Oct 9, 2026 · 43 min
AI spending tests the market’s resilience
Closing Bell 10/9/26
The episode weighs whether extraordinary AI investment and concentrated leadership can sustain earnings growth as rates, geopolitics, and risk premiums remain elevated.
- 1AI-related companies are driving earnings expectations, but investors must decide whether hyperscaler spending can produce adequate returns.
- 2Investment-grade corporate and municipal bonds offer meaningful competition to equities as elevated yields reshape portfolio choices.
- 3Bearish options positioning, bitcoin weakness, housing pressure, and accounting questions around OpenAI reveal a market sensitive to shocks.
Don't miss
Lo Toney reframes the OpenAI revenue shortfall as a possible accounting mismatch rather than evidence of weakening customer demand.
The brief
Closing Bell opens with a resilient market confronting elevated rates, geopolitical and energy risks, and an AI trade increasingly responsible for earnings expectations.
Michael Santoli, Tom Lee, and Bryn Talkington debate whether concentrated leadership signals strength or resembles a late-cycle bubble—and whether hyperscaler spending can generate adequate returns.
The risk map broadens from AI to bonds, options, bitcoin, housing, and telecom stocks, with yields creating competition for equities and investors buying protection against technology weakness.
Lo Toney argues that OpenAI’s apparent revenue shortfall may reflect gross-versus-net accounting rather than weaker demand, while explaining the economics behind Plexo Capital’s Anthropic investment.
Keith Lerner closes with the bull case: resilient margins, improving forward estimates, attractive yields, and historical patterns still outweigh the market’s growing list of vulnerabilities.
What was said on this episode
61 statements · 47 positive · 9 negative · 1 mixed · 4 neutral
The diesel supply measure is only a temporary solution.
“it's not a permanent solution at all. It's sort of a short term bandaid”
Listen at 2:30
AI’s economic growth prospects remain intact
“the growth prospects on the economy for the AI revolution are as intact this week as it were last week and the week before that”
Listen at 3:11
The market’s direction remains upward
“the direction of the market is upward and nothing is thwarting that at all”
Listen at 3:30
The AI growth trend is not slowing
“that train, I should say, called AI is it's not slowing down”
Listen at 4:22
Investors should remain diversified
“you still have to be diversified”
Listen at 4:55
Investors should remain diversified.
“you still have to be diversified.”
Listen at 4:55
Bonds may hedge AI-related equity risks
“I'm beginning to look at bonds. and say at these rates, especially these real rates that I have not seen for 25 years, this might be a hedge”
Listen at 4:57
Bonds may hedge AI-related risks
“this might be a hedge”
Listen at 5:05
AI leaders have stronger earnings than 1990s bubble companies
“these are real companies with earnings that are so great.”
Listen at 6:42
Current AI companies have strong earnings
“these are real companies with earnings that are so great”
Listen at 6:42
Higher real rates pressure value stocks
“The higher real rates are squeezing the value sector”
Listen at 7:39
Higher real rates pressure value-sector stocks downward
“Until they can experience the productivity growth from AI to offset these higher rates, you're going to see their stocks go down.”
Listen at 7:44
An AI bubble burst would sharply lower interest rates
“If the AI bubble burst, I think interest rates are going way down”
Listen at 8:00
Investors should diversify with bonds or cyclical stocks
“diversification, either with the bonds or the cyclical sector, I think remains important for investors”
Listen at 8:22
Current 25–30% earnings growth outside recession is unprecedented
“25 to 30 percent year over year gains not coming out of a recession. is something that is just unprecedented in financial history”
Listen at 8:54
AI-related stock prices are not excessively valued
“I don't think these prices are wild.”
Listen at 9:39
AI-related stock prices are not excessively high
“I don't think these prices are wild”
Listen at 9:39
Micron and NVIDIA will contribute 40% of 2027 S&P earnings growth
“For 2027, Micron and NVIDIA alone are going to contribute 40 percent to the earnings growth of the S&P.”
Listen at 10:54
Micron and NVIDIA will drive 40% of S&P earnings growth
“Micron and NVIDIA alone are going to contribute 40 percent to the earnings growth of the S&P”
Listen at 10:56
Rising compute and cloud use benefit major hyperscalers
“I think that plays really well into Google, Amazon and Microsoft. as the big hyperscalers”
Listen at 11:11
AI capital spending is beneficial if major companies earn returns
“as long as ultimately these big companies can show ROI, then yes, the CapEx was good”
Listen at 12:42
Unproductive AI spending would eventually hurt stock prices
“If not, but we're not going to find this out for, I think, a couple of years. And yeah, these stocks have been wasting money and the stock prices will go down.”
Listen at 12:49
AI capital-expenditure returns will become clear in several years
“we're not going to find this out for, I think, a couple of years”
Listen at 12:50
Third-quarter earnings will restore confidence in AI
“I'm going to be in a camp that third quarter earnings is going to restore the confidence of AI”
Listen at 14:14
Third-quarter earnings will restore AI confidence
“third quarter earnings is going to restore the confidence of AI”
Listen at 14:16
The midterms will clear political uncertainty for AI stocks
“I think the midterms are a clearing event of sorts”
Listen at 14:21
Concentrated AI market leadership is justified
“I think that concentration makes sense”
Listen at 14:35
Concentrated AI market leadership is justified
“I think that concentration makes sense.”
Listen at 14:35
Interest rates are no longer negative for equities
“I think we're at the point here where rates are no longer a negative story for equities”
Listen at 15:51
Seven-year investment-grade corporates yield over 6%
“you can get over six percent for seven years”
Listen at 17:16
Seven-year investment-grade corporates yield over 6%
“you can get over six percent for seven years.”
Listen at 17:16
Seven-year investment-grade munis yield over 7% for top tax brackets
“if you're in the highest tax bracket, that same seven-year investment grade, it's got your over 7%.”
Listen at 17:20
Seven-year investment-grade munis yield over 7% for top tax brackets
“that same seven-year investment grade, it's got your over 7%”
Listen at 17:22
Investors should allocate more to intermediate-duration corporates and munis.
“we are allocating and looking to allocate more into seven-, eight-year corporates and also munis as well”
Listen at 18:03
Investors will allocate more to longer-duration bonds
“investors will absolutely be starting to allocate to longer duration bonds with this yields, elevated yields”
Listen at 18:17
OpenAI’s revenue discrepancy reflects accounting rather than weaker demand.
“the discrepancy was more about accounting when you look under the hood versus slowing demand.”
Listen at 24:10
OpenAI is pursuing a $1.4 trillion valuation
“This company is in the process of doing $1.4 trillion valuation.”
Listen at 24:41
OpenAI’s revenue disclosure does not show fundamental weakness
“I don't see this disclosure as evidence that something is fundamentally wrong. With OpenAI”
Listen at 25:38
Anthropic’s enterprise focus was attractive to investors
“we liked Anthropic's focus on the enterprise.”
Listen at 28:12
Anthropic’s enterprise focus was attractive to investors
“we liked Anthropic's focus on the enterprise”
Listen at 28:12
Open-weight and frontier models require similar compute
“the compute is the same”
Listen at 30:47
Open-weight and frontier models require broadly similar compute
“the compute is the same. is the way that you're structuring the cost of your tokens.”
Listen at 30:47
Frontier models can perform previously impossible tasks
“Once they achieve the frontier, they're able to complete tasks that formerly had not been able to be done.”
Listen at 31:33
Customers will pay premiums for frontier-model capabilities
“There's a market that's willing to pay a premium. to be able to complete those tasks.”
Listen at 31:41
Lower prices for older frontier models should expand usage
“what used to be the frontier model, but now it's kind of the second or third generation from the frontier, as those prices drop... What we want to see is we want to see an expansion in the total number of people that now are willing to pay for using that model.”
Listen at 31:59
The NBA’s global strategy aims to grow audiences and profits
“This is a strategy that the NBA is deploying worldwide in Africa, in Europe, training young players, Scott, developing teams, growing the audience and, of course, the potential profits for all the investors involved in the game.”
Listen at 34:06
The 10-year yield and Nasdaq currently have 0.8 correlation
“The correlation between the 10-year yield and the NASDAQ is currently positive 0.8.”
Listen at 37:47
Bitcoin trades above $82,000, down about 34% from its peak
“it's trading at just above $82,000, down some 34% from its peak”
Listen at 38:12
Higher yields, stronger dollar, and expensive oil pressure risk assets
“Higher Treasury yields, a stronger dollar in oil above $100 are all weighing on risk assets.”
Listen at 38:31
Clarity Act passage this year appears unlikely
“the odds of passage this year now look increasingly slim”
Listen at 38:45
Clarity Act passage odds this year are increasingly low
“the odds of passage this year now look increasingly slim.”
Listen at 38:45
The stock market will achieve further gains
“we still think ultimately this market has more gains to see”
Listen at 41:20
The bull market will continue gaining
“we still think ultimately this market has more gains to see.”
Listen at 41:20
The market will withstand elevated interest rates
“I think the market will continue to power through”
Listen at 41:53
The market can withstand rates if they stabilize
“I think as long as we start to stabilize in rates here, I think the market can power through”
Listen at 42:03
Market can withstand current rates if yields stabilize
“as long as we start to stabilize in rates here, I think the market can power through”
Listen at 42:03
The market can withstand currently elevated rates
“I think the market can power through”
Listen at 42:06
Corporate margins and forward earnings estimates continue improving
“our companies have gone through one shock after another, and they have continued to improve as far as margins, and we continue to see forward estimates move higher.”
Listen at 42:18
Forward corporate earnings estimates continue rising
“we continue to see forward estimates move higher”
Listen at 42:24
Forward corporate earnings estimates continue to rise.
“we continue to see forward estimates move higher.”
Listen at 42:24
2027 earnings estimates are rising rather than falling
“2027 estimates are now in focus, and we're starting to see those estimates move up instead of the normal move, which is typically down”
Listen at 42:28
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.