Nov 9, 2026 · 47 min
AI sell-off tests confidence in long-term growth
4 Growth Stocks to Buy While They’re Still Undervalued
The episode separates short-term pressure from the underlying AI infrastructure thesis while identifying four growth stocks trading below Morningstar’s estimates of fair value.
- 1Higher rates, tighter credit, and concentrated data-center borrowing intensified the rotation away from AI and growth stocks.
- 2The hosts see durable AI infrastructure demand despite financing risks, valuation concerns, and potential semiconductor pricing cycles.
- 3Marvell, Monolithic Power Systems, Hexcel, and Qunity Electronics emerge as the episode’s four undervalued growth ideas.
Don't miss
Dave Sekera’s postmortem explains how concentrated AI exposure, rising rates, tighter credit, data-center borrowing, and margin liquidations combined to drive the sell-off.
The brief
Sarah Hansen and Morningstar strategist Dave Sekera open with the market’s abrupt rotation away from AI and growth stocks after the midterm elections, framing panic selling as the episode’s central question.
Inflation, jobs data, Federal Reserve policy, and tighter credit set the macro backdrop, while Applied Materials, CoreWeave, and Nebius expose the capital demands behind AI infrastructure.
Research updates span Apple, Palantir, Arista Networks, SanDisk, and Mondelez, revealing a market where strong operating results do not automatically overcome valuation or cycle concerns.
Sekera’s sell-off postmortem links concentrated AI exposure, rising rates, data-center borrowing, portfolio rotation, and margin liquidations—while preserving Morningstar’s long-term AI buildout thesis.
The episode closes with four undervalued growth ideas: Marvell, Monolithic Power Systems, Hexcel, and Qunity Electronics, spanning networking, power management, aerospace materials, and semiconductor chemicals.
What was said on this episode
18 statements · 9 positive · 8 negative · 1 mixed
Leading AI technology companies will reap long-term benefits from AI.
“we still think the stocks of those companies that are at the forefront of AI technology, really the leaders of new technology and building it out, will still end up reaping the long-term benefits of AI.”
Listen at 4:04
Commodity-oriented tech hardware stocks remain overvalued and will decline further.
“Those are still overvalued and still have further to fall.”
Listen at 4:29
New AI data-center capacity will be rapidly utilized.
“whatever these companies can build out will be very quickly put to work.”
Listen at 11:32
Some AI infrastructure companies could become bankruptcy candidates.
“they could even potentially be bankruptcy candidates.”
Listen at 14:53
Rising iPhone memory costs will pressure Apple’s margins.
“we're looking for margin pressure because the cost of the memory in those iPhones, you know, keeps going higher and higher, but they're not able to push all of that through to their end customers.”
Listen at 16:17
Apple stock is overvalued relative to Morningstar’s forecast.
“we think that the stock is overvalued.”
Listen at 17:01
Clorox’s incoming CEO will reduce costs and improve margins.
“we're expecting to see good ability for him to come in and really help that company really take a lot of costs out of their own supply chain, take costs out of their own operating you know, and be able to boost their margins going forward.”
Listen at 18:54
Investors should consider taking profits when a stock reaches two-star territory.
“when a stock gets into that 2-star territory, it's usually a pretty indication that you should at least start taking, you know, some profits off the table.”
Listen at 19:38
Healthpeak trades at a 26% fair-value discount with a 6% dividend yield.
“it's a 4-star rated stock at a 26% discount to fair value. Very nice, healthy dividend yield at 6%.”
Listen at 21:52
Arista Networks would be very undervalued if projected growth occurs.
“if we get that growth, the stock is very undervalued.”
Listen at 24:22
SanDisk pricing will enter a severe downcycle after peaking.
“we still expect that once we start to sell off in pricing, that we'll go into probably a pretty severe down cycle in pricing once it starts to crack.”
Listen at 25:51
SanDisk revenue will peak in 2028 and decline afterward.
“So 2028 will probably be the peak revenue on a combination of both increased prices as well as volume, but then we expect revenue to start coming down thereafter.”
Listen at 26:19
Mondelez trades at a 14% discount to fair value.
“it's still trading at a 14% discount to fair value.”
Listen at 28:14
A slowdown in AI buildout spending could cause a short-term U.S. recession.
“If that were to slow, I think that would weigh extremely heavily on the US economy, probably lead to a short-term recession.”
Listen at 30:43
Data-center construction will continue despite potential regulation.
“we still expect the data center buildout to continue.”
Listen at 34:54
Marvell trades at a 57% discount to fair value and has a five-star rating.
“Either way, stock is at a 57% discount to fair value after it fell as much as it fell, puts it well into 5-star territory.”
Listen at 37:53
Monolithic Power Systems trades at a 32% discount to fair value.
“Monolithic is a 4-star rated stock currently trading at a 32% discount to fair value”
Listen at 39:28
Monolithic Power Systems is attractive as a growth-at-a-reasonable-price stock.
“this is a good GARP stock, so growth at a reasonable price.”
Listen at 40:41
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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