Oct 23, 2026 · 43 min
Investors debate whether AI weakness signals a broader risk-off turn
Shifting Sentiment and Sliding Semis: The Investment Committee's Strategy 10/23/26
The committee weighs falling yields, slowing growth expectations, and expensive AI infrastructure against earnings strength and fresh opportunities in cybersecurity and energy.
- 1Falling Treasury yields may reflect either healthy rotation or a broader retreat from riskier assets.
- 2Mega-cap technology earnings must justify cloud spending, capital intensity, and valuations as growth expectations moderate.
- 3Stephanie Link shifts toward Wells Fargo and Zscaler while the panel finds bullish energy options activity.
Don't miss
Stephanie Link outlines buying more Wells Fargo, funding it by selling Dover, and initiating Zscaler as a discounted cybersecurity position.
The brief
Scott Wapner’s Investment Committee confronts a market under pressure, asking whether defensive leadership and lower Treasury yields signal healthy broadening or a deeper loss of risk appetite.
The panel debates AI and semiconductor exposure as valuations, financing risks, heavy technology selling, and mega-cap cloud spending challenge the case for continued offense.
Falling yields become the macro fault line: bonds may be cheap, or investors may be seeking safety as doubts grow about AI’s economic payoff.
Stephanie Link buys more Wells Fargo, sells Dover, and adds Zscaler, while the committee argues cybersecurity fundamentals remain supported by persistent threats and expanding technology budgets.
Michael Santoli asks whether rolling weakness has exhausted sellers, as bullish USO and XLE options activity and Schlumberger’s outlook point toward energy opportunity.
What was said on this episode
47 statements · 39 positive · 5 negative · 2 mixed · 1 neutral
Market breadth is expanding because the economy remains resilient.
“we're broadening out because the economy is doing OK in the face of all the unknown.”
Listen at 2:07
Materials, financials, discretionary, and homebuilders offer substantial value.
“I think there's much more value in the stocks, the sectors I just mentioned, but it is broad-based.”
Listen at 3:02
Upcoming S&P 500 earnings reports will be strong.
“They're going to be great. Wait until we get next week. We're going to get 30% of the S&P. It's going to be great.”
Listen at 3:11
Higher growth and monetization will restore investor confidence next week.
“I think that's going to give people confidence come this time next week.”
Listen at 3:35
Slower capital expenditure would harm AI infrastructure companies.
“If the CapEx slows down, that is a problem.”
Listen at 4:55
Investors should buy market dislocations ahead of strong mega-cap earnings.
“I think it's time to take advantage, right? Because I do think we're going to get some really nice prints from the big boys next week and continue to follow through through the rest of earnings.”
Listen at 5:38
AI infrastructure is a generational buildout that will create substantial investor profits.
“I think I'm confident long term in the theme. I think this build out is a generational build out. People are going to make a lot of money on this build-out.”
Listen at 7:14
The semiconductor correction is worth buying into.
“this is a correction that's worth taking advantage of.”
Listen at 8:48
Technology investor positioning has become excessively bearish.
“The positioning has already gone too far to the negative.”
Listen at 10:06
Anthropic IPO and OpenAI funding would revive the AI trade.
“if Anthropic actually does go public before the end of November and if OpenAI closes this 30-ish billion dollar funding round, those two things happen and it erases this worry about is the funding out there and the trade's back on when that happens.”
Listen at 10:24
The semiconductor companies discussed are high-quality businesses.
“I think these are incredibly high-quality companies.”
Listen at 11:19
Jason Snipe would not buy the semiconductor dips immediately.
“The answer is no, not for me right now.”
Listen at 11:40
Investors should pair healthcare and AI infrastructure exposure.
“I would barbell it with these two areas, the two highest conviction areas, health care and still AI infrastructure for us.”
Listen at 12:11
Jason Snipe remains positive on bonds.
“But I also like bonds quite a bit still.”
Listen at 12:20
AI and AI infrastructure are not yet in a bubble.
“I'm not in the camp that it's a bubble. I think that we're in the third or fourth inning in terms of AI and AI infrastructure and the food chain.”
Listen at 13:24
Cloud business momentum will continue.
“I think the momentum continues across the cloud businesses”
Listen at 14:18
Microsoft Azure revenue will grow 40% to 45%.
“Azure's business will be up 40% to 45%.”
Listen at 14:49
Amazon AWS growth could accelerate to 42–43%.
“I actually think AWS could accelerate from 37% growth last quarter to 42% or 43%”
Listen at 15:41
Amazon’s upcoming quarter will be strong.
“I think the quarter is going to be really strong.”
Listen at 16:00
Amazon’s valuation should not compress to 17 times forward estimates.
“not to 17 times forward estimates.”
Listen at 19:07
Alphabet and comparable stocks are undervalued relative to expected growth.
“that multiples have compressed more than they should have for where growth rates are going.”
Listen at 20:05
Slowing earnings growth remains attractive at current multiples.
“you're decelerating to a growth rate combined with a multiple that to me is very attractive.”
Listen at 20:49
Meta’s spending level is unattractive relative to returns.
“I'm not comfortable with the spend at a company like Meta”
Listen at 22:00
Meta’s Muse project will succeed by leveraging its user base.
“I think Muse will win as they leverage almost 4 billion of users.”
Listen at 22:46
Vertiv, GE Vernova, and Quanta will deliver strong results and are buys.
“I do think overall they're going to have great quarters, great backlogs, better margins, market share gains across all three of these names that I just mentioned. And I think they're buys now.”
Listen at 23:42
Infrastructure capital spending will not slow and creates an opportunity.
“I just don't think that slows down. For me, I think of it as an opportunity.”
Listen at 25:15
Wells Fargo will gain market share.
“I think they're going to gain market share going forward.”
Listen at 26:00
Wells Fargo is undervalued at 1.5 times book value.
“I think the stock at 1.5 times book, Scott, is it's a value here.”
Listen at 26:18
Wells Fargo stock will catch up over coming quarters.
“I just think it's going to play catch up over the next couple of quarters.”
Listen at 26:24
Zscaler margins will expand to 27–30% by 2030.
“Margins are going to... expand between now and 2030 to 27 to 30 percent.”
Listen at 27:33
Zscaler stock will catch up with cybersecurity peers.
“And so I think this is going to play catch up at some point.”
Listen at 27:37
Corporate technology budgets are continuing to expand.
“CTO budgets are continuing to expand.”
Listen at 28:56
Leading cybersecurity companies will continue accelerating.
“these are the best of breed names in the space. And I just think they continue to accelerate.”
Listen at 29:07
Cybersecurity companies will benefit from persistent cyber threats.
“these are some of the greatest companies in the world. and will continue to benefit from a theme that's not going away.”
Listen at 30:26
SpaceX’s growth story is still in its early stages.
“I think this is just getting going. I like the story. I like the move.”
Listen at 32:17
ServiceNow benefits from AI rather than being disrupted by it.
“this is the air traffic controller of the corporate AI stack, IT stack rather. It's an AI beneficiary. It's not an AI casualty.”
Listen at 32:30
ServiceNow will grow revenue 20% with expanding margins through agentic AI.
“20% revenue growth, expanding margins, like I said, leveraging agentic AI.”
Listen at 33:36
ServiceNow offers 20–25% growth with margin expansion at 25 times earnings.
“20 to 25 percent growth, 25 times multiple margin expansion.”
Listen at 33:51
Market prices have weakened substantially without major earnings deterioration.
“you have had plenty of damage done without really having, you know, the earnings picture change very much.”
Listen at 37:15
Schlumberger margins have room to improve.
“Margins have upside.”
Listen at 39:04
Schlumberger’s earnings power could improve if Middle East weakness eases.
“what this earnings power of this company could be.”
Listen at 39:13
Boeing deliveries will be light because of product constraints.
“Its deliveries are going to be light because of product constraints.”
Listen at 39:42
Boeing could guide to $4–5 billion cash flow for 2027.
“Is it $4 to $5 billion for 2027? I think if they guide to that, we'll be OK”
Listen at 39:47
Current market breadth reflects defensive rather than cyclical rotation.
“this breadth is not a broad cyclical rotation”
Listen at 40:42
Investors should own Devon Energy for its cash flow and discipline.
“own the cash flow, own the discipline, and let the market catch up, I think.”
Listen at 41:30
Lockheed Martin is somewhat expensive but attractive on PEG valuation.
“Lockheed Martin. We know what they do. Maybe a little pricey at 18 times, but the peg ratio is only 1.2.”
Listen at 41:38
Goldman Sachs equity revenue rose 72% last quarter.
“Goldman Sachs, equity, revenue was up 72% last quarter.”
Listen at 41:53
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.
Weekly email
State of the Pod, every Monday
The week's most-discussed names and stories from podcasts, with the moments behind them. Free, five minutes, unsubscribe in one click.