to the top 10 wealthiest individuals in the world is almost humorous, given the daily market fluctuations.

His approach to investing has always placed more emphasis on holding companies for their long-term economics than on worrying about where a stock is trading on a given afternoon.

Billionaire rankings do the opposite. They turn those daily fluctuations into a scoreboard. On Oct. 1, that scoreboard favored Buffett.

It just took a little increase in his wealth and a more severe drop in Ortega’s to flip their positions.

However, investors can value the rating’s backstory more than the actual ranking.

Buffett has now given up both of Berkshire’s most influential corporate designations, and the company continues to operate.

Under a new generation of executives, Berkshire has extended its exposure to Alphabet, according to Reuters. It has also accelerated stock acquisitions, ventured further into the housing market, and maintained its position as a trillion-dollar corporation.

The outcome is a unique kind of retirement for Buffett. Even if he is no longer the CEO in charge of every Berkshire decision, decades of ownership mean that those choices have the potential to make him hundreds of millions of dollars wealthier or worse on paper in a single day.

And on Oct. 1, that connection was enough to put Warren Buffett back among the world’s 10 richest people.

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Selling them to a specialist operator tends to make financial sense, as long as you can still access the services.

The math gets more complicated when midstream infrastructure comes with a debt load. Owning a stake in a midstream partnership means the partnership’s liabilities can flow onto your books, and those liabilities become a drag, whether oil prices cooperate or not.

That is the problem Chevron (CVX) just moved to resolve. The company confirmed an agreement to divest its ownership interest and general partner position in Hess Midstream LP, along with crude oil midstream assets in Colorado’s DJ Basin.

The transaction removes approximately $3.7 billion of Hess Midstream debt from Chevron’s consolidated balance sheet.

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Removing $3.7 billion in debt changes Chevron’s financial picture

Chevron will receive $200 million in cash as part of the transaction, but the more significant financial effect is the debt deconsolidation.

Removing $3.7 billion in liabilities from the balance sheet immediately changes how the company looks to lenders and investors evaluating its financial position.

The deal does carry a cost. Chevron expects to record a one-time after-tax loss of approximately $3 billion to $4 billion at closing. That is a significant charge, but it is the price of cleaning up a balance sheet rather than an indication of operational trouble.

Chevron expects the transaction to be accretive to return on capital employed by 0.5% on an absolute basis. The company also projects the new commercial framework will enhance future earnings through improved long-term midstream contracts.

Bakken midstream costs are getting cut in half

The deal is structured as an exchange rather than a straightforward sale. In total, Chevron receives $200 million in cash and revised midstream contracts in the Bakken across both components of the transaction.

Those revised contracts are expected to reduce Chevron’s Bakken unit midstream costs by approximately 50%.

That cost reduction is the operational payoff. Midstream expenses in the Bakken include gathering, processing, and transportation, and they directly affect production economics. Cutting those costs by half improves the margin on every barrel Chevron produces in the region.

The Bakken, located primarily in North Dakota, is one of the largest shale-oil producing areas in the United States, the Energy Information Administration noted. Midstream infrastructure is critical there because producers depend on pipeline and processing capacity to move crude to refineries and export markets.

Chevron is not exiting the Bakken. It is changing the terms under which it accesses midstream services there.

How Hess Midstream LP becomes a fully independent company

The buyer in this transaction is Hess Midstream LP itself. The publicly traded partnership, which trades on the New York Stock Exchange under the ticker HESM, is acquiring Chevron’s ownership interest and GP position, giving it a path to operate as a fully independent company.

Chevron inherited its Hess Midstream position through its acquisition of Hess Corp, according to CNBC. The midstream stake came with the deal, but it was never a natural fit for an upstream-focused major.

Divesting it completes one piece of the integration work that followed the Hess acquisition.

For Hess Midstream investors, the key question is what changes commercially. The partnership operates crude oil, natural gas, and water infrastructure in the Bakken.

The deal includes new long-term midstream contracts with Chevron in both the Bakken and DJ Basin, which should help support future volumes and cash flows. The pricing terms of those contracts will matter more than the ownership change itself.

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Chevron swaps DJ Basin pipelines for service contracts

In Colorado’s DJ Basin, Chevron is selling its crude oil midstream infrastructure outright and replacing it with new service contracts. The structure mirrors what the company is doing in the Bakken: trading asset ownership for contractual access to the same services.

Owning pipelines means paying to keep them running, whether volumes are up or down. Contracting for the same service moves that obligation off Chevron’s books.

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What Chevron gets back is fixed pricing, which simplifies planning at the well level. The catch is that volume commitments tend to be baked into those contracts, so if production disappoints, the terms can get expensive fast.

Chevron is not leaving Colorado. Its drilling program in the DJ Basin stays intact. What it shed was the hardware sitting between the wellhead and the market, and that hardware was never the point.

The company has been moving away from infrastructure ownership for years, Energy Intel reported, concentrating its balance sheet on the assets that actually produce oil. This deal is another step in that direction, and the DJ Basin upstream position does not change.

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3 numbers that will define this deal’s final value

The deal is expected to close before the end of 2026, pending regulatory sign-off.

The exact proceeds from the DJ Basin midstream asset sale have not been disclosed separately. The terms of the new Bakken and DJ Basin midstream contracts, including duration and pricing structure, will determine whether the cost savings hold up over time.

The one-time after-tax loss, estimated at $3 billion to $4 billion, will hit Chevron’s reported results in the quarter the deal closes.

Nothing here touches Chevron’s production plans in either basin. The wells keep running. What changes is the financial structure around them, and the question now is what Chevron does with $3.7 billion less debt on the books.

The company has kept its dividend growing through a difficult stretch for oil prices, and shareholders will be watching to see whether this kind of balance sheet work accelerates that trajectory or funds something else.

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He made that case on CNBC’s “The Tech Download” podcast. “Reality is that if we could build 2x faster, our customers could build 2x faster, they probably would,” he said.

The timing is important. His comments follow Anthropic CEO Dario Amodei’s call to slow the development of the most advanced AI models. That call triggered a sell-off in AI stocks last month.

Hotard argued that demand does not hinge on new models. “Even if we didn’t have another frontier model released in the next three years, we could probably make tremendous progress just deploying the technology that’s there today,” he said.

I think he is right about demand. The catch is what his argument concedes. Nokia’s AI growth now runs on other companies’ supply chains, which changes how investors should read its order book.

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Nokia’s AI orders are piling up faster than sales

Nokia’s numbers show the gap. The company booked €2.8 billion in orders from AI and cloud customers in the second quarter, according to its half-year report filed with the SEC.

Sales to those customers totaled €446 million, according to the filing. In other words, Nokia’s AI orders were approximately six times its AI revenue.

Nokia expects about half of those orders to generate revenue within 12 months, according to the report. Hotard said supply remains the industry’s main constraint, prompting customers to place longer-term orders.

That matters because buyers facing a shortage often order early and order extra to hold their place in line. In my view, part of Nokia’s AI order book is a reservation, not a guaranteed sale.

Memory chips and power now set Nokia’s pace

Nokia sells the technology that connects racks of chips inside data centers and links data centers across locations, according to CNBC. That puts it downstream of the components customers cannot get enough of.

Shortages of memory chips and energy are among the constraints facing the sector, CNBC reported. Nokia cannot connect servers that have not arrived or link sites still awaiting power.

Nokia’s filing acknowledges the exposure. It lists matching inventory and supplier commitments to customer demand as among its risk factors.

Nokia is producing more of its own optical parts. Its San Jose fab is due to ramp up later this quarter to meet demand expected in 2027 and 2028, according to the filing. The company also agreed to buy NXP’s chip plant in Chandler, Arizona.

Companies do not buy fabs to address a shortage they expect to vanish next year. I read the move as a bet that supply, not demand, remains the scarce asset.

Nokia stock is running ahead of its AI revenue

Nokia is a Finnish network equipment maker whose U.S.-listed shares trade as NOK. The stock has climbed around 130% over the past year, according to CNBC, as investors recast it as an AI picks-and-shovels play.

Nvidia helped drive that run with a $1 billion investment for a 2.9% stake in October 2025, Bloomberg reported. Nokia shares posted their biggest jump in more than a decade on the news.

Even so, AI and cloud customers made up less than a tenth of Nokia’s second-quarter sales, based on figures in the filing. Telecom carriers still generate most of the revenue.

In my view, the market is pricing Nokia based on its order book, not its income statement. That works only if orders convert on schedule, which supply constraints threaten.

Still, the growth engine is real. Optical Networks sales grew 20% at constant currency in the second quarter, driven partly by AI and cloud customers, the filing shows. IP Networks, which includes data center switching, grew 16% on the same basis, the report shows.

Full-year guidance calls for 18% to 20% growth across IP and Optical combined, according to the filing. That target leaves little room for shipment delays.

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The real overbuild test comes when the bottleneck clears

Investment in the AI buildout will total $10.3 trillion from 2025 to 2032, according to research presented at the Brookings Papers on Economic Activity, CNBC reported. That spending assumes demand holds up for years.

Yet shortages blur the signal. When memory and power are rationed, every order looks like proof of demand, even ones placed only to secure a spot.

The cleaner test arrives when supply loosens, and nobody needs to order ahead. Nokia’s Oct. 22 earnings report offers an early read on whether AI orders are converting into sales or stacking up.

For AI suppliers, the shortage has been both a speed limit and a shield against claims of overbuilding. The story to remember is what happens when it lifts.

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Happy Wednesday. Stocks were lower and oil prices were rising Wednesday after Wall Street closed at record highs, as investors await the release of the Federal Reserve’s minutes from its September meeting.

The minutes are expected to show a much broader debate among policymakers than reflected in the unanimous decision to raise interest rates, with possible implications for the U.S. central bank’s next policy steps, Reuters reported.

The rate hike at the conclusion of the September 15-16 meeting was billed by Fed Chairman Kevin Warsh as an effort to remove a “dose of accommodation” at a time when inflation appeared stalled above the central bank’s 2% target and monetary policy, in Warsh’s view, was putting little restraint on the overall economy.

The minutes are scheduled for release today at 2 p.m. ET.

Markets closed higher Tuesday, with the S&P 500 scoring a record close and the Nasdaq Composite hitting an all-time high.

“Tuesday closed with another all-time high in Wall Street helped by continued enthusiasm around AI and expectations for close to 30% S&P 500 earnings growth in Q3,” Daniela Hathorn, senior market analyst with Capital.com, said.

“However, the S&P 500 and Nasdaq futures are edging lower this morning as investors reassess the balance between strong earnings expectations and a renewed rise in bond yields.”

Hathorn said the main constraint remains the Treasury market, with the 10-year yield back around 5.31% and the 30-year near 5.68%, reversing part of Tuesday’s relief.

“This keeps valuation pressure elevated, particularly outside the mega-cap technology names that continue to dominate index performance,” she said.

“Investors are also waiting for today’s FOMC minutes for clues on how much appetite remains for another rate hike later this month, with markets currently putting the probability of a 25bp move at only around 20%.”

To increase its earnings, the company decided to buy Juniper Networks in early 2024, but due to various reasons, couldn’t close the deal until the next year. Then in July 2025, HPE successfully bought Juniper for $14 billion.

That decision is now starting to pay off. 

At HPE’s Networking Investor Day on Sept. 30, the company roughly doubled its long-term growth outlook for the networking market and raised its fiscal 2027 outlook for the business. Morgan Stanley responded the next day by lifting its price target on the stock.

What Morgan Stanley changed in its HPE call

The Morgan Stanley analyst who made the call is Erik Woodring. Woodring has covered IT hardware at Morgan Stanley for several years, and he leads the firm’s research on names including Apple and Dell.

In a Morgan Stanley research note shared with me, Woodring raised his HPE price target to $72 from $67, and he kept his Overweight rating. He also raised his bull case estimate to $94.

Also read: Morgan Stanley revisits Micron stock price target amid stellar growth

His upgrade came about a month after HPE reported its fiscal third-quarter results. During the third quarter, the company’s revenue grew 33.68% year over year to $12.21 billion, beating Wall Street’s earnings expectations by 18.41% and revenue estimates by 1.83%.

HPE gave an early fiscal 2027 earnings estimate of $4.40 to $4.60 per share, and Woodring’s new price target suggests he believes HPE could reach or exceed that range as its networking business continues to grow.

Why networking has become HPE’s biggest growth driver

HPE now expects its networking market to grow by about 18% each year until the end of 2029, roughly double what the company told investors last year.

HPE also said it plans to grow its networking sales at that same high-teens pace. That would mean the company will start taking market share from rivals like Cisco.

“HPE’s Networking market growth outlook has effectively doubled since last year, while HPE’s relative growth positioning has strengthened,” Woodring wrote in the note.

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Inside HPE’s networking business, the company expects data center networking to grow the fastest. HPE expects data center networking to grow about 50% a year through the end of fiscal 2029.

The company also expects routing to grow about 20% a year, while sales of networking gear for office campuses and branch locations are expected to grow at high-single-digit rates.

“AI is reshaping the technology stack, making the network more strategic and driving significant new demand from enterprises and service providers,” Rami Rahim, who was the CEO of Juniper before HPE bought the business, said. Rahim now leads HPE Networking.

The AMD Helios deal and the $1.2 billion Vultr win

Another factor that supports HPE’s new outlook is its partnership with AMD on the Helios rack.

The Helios rack is like a ready-to-use AI computer that comes with AI servers and HPE’s networking switches built inside. HPE can sell the full thing or just the networking parts alone to companies that want to build their own. 

Related: Morgan Stanley doubles down on SpaceX stock verdict for investors

HPE confirmed on Sept. 30 that it received its first Helios order. The large $1.2 billion deal came from Vultr for the full Helios cabinets. A major deal like that is a sign that Helios is already bringing in real money for HPE.

However, the company might face some supply constraints. “The FY27 Networking outlook moves higher just one month after earnings as HPE incorporates the incremental Helios opportunity, with supply, not demand, remaining the key constraint,” Woodring wrote.

If HPE can get the parts it needs to avoid supply issues, Woodring feels the company could achieve its targets.

What everyday investors should consider after HPE’s rally

HPE stock has already climbed 186.84% year to date and increased by 7.36% on Oct. 2 alone, closing at $69.33. That means the company’s shares are already close to Morgan Stanley’s new $72 base case, and it’s why I believe a lot of the good news is probably already priced in.

For Woodring’s $94 bull case to happen, HPE’s AMD Helios orders have to keep growing. The Juniper cost savings will also need to come in faster, and server demand would have to stay strong until the end of fiscal 2028.

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But a different kind of AI is gaining ground, and it mostly goes unnoticed. It sits inside the systems that generate invoices, move money between organizations, assess credit exposure, and capture billable time.

Nobody calls it AI when it’s working. They just notice that fewer bills get rejected and collections take less time.

That gap between where AI gets attention and where it may actually be creating value is increasingly relevant for investors. Legal services is one place where the gap is narrowing fast, and the companies enabling it are starting to look like a serious infrastructure play.

Also read: Apple’s biggest AI advantage may face new privacy challenge

The AI that works best is the kind no one sees using

Most enterprise software still requires people to adapt to it.

The more interesting shift happening now is the reverse: Intelligence is being embedded into workflows so deeply that the people inside those workflows never have to think about it.

A lawyer doesn’t need to know that AI reviewed an invoice against a client’s billing guidelines before it went out. A finance director doesn’t need to know why exceptions are down. The value shows up in the outcome, not the interface.

Ahmed Shaaban, CEO of legal operations technology company Fulcrum GT, argued that this is where enterprise AI becomes economically meaningful.

“We’ve shown the world that AI can hold a conversation,” Shaaban told TheStreet in an interview. “Now let’s put it to work. Connect it to how a business bills, manages risk, and gets paid, and you start opening up possibilities that weren’t practical before. That’s the next chapter: intelligence working inside the business, helping people do things they simply couldn’t do before.”

The challenge is that embedding intelligence into operational processes requires the underlying data and systems to already be in reasonable shape. If billing, time capture, and matter management live in disconnected silos, adding AI exposes those gaps rather than closing them.

Law firms are building the operational foundation first

Some of the most established law firms in the world are already several years into that foundational work. Their experiences are instructive not because they represent the finished product, but because they show how much has to come before any AI deployment can actually deliver.

DLA Piper International began with process standardization and a shared services center in Warsaw. The firm established clear senior ownership over its finance function, implemented enterprise technology, and built a consistent internal team capable of carrying transformation across borders.

Garry Swaine, who led the effort, said the platform went live across 30 countries on the same day. The foundation made the speed possible.

Eversheds Sutherland took a similar route, consolidating around core platforms that could grow alongside the business. The firm spent 180 hours consulting directly with lawyers about the friction they experienced in daily work.

That exercise surfaced a collections process requiring roughly 300 records to be updated by hand each month, a problem the firm is now exploring whether an AI agent could handle without overhauling the broader collections model.

Both firms described their AI applications as areas still under development. The platforms and processes are in place. The efficiency gains from layering AI onto them are what comes next.

A new ownership model is entering the picture

Alongside traditional partnerships investing through their own structures, management services organizations (MSO) are emerging as a separate path to modernized legal operations.

An MSO provides shared non-legal services, including finance, technology, and administration, through a separately organized entity, while leaving the law firm itself in the hands of its lawyers.

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Orion Legal MSO, formed in January 2026 by Uplift Investors, offers one early example. Louisiana personal injury firm Dudley DeBosier joined as the founding partner.

Uplift has said the structure is designed to deliver operational support without altering firm ownership or control. The stated investment thesis includes technology, data, and AI integration across the firms the MSO supports.

Whether the MSO model outperforms a well-run partnership investing in its own shared services is not yet clear.

The DLA Piper and Eversheds examples show that established firms are capable of significant operational transformation without outside capital or a separate organizational structure. The MSO model adds a path; it does not establish a superior one.

What enterprise software investors are paying attention to

For investors assessing enterprise software companies, the dynamics playing out in legal services reflect a broader question about where AI creates durable commercial value.

An established firm expanding internationally, a partnership improving its existing operations, and an MSO building shared infrastructure across multiple firms may all need the same underlying capabilities. Demand can come from several directions at once.

Scott Mozarsky, a former president of Bloomberg Law, frames the investment question around proximity to mission-critical workflows. “From an investment perspective, simply being able to say that a product contains AI is becoming less interesting,” Mozarsky told TheStreet in an interview.

“The more important questions are whether the company sits inside a mission-critical workflow, whether it has access to differentiated data and context, and whether its technology is connected closely enough to the customer’s operations to create measurable economic value.”

That framing is useful precisely because it separates the hype from the signal. A software provider’s position in a critical process is a starting point, not a verdict.

Investors still need to examine how deeply embedded the product actually is, what it costs to implement, whether adoption is genuinely sticky, and whether the efficiency improvements being promised translate into numbers the customer can point to.

Governance cannot be added after the fact

The deeper AI goes into operational processes, the higher the stakes become when something goes wrong. A system that can change a financial record or initiate a payment needs more than a capable model. It needs reliable data, defined access controls, and a clear path for human intervention before errors compound.

At Eversheds Sutherland, compliance, cybersecurity, and in-house counsel were part of the delivery team from the start.

That is a practical acknowledgment that the governance layer cannot be retrofitted once AI is already embedded in a workflow. It has to be part of the design from day one.

That requirement raises the bar for any software provider looking to move AI deeper into legal and financial operations. The firms that make it work will likely be the ones that treated data quality, permissioning, and auditability as engineering problems rather than policy ones.

The firms that try to add controls later will find out why that order of operations matters.

Related: Jim Cramer spills the beans to AI stock investors

As demand for Nvidia-powered AI infrastructure continues to surpass what the business can bring online, CEO Mike Intrator told Bloomberg that CoreWeave is still mostly sold out, with capacity committed for many years.

However, that lack of capacity is only one aspect of the issue. CoreWeave is also working to offer clients more than just graphics processing units, or GPUs.

This week, the business unveiled Forge, a software platform that expands the company beyond a neocloud by unifying AI development tools in a single setting. The push arrives as CoreWeave’s rapid expansion produces some striking numbers.

Second-quarter revenue reached $2.58 billion, more than double a year earlier. Revenue backlog, which includes contracted business expected to become revenue later, stood at roughly $104 billion.

Those numbers have an asterisk, though. Net interest expense reached $640 million during the quarter, reflecting the strain CoreWeave is under. Its computer infrastructure remains in high demand, but meeting that need requires billions of dollars for servers and data centers, and much of that money must be borrowed.

Forge creates the opportunity for an additional revenue stream, potentially curing that headache.

CoreWeave’s Nvidia capacity is sold out for years

CoreWeave continues to evaluate chips beyond Nvidia, Intrator told Bloomberg.

Because they are built to execute the many computations needed for artificial intelligence much more quickly than traditional processors, such chips are often referred to as accelerators.

However, Intrator said CoreWeave currently lacks enough infrastructure to deploy all the Nvidia capacity its customers want. He described the company as “overwhelmed” by demand and said it is largely sold out for several years.

Regarding the discussion of whether expenditure on AI infrastructure is starting to exceed real demand, the remarks provide investors with key insight.

According to CoreWeave’s second-quarter data, contractual demand remains significant. As of June 30, the business had a sales backlog of around $104 billion. More than $25 billion in additional client commitments signed early in the third quarter were not included in that amount, according to CoreWeave.

A revenue backlog does not guarantee that all of that money will turn into revenue right away. CoreWeave still has to fulfill the conditions of those client agreements and make the promised capacity accessible.

Infrastructure deployment is particularly crucial because of this.

Intrator said CoreWeave brought about 500 megawatts of active power into its infrastructure around the time of its previous earnings call.

Power is important, since purchasing GPUs does not, by itself, increase AI capability. To operate dense clusters of processors, operators also need data centers, networking hardware, cooling, and sufficient energy.

Additionally, Intrator refuted the notion that the planned limits on data centers will eliminate the need for computing.

“Moratoriums do not alter the demand for compute,” he said, arguing that such restrictions instead influence where the capacity gets built.

However, CoreWeave must pay a high price to bring all of this infrastructure online, increasing the significance of what the business offers beyond that infrastructure.

CoreWeave’s Forge targets the margin question

CoreWeave unveiled Forge at its Fully Connected conference in San Francisco on Sept. 30.

Forge combines several pieces of AI development in one environment, including training models, running them after they have been trained, measuring their performance, and improving subsequent versions.

That second step is commonly called inference. In simple terms, training teaches an AI model, while inference is what happens when people actually use the trained model to generate an answer or perform a task.

According to CoreWeave, MasterClass and Canva are already building on Forge. Intrator said the product grew out of customers effectively pulling CoreWeave “up the stack.”

The company said more than 4,500 customers, partners, developers, and AI industry participants attended Fully Connected. And clients who came to CoreWeave for computer infrastructure are increasingly requesting that the firm provide some of the software tools they use to create AI solutions.

Financially speaking, this is significant, since CoreWeave’s underlying infrastructure is costly.

In CoreWeave’s quarterly report to the Securities and Exchange Commission, the corporation said its total debt was $35.6 billion as of June 30. Additionally, CoreWeave spent $14.1 billion on property and equipment in the first half of 2026, up from $3.9 billion in the same time last year.

That expenditure includes the infrastructure and servers needed to handle AI workloads.

Forge offers another chance. “It’s going to be accretive to margins,” Intrator said.

Intrator did not quantify Forge’s potential contribution to revenue or margins. However, the remark addresses one of the main issues with CoreWeave’s business strategy.

To clear its massive backlog, the corporation can continue to grow its infrastructure. However, if it can use that infrastructure to offer software and development tools to clients, it may be able to make more money from those connections without needing to grow physical computer power for every dollar of revenue.

Although Forge is not a solution to CoreWeave’s funding needs because of these factors, it does clarify why investors may care about the software push.

CoreWeave wants to move beyond the neocloud label

CoreWeave is attempting to alter consumers’ perceptions of the business itself.

The business has sometimes been referred to as a “neocloud,” a phrase used in the industry to designate more recent cloud providers that are primarily focused on GPUs and AI workloads rather than conventional general-purpose computing.

CoreWeave was one of the first neocloud firms, according to Intrator. However, he said the business now sees itself as an “AI cloud.”

Although the distinction may seem semantic, CoreWeave’s most recent product strategy lends additional weight to the claim.

Weights & Biases, an AI development platform, was purchased by CoreWeave in 2025. This company provides tools for developers to monitor trials, assess models, and oversee AI research.

In June, CoreWeave introduced ARIA, an AI research and iteration agent that uses Weights & Biases technology. These features are now combined with CoreWeave’s training and inference offerings in Forge.

Instead of forcing every task to reside only on CoreWeave infrastructure, CoreWeave claims that Forge stays open across models, software frameworks, and other cloud providers.

This is significant, since it expands CoreWeave’s target market.

Once GPU capacity is supplied, the corporation no longer wants its connection with consumers to expire. It encourages developers to construct, test, assess, and refine AI models using CoreWeave’s software.

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Additionally, the tactic provides CoreWeave with an additional means of connecting with clients that may not have access to sizable engineering teams capable of overseeing their own AI infrastructure.

Intrator said it’s one of the audiences Forge is designed to address. He cited various CoreWeave clients, including well-known industrial firms such as Caterpillar and cutting-edge AI laboratories.

There is a chance to simplify complex AI infrastructure so that conventional organizations can use it without having to handle every technological layer on their own.

If the next wave of AI investing extends beyond the small number of tech firms and AI labs that were mostly responsible for the industry’s early infrastructure buildout, that might become more important.

According to Intrator, there is still a high demand for the underlying processing capacity. He disagreed with the notion that slower advancements in AI would inevitably lead to a significant drop in computing needs, arguing that businesses should continue purchasing cloud services, software, and infrastructure while developing AI solutions.

CoreWeave now has to turn demand into better economics

Customers’ need for AI processing power is easily demonstrated by CoreWeave.

Strong contractual demand is evident from its approximately $104 billion backlog, more than $25 billion in additional early-third-quarter commitments, and Intrator’s remarks about being sold out for years.

Providing it profitably is the more difficult part. Even though revenue more than quadrupled to $2.58 billion in the second quarter, CoreWeave recorded a $626 million net loss. $640 million was spent on net interest.

These numbers contribute to the explanation of why Forge merits consideration outside of its product attributes.

If CoreWeave wants to meet the clients who are already waiting for computation, it still has to fund servers, GPUs, electricity, and data center capacity.

A hypothetical second layer of economics around that infrastructure is provided by software.

Through the purchase of Weights & Biases, ARIA, and now Forge, the approach has been progressively evolving.

There are still many things investors may be wondering. Intrator did not estimate how much the platform may increase profits, and CoreWeave has not revealed a sales goal for Forge.

Additionally, the company’s debt burden and the cash needed to increase capacity are not eliminated by the new software venture.

However, the issue with CoreWeave is now more apparent.

Finding clients who are eager to purchase AI compute is not a problem at the moment. Instead, it is having trouble producing enough of it.

Therefore, the firm’s ability to leverage Forge and its wider software platform to increase the value of each client connection, while continuing to finance one of the industry’s biggest infrastructure expansions, may determine the next chapter in the CoreWeave tale.

Related: JPMorgan backs CoreWeave’s pricing play as a bear digs in

The bond market took the bet. It has not been pretty for Washington’s point man on the economy.

Bessent is now changing his tone, trading combative declarations for quieter talk about patience and process.

Here is the full story behind the retreat, the numbers that forced it, and what investors should be watching next.

Also read: Goldman Sachs expresses doubts about Scott Bessent’s plan

From ‘I am the house’ to trusting the process

Bessent first issued his challenge on Sept. 8. Speaking at Southern Methodist University, he told the audience he was “the house now.” He warned anyone betting against the Treasury that they were playing a losing hand.

None of that is coincidence. Before Washington, Bessent spent decades in hedge funds. At Soros Fund Management, he was part of the trade that forced the Bank of England off its currency peg in 1992, one of the most famous bets in market history.

Critics say Bessent has brought that same aggressive instinct to his current role, rather than the more cautious approach typically expected of a sitting Treasury secretary, according to 24/7 Wall St.

The bond market has not cooperated since. Bessent now says he “trusts the process” and that in bond markets “you win over time.” It is a notably softer posture than his earlier dare, as reported by CNBC.

His own mentor was among the loudest critics.

Legendary investor Stanley Druckenmiller penned an op-ed warning that efforts to suppress yields would ultimately backfire. He argued that the 30-year Treasury yield is the most important price in the world and the only fiscal disciplinarian the U.S. has left.

The numbers that undercut Bessent’s bet

The Treasury’s key tool was its bond buyback program. It doubled the program on Aug. 19 to at least $4 billion per operation for bonds maturing in 10 to 30 years, according to 24/7 Wall St. That came one day after the 30-year yield hit a 19-year high of 5.34%.

The move worked for barely a day. Long yields fell nine basis points right after the announcement.

But within the week, the 10-year was back near 4.70% and the 30-year had climbed to roughly 5.27%. Both were higher than before Bessent intervened.

Inflation expectations also moved in the wrong direction. Breakeven rates touched a two-month high in the days following the buyback expansion.

Related: Scott Bessent’s net worth in 2026 as Treasury chief

Bessent insisted it was a routine liquidity measure, not an attempt to suppress yields. But markets were not convinced. The operation added to concerns about broader inflationary implications, CNBC reported.

JPMorgan offered one of the sharpest assessments. The bank’s co-head of global fundamental research compared the approach to paying a mortgage with a credit card. The buybacks address a symptom of the problem. They do not address the underlying deficit driving it.

Why yields kept climbing anyway

The selloff deepened after President Trump rejected an Iranian ceasefire proposal over the weekend of September 26. The seven-day plan would have reopened the Strait of Hormuz if the United States lifted its naval blockade, according to Reuters.

About a fifth of global oil and gas moves through that strait. Months of disruption had already driven energy prices higher. Bond buyers were demanding more compensation for holding long-dated debt, and the Iran news made that case harder to argue against.

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That combination pushed Treasury yields to their highest levels in 24 years. The 10-year climbed to 5.342%. The 30-year surged past 5.60%. Both surpassed the elevated levels that triggered Bessent’s August intervention.

“The ‘higher for longer’ rate environment has become ‘much higher for a lot longer,'” said JoAnne Bianco, senior investment strategist at BondBloxx Investment Management.

Investors may be facing a more persistent period of elevated rates, not a temporary spike.

What investors should watch going forward

The U.S. hit $40 trillion in national debt in August. Five months earlier, the number was $39 trillion.

Just the interest bill, not principal, not programs came to roughly $857 billion through the first nine months of fiscal 2026. Every tick higher in yields makes that number worse.

Investors should watch the pace of Treasury issuance and the term premium closely. Both reflect how much compensation bond buyers are demanding amid a persistently large federal deficit. Morgan Stanley has flagged this dynamic as a hard limit on what any single buyback program can accomplish.

Higher borrowing costs are also complicating the Federal Reserve’s path. Persistently elevated long-term yields leave policymakers less room to ease, even if the broader economy slows.

That leaves Bessent’s retreat from confrontation looking like a footnote. The harder question is whether Washington actually narrows the deficit driving the selloff, rather than simply changing how its Treasury secretary talks about it.

Related: Scott Bessent sets startling oil price target

Options market pricing data suggests the chipmaker has a high likelihood of reaching a $6 trillion valuation by the end of this month, a level no company has ever reached. 

Based on its current share count, Nvidia would need to reach about $248 per share to get there.

For ordinary investors, the significance is bigger than the previous record. Nvidia now carries enough weight in the Nasdaq and S&P 500 that a sharp move in the stock can influence retirement accounts, index funds, and broader market performance.

But perhaps the bigger question is no longer whether Nvidia can keep climbing — it is how much of the future investors are already paying for.

Nvidia’s options market is flashing a signal Wall Street cannot ignore

Nvidia stock is now trading close to a $6 trillion market value, which options traders are treating as an unprecedented milestone as a realistic near-term outcome.

As reported by Seeking Alpha, market-maker pricing reportedly implies roughly a 50% chance Nvidia reaches $6 trillion by the end of October and approximately 67% odds by Dec. 18.

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Based on its current share count, the stock would need to reach about $248 as per Yahoo Finance data. Traders are even assigning roughly a one-in-16 chance to Nvidia reaching $7 trillion by Nov. 20.

I think the broader signal matters more than the round number. 

Nvidia already represents about 13% of the Nasdaq and 8% of the S&P 500, meaning another sharp move higher increasingly becomes an index-level event rather than just being an Nvidia story.

The underlying business is also giving bulls ammunition.

Nvidia generated $96.2 billion of quarterly revenue, up 106% year over year, while data center revenue surged 117% to $89 billion. Moreover, it authorized another $150 billion in stock repurchases, as I covered, bringing its remaining authorization to $235 billion, the largest repurchase authorization increase on record. 

Still, I would not treat options-derived odds as a forecast. They typically reflect volatility and positioning as much as conviction, particularly with Nvidia testing technical resistance near $238.

AI turned Nvidia from a $364 billion chipmaker into a $6 trillion contender

Perhaps the most extraordinary part of Nvidia’s tremendous rise becomes clearer when comparing today’s pricing with where the company stood when generative AI entered the mainstream.

At the end of 2022, shortly after ChatGPT’s launch, Nvidia was worth $364 billion, according to The Motley Fool. That was actually down sharply from about $735 billion at the end of 2021.

By the end of 2023, however, its market capitalization had exploded to $1.22 trillion as per Reuters. It reached roughly $3.29 trillion by the end of 2024, $4.64 trillion by the end of 2025, and about $5.76 trillion this week. 

AI fundamentally changed how investors value the company, and the reason is fairly straightforward.

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Nvidia’s GPUs became “mission-critical” computing infrastructure behind the generative-AI buildout. The company crossed $2 trillion in February 2024, as reported by Reuters, only around nine months after reaching $1 trillion, then took just 96 days to move from $2 trillion to $3 trillion. 

Jensen Huang has continued arguing that the opportunity remains much larger. In 2025, he said, “A new industrial revolution has started. The AI race is on.”

He projected $3 trillion to $4 trillion of AI infrastructure spending by 2030. More recently, Nvidia’s latest results strengthened that argument: quarterly sales more than doubled, and Huang said AI had reached an “inflection point.”

To me, that is why $6 trillion is even conceivable. Investors are no longer valuing Nvidia primarily as a semiconductor manufacturer. They are valuing it as infrastructure for an economic transition.

Related: How much Nvidia stock does CEO Jensen Huang actually own?

What I think the $6 trillion signal really means for investors

That said, I would be careful about interpreting the 50% options figure as Wall Street saying Nvidia will reach $6 trillion this month.

Options markets price volatility, hedging demand, and positioning in line with expectations, so the figure is better read as evidence that the milestone is well within the market’s plausible range.

What gets my attention is how little additional appreciation Nvidia now needs

From Monday’s nearly $5.76 trillion valuation, reaching $6 trillion requires only about another 4%. That is relatively small for a stock that has repeatedly moved hundreds of billions of dollars after earnings.

But I think size increasingly cuts both ways.

Nvidia’s massive index weight means passive investors now have meaningful exposure, whether they actively chose the stock or not. 

Another rally can pull major indexes higher, but disappointment can work in reverse. Nvidia demonstrated that risk dramatically during the 2025 DeepSeek selloff, when roughly $593 billion of market value disappeared in one session. 

So I would focus less on whether Nvidia hits $248 this month and more on whether earnings can continue to catch up with an extraordinary valuation.

The $6 trillion milestone would be historic. To me, though, the bigger signal is that markets now consider it almost ordinary enough to price into October.

Related: Nvidia’s AI boom revives a Warren Buffett warning for investors

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McDonald’s says it reflects local business circumstances and choices by individual franchisees. But a new lawsuit says the company’s technology may have significantly greater effect on those prices than consumers know.

The nationwide class action suit filed in federal court in Chicago alleges that McDonald’s (MCD) used AI-powered pricing and nonpublic data to coordinate prices across independently operated restaurants, Reuters reported.

The allegation turns an ordinary transaction into a much larger question. When a consumer purchases a Big Mac, how independently was the pricing truly determined?

The solution, McDonald’s says, is that franchisees make the decision.

“AI does not set the price of a Big Mac or any other menu item,” the company said in a recent response to reporting about its pricing technology. McDonald’s says its system makes recommendations and cannot directly change restaurant prices.

For shareholders, the dispute reaches into the heart of McDonald’s business model and ecosystem. About 95% of McDonald’s restaurants globally are franchised, and a significant chunk of the company’s income comes from rent and royalties based on those locations’ sales.

So the legal dispute is about more than software. This is about the connection among McDonald’s, its franchisees, and the consumers paying at the counter.

McDonald’s pricing technology reaches millions of meals

The lawsuit follows a Reuters investigation into the technology McDonald’s uses to help franchisees determine pricing.

Reuters said the company’s technology employs machine-learning algorithms to examine millions of daily transactions at nearly 14,000 eateries throughout the United States. The program may take in local market data and other inputs to provide a restaurant-specific price suggestion.

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This information might be useful to an operator seeking to answer a classic restaurant question: How high can prices go before consumers start ordering less or going someplace else?

Given the magnitude of McDonald’s footprint, minor choices can have a huge impact. A few pennies more on a burger or fries can accumulate over millions of transactions and affect restaurant sales, franchisee profitability, and ultimately the royalties that McDonald’s earns.

The system goes too far, the complaint alleged. It said McDonald’s and its franchisees worked together to set prices using algorithms based on nonpublic information, Reuters reported. The complaint also asserted that independent restaurants should instead set prices individually.

McDonald’s denied this characterization. It said franchisees can accept or reject recommendations and that the system does not engage in real-time dynamic pricing or calculate what an individual customer might personally be willing to pay.

That difference will count.

A recommendation tool is a common business practice. A system that facilitates coordinated pricing among supposedly independent businesses, however, could raise a very different set of antitrust questions.

McDonald’s franchise model raises the stakes

Nearly every McDonald’s restaurant a customer visits is run by a franchisee rather than directly by McDonald’s.

That arrangement has been a financial boon for McDonald’s for a long time. Franchisees carry most of the day-to-day expenses of running restaurants, while the corporation collects rent, royalties, and other fees.

For the first half of 2026, McDonald’s generated about $8.4 billion in revenue from franchised restaurants, including $5.26 billion in rent and $3.1 billion in royalties.

McDonald’s describes the model as producing relatively stable and predictable revenue, largely because those cash flows depend on franchisee sales.

That makes menu pricing especially challenging. Charge too little, and restaurants may have a particularly difficult time absorbing increased labor, food prices, and rent. Push prices too much, and consumers may conclude that the value is gone.

For a family pulling into a drive-thru, that calculation is much simpler. They see the number on the menu board and decide whether dinner still fits the budget.

That consumer sensitivity has made fast-food affordability an increasingly prominent problem in recent years.

McDonald’s built the pricing system to give restaurant owners more information to work through that challenge. The complaint now questions whether the centralization of so much information caused a distinct concern.

McDonald’s says people still set the prices

McDonald’s issued an unusually detailed defense of its pricing practices on Oct. 1.

The business maintained that its technology does not adjust rates, does not employ dynamic pricing, and does not decide what a certain consumer pays. Instead, McDonald’s claims it offers franchisees restaurant-specific suggestions based on what the local market calls for.

“People make the final pricing decisions,” McDonald’s said.

McDonald’s also contends that two stores only a few miles apart may have quite different economics.

A restaurant in a transportation hub could have different labor expenses, customer traffic, and competition than one in a suburban community.

Those distinctions help explain why the same menu item at McDonald’s may not cost the same everywhere.

The case offers an alternative reading of the same technology. The complaint contends that the use of centralized, nonpublic information to develop recommendations for independent operators might serve to stymie the competition that would otherwise exist among eateries.

So far, no one has proved such charges.

The litigation is in its early stages, and no court has ruled that McDonald’s or its franchisees improperly set pricing.

McDonald’s investors now have another AI risk to watch

Lawsuits have previously been filed outside the restaurant sector over algorithmic pricing. Reuters said these suits have challenged similar techniques used to propose rates for apartments, hotel rooms, and other goods.

Now McDonald’s has taken the matter to one of America’s most well-known consumer transactions.

The immediate financial effect on stockholders is unclear. McDonald’s has not been held accountable, and a planned class action may take years to wind through the courts.

The bigger issue is how the organization uses technology to run a franchise system with thousands of independently controlled companies.

McDonald’s wants data and AI to assist those restaurants in making better judgments. Stronger sales by franchisees also boost its corporate finances, since royalties are often based on a proportion of sales.

It seems that the company needs to clarify where help ends and cooperation begins.

For consumers, the question is much simpler. The next time the price of a Big Mac increases, customers may ask who truly chose the figure on the menu board.

Related: McDonald’s could soon unlock a major revenue stream

That phase is not over. But a second phase is beginning, and it favors companies that are replacing what they once bought with something they built.

Paying another company to power your AI tools works until it doesn’t. At the scale Microsoft (MSFT) and Meta (META) operate, those bills get large fast.

Building in-house is a bigger investment upfront, but the data stays yours and the tools can be shaped around what your employees actually do. That is a different proposition than a vendor relationship.

Both Meta Platforms and Microsoft are now steering employees away from Anthropic’s Claude, according to The Information. The specifics differ between the two companies, but the underlying logic is the same.

Also read: Mark Zuckerberg sends bold message to Meta investors after Muse

Microsoft slashed its internal Claude budget by a third

Microsoft had projected at least $1 billion in internal spending on Anthropic’s tools earlier this year. That estimate has since been reduced by more than one-third. Company leaders have directed employees to limit their Claude usage and prioritize Microsoft’s own AI products.

That cut applies only to Microsoft’s internal use. Enterprise customers can still access Anthropic models through Microsoft’s platforms, and demand from those customers has reportedly held steady.

Microsoft can reduce what it spends internally while still selling Claude access to businesses that want it. The two decisions are not the same one.

Microsoft has spent the past year pushing its own AI products harder across its enterprise portfolio. GitHub Copilot has reached 50 million users and paid Copilot seats have been growing.

Internal tools that run on the company’s own infrastructure become easier to justify when they are improving fast enough to compete with outside alternatives.

Meta’s Claude Code user count dropped from 60,000 to 30,000

Meta’s pullback is concentrated in Claude Code, Anthropic’s AI coding assistant. Usage inside the company has fallen from roughly 60,000 employees to around 30,000.

The company’s spring layoffs, originally announced by Bloomberg, cut approximately 10% of Meta’s workforce. This round of layoffs account for part of that decline. The primary driver, per the report from The Information, is Meta’s push to develop its own AI tools.

The replacements are already running. MetaCode, an internal coding assistant, has surpassed 30,000 users inside the company.

Meta also began external testing of Muse Code in August. Powered by Meta’s own models, Muse Code had already reached more than 6,000 internal users by the time of the report.

Meta is not simply reducing Claude usage. It is replacing it with tools it owns and controls.

The competitive dynamic between Meta and Anthropic is layered. Meta has also been in discussions about a compute deal with Anthropic, in which Anthropic would pay for access to Meta’s data center infrastructure. Commercial relationships and competitive ones can exist simultaneously in this industry.

Why the economics favor building over licensing at this scale

When a company is staring at a nine-figure internal AI bill, building its own tools starts to look a lot more compelling. You pay more upfront, but you own what you build, and it gets cheaper to run over time.

The strategic reasons are at least as compelling as the financial ones. Microsoft can integrate its own models more directly into GitHub Copilot, Microsoft 365, and Azure.

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Meta can train internal tools on workflows specific to how its engineers build and ship products. A company using its own AI stack generates usage data that helps those tools improve. A company licensing someone else’s model does not get the same feedback loop.

There is also a bigger strategic picture here. Having the best model used to be enough. That is less true now.

The companies consolidating real advantage are the ones owning the cloud compute, the developer tools, the enterprise software layer. The more of that stack you control, the more of the revenue AI creates flows back to you. Both companies are playing that game.

Related: Microsoft CEO names one key concern with its AI

What this pullback does not tell you about Anthropic

The internal reductions at Meta and Microsoft are not a verdict on Anthropic’s commercial position. Enterprise demand for Claude through Microsoft’s platform has held steady, according to The Information.

Businesses often prefer access to multiple AI providers over a single-vendor relationship. A platform that offers both Microsoft’s own models and Anthropic’s is more useful to those customers than one that offers fewer options.

The signal that matters for investors is which customers are sticking. Hyperscalers with the engineering capacity to build their own AI tools will eventually do so.

The enterprises that cannot build for themselves represent more durable demand for a provider like Anthropic. That customer segment may ultimately offer more predictable revenue than relationships with large tech companies actively building internal alternatives.

What the report establishes is that AI partnerships have natural limits. Large technology companies will use outside models where they represent the most efficient option and build their own where it makes more sense.

As internal alternatives at Meta and Microsoft continue to improve, the balance will keep shifting in the same direction. For Anthropic, the commercial opportunity going forward may lie less with companies that can build for themselves and more with the enterprises that cannot.

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He had just $60 at the time, with $43.60 already put aside for rent. Stallone says he survived on $1 or $2 a day for food and earned $34 a week, according to Fox News.

These difficult years ultimately contributed to Stallone’s creation of Rocky Balboa, the fictitious boxer whose battle became one of Hollywood’s most enduring franchises.

That makes Stallone’s narrative more than just nostalgic 50 years later. It’s also a tale of intellectual property that Amazon (AMZN) still finds valuable.

“Rocky” and “Creed” were part of MGM’s catalog, along with “RoboCop” and the James Bond movies, which Amazon acquired for $8.45 billion. At the time, Amazon claimed that MGM had more than 4,000 movies and 17,000 TV shows in its repertoire.

Additionally, Amazon continues to invest in the “Rocky” world.

Prime Video is bringing “Creed” to television, and a new Amazon MGM Studios film depicting Stallone’s struggle to create the original picture will be released this fall.

Stallone stretched almost every dollar before “Rocky”

Some of the nuances that subsequently gave the character Rocky Balboa a genuine feel came from Stallone’s early years in New York.

“I could never afford to go to a laundromat,” Stallone told Fox News. To wash everything at once, Stallone would take a shower while wearing his shirt, pants, underwear, and socks.

Similar ingenuity was needed for food. During the colder months, he used his windowsill as a makeshift refrigerator and sometimes depended on cottage cheese and three or four raw eggs.

Eventually, that specific behavior made its way into the big screen. One of the most well-known moments from the 1976 film is Rocky consuming raw eggs, but Stallone’s new book, “The Steps,” reveals that the concept was inspired by his own financial situation.

His work history was equally colorful. As a theater usher, Stallone earned $34 per week. He studied movies during his shifts, using them as an informal sort of film education. He also worked nights at a delicatessen and cleaned lion cages at the Central Park Zoo.

The situation is entirely different from Amazon’s contemporary streaming business. However, the persona Stallone created based on his life experiences turned out to be precisely the type of enduring intellectual property that media firms now value.

Amazon paid billions for MGM’s Hollywood library

Decades later, Amazon connected Stallone’s narrative to its brand.

In 2021, the digital behemoth said that it would buy MGM for $8.45 billion, and Amazon specifically mentioned “Rocky” and “Creed” as two of MGM’s main properties.

When the deal concluded in 2022, MGM joined Prime Video and Amazon Studios.

That does not imply that “Rocky” cost Amazon $8.45 billion. MGM produced thousands of movies, TV shows, and other significant franchises.

However, the movie serves as an example of how vintage Hollywood libraries may remain profitable long after the original film has left cinemas.

Decades later, successful intellectual property may lead to new projects, television series, licensing, streaming engagement, and sequels.

With the franchise, Amazon is already doing that.

Amazon is still finding new ways to monetize “Rocky”

“I Play Rocky” will be released in November via Amazon MGM Studios.

The film is based on the true tale of an unknown Stallone trying to pitch the movie and insisting on playing the main role himself.

It will run in select theaters beginning Nov. 6 and be released more widely later that month, almost precisely 50 years after the original “Rocky” launched, Amazon said.

The timing is a rare chance for Amazon. Stallone’s new biography is bringing the real-life tale behind “Rocky” back into the public debate, just as Amazon is preparing to offer moviegoers its own dramatized version of that narrative.

The company is also growing the fictitious world. Prime Video has given a series order to “Delphi,” the first live-action series based in the “Creed” world.

The series will focus on teenage boxers training at the Delphi boxing club, with Michael B. Jordan attached as an executive producer. Amazon reported that “Creed III” made $275 million worldwide and was the franchise’s top-grossing picture.

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This shows how Amazon can make money from MGM’s catalog, and not just by putting older films on Prime Video.

Familiar brands may fuel theatrical releases, streaming series, and advertising inventory, while offering fans one more incentive to stay within Amazon’s entertainment ecosystem.

This year, Amazon assured shareholders that it remains committed to Prime Video and Amazon MGM Studios as part of its larger entertainment company.

Stallone’s struggle became intellectual property that still pays

Clearly, for Amazon investors, “Rocky” is a minuscule portion of a media giant that did more than $700 billion in sales last year.

One movie franchise won’t define where Amazon stock is headed. The more relevant lesson is what “Rocky” reveals about the economics driving Amazon’s MGM acquisition.

Amazon didn’t simply purchase a number of old movies. It got stories and characters that can be turned into fresh content again and again.

Amazon MGM is producing a movie about how Stallone made “Rocky,” while extending the “Creed” world for Prime Video 50 years later. That’s the type of durability that makes established intellectual property appealing to major media companies.

And the difference is stark.

Stallone reportedly washed his clothes in the shower because it cost too much to go to the laundromat. The character shaped by those years later became part of a Hollywood library Amazon valued highly enough to spend $8.45 billion acquiring.

For Stallone, “Rocky” changed a career. For Amazon, the story remains an asset it can still put back to work.

Related: Apple secret new device is a challenge to Amazon

Saudi Aramco CEO Amin Nasser is warning that the global oil market has lost much of the buffer that normally helps keep fresh supply problems from quickly spilling into fuel prices and everyday costs, as reported by Seeking Alpha.

Since the Iran war began, nearly 3 billion barrels of oil supply have been lost, while about 1 billion barrels have been drawn from global stocks.

Depleted inventories leave less room to absorb the next disruption. Even if shipping flows improve, governments and energy companies would still need to rebuild those reserves while continuing to meet normal demand.

The bigger issue, then, is not just whether supply returns. It is how quickly the market can rebuild its safety cushion.

Aramco’s warning is really about what happens after the oil crisis

Nasser is essentially arguing that even if the immediate geopolitical shock from disruptions in the Strait of Hormuz eases, the oil market wouldn’t return to normal as quickly as is commonly perceived.

Speaking at the Energy Intelligence Forum in London, he said the world entered the crisis with almost 10 billion barrels of oil stocks.

Since the Iran war began, nearly 3 billion barrels of gross oil supply have been lost, while more than 1 billion barrels have been pulled from inventories to cushion the disruption.

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Aramco now estimates that less than 6 billion barrels of commercial inventories remain, with much of that oil not practically available because some stocks are needed to keep pipelines, terminals, and other infrastructure operating.

The “scarily thin” argument is that 100 million barrels of emergency crude and diesel that the G7 recently agreed to release may soften the immediate squeeze.

Nasser’s assessment, however, was much harsher: “Emergency reserves might buy us a winter. They cannot fix long-term supply.” 

Nasser also said rebuilding depleted inventories while simultaneously satisfying normal consumption could take up to two years. He also argued that without Saudi Arabia’s East-West pipeline, which bypasses Hormuz, Brent could have reached $200 a barrel.

It’s important, though, for investors to understand that flow recovery isn’t stock recovery.

Middle Eastern shipments are already recovering. 

Gulf oil flows, excluding Iran, averaged about 81% of pre-war levels in September, while crude and condensate exports recovered to roughly 91%, as reported by Reuters. Yet refined-product exports were only around 60% of pre-war levels.

That helps explain why Brent can hover around $100 even while diesel and other fuels remain exceptionally expensive.

The refining side may actually be the bigger problem. Kuwait Petroleum CEO Shaikh Nawaf Al-Sabah estimates that the Iran war has left the world short roughly 6 million barrels a day of refined products. He warned that there simply is not enough spare refining capacity elsewhere to compensate for shuttered Gulf facilities. 

U.S. data reinforces that point. 

American diesel inventories fell to 107.9 million barrels in September, the lowest seasonal level in records dating back to 1982, while retail diesel prices climbed above $6 a gallon, according to Binance.

That said, I interpret Nasser’s warning as bigger than a call for $150 oil. The market has burned through much of its safety cushion, which makes the next disruption potentially more painful.

And even when supply normalizes, I think rebuilding inventories could create another source of demand that markets are underestimating. 

Wall Street still sees room for Brent to cool from here

Using Brent at around $99.49 a barrel on Oct. 6 as the comparison point, most major banks still expect oil prices to ease from current levels even as Middle East risks keep the market volatile.

Here are the latest publicly reported forecasts:

• Morgan Stanley: $100/bbl in Q4 2026, roughly 0.5% upside from current Brent. It also sees $95 in Q1 2027 before prices ease further. 
• UBS: $95/bbl by year-end 2026, about 4.5% downside. UBS sees $90 by March 2027 and $85 by mid-2027. 
• Bank of America: $95/bbl by year-end, about 4.5% downside. Its base case is much calmer than its stress scenario, which could send Brent above $150 if supply disruptions worsen materially. 
• HSBC: $95/bbl for Q4 2026, about 4.5% downside, with $85 forecast for 2027. 
• Goldman Sachs: $85/bbl by December 2026, implying roughly 14.6% downside, followed by about $80 in 2027. 
• J.P. Morgan: $78/bbl at year-end 2026, around 21.6% downside, with its July framework pointing to roughly $64 on average in 2027. 
• Citi: $70/bbl in Q4 2026, about 29.6% downside, and $65 on average in 2027.

Chevron, ConocoPhillips, and even United are preparing for a tighter oil world

Nasser is not alone, and executives at major U.S. companies have been talking about the same scenario. 

Chevron (CVX) CEO Mike Wirth delivered an unusually similar message, as reported by Reuters on Oct. 6, saying that the global energy system is now more fragile than it was earlier in the Iran conflict, with crude and refined-fuel buffers continuing to shrink. 

Wirth had already warned in September that the mechanisms that restrained crude earlier in the conflict had largely been exhausted: “I think the risks remain to the upside over the next few months.”

To me, Chevron and Aramco are describing essentially the same vulnerability from different market positions. Inventories absorbed the first shock, but they cannot absorb shocks indefinitely.

ConocoPhillips (COP) is somewhat less alarmist, but its former CEO and current executive chairman, Ryan Lance, is also arguing for a structurally higher price floor, as reported by Reuters. Lance said he sees WTI’s floor moving toward $70 a barrel, with a longer-run mid-cycle level of roughly $65 to $70. 

But Lance also identified the longer-term problem. “The real strategic question for companies like mine is where the conventional production is going to come from,” he said.

Occidental Petroleum (OXY) CEO Vicki Hollub made a related argument even before the Iran shock intensified, saying in February that U.S. producers would need oil at roughly $70 to continue growing output, as BOE Report noted.

Moreover, the implications are already spilling well beyond Big Oil.

United Airlines (UAL) CEO Scott Kirby told employees in March that the carrier was preparing for Brent to reach as much as $175 a barrel and potentially remain above $100 through the end of 2027, according to Reuters. 

At those levels, Reuters calculated United’s annual fuel bill could increase by roughly $11 billion.

I think United is particularly useful confirmation because an airline has the opposite economic exposure of Aramco. 

Saudi Aramco generally benefits from expensive crude; airlines generally do not. When companies on both sides of the barrel are preparing for prolonged tightness, I pay closer attention.

What I think this means for consumers and investors

For consumers, I would watch diesel before obsessing over Brent. 

Crude gets the headlines, but diesel moves trucks, farm equipment, construction machinery, and much of the industrial economy, while jet fuel feeds directly into airline costs. When those fuels stay expensive, the impact spreads through shipping, groceries, airfare, and manufactured goods.

That pressure is already visible.

U.S. diesel recently reached about $6.50 a gallon, while airlines have cut less-profitable routes as fuel costs rise. The U.S. services sector is also seeing its strongest input-cost pressures since 2022, with energy a major driver.

For investors, I see a more complicated setup than simply “oil stocks go up.” Higher prices can boost cash flow for Exxon, Chevron, and ConocoPhillips, while refiners can benefit from strong margins. But $100-plus Brent is not guaranteed to last as Gulf exports recover and strategic reserves are released.

What changes my view is the lack of cushion. Even if Hormuz normalizes, depleted inventories still need to be rebuilt.

I would watch throughput, diesel stocks, refinery availability, and reserve replenishment closely. To me, that keeps energy a macro risk well into 2027.

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For years, that choice was easy. Bonds paid almost nothing, so income-seekers preferred high-yield dividend stocks.

That math has changed.

The Treasury note that matures in a decade now yields around 5.3%. A retiree can lock in steady income without being exposes to stock market volatility.

So why take on stock market risk at all? Because history says dividends do far more than pay the bills.

Why dividends matter for investors

Dividends have quietly driven stock returns for nearly a century.

According to a report from Hartford Funds, dividends accounted for 33% of the S&P 500’s total return between 1940 and 2025. 

Here’s what separates a dividend from a bond payment:

• A Treasury coupon stays fixed until the note matures.
• A dividend can rise as company profits grow.
• Reinvested dividends buy more shares, which then pay their own dividends.
• Share prices can climb over time, allowing you to benefit from capital gains. 

Here’s a simple example.

Allocate $10,000 in a Treasury note at 5.3%, and you collect $530 a year. Put the same amount in Altria at about 6.5%, and you collect roughly $650.

This gap will grow if the dividend keeps rising.

Verizon stock is a a telecom giant

Similar to other telecom companies, Verizon had a customer problem. More subscribers were leaving each quarter, a measure the industry calls churn.

Then CEO Dan Schulman took over last October and focused on customer retention. The turnaround is showing up in the numbers.

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Consumer postpaid phone churn fell to 0.84% in the second quarter, down from 0.90% in the first quarter. 

In Q2, Verizon (VZ) reported free cash flow of $6.4 billion, up 24% year over year. Verizon raised its full-year FCF growth forecast to between 9% and 10%. 

“We want to earn back your confidence with execution, not with promises,” Schulman stated.

With a quarterly dividend expense of around $2.9 billion, Verizon’s dividend payout ratio is less than 50%. 

CFO Tony Skiadas made the priority clear at Citi’s Global TMT Conference on Sept. 9.

“Our commitment to the dividend is ironclad, and we’ve raised the dividend for 20 straight years,” he said.

Altria stock is a Dividend King

Altria (MO) faces a shrinking market and sluggish customer spending. Its domestic cigarette volumes fell 3.2% in the second quarter.

Yet the checks keep growing. Altria just raised its quarterly dividend to $1.11 per share, its 61th increase in 57 years, making it a Dividend King.

The secret is pricing power. Marlboro held 59.6% of the premium cigarette segment, and smokeable products earned an adjusted margin of 64.8%.

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Adjusted earnings per share rose 4.9% to $2.80 in the first half. Altria also returned nearly $3.9 billion to shareholders via dividends and buybacks in this period.

“First and foremost, we remain committed to delivering strong shareholder returns. Obviously, our primary vehicle to do that is by way of the dividend,” CFO Heather Newman said on the second-quarter earnings call.

Verizon and Altria dividend ratios compared

Key dividend ratios for Verizon

• Annual dividend: $2.83 per share ($0.7075 quarterly)
• Dividend yield: 6.2%
• Free cash flow payout: About 58% ($5.9 billion in dividends vs. $10.2 billion in first half free cash flow)
• Dividend streak: 19 straight years of increases
• 20-year dividend growth CAGR: 2.8%

Key dividend ratios for Altria

• Annual dividend: $4.44 per share
• Dividend yield: About 6.4%
• Dividend streak: 57 years
• Free cash flow payout 2026 (e): 74% ($7.4 billion in dividends vs. $10 billion in 2026 FCF)
• 10-year dividend growth CAGR: 6.2%

The risks dividend investors should weigh

The U.S. government backs a Treasury note, while a dividend is not guaranteed.

So, it’s essential to gain exposure to blue-chip stocks in mature markets that can generate cash flows across market cycles. 

Verizon’s wireless service revenue still slipped 0.7% in the second quarter. Meanwhile, Altria’s customers may pull back spending amid a challenging macro environment. 

Inflation is outpacing wage growth, pushing many toward cheaper discount cigarettes, CFO Heather Newman said. Discount brands gained 2.6 share points in the second quarter.

“The consumer remains under pressure. Gas prices and inflation remain elevated,” Altria CEO Sal Mancuso said.

Still, both companies keep raising their forecasts and paying down debt. For patient investors, that second envelope may be worth opening.

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The new names JPMorgan added help clients diversify their investments beyond the crowded chip trade. The bank highlighted three names in particular out of the new picks, and they fell under the Value and Growth categories.

American Express (AXP) was added as the main Value pick. Thermo Fisher Scientific (TMO) and Liberty Energy (LBRT) were the primary Growth picks, with the bank linking Liberty to the rising power needs of AI data centers. 

American Express as the Value pick

American Express (AXP) is a credit card company that makes its money from annual card fees and interest. It also earns money by charging a fee every time a shopper makes a purchase with an AmEx card.

The stock has dropped about 18% to 19% so far this year because investors worry about rising consumer debt and people becoming more prudent with spending due to economic pressures.

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However, JPMorgan analyst Richard Shane thinks investors shouldn’t be too worried. He said, “AXP remains a core holding for investors looking for industry leading high returns and disciplined return of capital.”

Shane also points out that American Express produces steady profits and has a habit of buying back about 3% of its own shares every year, CNBC reported. It also delivers a regular dividend.

When a company buys back its own shares, it reduces the number of shares available in the market, which in turn increases shareholders’ earnings per share. Buybacks alongside its dividend give AmEx two ways to return cash to shareholders while they wait for the stock to recover.

Thermo Fisher as the biotech Growth pick

Thermo Fisher (TMO) sells lab equipment, testing tools, and manufacturing services to drug makers and research labs. When a drug company needs to make a new vaccine or build a test for a disease, Thermo Fisher often supplies the equipment and chemicals that it needs.

TMO is up more than 25% in the past three months, and JPMorgan analyst Casey Woodring expects the stock to keep climbing.

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He cites a new partnership deal Thermo Fisher has with the Mayo Clinic focused on catching diseases earlier, and government efforts to bring drug manufacturing back to the US.

Woodring also likes that Thermo Fisher is a growing player in AI-powered lab machines. UBS had a similar view earlier in September, upgrading Thermo Fisher to a Buy rating with a $730 price target.

Liberty Energy as the AI power Growth pick

Liberty Energy (LBRT) helps oil and gas producers drill wells. It has also built a second business selling small power systems that can generate electricity on-site when the main power grid is having capacity issues.

That second business is why JPMorgan is bullish on LBRT. Analyst Arun Jayaram wrote that the market setup supports a “multi-year demand runway” thanks to rising electricity demand from AI data centers.

He also said he expects power shortages to extend into 2030. He calls Liberty a “behind-the-meter” provider because its machines run at the customer’s site and skip the public grid entirely.

Liberty shares are already up about 52% over the past 12 months, and the reason is quite simple. Big tech firms keep building more AI data centers, and they need a steady supply of electricity to run them. That makes Liberty’s power systems more valuable right now.

What everyday investors should think about before buying

Investors should treat JPMorgan’s Overweight list as research material. Each stock it names still has its own risks.

AmEx could keep falling if consumer credit gets worse. Thermo Fisher’s gains depend on biotech customers maintaining their spending rate and the Mayo Clinic deal turning into actual sales. And Liberty Energy’s rise is tied to the AI data center boom, which could slow if big tech buyers decide to cut spending.

As I’ve written in previous articles for TheStreet, the smart move with a list like this is to treat it as a starting point for your own research. Compare each name to what you already own, consider how much a single stock would affect your portfolio, and read each company’s latest earnings report before buying.

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On the Oct. 5 episode of “Mad Money,” Cramer said commodities strategist Carley Garner, whose charts he has often featured on the program, now sees a “high probability” setup for a strong gold bounce.

This offers meaningful relief for investors who have watched gold slide from nearly $5,600 an ounce to around $4,100.

The case rests on more than oversold conditions. Garner is also leaning on gold’s historically strong late-September-to-late-October seasonality and the possibility that falling oil prices eventually pull Treasury yields lower.

That last link matters most. If yields stay elevated even as oil falls, the rebound case weakens substantially, which makes the bond market, not gold itself, the key test of Cramer’s call.

Cramer sees a sharp gold rebound after the $1,500 washout

Gold’s tremendous 2026 round trip has Jim Cramer looking for the next major move.

For perspective, the shiny yellow metal traded as high as $5,595 an ounce in late January before collapsing back toward $4,100. On Oct. 6, spot gold was around $4,128, putting it almost $1,470 below that January intraday peak. U.S. gold futures were around $4,155. 

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On “Mad Money,” Cramer, citing Garner, argued that the sell-off may finally have created the conditions for a substantial short-term rebound. 

Garner had warned around gold’s January peak that the precious-metals market looked “broken” and was vulnerable to a major correction. Cramer’s point on Oct. 5 was that, after months of bearishness, her technical view has changed.

There are multiple pieces to that change.

First is seasonality. Cramer cited Moore Research data showing December gold futures gained in 12 of the past 15 years when bought around Sept. 29 and held through October 25. He linked the pattern to demand for Indian festivals and weddings, plus China’s Golden Week. 

Garner believes gold may be forming a short-term bottom. 

October futures plunged about $170 in a single day, but prices then held near $4,150, while momentum indicators indicated the metal was oversold.

If that support holds, her charts point to gold rebounding toward $4,500, and possibly $4,650. From around $4,155, that would mean roughly 8% to 12% upside.

Cramer summarized the setup: “The charts interpreted by Carley Garner suggest that we’ve got a high probability set up for a strong bounce in gold this month.”

Cramer’s gold bounce depends on Treasury yields finally breaking lower

Perhaps the biggest risk to Jim Cramer’s gold call isn’t gold itself. It is the bond market.

Cramer’s case, built around Garner’s charts, basically runs through three linked moves: oil falls, Treasury yields ease, and gold rebounds. 

Gold pays no income, so rising yields increase the appeal of government bonds and raise the opportunity cost of holding bullion. Falling yields tend to have the opposite effect.

That relationship has been unusually strong. 

Cramer said Garner found that gold and the 10-year Treasury note had settled in the same direction 94% of the time over the previous 30 sessions. Because Treasury prices rise when yields fall, anything pushing bond prices higher could help gold.

Garner sees another potential catalyst in oil. 

With West Texas Intermediate around $89, she believes a break lower might send crude toward roughly $75. Cramer argued that cheaper oil could ease inflation pressure and pull yields down with it.

But there is an important catch. Earlier in the same episode, Cramer noted that oil had already fallen while Treasury yields kept climbing, saying market patterns had “gone out of whack” and concluding that “Bonds, not oil, are telling the truth at least longer term.”

I feel that makes a yield an interesting confirmation signal. 

Related: Jim Cramer’s net worth: How much does ‘Mad Money’s' stock-picking superhost make?

Watch yields before chasing Cramer’s gold rebound

I feel that Cramer and Carley Garner are essentially making a near-term technical call, while Wall Street’s biggest gold bulls are making a much longer-term structural bet.

Garner sees gold rebounding toward 4,500 to 4,650 if support holds around $4,150, helped by seasonality, lower oil, and potentially lower Treasury yields.

In contrast, Goldman Sachs has targeted $4,900 by year-end, while UBS sees nearly $5,400 over 12 months, and J.P. Morgan has forecast about $6,000 in Q4 2026, with upside toward $6,300 in 2027. 

HSBC is more restrained, as I previously covered, with a $4,490 average for 2026, though it still sees stronger central-bank demand emerging near $4,000.

I read those forecasts as evidence that Cramer’s call is not especially aggressive. 

The banks are focused on central-bank buying, reserve diversification, ETF demand, fiscal concerns, and geopolitics.

That said, I also think both views can be right. Gold could rally toward Garner’s resistance zone, stall near the 200-day moving average, and still resume a longer-term advance later.

For now, I’d watch three things: $4,150 support, oil prices, and especially Treasury yields. If yields refuse to fall, I’d view Cramer’s rebound case as materially weaker.

Related: ‘Bond King’ issues stunning warning to stock market investors

Her loyalty account holds a healthy stack of miles but not enough to cover the entire ticket price.

For years, that left two options. She could pay the entire fare in cash and leave her miles untouched. Or she could hold off on booking until she earned enough miles for a free ticket.

This small gap is where many loyalty points end up sitting unused. Now one of the world’s biggest airlines wants to close it.

Why airline miles matter more than ever

American Airlines is no newcomer to loyalty, given that it created the first airline loyalty program.

The airline itself is also hitting a big milestone. American Airlines (AAL) traces its roots to an air mail carrier in 1926, and it is celebrating its 100th year in 2026.

Also Read: American Airlines CEO delivers stark warning on rising fuel costs

Today, American runs more than 6,000 daily flights to more than 350 destinations in more than 60 countries. It serves more than 200 million customers a year. 

Loyalty is also big business for the airline. At Morgan Stanley’s 14th Annual Laguna Conference on Sept. 16, CEO Robert Isom said:

• American expects about $8 billion in cash this year from its credit card partnership with Citi.
• He said that number should grow to over $10 billion by 2030.
• He also expects another $1.5 billion in pretax profit from the deal.

Put simply, every member who uses the program helps feed one of American’s biggest moneymakers.

American Airlines adds cash and miles booking option

Here’s the fix for American Airlines travelers. As the feature rolls out in the coming weeks, eligible AAdvantage members can combine cash and miles on aa.com and the American app.

“At American, we’re continually evolving the AAdvantage program to deliver more choice and flexibility for our members,” said Scott Long, American’s senior vice president of AAdvantage.

“The introduction of cash and miles is another step in our ongoing effort to provide AAdvantage members with more personalized ways to engage with the program and get more value from their membership,” he added.

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The process takes just a few steps:

• Log into your AAdvantage account and pick your flights with cash.
• Decide whether you want the optional trip insurance offer at checkout.
• Use a slider to choose your mix of cash and miles.
• Watch the cost summary update automatically.
• Enter your payment details and book.

In plain terms, you no longer need a full award balance to put your miles to work.

More AAdvantage rewards for members

Cash and miles is the newest piece of a wider push. American has also added several new Loyalty Point Reward options. 

Members who reach 15,000 Loyalty Points in a membership year can choose two inflight food and beverage coupons.

Related: Southwest Airlines CEO says the quiet part about airfare out loud

New York Times subscriptions are also on the menu. At 15,000 Loyalty Points, members can pick 12 months of Games, Cooking, or The Athletic.

At higher levels, from 175,000 up to 750,000 Loyalty Points, members can choose 12 months of New York Times All Access, which includes News, Games, Cooking, Wirecutter, and The Athletic.

Million Miler members will soon get a wider selection of gifts at each milestone, too.

What American’s CEO says about loyalty

Isom spent much of his Laguna appearance promoting the program. He called AAdvantage the industry’s first and largest loyalty program.

“We’ve seen AAdvantage enrollments at record levels,” Isom said.

“We offer day in and day out more value in that program for our customers than anyone else,” Isom added.

He also explained why giving members more choice matters to the airline.

“What I really like is the flexibility of our offerings that just encourage a much, much tighter relationship in the American Airlines ecosystem,” he said.

Cash and miles fit that idea neatly. The easier it is to use miles, the more reason members have to keep earning them.

Why loyalty matters for AAL stock

Despite a challenging macro environment, American Airlines has grown top-line revenue primarily due to strong customer demand. 

On its second-quarter earnings call, the airline giant guided to 16% to 19% revenue growth in the third quarter.

Given consensus estimates compiled by TIKR, American Airlines is projected to increase revenue by 15.7% year over year to $63.21 billion in 2026.

However, it is expected to report a loss per share of $0.61 this year, compared to earnings of $0.17 per share in 2025. 

The primary headwind for airline companies this year is volatile fuel prices. 

“I don’t like where fuel is today,” Isom told the conference.

CFO Devon May put a number on it. Fuel has climbed roughly $1 a gallon for the fourth quarter alone, he said. Every penny is worth about $10 million in a quarter.

That’s why the loyalty program keeps coming up when management talks about upside. It’s a lever American controls, unlike jet fuel prices.

May said the company will update its fourth-quarter outlook on its next earnings call. For travelers, the news is simpler: Those leftover miles are about to become a lot more useful.

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ABNB shares rose after the call and closed at $162.43 on Friday, Oct. 2, ending its losing streak. The stock also increased by about 4.2% over five trading sessions.

KeyBanc believes the new business Airbnb is integrating into its core model could pay off in the future.

KeyBanc lifts Airbnb to Overweight with a $191 target

On Oct. 2, 2026, KeyBanc analyst Sergio Segura upgraded Airbnb from Sector Weight to Overweight, meaning he believes the stock is a buy. He set a $191 price target along with the new rating, an increase of about 19% from its Oct. 1 close of $160.47, according to CNBC.

Also read: Airbnb CEO says travelers are about to see big changes

Segura has covered internet and travel stocks at KeyBanc for several years, and he often watches for companies at a turning point. Citizens also recently raised its Airbnb target to $200, so KeyBanc isn’t the only one with a positive view of the stock.

In fact, of the 34 analysts covering the stock, 22 rate it a Buy, while 11 have Hold ratings, and there is only one Sell rating. 

Why hotels are becoming Airbnb’s new growth engine

Airbnb makes most of its money by linking up travelers with people who rent out homes, apartments, and spare rooms. Then it charges a service fee when travelers book through those listings.

However, that model has faced challenges in cities like New York and Chicago, which have strict short-term rental rules. But working with hotels has begun to ease those difficulties. 

KeyBanc noted that the number of people booking hotel nights through Airbnb is increasing three times faster than the number of people booking homes, Investing.com reported.

“Hotels are currently a single-digit percentage of Nights but growing three times faster than Airbnb’s homes segment,” said Segura.

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Here’s a detail that I find interesting. Some first-time guests who book a hotel on Airbnb later book a home.

“Roughly 35% of first-time hotel guests return to Airbnb to book a home,” Airbnb CEO Brian Chesky said. “What this shows is how hotels are introducing new guests to Airbnb, and many of those new guests don’t just come back and book hotels; they come back and they book homes. Hotels are making homes stronger.”

That’s the kind of positive change shareholders want to see.

The AI rollout and the cheap valuation case

On Sept. 30, Airbnb updated its U.S. platform so it could include a voice search option, AI filters, and AI-generated summaries for the places it recommends.

KeyBanc thinks these tools will help travelers plan their trips, which could end up bringing more customers to the business.

Related: Jim Cramer says battered travel stock everyone uses is a ‘steal’

Airbnb trades at about 14.1 times its estimated 2028 EV/EBITDA, which is below its three-year average of 16.7 times. That’s after the stock’s 18% year-to-date gain.

Because of that, Segura said the stock is too cheap to ignore, since it trades at a cheaper valuation than traditional hotel chains despite stronger growth.

What ABNB investors should watch before buying in

Airbnb plans to report its third-quarter earnings on Nov. 5. Wall Street expects to see a double-digit increase in the total number of nights booked. If the company doesn’t meet expectations, the stock could fall again. Also, the regulatory pressure affecting short-term rentals hasn’t completely disappeared.

New investors thinking of buying the stock could wait for the November report before putting money in, while current holders may prefer to add to their positions gradually rather than all at once.

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UBS looked at the third-quarter delivery report and came away with the same answer it had going in: not yet convinced. The bank held its Neutral rating and kept its price target right where it’s been.

Tesla beat delivery expectations in Q3, which is the headline. But its energy business fell short, and at roughly 345 times earnings, a single strong delivery quarter doesn’t do much to resolve the bigger question.

You need a lot more than one good month on vehicles to justify what the market is paying for this stock. That’s been UBS’s position, and nothing in this report changed it.

Better than feared isn’t a reason to pop champagne, but it keeps the story alive. The stock shrugged and moved on after the report. That probably tells you more about where the valuation debate actually stands than any single analyst note.

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A delivery beat doesn’t close the valuation gap

Tesla shipped 486,500 vehicles in the third quarter, beating consensus estimates by roughly 5% to 6%. Model 3 and Model Y did the heavy lifting, as they usually do.

For a company that’s been dealing with slowing EV demand, more competition from every direction, and the phaseout of U.S. electric-vehicle tax incentives, clearing the bar by that margin is a meaningful result. It shows the core business isn’t in free fall.

Deliveries were still lower than they were a year ago, though. HSBC has a theory on that. The Inflation Reduction Act credits expiring pulled a bunch of buyers forward, which made earlier quarters look stronger than they really were.

Now you’re comparing against an inflated base. The beat happened. You just need to know what you’re actually looking at when you see it.

What it does tell you is that Tesla can still surprise people on the upside in its core business, even when conditions aren’t great. That’s worth noting. But it doesn’t answer the question that Wall Street keeps circling back to, which is whether any of this justifies what you’re paying for the stock.

The one Tesla number Wall Street isn’t talking about

Tesla’s energy-storage business came in below what UBS was expecting, and that’s the number that deserves more attention than it’s getting.

The bank trimmed its earnings estimate slightly to account for the shortfall, but that’s not really the point. It’s that energy is quietly one of the more interesting parts of Tesla’s business right now, and it had a softer quarter.

UBS called it a lumpy business, meaning the results can swing significantly from one quarter to the next depending on when large contracts close. That’s fair, since one soft quarter in energy doesn’t tell you much about the longer-term trajectory.

But it is worth watching because energy generates above-average margins for Tesla compared to its vehicle business. Investors tracking growth beyond automotive should be paying close attention to how consistently this segment performs going forward.

A softer quarter isn’t a red flag. It’s a reminder that this part of the business is still unpredictable, and that investors pricing in Tesla’s energy future are doing so with limited visibility into the near term. That uncertainty is worth keeping in mind.

What paying 345 times earnings actually means

At around $378 per share, Tesla is trading at roughly 345 times earnings, according to Investing.com. UBS’s price target sits at $385, which is almost exactly where the stock is trading.

That’s not a coincidence. It’s the bank saying there’s no compelling case to buy or sell at these levels right now.

A multiple like 345 isn’t pricing in car sales. It’s pricing in full self-driving becoming a real commercial product, humanoid robotics becoming a business, AI generating meaningful revenue, and energy storage scaling up substantially, all happening within a reasonable timeframe.

Every single one of those things has to work. And most of them are still unproven.

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None of this makes Tesla a sell. The company has a track record of doing things people thought it couldn’t do.

But you’re paying a serious premium for what might happen, not for what’s happening today. UBS isn’t being negative about the company. It’s just refusing to get ahead of itself on the price.

From $157 to $475: why no two analysts see Tesla the same way

Look at the analyst spread after this report and you’ll see exactly why Tesla remains one of the most polarizing stocks on the market.

Baird came away with an Outperform rating and a $475 price target, calling the delivery beat a positive signal. Truist Securities held its ground at Hold with a $370 target. HSBC, which still carries a Reduce rating, actually raised its target, but only to $157.

The gap between the most bullish and most bearish targets for the same stock, after the same report, is enormous.

Part of the reason you get that kind of spread is that analysts are essentially betting on different versions of Tesla. The car company version. The AI company version. The robotics play.

Those aren’t the same bet, and the price target you land on depends almost entirely on which one you think wins. Baird is making one of those bets. HSBC is making another. UBS is saying it needs to see a lot more before it picks a side, and at these prices, that’s a defensible position.

The delivery numbers show the business isn’t falling apart. But a stock priced for perfection across multiple unproven businesses is one where you have to be sure before you step in.

Right now, there’s not enough certainty to be sure. And that’s exactly what UBS is saying.

Related: The Robotaxi payday Tesla promised owners isn’t coming

That changed, briefly and publicly, after watching a rival’s AI demo live on air. Here is what Cramer actually said, the stock moves that gave his comment real weight, and what it all means for anyone holding either name heading into the rest of the year.

Also read: Jim Cramer noticed something odd about the stock market

Jim Cramer says he may quit Amazon for the rival

Cramer made the comment live on CNBC’s Squawk on the Street on September 28, after watching a demonstration of Meta’s (META) new AI shopping capability. “I’m an Amazon guy, but maybe I shouldn’t be. This seemed impressive,” he said, speaking as a shopper describing his own buying habits rather than making a stock call.

The timing gave the remark unusual weight. Meta shares had climbed roughly 24% over the prior month. Amazon fell roughly 8% over the same stretch. Investors were already debating which company was winning the fight for online shoppers before Cramer weighed in.

At the center of the shift is Meta’s Muse AI assistant, which can search listings across retailers rather than defaulting shoppers to a single marketplace. That creates a potential threat to Amazon’s roughly $19.8 billion advertising business. The threat is at the exact moment where product discovery and purchase decisions begin.

The backdrop stretches back three weeks. Meta launched Muse on September 8, and shares jumped 11.3% on September 21 as investor demand for the tool built following signs of strong early adoption, The Motley Fool reported.

Why Amazon’s ad business is suddenly exposed

Amazon did not wait to see how the competitive threat played out. The company began blocking Muse from accessing its platform on the night of September 20, cutting off the agent’s ability to browse or complete purchases through Amazon’s own storefront.

Shopify took the opposite approach. The e-commerce platform opened its doors to Muse the same week Amazon shut them, and its stock closed up more than 7% on September 21. Investors rewarded the partnership that allowed the AI agent to complete purchases through Shop Pay across Shopify stores.

The stakes for Amazon go beyond a single feature. More than 350 million customers used Alexa for Shopping over the past year. Those shoppers spend over 40% more per order than typical customers. Amazon has a strong incentive to protect against any outside agent redirecting that traffic, 24/7 Wall St reported.

Even Meta’s reach into physical retail is expanding through the same technology. Morgan Stanley has pointed to Muse’s ability to open browsers, fill out forms, and negotiate prices as a threat that could reshape car buying. Six major auto retail groups seem more exposed to the shift than others in the sector.

Related: Jim Cramer’s net worth: How much does ‘Mad Money’s' stock-picking superhost make?

Cramer’s own limits on the AI trade

Cramer was careful to frame his comment narrowly. He said he was speaking only as a shopper describing his own buying habits, rather than an explicit call to sell Amazon stock.

He also drew a clear line around how far his trust in AI agents extends. Cramer said he was skeptical that consumers would want AI agents moving their money between banks. He would not give an agent his banking information because it does not seem safe.

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The comment also arrived just three days after Cramer had called Amazon a recession-proof buy on Mad Money. A demonstration of Meta’s shopping technology had him questioning his own allegiance to Amazon as a shopper within days of that call.

Cramer has pushed back on broader AI panic elsewhere too. Days later, he argued Wall Street may be overreacting to Muse’s threat across consumer stocks generally. He pointed to companies like Airbnb as largely insulated and compared the moment to the so-called SaaSpocalypse selloff that ultimately proved overdone, Benzinga reported.

What investors should watch going forward

The real test for Amazon’s ad business will show up in its own quarterly numbers. Warning signs would include ad revenue growth slowing from its recent 26% pace or paid units growing slower than last quarter’s 17% rate. Any sign that engagement with Amazon’s own AI shopping tools is losing momentum would matter too.

On Meta’s side, the signal to watch is whether Muse actually starts completing purchases with third-party merchants at meaningful scale. That is the behavior that would prove if shoppers are genuinely changing habits rather than just trying out a new feature.

Cramer himself has warned against treating any of this as a reason to abandon diversification across megacap tech. Owning Meta, Amazon, Netflix and Alphabet together can create a false sense of safety. All four remain exposed to the same technology spending and advertising cycles.

Related: Jim Cramer spills the beans to AI stock investors

On Monday, October 5, 2026, he joined the sellers. Burry booked a tax loss on Lululemon, his largest single holding, and moved the money into Deckers Outdoor (DECK), the maker of HOKA running shoes and UGG boots, according to Stocktwits. Deckers shares rose on the news, according to TipRanks.

This is not a change of heart. Burry plans to buy Lululemon back once a 30-day tax window closes, the report said.

Until then, a shoe company holds his seat. To me, the trade is smarter than it looks and riskier than he lets on.

Read More: Lululemon receives a warning as customers turn to rivals

The tax rule that put Deckers in Lululemon’s seat

The wash-sale rule bars investors from deducting a loss if they buy a “substantially identical” security within 30 days before or after the sale, according to the SEC’s Investor.gov. Deckers is a different company, so Burry’s Lululemon loss counts now.

Some early coverage labeled the move a wash sale. It is the opposite: a proxy swap avoids one, locking in the deduction while keeping sector exposure.

The timing is the cleverest part. Burry wrote that he tries to beat a selling rush that arrives in late October and peaks in early December. If he sold around his post, his earliest clean buyback would fall in early November, as that pressure builds.

He sold before the crowd and plans to return while it is still selling. Ordinary investors can run the same play, as long as the stand-in is genuinely a different security.

Deckers is a shaky stand-in for Lululemon

Burry expects the two brands to move in tandem during the window, according to Stocktwits. This year argues otherwise: Lululemon is down about 55% in 2026, and Deckers is down 23%, the same report noted.

The business mix explains the gap. HOKA generated $703.5 million of Deckers’ $1.02 billion in quarterly sales, according to its latest earnings release. That makes Deckers mostly a running-shoe company, while Lululemon lives and dies by lifestyle apparel.

That divide showed up last week. Nike (NKE) warned that its sales slump will worsen this fiscal year, Bloomberg reported. Its performance products grew while lifestyle Sportswear fell, a call transcript showed.

Deckers also brings its own catalyst. It reported its September quarter on October 23 last year, according to an SEC filing, so its next report could land inside Burry’s window. To me, that makes the proxy less of a hedge and more of a second bet.

Wall Street rates the stand-in above the OG

Lululemon sells premium yoga pants and athleisure. Its stock closed at a record $511.29 on December 29, 2023, and at an all-time low of $2.24 in March 2009, according to CompaniesMarketCap. It now trades more than 80% below that peak.

Comparable sales fell 9% last quarter, and the company cut its outlook again, according to CNBC. Shares also fell when former Nike executive Heidi O’Neill was named CEO, Reuters reported.

The 35 analysts tracked by Stock Analysis rate Lululemon a Hold, with an average target of $104.91, implying about 11% upside. They expect revenue to shrink 5.8% this fiscal year, so the stock trades as a turnaround, not a bargain.

Deckers closed at a record $223.11 on January 30, 2025, and at a split-adjusted low of about 8 cents in December 1998, according to CompaniesMarketCap. Its 27 analysts rate it a Buy with an average target of $120.41, implying roughly 52% upside, according to Stock Analysis.

Here is the twist. Both stocks trade near 10 times forward earnings, though Deckers is expected to grow revenue 7.4% this fiscal year. Deckers also repurchased $338 million of stock last quarter at an average of $103.79 a share, well above today’s price, its earnings release showed.

That may be why Burry left the door open to keeping Deckers. If the proxy fails, it could fail upward.

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Burry’s tax trade is now a market event

Tax-loss selling is usually quiet year-end bookkeeping. Burry narrates his to paying subscribers, turning private housekeeping into a public signal.

Lululemon already ranks among the S&P 500’s biggest decliners of 2026. Many holders sit on losses, and one of its best-known bulls just showed them how to harvest theirs without leaving the sector.

That could deepen the October selling Burry hopes to buy into. The real test comes in early November, when the window closes.

If he rebuys Lululemon and keeps Deckers, his conviction will be hard to question. If the window passes quietly, the calendar will have said more than anything he wrote.

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Happy Tuesday. Stocks were rising and oil prices were retreating as markets sought to build on the previous session’s gains.

The major U.S. indexes finished higher on Monday, with the Nasdaq closing at a record high.

“The rally in the market was tech-led once again, with the marginal easing of interest rate uncertainty along with a slight moderation in geopolitical risk — reflected in a dip in crude prices — allowing market participants to focus on the extraordinary earnings growth being delivered by AI names,” said Kyle Rodda, senior financial market analyst with Capital.com.

Rodda said that while the narrative justifiably remains captured by the short-term swings in expectations about global monetary policy and the developments in the war between the U.S. and Iran, “a less discussed factor driving the markets is extraordinarily strong (albeit concentrated) earnings growth expectations.”

“According to FactSet, earnings growth estimates for the upcoming earnings season have been upwardly revised to nearly 30%,” he added. “This follows on from the remarkable 50% growth delivered in Q2.”

The 10-year Treasury yield once again touched levels last seen in 2002, surpassing 5.3%, according to CNBC. The 30-year yield also breached 5.7% at one point, its highest level in 24 years.

The ADP Weekly Employment Change is scheduled for release at 8:15 a.m., followed by the International Trade in Goods and Services report at 8:30 a.m.

Somewhere in that invisible infrastructure, chances are that Eaton (ETN) had something to do with it.

Most people have never heard of Eaton. But if you work in a data center, fly on a commercial aircraft, or manage a utility grid, you probably depend on its products every day.

The company makes the circuit breakers, switchgear, transformers, and uninterruptible power supplies that keep electricity flowing safely and reliably. In a world where AI data centers are growing at an unprecedented pace, that has become an extraordinarily valuable thing to do. 

Bloom Energy is also emerging as a strong contender to help meet the growing energy demand from data centers. You may want to read my previous coverage, which provides three key reasons Morgan Stanley thinks Bloom could have a decisive competitive advantage.

Bank of America Securities analyst Andrew Obin reiterated a Buy rating on Eaton with a $490 price target this week, according to a note shared with TheStreet.

His conviction rests on a grounded observation: Channel checks show strong visibility and pricing in U.S. electrical markets, with data centers and utilities driving demand that flows into order books.

Also Read: Eaton Corporation PLC Latest News

What the Eaton CEO said, and why it matters

At the Morgan Stanley Laguna conference on Sept. 16, Eaton CEO Paulo Ruiz made a comment that would have been easy to miss, but landed for anyone tracking the company’s momentum. 

He said Eaton had a “very strong” July and August and expected third-quarter results to come in toward the high end of its guidance range, according to an Investing.com report.

“High end of guidance” from a company like Eaton is a signal that the demand the company has been describing publicly is actually showing up in real orders and real shipments.

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Obin maintained his Q3 EPS estimate at $3.54, which is at the top of Eaton’s $3.46 to $3.56 guidance range. The organic growth estimate for the quarter was also raised to 16.0% from 14.8%, reflecting stronger-than-expected performance from the electrical segment. 

Obin also raised his fiscal 2027 EPS estimate to $15.90 from $14.92, reflecting better electrical margins and lower corporate expenses.

The data center number that explains Eaton’s entire year

An Axios report shows data center spending jumped 57% year over year in July, reaching an annualized pace of $75 billion.

Of course, every one of those data centers needs power distribution equipment and circuit protection. Every one needs the industrial electrical infrastructure that Eaton has manufactured and installed for the last 115 years.

In fact, when hyperscalers announce billion-dollar campuses and AI infrastructure investments, Eaton is one of the first vendors they call.

Related: BofA cuts to the chase on AI data center demand

That’s showing up in orders. Twelve-month rolling average orders were up 41% in Electrical Americas, 33% in Electrical Global, and 17% in Aerospace as of the most recent quarter, according to Eaton’s statement. 

All of those orders represent multi-year infrastructure commitments that convert to revenue over extended installation timelines.

In the same quarter, Sales reached $8.5 billion — a company record — up 21% year over year (YoY), with organic sales growth of 14%, above the high end of guidance. That 7% difference comes from acquisitions. 

Eaton is growing organically at a pace the market would have considered extraordinary for this type of industrial company just two years ago.

Eaton’s European expansion and what it signals

Just this October, Eaton announced it is expanding its manufacturing facility in Schrems, Austria, by 5,000 square meters. 

The expansion is directly tied to rising European demand for power management infrastructure as electrification and digitalization reshape the continent’s energy landscape.

I want you to look beyond the square footage. And it’s fair to agree and conclude that in most cases, if not all, when a company expands manufacturing capacity, it’s making a capital commitment based on demand it expects to persist, not a one-quarter blip. 

What Wall Street thinks about Eaton

The broader analyst community shares Obin’s conviction. 

• Morgan Stanley raised its price target to $520 from $500.
• UBS upgraded to Buy with a $515 target from $450.
• RBC reiterated Outperform at $512 from $484.
• Bernstein maintained its Street-high Buy at $534.
• Wells Fargo initiated fresh coverage with an Overweight rating at $503. 
• Deutsche Bank adjusted its target to $521 from $493, keeping a Buy Rating.

Most firms are either maintaining or upgrading their bullish stance. ETN shares are up 38.07% year to date and 17.04% over the past year, according to Yahoo Finance data. The three-year return is 115.34%, and we’re likely to see more upside.

The building you’re sitting in right now probably has Eaton equipment inside it. The data center processing your AI requests almost certainly does. That company, which is making sure all of that works reliably, just said its best months of the quarter were July and August.

Obin believes the third quarter will prove it. And I also think Eaton is one to watch closely, just like Bloom Energy.

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Bill Gross, the legendary investor known as the “Bond King,” warns that persistently high yields could potentially pose a direct problem for stocks by squeezing profit margins and reducing the valuations investors are willing to pay, as reported by Fortune.

It’s a pointed message for shareholders in expensive growth stocks and companies relying heavily on debt.

Gross is not calling for an immediate market collapse, though. His concern is that the financial backdrop itself is changing as government and corporate debt rise, Treasury yields stay elevated, and borrowing costs remain higher for longer.

Why Bill Gross still gets Wall Street’s attention

Gross earned the “Bond King” title as he effectively turned fixed income from a buy-and-hold corner of finance into an actively traded asset class for total return. 

He co-founded PIMCO in 1971 and later ran its flagship Total Return Fund, which became the world’s largest bond fund.

Morningstar named him its Fixed-Income Manager of the Decade in 2010, as reported by the Boston Herald, while PIMCO still credits the strategy he pioneered with combining coupon income and capital appreciation rather than simply “clipping coupons.” 

Gross has also made multiple prescient calls on traditional bond investing that aged well. In 2007, before the financial crisis fully erupted, he identified collapsing confidence in ratings and structured credit as a mechanism capable of freezing lending markets, Quartz noted. 

His more recent energy bet has also paid off. Gross has described a portfolio of pipeline master limited partnerships as one of his best investments, with Western Midstream producing a total return of more than 200% over five years, a Business Insider report confirmed.

Bill Gross sees valuation problem building beneath the stock market

For stock investors, Gross’ warning is essentially that the financial system is carrying far greater debt at a time when that debt has become much more expensive to finance.

U.S. domestic nonfinancial debt reached $84.1 trillion in the second quarter, including $24 trillion owed by businesses and $38.7 trillion by governments. Debt was still growing at an astonishing 5.2% annualized pace.

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Gross’ concern is that borrowing can support growth and asset prices for a while, but eventually the bill shows up through higher interest expense, persistent inflation, and tighter financial conditions. 

The AI boom adds another layer. He has pointed to roughly $1 trillion of debt-financed AI investment by 2027, while AI-linked hyperscalers now represent about 16% of the U.S. investment-grade bond market.

For me, that is where this stops being a bond story and becomes a stock-market story.

The 10-year Treasury yield recently reached 5.34%, its highest level since 2002, as reported by Reuters. Gross argues that “higher yields over time will contract profit margins,” and I think that risk works through stocks in two ways.

First, companies paying more to borrow have less room for investment, buybacks, and earnings growth. Second, investors no longer need to accept the same valuation risk when government bonds offer yields above 5%.

The S&P 500 is near record territory, trading at around 19.2 times forward earnings, according to Reuters. The multiple has already compressed from roughly 22 earlier this year, but elevated yields still raise the hurdle for expensive stocks.

I would not read Gross as predicting an imminent crash. 

Even if earnings keep growing, stock prices can struggle if investors decide those earnings deserve a lower multiple in a world of persistently high yields.

What Gross wants investors to do now

Gross’ investment philosophy can be effectively condensed into four words: “Preserve and protect.”

He is unusually defensive across both major asset classes.

On bonds, Gross advises avoiding longer-term debt and makes an exception for one-year Treasury bills yielding around 4.55%. Investors can collect meaningful income without taking the same price risk that comes with owning a 10- or 30-year bond if yields move higher again.

On stocks, he is not saying investors should liquidate everything. 

His objection is primarily to paying aggressive valuations while financing costs remain high. Gross says he is suspicious of AI hyperscalers unless their P/E ratios fall below roughly 20 times earnings.

So what he’s calling for is for investors to demand more compensation for risk.

A company financing growth at 3% rates can justify a different valuation than one refinancing debt at 6%. Similarly, a 35-times-earnings stock has a higher hurdle to clear when short-term government securities yield more than 4% and the 10-year Treasury yields more than 5%.

Gross also points toward income-producing securities trading at discounts to net asset value, although he warns that those can suffer if short-term rates rise further. 

He mentions Verizon (VZ) and AT&T (T) as examples of stocks with strong yields, while simultaneously flagging the competitive threat Starlink could pose to their businesses.

At the same time, the counterargument is substantial.

S&P 500 profits are still growing rapidly, AI investment continues to support economic activity, and some strategists are already discussing an S&P 500 at 10,000 later this decade. 

Gross is questioning what would happen if the bond market refused to cooperate with that bullish story. With federal debt held by the public already around 101% of GDP and the CBO projecting it to reach 120% by 2036, elevated high yields could turn what looks like an earnings story today into a financing and valuation problem tomorrow.

Related: Nvidia’s AI boom revives a Warren Buffett warning for investors

Tesla delivered 486,532 vehicles in the trailing three months while producing more than 464,000 vehicles. While deliveries fell about 2% year over year from 497,099 in 2025, Tesla moved far more vehicles than the 461,000 analysts polled by StreetAccount were expecting, representing a 5.5% beat.

The beat sent prices soaring by 5% on the Friday after its release and that rally continued into Monday, Oct. 5, with shares up another 2% to $378.14 at last check.

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That price is well ahead of the $370 price target analysts at Deutsche Bank set for the stock. So the bank raised its price target this week.

Deutsche Bank raises Tesla price target on delivery beat

Deutsche Bank analysts led by Edison Yu raised Tesla’s price target to $420 from $370.59, an 11% increase, after Tesla topped its own third-quarter delivery estimate of 465,000 by more than 5%, according to a note viewed by TheStreet.

The firm was particularly impressed with the company’s international performance.

“Our sense is upside came from Europe being stronger in September (e.g., France, Sweden) and China also outperforming, helped by cash discounts on in-stock cars; we think U.S. demand remained supply constrained with Model Y and Model Y L wait times running into 2027,” Yu said.

Deutsche Bank also noted that Tesla’s 3% quarter-over-quarter increase in production represented a drawdown of more than 22,000 units of inventory, which “should be a tailwind for working capital.”

DB raises Tesla revenue expectations

The third quarter was always going to be a tough comp for Tesla due to the buying rush induced by the expiration of the federal $7,500 EV tax credit last September. Buyers rushed to purchase EVs ahead of the government-funded program’s end, leaving EV makers with inflated numbers.

But this year, DB sees Tesla’s auto gross margin excluding credits relatively flat quarter over quarter, “supported by better fixed cost absorption.”

However, while Deutsche Bank raised its third-quarter revenue expectations to $27.7 billion from its previous view of $27.2 billion, the firm has a 30-cent-per-share EPS expectation, well below Wall Street’s 41-cent-per-share expectation.

Still, some of its full year expectations are bullish.

“Having cleared out a lot of inventory, 4Q deliveries should track production more closely and may be more supply-constrained, but Giga Texas is ramping Model Y L output, which should support our 485k 4Q estimate. For the full year, this implies vehicle deliveries of about 1.8m or +11% YoY,” Yu said.

But DB lowered its full-year EPS expectations to $1.40 per share from $1.48 per share while increasing its revenue expectations to $106.1 billion from $105.4 billion. This would represent a $12 billion year-over-year increase and represent an all-time record for Tesla.

Tesla looks to turn around recent trends

Tesla needs to finish the year strong to avoid falling sales for a third consecutive year.

In 2025, Tesla’s revenue fell year over year for the first time in its history as sales and margins fell. But unlike its revenue decline, the margin problem has continued into 2026.

Tesla reported second-quarter revenue of $28.2 billion, a record that topped analyst estimates of $27.6 billion. However, the 33 cents per share the company reported missed estimates from analysts polled by Tesla (TSLA), who were expecting 55 cents per share.

So it seems that as Tesla chased volume, delivering 480,126 vehicles, a 25% increase from the same period a year ago, it sacrificed margins to get there. Net income for the quarter fell 17% to $1.15 billion. Analysts were expecting net income of $1.27 billion.

Meanwhile, Tesla’s results from the first quarter were flipped.

Tesla missed analyst revenue expectations, reporting $22.39 billion versus analysts’ $22.64 billion, but earnings of 41 cents per share topped estimates of 37 cents per share.

Despite its recent rally, Tesla shares are down more than 13% year to date and more than 16% year over year.

Related: The Robotaxi payday Tesla promised owners isn’t coming

AI data centers lose power the same way at every step between the grid and the processor. As racks grow hungrier, those leaks have become a business problem.

Navitas Semiconductor (NVTS) built its name shrinking chargers with gallium nitride chips. On Monday, Oct. 5, it teamed up with Microchip Technology (MCHP) to apply that idea to AI server racks, according to a press release.

Their reference design converts 800 volts straight down to 6 volts for GPU boards. It folds two conversion stages into one converter, Investing.com reported, cutting wasted heat and freeing space around the chips.

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Power is joining chips as AI’s tightest constraint

I think power is becoming AI’s next bottleneck after chips. Microsoft CEO Satya Nadella said as much last November, describing “chips sitting in inventory that I can’t plug in,” TechCrunch reported.

Global data center electricity demand jumped 17% in 2025, according to the International Energy Agency. That is more than five times the growth rate of overall electricity demand.

In the U.S., data centers drove about half of electricity demand growth last year, Fortune reported, citing IEA figures.

The IEA’s latest AI energy report describes a scramble for electricity, grid connections, and factory capacity, not just chips. It expects AI server power density to quadruple again by 2027, testing supply chains for power electronics.

One caveat: Chips are not fully solved. The IEA expects a high-bandwidth memory shortage to last through at least 2027, so power is joining chips as a constraint, rather than replacing them.

Cutting one conversion step matters more than it sounds

Every voltage change leaks some power as heat. The release says racks are moving to 800 volts partly to curb those losses. Removing a whole stage pushes that logic further.

The board targets up to 96% peak efficiency at full load, according to the release. With grid connections fixed, every point saved can be used for computing instead of cooling.

Security is the overlooked detail. The design adds Microchip’s TA100 authentication chip and controllers that support post-quantum cryptography, the release said. That treats power hardware as a hacking target, a risk the IEA flags.

Still, a reference design is a blueprint, not a purchase order. The companies will show it at Microchip’s OCP event in San Jose on Oct. 12-15.

What investors are paying for

Navitas sells gallium nitride and silicon carbide power chips, and AI data centers are now its central pitch. It is worth about $3.2 billion, according to Stock Analysis.

That price leans on the future. Trailing revenue fell 46% to about $37 million as Navitas pulled back from mobile chargers, leaving the stock above 80 times sales, Stock Analysis data shows. Management expects AI infrastructure to top a third of sales by year-end, its second-quarter call revealed.

The stock set an all-time high of $34.17 in June after an all-time low of $1.52 in April 2025, while its 52-week low is $6.85.

Barron’s noted the shares slumped from that peak before a U.S. Army contract sparked a rebound. Eight analysts rate Navitas a Hold, with an average target of $14.08, Stock Analysis noted.

Microchip is the steadier half. It sells microcontrollers and analog chips into cars, factories and data centers, and is worth about $44 billion, Stock Analysis data show.

Its trailing P/E near 120 looks extreme compared with a forward P/E near 21. That gap signals expected earnings recovery.

Microchip’s 52-week range runs from $48.52 to $105.91, Stock Analysis indicated, and that high is its all-time record. TradingView puts its split-adjusted all-time low near 31 cents in 1993.

Twenty-six analysts rate Microchip a Buy, with an average target of $107.84, according to Stock Analysis. For Microchip, AI rack power is one growth lane. For Navitas, it is the thesis.

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The fix for AI’s power problem has its own chokepoint

Gallium nitride chips need gallium, and China produced 94% of the world’s supply, according to a 2024 European Union report cited by AFP.

Beijing banned gallium exports to the U.S. in December 2024, then suspended the ban until Nov. 27, 2026, Reuters reported. Shipments still need Chinese export licenses.

Navitas makes its newest GaN chips with GlobalFoundries in the U.S., according to a press release. That secures the factory step, not the raw metal.

For most of this AI boom, investors asked who could make enough chips. The next phase asks who can deliver the power to run them, and who controls the materials underneath.

The Nov. 27 deadline, six weeks after the San Jose demo, is the next real test.

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That kind of premium usually makes analysts nervous. Morgan Stanley isn’t nervous. In fact, it’s been doubling down.

Analyst Adam Jonas reiterated an Overweight rating and a $300 price target for SpaceX, which trades under the ticker SPCX, according to Investing.com. The stock was sitting at around $159 at the time of the report, which means Jonas is calling for roughly 90% upside from that level.

It’s a bold call on a stock that already carries a rich valuation by most traditional measures.

But Jonas’ argument isn’t really about the headline multiple. It’s about what that multiple misses. When you adjust for SpaceX’s expected growth rate, the stock actually looks cheaper than many of its peers, and the gap is widening in SpaceX’s favor.

Also read: OpenAI makes development moves to counter SpaceX and Meta

Why the SpaceX valuation looks different when you dig in

The comparable group of mega-cap AI companies trades at roughly 16 times 2028 estimated EV-to-EBIT, according to Jonas. SpaceX is at about 30 times.

On that basis alone, the stock looks stretched. But Jonas is focused on a different metric: enterprise value-to-earnings growth, which accounts for how fast a company is expected to expand rather than just where it sits today.

On that growth-adjusted basis, SpaceX trades at roughly 0.3 times its 2028 multiple, compared with a median of about 0.5 times for the rest of the mega-cap AI peer group.

In other words, you’re paying less per unit of growth with SpaceX than you are with most of the companies it gets compared to. Even at Morgan Stanley’s $300 target, the stock would sit at around 0.6 times that growth-adjusted measure, which is roughly in line with Amazon and below both Alphabet and Meta.

Jonas describes the valuation challenge as an “and” problem rather than an “or” problem. SpaceX isn’t one business. It’s a launch company and a satellite connectivity provider and a mobile communications player and an AI infrastructure business.

Investors have to think about how all of those pieces interact, not just what any one of them is worth in isolation. That complexity is part of why the stock is hard to value, and also part of why Jonas thinks the market is underpricing it.

How SpaceX’s business breaks down at current prices

At $159 per share, Morgan Stanley estimates that SpaceX’s space launch and Starlink connectivity businesses account for around $127 of that price. This leaves roughly $32 per share attributed to AI, which works out to about three times estimated 2028 enterprise value to sales for a neocloud business.

That’s not a demanding AI multiple relative to what pure-play neocloud companies trade at.

Here’s where things get really interesting on the AI side. Consensus estimates are built around $17.60 per watt across 4.1 gigawatts of capacity. Jonas ran the numbers and found that every additional $10 per watt could tack on more than $40 billion in revenue above that baseline.

Now consider that SpaceX’s recent short-term neocloud contracts are reportedly coming in somewhere between $30 and $50 per watt. That’s a lot higher than what the market is currently pricing in.

That doesn’t mean the upside is guaranteed. SpaceX still has to build the infrastructure, secure enough power and actually convert demand into profitable contracts. AI data centers eat capital.

The gap between what SpaceX could earn and what it will earn depends on execution, and execution risk is real at this scale.

What catalysts could move SPCX stock?

Jonas flagged several near-term events that could shift sentiment on SPCX. Starship Flight 15 is expected sometime in late October or early November. Third-quarter earnings are also due in late October. Flight 16 is expected before year-end.

Beyond the launch schedule, new Grok model releases, additional neocloud agreements, and continued progress on Starship reusability are all on Jonas’ radar as potential catalysts.

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A successful Starship catch, Jonas said, could be the biggest positive catalyst for the stock since its IPO. Morgan Stanley gave Flight 14 a B+ and has been tracking the program closely.

Faster vehicle reuse means lower cost per launch and more launches per year, which strengthens the economics of the space business and gives Starlink more capacity to grow.

It’s easy to read a Starship catch as a cool engineering moment and move on. But it matters for the business in a pretty direct way.

Every time SpaceX reuses a vehicle instead of building a new one, the cost per launch drops. More launches per year, lower cost per launch.

That’s what makes the whole economics of the space business actually work, and it’s why no competitor has been able to close the gap.

What could go wrong?

Jonas sees the upside clearly, but he’s also put a bearish scenario on the table. If AI momentum slows, Starship hits a serious wall in testing, or SpaceX needs to go back to investors for a big equity raise, Jonas said the stock could slide toward $100 within 12 months.

That’s a real loss from where it’s trading now. And given how much of the $300 target depends on everything going more or less according to plan, it’s not a scenario you can just dismiss.

Slower Starship reuse, weak enterprise demand for AI services, higher computing costs, delays in connecting power to data centers, large future funding requirements, regulatory setbacks, and challenges monetizing AI models are all on the risk list.

Not every analyst agrees on the valuation, and the bearish case isn’t hard to construct when a stock is priced for aggressive execution across multiple high-stakes businesses simultaneously.

The interrelated nature of SpaceX’s businesses cuts both ways. It gives the company multiple shots at value creation, but it also makes the investment harder to analyze and harder to hold through a rough patch in any one segment.

For investors already in SPCX, Morgan Stanley’s message is that the growth math still works in your favor. For those still on the sidelines, the case rests on whether you believe SpaceX can execute on all of it at once.

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A group of engineers believed they could monitor the entire Earth from space every day, and turn that data into something useful here on the ground — not just for governments and militaries, but for farmers in Rwanda, land managers in New Mexico, and researchers tracking methane emissions from orbit.

PL hasn’t changed that mission. They keep rowing the boat forward. But the stock has. Planet hit an all-time high of $51.76 on May 28, 2026, according to Yahoo Finance. 

By the close of the first week of October, it was trading around $17.50. That’s a 66% collapse in just four months and a few days. Jim Cramer doesn’t think it goes much lower from here. 

I think you should buy it. I think it's done going down.

In Oct. 2 Lightning Round, Cramer also mentioned meeting CEO Will Marshall through Salesforce’s Marc Benioff.

That also caught my attention because it hints at PL becoming the kind of company that increasingly moves in serious technology and climate circles.

Also Read: Planet Labs PBC (PL) Latest News

What just changed for Planet Labs

On Oct. 1, a SpaceX Falcon 9 rocket launched the Transporter-18 rideshare mission from Vandenberg Space Force Base in California, carrying 20 Planet Labs-built satellites into orbit. 

PL shares jumped 8% the following day, according to Yahoo Finance. And that’s where Cramer’s conviction came from. He pointed to the stock’s strong performance, noting that “it had a good day today.”

Planet Labs noted the 20 satellites included 18 SuperDove Earth-observation satellites that refresh Planet’s core imaging fleet, one Tanager-2 hyperspectral satellite designed to track greenhouse gas emissions including methane and CO2, and one satellite that deserves more attention than the other 19 combined.

That twentieth satellite is Project Suncatcher, an experimental space-based AI computing node developed alongside Alphabet.

Outfitted with Google’s custom TPUs, the platform aims to determine whether orbital solar power can support direct AI inference processing in space. Should the experiment succeed, it could mark Planet’s most consequential strategic shift since its public market debut.

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If you can run AI inference in orbit using the same solar energy that powers the satellite, you eliminate the need to beam raw data down to Earth for processing and create an entirely new class of space-based computing infrastructure. 

Planet Labs, which already operates close to 200 satellites and captures terabytes of visual data daily, would have a natural competitive advantage in building and operating such systems.

Analysts polled by S&P Global Market Intelligence don’t anticipate Planet Labs reaching profitability before 2029. Of course, we don’t expect Suncatcher to change that timeline immediately. 

But it gives the company its most credible path to a new revenue stream that doesn’t depend entirely on subscription imaging contracts.

Even Planet Labs’ core business is already growing fast

Before Project Suncatcher becomes the story, we should also understand the existing business, which is performing better than the stock suggests.

Planet Labs reported record Q2 revenue of $116.1 million, up 58% year over year (YoY), according to Planet Labs Q2 Fiscal 2027 statement. 

Related: Jim Cramer spills the beans to AI stock investors

CEO Will Marshall called it the “fourth consecutive quarter of meeting or exceeding the Rule of 40,” a benchmark that combines revenue growth and profit margin and serves as a strong indicator of business health for a subscription software company.

Backlog reached $814.9 million as of Q2, with approximately 50% applying to the next 12 months. Remaining performance obligations stood at $753.1 million.

Contract wins driving Planet Labs’ backlog show who needs daily satellite imagery

1. The National Geospatial-Intelligence Agency awarded Planet an $8 million contract for its Global Monitoring Service in August, according to Planet Labs.
2. German government awarded Planet a dedicated satellite services tender worth up to €25 million over five years. 
3. A European defense and intelligence customer signed a seven-figure agreement for high-resolution global mapping. 
4. Rwanda’s Space Agency signed a national satellite data program, Planet’s first of its kind in Africa, for agricultural management, urban planning, and disaster response, according to the company statement.

That Africa contract tells us the company has become an infrastructure provider, not just a vendor. Rwanda’s government is building national policy around Planet’s imagery.

Planet also renewed a contract with a hyperscaler AI developer for global monitoring of data center and semiconductor manufacturing facility construction, according to Planet Labs. The AI buildout is literally visible from space, and Planet is the company selling that view.

Why the sell-off and what it means for buyers now

PL is down 11.26% year to date but up 17.85% over the past year, according to Yahoo Finance. The three-year return is 580.93%. The stock rose on a speculative wave in early 2026, peaked at $51.76 in May, and has been correcting since.

The “done going down” thesis is supported by a specific combination of factors all arriving at the same time: the major satellite launch completed successfully, a Google partnership beginning to generate real orbital data, record quarterly revenue, and an $814 million backlog providing forward visibility. 

Planet was built to watch the Earth. Right now, investors finally have enough to watch in return.

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Goldman Sachs expects another strong quarter, but its forecast suggests the benefits of the AI spending surge are still heavily concentrated. 

Nevertheless, shareholders could see significantly different results depending on who owns the companies that build, supply, or directly monetize AI infrastructure.

It’s important to note that the broader market isn’t moving in lockstep. Some companies are still facing sluggish growth, tighter margins, and higher costs, even as AI-linked businesses continue to pull the index higher.

That creates a more complicated setup than a simple “strong earnings” headline suggests.

The real question now is whether AI spending can begin to create a broader earnings lift across the market, or if the next season will reinforce how dependent the S&P 500 has become on a relatively narrow group of winners.

Goldman Sachs expects another strong earnings season, with AI doing more of the work

Goldman Sachs expects the S&P 500 to deliver another robust quarter of bottom-line growth, with AI investment accounting for an increasingly large share of the gains.

Consensus forecasts call for Q3 S&P 500 earnings per share to rise 27% from a year earlier, according to an Oct. 2 report led by Goldman strategist Ben Snider, as reported by Seeking Alpha. 

That would still be a very strong result, even if it marks a slowdown from the roughly 33% growth recorded in Q2, after accounting distortions are stripped out.

Goldman also expects most companies to beat consensus estimates again.

AI infrastructure companies are expected to account for more than 50% of the S&P 500’s earnings growth this quarter, while information technology and energy together are projected to generate nearly 80% of the total increase.

AI is driving the index, but the average company tells a different story

Goldman’s headline forecast looks strong, but perhaps the more revealing number is 68%. That’s how much of the S&P 500 earnings growth the firm expects in Q3 from just 10 companies to generate.

Micron (MU) and Nvidia (NVDA) alone are projected to account for more than one-third. Micron has already set the tone, delivering year-over-year earnings growth of 1,003% and beating expectations. 

Information technology and energy together are expected to produce nearly 80% of total index earnings growth.

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That concentration changes how I would read the season.

The S&P 500 may deliver 27% EPS growth even while the median company grows earnings just 9%, with revenue growth slowing and median net margins slipping to 14.7% from 15.1%.

Independent data strengthens Goldman’s broader optimism without clipping away at that divide. FactSet currently sees S&P 500 earnings rising 29.5%, up from a 26.7% estimate at the start of the quarter. 

Even more unusually, analysts actually raised quarterly earnings estimates by 1.4%; historically, they tend to cut them. Seventy-two companies have also issued positive EPS guidance, far above the five-year average of 42 as reported by FactSet.

So the question now is largely about who is producing those profits. With the median S&P 500 stock sitting well behind its record while the index remains near its high, another AI-heavy earnings beat might reinforce rather than resolve the market’s unusually narrow leadership.

AI spending is no longer the story: returns are

Naturally, for investors, the big question is whether AI spending can produce enough sales, bottom-line expansion, and strong productivity gains to justify the next investment leg.

Goldman Sachs expects hyperscaler capital spending to jump to 116% year over year in Q3, after already climbing 87% in the second. The firm also thinks spending could grow more than 50% again in 2027 and ultimately exceed the roughly $1.1 trillion currently embedded in consensus estimates.

That’s an enormous capital commitment, which raises the bar for what investors should demand in return.

The encouraging sign is cloud revenue. 

Goldman expects combined growth at Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Oracle (ORCL) to accelerate to 55% from 48%. If that high bar is achieved, it would show that at least part of the spending boom is translating into real business demand.

The weaker point is productivity. 

About half of S&P 500 companies discussed AI in connection with efficiency last quarter, yet only 2% earnings impact. That gap between enthusiasm and proof is still too wide.

There is also less help from accounting this quarter. Goldman does not expect a repeat of the roughly $150 billion in Q2 mega-cap technology gains tied to rising investment values.

If revenue, margins, and productivity keep improving, the market can justify more investment. If they do not, the same spending that powered earnings growth could become the source of the next valuation problem.

It’s important to note that the S&P 500 is not especially cheap, but its valuation has become less stretched as earnings estimates have risen. 

FactSet puts the index at about 19 times forward 12-month earnings, below its five-year average of 19.8 times and just under its 10-year average of 19.1 times.

Related: Nvidia’s AI boom revives a Warren Buffett warning for investors

For most travelers, those were two separate choices. You either sailed from island to island, or you unpacked once and stayed put at a resort.

Now, Royal Caribbean (RCL) wants guests to stop planning one big trip and start planning a lifetime of them, all inside the same family of brands.

And the cruise giant has found a way to take that idea off the water.

Why loyal guests matter for RCL stock

To understand the deal, let’s start with how Royal Caribbean Group operates today. 

The company runs 71 ships across three wholly owned brands: Royal Caribbean, Celebrity Cruises, and Silversea.

It also owns private destinations, including Perfect Day and the Royal Beach Clubs. In 2027, it will enter river cruising with Celebrity River Cruises.

The common thread is repeat business.

Also Read: Royal Caribbean beats Carnival in one major area

On the company’s second-quarter earnings call on July 28, CEO Jason Liberty said spending for repeat guests increases by 20% to 25%. Holders of its new Royal ONE credit card are twice as likely to sail more than once.

While talking about river cruises, Liberty explained why adding new kinds of trips is key. “Now for us to be able to offer them another vacation experience that is typically not a substitute, it’s an additional vacation, we feel very encouraged by that level of demand that we’re seeing.”

In plain terms, a new product doesn’t steal a cruise booking. It adds another trip to the calendar. 

RCL stock adds a $3 billion resort bet

On Sept. 23, Royal Caribbean Group confirmed it will buy a 50% stake in Sandals Resorts and Beaches Resorts. 

Here is how the deal works:

• Price: About $3 billion for half of the business.
• Valuation: About 10 times forward EBITDA (earnings before interest, taxes, depreciation, and amortization). Simply put, Royal Caribbean is paying about 10 times the annual operating earnings its stake is expected to generate.
• Funding: Committed debt financing from Morgan Stanley.
• Timing: Expected to close in early 2027, subject to approvals.
• Payoff: Expected to add to earnings next year.

The partnership allows Royal Caribbean to unlock a new revenue stream and enter the $2 trillion  global vacation market.

Sandals is the adults-only resort brand. It has beachfront properties in Jamaica, Antigua, Saint Lucia, The Bahamas, Barbados, Grenada, Curaçao, Saint Vincent, and The Grenadines. 

Beaches is the family brand, with resorts in Negril, Jamaica, and Turks and Caicos. More are coming to Exuma, Barbados, Runaway Bay, and Saint Vincent and the Grenadines.

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“Our partnership with Sandals and Beaches Resorts is an important next step on that journey,” Liberty said in the statement. “Together, we see tremendous opportunity to expand the reach of Sandals and Beaches Resorts and continue turning the vacation of a lifetime into a lifetime of vacations.”

This deal is also about a founder’s dream.

Gordon “Butch” Stewart founded Sandals. His son, Adam Stewart, now serves as executive chairman of Sandals Resorts and Beaches Resorts.

“My father, Gordon ‘Butch’ Stewart, founded Sandals Resorts with the belief that a company built in the Caribbean could stand on the world stage alongside the most respected names in hospitality. Today is proof of how far that vision can go,” Stewart said.

He sees the partnership as a way to grow faster with a partner that shares his company’s values.

“The future has never been brighter, and I know this moment would make my father incredibly proud,” he added.

Stewart and Liberty will share leadership of the joint venture’s board, and Stewart will keep guiding the resort company’s growth.

Existing reservations, loyalty programs, resort operations, and cruise operations will continue as usual.

What the Sandals and Beaches deal means for RCL stock price

A $3 billion purchase paid for with debt raises a fair question: Can Royal Caribbean afford it?

Its latest results suggest it has room to move. Second-quarter revenue grew 6% from a year earlier. Adjusted earnings per share came in at $4.21, which was $0.33 above the midpoint of its guidance.

Related: Royal Caribbean shares disappointing news on cruise prices

The company ended the quarter with $6.9 billion in liquidity, meaning cash and credit it can draw on. Leverage was below three times.

Management also raised its full-year outlook. It now expects adjusted earnings per share of $17.73 to $17.87, up 14% year over year. 

On the same call, Liberty described how the company thinks about spending.

“We continue to believe that we drive tremendous shareholder value with moderate yield growth, strong cost control, and being very discerning about how we invest our capital and how we return capital to shareholders,” he said.

The deal won’t close until early 2027 and still needs approvals. Royal Caribbean is also taking on new debt, which could make investors nervous amid rising interest rates. And this year, the conflict in the Middle East weighed on some European bookings.

Still, the story is easy to follow.

Royal Caribbean’s ships have sailed past Caribbean beaches for decades. Soon, some of those beaches could belong to the same vacation family.

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Investors now have a better understanding of how Howard Hughes Holdings (HHH) may achieve this.

Howard Hughes intends to include outside investors in real estate projects that it has traditionally funded mostly with its own resources, Ackman told Bloomberg.

The change could reduce Howard Hughes’ own equity commitment to parts of its real-estate portfolio by as much as 80%, Ackman said.

By the end of the next year, he hopes to have freed up between $2 and $3 billion in cash, which he would then put back into Vantage, the specialized insurance and reinsurance business that Howard Hughes purchased in June.

That fits with what Howard Hughes told shareholders ahead of its Sept. 30 annual meeting: The company wants to “significantly reduce” the capital intensity of Howard Hughes Communities and increase capital available for Vantage. Howard Hughes Holdings Inc.

Howard Hughes acquired acquired Vantage for around $2.1 billion on June 4, turning what had previously been mostly a real estate business into a holding firm with two significant operational platforms.

Ackman’s next strategy is to alter the way those two companies supply one another.

Ackman wants Howard Hughes to use outside capital

In the past, Howard Hughes’ real estate company has functioned differently from that of many major investment managers.

Ackman told Bloomberg that instead of bringing in institutional investors for specific initiatives, the business has often used its own stock to fund developments.

He now wants to alter that.

Instead of financing every project solely from their own balance sheets, Ackman cited companies like Blackstone and Brookfield as instances of real estate managers that invest alongside outside capital.

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Howard Hughes plans to maintain significant control while attracting outside investment. That might accomplish two things.

First, it may lower the amount of money Howard Hughes needs to fund both current and future projects.

Second, Howard Hughes may collect asset-management fees and “promotes,” which is the word used in the business to describe the additional portion of a project’s earnings that a manager is entitled to if investors meet certain return levels.

Ackman contends that this might lead to increased returns on Howard Hughes’ own capital investments.

This is not a completely novel approach.

On Howard Hughes’ second-quarter earnings call obtained by The Motley Fool, Ackman said that rather than just needing more stock from Howard Hughes, future incremental capital will probably come from current assets, outside partners, and third-party capital. Additionally, management said that over a five-year period, the real estate business might naturally generate between $2.5 billion and $3 billion in surplus free cash flow.

The scope of the shift that Ackman is now outlining is novel.

A very capital-intensive corporation may become more akin to an asset-management model by reducing its equity commitment to certain real estate assets by as much as 80%.

There would then be another place for that cash to go.

Vantage gives Howard Hughes its Buffett-style engine

Ackman made the inspiration explicit.

“We’re taking a page from Mr. Buffett,” Ackman told Bloomberg.

One of Berkshire Hathaway’s most significant sources of investable cash, according to Warren Buffett, was insurance operations.

Before many claims are finally settled, insurance firms receive premiums. Insurance “float” is the term used to describe the funds maintained between those two occurrences.

The money is neither risk-free nor free capital as a result. In order to pay policyholder claims, insurers must have sufficient liquid assets on hand.

However, while the core insurance company continues to generate premiums, a well-managed insurer may invest a portion of its cash.

Vantage should have a comparable function at Howard Hughes, according to Ackman.

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In June, Howard Hughes paid almost $2.1 billion to purchase Vantage. Pershing Square now manages the insurer’s investment portfolio, so Howard Hughes does not have to pay an extra investment-management charge.

After the purchase, the business swiftly liquidated longer-term fixed-income assets and moved a large portion of the portfolio into short-term U.S. Treasuries, Ackman told Bloomberg.

Common stocks are progressively receiving the remaining part.

Shortly after the purchase, over 60% of Vantage’s portfolio was in short-term Treasuries, while almost one-third had already been invested in stocks, according to Howard Hughes management’s second-quarter report. Afterward, that equity allocation rose to almost 40%.

Ackman said the longer-term structure could allow roughly 40% to 45% of Vantage’s investment assets to sit in common stocks while maintaining comparatively low insurance leverage.

The concept is simple: The funds required to satisfy insurance commitments should be kept in very low-risk assets. Pershing Square should then invest the leftover funds in businesses that it believes have the potential to grow over time.

Howard Hughes is becoming a different company

The most important thing for investors is that Howard Hughes no longer resembles the business it was a few years ago.

Real estate continues to be its primary industry. In regions like Nevada, Texas, and Hawaii, Howard Hughes Communities owns profitable assets and creates master-planned communities.

However, HHH now has a second operating platform with completely different economics thanks to the Vantage purchase.

Howard Hughes had over $2.65 billion in cash and cash equivalents at the end of the second quarter, including Vantage’s cash. The insurance division generated $97.2 million in net earned premiums in the brief period between its June 4 purchase and the end of the quarter.

In regulatory filings, the corporation has also made the strategy change clear.

Currently, Howard Hughes characterizes itself as a holding company that operates a specialist insurance and reinsurance subsidiary in addition to a large-scale real estate platform. SEC

Adjusting the balance between them appears to be the next step.

These days, real estate absorbs a lot of equity.

While Howard Hughes maintains significant ownership and may benefit from asset-management economics, Ackman wants outside investors to bear a larger portion of that burden.

This might enable HHH to support Vantage with more funds without issuing a lot of new shares.

Another aspect of the Berkshire analogy that Ackman highlighted in the interview is avoiding needless share issuance. Due in part to the internal capital produced by its operational companies and the relatively limited number of shares it held, Berkshire generated huge value for its shareholders.

Howard Hughes could use a similar compounding strategy, according to Ackman.

As previously reported by TheStreet, Ackman has defined Howard Hughes as the vehicle he plans to transform into a contemporary Berkshire Hathaway. That analogy became more concrete with the purchase of Vantage.

It may become even more crucial with this new real estate approach.

Ackman’s Howard Hughes plan now faces an execution test

On paper, the method is quite appealing.

In addition to bringing institutional partners into its projects and shifting billions of dollars toward an insurance platform that Ackman thinks will compound capital at greater rates, Howard Hughes might lessen the amount of wealth tied up in real estate.

However, none of that money has yet to be released automatically.

Howard Hughes must reach mutually agreeable values, frameworks, and return expectations in order to attract outside investors.

Timing is also important.

Ackman said that releasing between $2 and $3 billion was a goal rather than money that was already on Howard Hughes’ balance sheet.

In more circumspect language, Howard Hughes has said that it plans to raise Vantage’s cash availability and drastically lower the capital intensity of its real estate division. SEC

Vantage with its own dangers.

Disciplined underwriting is essential to the profitability of insurance, and investing more in equities than in short-term Treasuries increases market volatility. By keeping Vantage comparatively lightly financed, Ackman is attempting to mitigate some of that risk.

For Howard Hughes stockholders, this transaction means that the next year will be crucial.

By purchasing Vantage, the business has already accomplished the first significant step. It must now demonstrate that it can change its real estate business without compromising the economics that once made those assets desirable.

Ackman’s Berkshire parallel will become less theoretical if Howard Hughes is able to effectively entice partners into its real estate portfolio, release billions of dollars of its own stock, and redeploy that money at favorable rates.

Howard Hughes will continue to rely much more on its conventional capital-intensive real estate business if it is unable to do so.

The blueprint is becoming clearer.

The next step is execution.

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Companies expanded capacity amid rising demand, translating into higher margins. A few years later, slowing demand meant an oversupply of products, which drove profits down. 

Artificial intelligence may be tearing up that script.

And one of Wall Street’s most closely followed chip analysts just weighed in on whether Micron’s remarkable run has room left.

Why Micron stock rides the AI memory boom

Every AI model needs a ton of memory driven by bigger models, longer conversations, and a widening user base. 

Micron (MU) Chairman and CEO Sanjay Mehrotra put it plainly on the company’s Sept. 30 earnings call. AI platforms deliver more value with more memory and faster memory.

That demand has turned Micron into a cash machine. Fiscal 2026 revenue reached a record $133.2 billion, up 256% from the prior year, CFO Mark Murphy said on the call. 

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Gross margin expanded to 81.1%, a 40-point jump, while earnings per share soared 811% to $75.52. The fiscal fourth quarter, which ended in August, was even stronger:

• Revenue: A record $54.2 billion, up 379% from a year earlier and the sixth straight quarterly record
• DRAM revenue: A record $39.8 billion, or 73% of total sales
• Data center SSD revenue: Nearly $10 billion, more than 10 times the level a year earlier
• Gross margin: 87%, up 2.1 percentage points from the prior quarter
• Free cash flow: $33.2 billion

Micron expects fiscal first quarter revenue of $61.5 billion and earnings of $38.15 per share.

The forecast came in well above what Wall Street analysts expected, which was $57.4 billion in revenue and $35.47 per share, according to a Morgan Stanley research report shared with me.

Morgan Stanley holds its Micron stock price target

Morgan Stanley analyst Joseph Moore kept an “Overweight” rating and a $1,200 price target on Micron in an Oct. 1 research note titled “Micron makes the case that it’s better for longer.”

At the time of writing, MU stock trades at $1,074, so the target implies about 10% upside.  

The firm did reset its numbers, though.

Morgan Stanley lifted its fiscal 2027 earnings estimate to $182.52 per share from $168.52. Its revenue forecast climbed to $281 billion from $266.9 billion.

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“We said in our preview and in recent notes that the debate has shifted from ‘how good can it get’ to ‘how long it can stay good,'” Moore wrote.

Here’s the twist. Micron’s beats are getting smaller. Over the prior three quarters, it topped consensus earnings estimates by 20% to 40%. This time, the beat was 5% and guided 6% above consensus.

Moore doesn’t see that as a red flag. He thinks it may be “the new normal as Micron’s visibility improves.”

Also read: Who owns Micron Technology? A look at its top investors

Why Micron’s supply crunch matters

Building memory capacity takes years, clean rooms take a long time to construct, and production ramps slowly, even after the first wafers roll out.

Mehrotra offered the most striking comment of the call. “Even with additional industry DRAM clean room space plans with robust demand trends, including new upside requests from customers, we do not have line of sight to when supply and demand will return to balance.”

Customers are acting on that fear. Micron has signed 26 strategic customer agreements, known as SCAs. These are multiyear take-or-pay deals that lock in supply. 

Related: Micron’s memory boom faces a new test

Customers have committed $32 billion, mostly cash deposits. Mehrotra said more than 75% of Micron’s 2027 output is already spoken for.

Moore called the longer contracts “a testament to the customer anxieties about securing DRAM even 5 years from now.”

He added that, on Morgan Stanley’s new estimates, Micron will earn close to half its current $1.23 trillion market value by the end of 2028.

Murphy said Micron plans to return 100% of its excess cash to shareholders over time, with a step up starting Dec. 9.

What could cool the Micron stock price

The rally hasn’t been linear. Moore said investors trimmed bullish forecasts in July for a few reasons.

A trillion-dollar memory market can’t keep raising prices at this pace forever. Long-term contracts include price ceilings. And AI customers are learning to do more with less memory.

The once popular $300 earnings call now looks less likely, Moore said. Morgan Stanley sees about $200 for calendar 2027 and calls that conservative.

The firm’s bull case puts the stock at $1,650. Its bear case, where memory slides into a downturn in 2027, sits at $675.

Two catalysts remain. Repricing of high bandwidth memory, or HBM, could add roughly $9 to quarterly earnings per share, Moore estimated. A larger buyback authorization is also coming.

For a business famous for boom and bust, “better for longer” might be the most bullish phrase of all.

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He described how the University of Texas came back from a 20-point deficit against the nation’s top team. 

What stuck with him wasn’t the final score. It was the “methodical drives” and “calculated risks” that got the team there.

The message to investors was clear. Nike (NKE) is behind, and the comeback will take time.

Wall Street heard the message, but didn’t like what the scoreboard showed in fiscal Q1.

Nike stock hits a wall

Nike has spent the past few years trying to get back to its roots. In certain business segments, that plan is working.

Its performance business covers running, football, basketball, and training gear. The segment reported revenue of $16 billion in fiscal 2026 (ended in May). It grew in the high single digits again in fiscal Q1, while the running business grew by double digits. 

Notably, excitement surrounding the FIFA World Cup powered strong gains. 

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However, Nike Sportswear, which accounts for just under half of quarterly sales, fell by double digits. The Jordan brand, which generates 13% of revenue, fell by the mid-teens, and sales from Greater China were down 26%. 

Nike cut revenue from its once-red-hot Dunk sneaker by nearly 50%, a hit of roughly $200 million.

“Yes, the consumer is cautious. But as the leader in the industry, it’s on us to bring more creativity to sportswear,” Hill explained. 

He was even more direct about Jordan.

“Simply put, we’ve been oversupplying our iconic retro product, asking them to do too much,” Hill said. “When consumers see the Jumpman, it should feel special. It should feel earned.”

Total revenue in fiscal Q1 came in at $11.2 billion, down 4% from a year earlier. Earnings per share slipped 2% to $0.48.

Comparatively, Wall Street forecast revenue $11.32 billion with earnings per share of $0.43 in Q1. 

Goldman Sachs cuts Nike stock price target

The bigger shock for Wall Street was the outlook.

Goldman Sachs lowered its Nike price target to $30 from $38 and kept a “Neutral” rating, Investing.com reported. The firm pointed to fiscal 2027 guidance that landed well below FactSet expectations.

Goldman analyst Brooke Roach pressed management on China during the call, and Chief Financial Officer Dave Denton didn’t sugarcoat his answer.

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“The guidance range that I just provided to you assumes that China actually gets worse from a revenue perspective for the balance of this year,” Denton said.

That’s a tough setup for a stock already on the ropes. 

Nike stock currently trades at $33.87, which is close to its 13-year low. Valued at a market cap of $50 billion, NKE stock is down 81% from record highs. 

Goldman’s new target sits about 10% below the current price.

Wall Street splits on Nike stock

Goldman wasn’t alone. Several firms revised their Nike price targets after the report, according to Investing.com:

• Stifel: Cut to $36 from $40, citing bleak revenue projections and a 21% drop in adjusted EPS.
• BTIG: Trimmed to $50 from $55, keeping a Buy rating.
• BofA Securities: Cut to $24 from $30, keeping an Underperform rating due to limited visibility on a sales turnaround.
• Jefferies: Lowered to $60 from $75, keeping a Buy rating while noting progress in Performance and North America.

The spread tells the story. The lowest Nike stock price target is $19 and the highest is $68. Analysts agree that the next year looks rough. They disagree on how long the rough patch lasts.

Out of the 33 analysts covering Nike stock, eight recommend “Buy,” 18 recommend “Hold,” and seven recommend “Sell.” The average Nike stock price target is $38, indicating an upside potential of 12% from current levels. 

Why the Nike stock price is under pressure

Nike’s guidance explains the gloom.

Management expects fiscal 2027 revenue to fall by high single digits. EBIT, or earnings before interest and taxes, could decline even faster as lower sales squeeze margins.

Nike’s guidance for adjusted EPS is $1.15 to $1.35. That leaves out about $0.15 tied to Pace, a new program designed to make Nike faster and leaner.

Related: Analyst warns Nike’s best quarter this year may be behind it

Pace is a big bet. Nike expects it to save about $2.5 billion at a cost of roughly $1 billion. But most of those savings won’t arrive until fiscal 2029 and 2030.

The plan includes a new campus in Bengaluru, India, and cutting Nike’s regions from four to three.

Denton, only weeks into the job, described the moment plainly.

“Our results are below both our expectations and our potential, and we are focused on closing this gap,” he said.

What’s next for Nike stock

There are bright spots for the iconic footwear brand, given that sales in North America grew by 2%.

Its gross margins also rose 60% basis points to 42.8%. Moreover, Nike ended the quarter with $8.4 billion in cash and short-term investments.

Income investors got some comfort, too. Nike returned about $610 million to shareholders in the quarter.

The drawdown has meant Nike offers shareholders a tasty dividend yield of 4.7% in October 2026. 

Data compiled by TIKR shows that Nike is projected to improve free cash flow from $2.18 billion in fiscal 2026 to $2.77 billion in fiscal 2027 and $3.85 billion in 2031. Comparatively, its annual dividend expense is around $2.4 billion. 

Denton claimed that “under all scenarios, we have support for maintaining and ultimately growing the dividend over time.”

The next big test comes in November. That’s when Nike holds its Investor Day and plans to share a financial roadmap for the next five years.

Hill likes to compare Nike’s comeback to a game won with patient, methodical drives. Investors now want to see points on the board. 

Until then, Goldman’s $30 target suggests the wait could get more painful.

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Kimberly-Clark is the company that makes some of the regular household products we use, such as Kleenex tissues and Scott paper towels. However, the stock hasn’t been doing all that great recently. 

KMB’s value has dropped by about 20% over the past year for several reasons, including investor uncertainty about the company’s pending acquisition deal with Kenvue. That’s why Cramer’s call is worth noting. 

Kimberly-Clark’s acquisition of Kenvue (KVUE) is a blockbuster $48.7 billion consumer staples consolidation, designed to build a $32 billion global health and wellness giant capable of going toe-to-toe with sector leader Procter & Gamble.

Cramer has hosted “Mad Money” since 2005, and he also runs the CNBC Investing Club with Jeff Marks, so many investors value his opinion.

But this time, his view is quite different from how many Wall Street analysts see KMB stock. 

Cramer tells viewers Kimberly-Clark is a buy in the $90s

When a viewer called and asked about the stock, Cramer said, “One, I think it’s a buy, and two, when I talk about it with Jeff Marks, I feel I started too soon. It’s become a bond play, but I am going to buy more because I think the combination with Kenvue is unstoppable.”

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For him to use the word “unstoppable,” that means he has a certain level of confidence in the stock. He even supported the statement, saying, “I am willing to stick my neck out and say I’m not going to regret buying Kimberly-Clark in the $90s a few years from now.” 

Kimberly-Clark recently raised its quarterly dividend to $1.28 per share, which gives the stock a yield of about 5.4%.

Why Kimberly-Clark stock keeps falling near a 52-week low

You can find Kimberly-Clark products in many grocery stores around the country. It is the company behind popular brands including Huggies, Kleenex, Cottonelle, Scott, and Kotex. Each of those businesses usually brings in steady profits, but 2026 has been a bit rough.

KMB closed at $94.36 on Oct. 2 and was down about 7% year to date at the time. In fact, the stock is quite close to a 52-week low of $92.42.

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The stock fell mainly because of a six-alarm arson fire at a major 1.2 million-square-foot U.S. distribution center and a mid-September profit warning resulting from the company’s delays in launching new products.

At a range of about 13 to 14 times forward earnings, KMB now trades at its cheapest valuation in 10 years. Analysts at Simply Wall St wrote that the stock “still looks cheap despite a 16% slump” when compared with its fair value.

The Kenvue deal is the real reason behind Cramer’s bullish call

One of the main reasons why Cramer is still bullish on KMB is its pending deal with Kenvue. Kenvue was formerly a part of Johnson & Johnson’s consumer health division, and it makes Tylenol, Band-Aid, Neutrogena, and Listerine.

KMB shareholders approved the deal earlier this year, and Kimberly-Clark reported that 96% of them supported it.

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Once the deal closes in the second half of 2026 under CEO Mike Hsu, Kimberly-Clark will be able to add high-profit personal health products to its lineup.

Cramer believes that with the new deal, KMB could become a serious rival for Procter & Gamble, which is the top name when it comes to household goods.

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What everyday investors should consider before buying KMB

Although Cramer sounds confident about KMB, the stock still carries some risks.

For one thing, investors still need to wait for the Nov. 3 third-quarter earnings report to know whether the warehouse fire problems are no longer affecting the company. If not, the stock could fall again.

The merger with Kenvue is another consideration. Large deals like this often take time before delivering the profit people expect. So if you’re buying today, you should be ready to hold the stock for at least a full year before expecting substantial gains. 

A high dividend yield alone is usually not enough reason to buy a stock, but KMB has something many peers don’t have. The company has increased its dividend for 54 straight years, which makes it qualify as a Dividend King.

Also, some investors feel its 5.4% yield is worthwhile enough for them to wait while the company completes the Kenvue merger.

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