Oct 27, 2026 · 43 min
AI funding fears test the rally’s next leg
The AI Correction, Tech Earnings and the Rally 10/27/26
The episode weighs whether lower yields and lighter positioning can revive AI stocks while funding demands expose differences between durable leaders and leveraged challengers.
- 1Falling yields and improved positioning could broaden the rally beyond technology into industrials and other overlooked sectors.
- 2Broadcom, hyperscalers, and established chipmakers appear better equipped to fund AI expansion than neocloud companies such as CoreWeave.
- 3Options activity points to cautious expectations for Alphabet and Microsoft, even as investors debate whether recent declines create tactical opportunities.
Don't miss
The panel’s options review contrasts active Alphabet calls, including large upside-call selling, with subdued and neutral Microsoft activity ahead of earnings.
The brief
The panel asks whether the AI-stock correction has ended, linking falling Treasury yields and improved positioning to the possibility of a broader market rebound.
The central fault line is funding: established chipmakers and hyperscalers can generate cash for AI expansion, while companies such as CoreWeave face greater financing pressure.
Valuation debates extend beyond megacap technology, with Micron, Cadence, Synopsys, Teradyne, and cybersecurity stocks assessed for growth, balance-sheet strength, and earnings support.
Josh Brown makes the case for Brazil’s EWZ ETF despite election volatility, while the panel reviews UPS, Coca-Cola, Boeing, and other opportunities outside the AI trade.
The standout market signal comes from options: Alphabet calls are active but upside is being sold, while Microsoft trading appears subdued and broadly neutral ahead of earnings.
The episode closes by testing whether compressed valuations and washed-out positioning can support an AI rebound without making every competing investment thesis viable.
What was said on this episode
51 statements · 41 positive · 6 negative · 4 neutral
AI optimism will return through the end of 2026.
“I think that's an excellent... set up for this return of optimism that I'm anticipating us to close 2026 out with.”
Listen at 3:35
Investors should focus discipline on large-cap AI names.
“I think that's where you exert the discipline that they cite there in their report.”
Listen at 3:47
AI-related good news should produce positive stock reactions.
“when we get good news surrounding AI, I want there to be a good reaction.”
Listen at 3:57
AI-related stocks should show continued gains after upcoming earnings.
“I want follow through for the remainder of the week as we hear from Microsoft and from Alphabet and from Amazon”
Listen at 4:29
AI, cybersecurity, and robotics remain relatively early investment themes.
“I think we're in the fourth inning in AI and I think we're in the third inning in cybersecurity and the first inning in robotics.”
Listen at 5:36
Semiconductors will report very strong results.
“I expect the semiconductors to have very good results.”
Listen at 6:22
Hyperscalers are continuing to increase spending.
“I think the hyperscalers are continuing to spend.”
Listen at 6:25
Hyperscaler AI spending is not expected to end soon.
“they're telling us it's not going to end.”
Listen at 6:34
Industrials will perform exceptionally well this week.
“I think we're going to lights out tomorrow and this week on the industrials, no question.”
Listen at 6:54
SanDisk trades at a PEG ratio of 0.08.
“Sandisk is currently selling at a PEG of 0.08.”
Listen at 8:37
Micron and Western Digital trade at PEG ratios of 0.10 and 0.13.
“Micron, 0.10 PEG. Western Dig, 0.13.”
Listen at 8:50
Technology earnings expectations are rising.
“Earnings expectations for tech are not coming down. They're going up.”
Listen at 8:55
NVIDIA trades at 15.3 times forward earnings.
“NVIDIA is selling at 15.3 times forward earnings.”
Listen at 9:02
The current market setup is more favorable for AI-related stocks.
“So I do think the setup looks better.”
Listen at 9:08
Amazon's upcoming earnings could be exceptionally strong.
“what we're going to hear from Amazon on Thursday after the close could be absolutely explosive.”
Listen at 9:40
AI-driven economic activity may be spreading beyond technology.
“maybe all of this economic activity... from AI is bleeding out further.”
Listen at 11:52
Momentum stocks have an excellent setup into year-end.
“I think the setup for momentum as we move towards the end of the year is excellent.”
Listen at 12:41
Momentum stocks have an excellent setup into year-end.
“the setup for momentum as we move towards the end of the year is excellent.”
Listen at 12:41
Changes in yields influence momentum-factor performance.
“there's a correlation to the delta for yields. is what impacts where the momentum factor goes.”
Listen at 13:25
Changes in yields strongly correlate with momentum-factor performance.
“there's a very strong correlation that I continue to watch between the rate of change in yields and what the momentum factor ultimately does.”
Listen at 14:03
Broadcom's Anthropic deal secures about $60B revenue for 2027.
“that has secured about $60 billion in revenues for 2027”
Listen at 14:56
Broadcom offers an investment opportunity.
“I think there's opportunity here.”
Listen at 15:39
Some AI-related companies face hidden financial risks.
“I think there's a pocket of toxicity lurking out there”
Listen at 18:18
Some AI-related companies face hidden financial risks.
“there's a pocket of toxicity lurking out there”
Listen at 18:18
Capital is shifting toward AI companies with stronger balance sheets.
“The market is narrowing the AI opportunity and it's exploring where there are better balance sheets and capital is going in that direction.”
Listen at 18:56
The cost of capital has increased.
“The cost of capital has gone up.”
Listen at 19:18
Markets have distinguished stronger hyperscalers from weaker neoclouds.
“The market has correctly surmised what you're suggesting.”
Listen at 19:54
Alphabet's convertible preferred is undervalued.
“I think it's undervalued.”
Listen at 20:08
Micron has over $100B secured through 2030.
“they've got over $100 billion secured between now and 2030.”
Listen at 22:27
Cadence reported an exceptionally strong quarter.
“I thought cadence's quarter was phenomenal.”
Listen at 22:43
Teradyne is an attractive investment.
“I like Teradyne.”
Listen at 23:16
Starlink could reach about 200 million subscribers by 2030.
“I think they're on path to see something like 200 million subscribers in Starlink by 2030.”
Listen at 24:01
SpaceX is a long-term buy-and-hold investment.
“this is a buy and hold it for a really long time.”
Listen at 24:17
Brazil has substantial future growth potential.
“I think there's a lot of growth yet to be had.”
Listen at 25:45
Brazil's recent selloff is excessive; Stephanie will keep buying.
“Short term, I think it's way overdone, and I'll continue to add at these levels.”
Listen at 25:58
Investors should continue adding Brazil exposure at current levels.
“I'll continue to add at these levels.”
Listen at 26:00
Brazil contains several exceptional companies.
“there's phenomenal companies in the country of Brazil.”
Listen at 26:23
UPS's strategy is producing positive results.
“UPS, right? Their strategy is working.”
Listen at 28:17
UPS's strategy is working.
“Their strategy is working.”
Listen at 28:19
UPS is an attractive investment.
“I think it's a great place to be.”
Listen at 28:58
Coca-Cola is well positioned in its market.
“they really are sitting in the sweet spot”
Listen at 29:51
Boeing may miss its $1B–$3B free-cash-flow target this year.
“I think it's going to be really hard for them to get to the one to three billion dollars of free cash flow for this year.”
Listen at 30:45
Josh Brown is not recommending reentering Meta.
“We are not reentering. The name is off the list.”
Listen at 33:29
Traders should wait for Meta to reclaim approximately $664 before acting.
“you need to see the stock take back its 50 day, which is about 664 before you do anything.”
Listen at 33:35
“If it stays above, I think you want to remain constructive in Cloudflare.”
Listen at 35:05
Okta is a potential takeover target.
“there's the one that I believe is the takeover target, which is Okta.”
Listen at 35:33
Zscaler is expected to outperform after lagging peers.
“I think it's going to play catch up.”
Listen at 35:58
AI stocks are positioned for a tactical rebound.
“you really do have the makings for what should be a tactical bounce.”
Listen at 36:41
Competition among five major AI investors may limit returns from massive spending.
“I do still think you stub all these companies investing at a scale where they think it's win or take most, and it can't be win or take most if there's five of them trying to do it.”
Listen at 38:02
Google will remain fundamentally sound over the long term.
“I think Google, over the long term, will be fine.”
Listen at 40:28
Delta stock will rebound strongly if oil prices decline.
“If and when oil comes down, Delta is going to act like it's on a trampoline.”
Listen at 42:11
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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