Oct 21, 2026 · 44 min
Investors test whether AI weakness signals opportunity or cycle peak
Will the AI Trade Resume? The Investment Committee Weighs in 10/21/26
The episode weighs whether volatile AI markets reflect temporary fear or a deeper reset, while examining regulation, China exposure, and practical portfolio risk.
- 1The committee separates AI winners from weaker names by weighing earnings, valuations, profitability, and uncertain data-center spending.
- 2Netflix’s weaker guidance revives questions about slowing growth, rising content costs, and whether its valuation still compensates investors.
- 3Circle’s Jeremy Allaire links stablecoins and AI-driven finance to an evolving framework for digital-dollar regulation.
Don't miss
Jeremy Allaire connects stablecoins, digital-dollar regulation, Bitcoin, and AI-driven economic activity in a discussion of future financial infrastructure.
The brief
The Investment Committee debates whether recent AI weakness creates a buying opportunity or marks the start of a broader cycle peak, with earnings and valuations at the center.
Meta and AMD become tests of selectivity: strong profitability may support Meta, while AMD’s valuation and uncertain data-center spending complicate the broader AI case.
Netflix’s shares fall after weaker revenue guidance and reduced advertising expectations, prompting a debate over slowing growth, content costs, and streaming’s valuation.
Circle CEO Jeremy Allaire discusses stablecoins, the OCC’s implementation of the GENIUS Act, Bitcoin, and how AI-driven activity could reshape financial infrastructure.
The episode widens its lens to bullish options in Chinese equities, analyst calls across sectors, and practical guidance on risk-taking, diversification, and asset allocation.
What was said on this episode
46 statements · 28 positive · 13 negative · 4 mixed · 1 neutral
Joe Terranova expects earnings growth and rapid AI-position rebuilding in November.
“the earnings growth is going to be there and they are going to have to quickly rebuild positioning as we move through the early part of November and you see the optimism return once again as we close out 2026 in a very strong way.”
Listen at 1:55
Stephanie Link says reasonable valuations depend on strong upcoming earnings.
“if we hear good numbers over the next 10 days.”
Listen at 3:50
Steve Weiss does not expect elections to trigger an AI-trade clearing event.
“I don't think that you're going to see a clearing event with the elections.”
Listen at 4:52
Steve Weiss says the AI trade continues but requires selective positioning.
“I continue to say this. I'm not saying the AI trade is done. I'm just saying it's a time where the tide is not lifting all ships and you've got to be careful what you go to.”
Listen at 5:23
Steve Weiss prefers established cash-flow companies over CoreWeave, Anthropic, and OpenAI.
“I'm avoiding those. I'm not saying they're not going to go up. I'd just rather miss, you know, the high, high momentum hype and stick with what's going to endure over a long-term multiple cycles.”
Listen at 6:44
Joe Terranova recommends selectively allocating toward underperforming AI-related names.
“I want to tactically and surgically allocate in the direction where there has been clear underperformance.”
Listen at 7:29
Steve Weiss expects appetite to wane as AI capital spending growth peaks.
“when I see the end of the cycle in terms of growth in spending, in CapEx, and I see that a year out, right, the appetite for it is going to wane for these companies that just have to spend and spend and spend.”
Listen at 9:07
Carrie Firestone says Micron’s valuation reflects doubts about sustained earnings growth.
“Micron's up 220% on the year. Yet trading at under 10 times earnings because there's so much skepticism about if they can really sustain the earnings growth.”
Listen at 10:18
Carrie Firestone says investors have become more selective about AI stocks.
“discretion and discernment entered the investors' take on AI”
Listen at 11:50
Joe Terranova says data centers will continue needing power and cooling equipment.
“we're not going to still need power generation and cooling equipment for data centers as we move forward.”
Listen at 12:36
Steve Weiss expects AI-related spending to peak rather than grow indefinitely.
“It will peak like every other cycle. It peaks.”
Listen at 13:00
Joe Terranova believes Micron is in a longer-than-usual cycle.
“I think Micron's in a more elongated cycle than history would tell us.”
Listen at 13:06
Steve Weiss expects the cycle to peak about a year ahead.
“I believe we peak a year out and markets historically discount a year before.”
Listen at 13:40
Joe Terranova views the AI-trade pullback as a buying opportunity.
“I'm recognizing you're getting a correction opportunity in the AI trade that I want to take advantage of.”
Listen at 14:01
Carrie Firestone says the recent AI-trade decline is insufficient to constitute a meaningful discount.
“It's not enough. Like what happened over the last week is not a slap to the AI trade. It's not— there's not enough discount.”
Listen at 14:39
Carrie Firestone senses the AI market may be near a peak but lacks confirmation.
“I'm saying we haven't seen anything yet for like when— and I think we all have this sensation and all that can be is a sensation. We all have this sensation that we're somewhere around a peak”
Listen at 14:59
Carrie Firestone expects Meta’s quarterly earnings to grow 24%.
“they should grow their earnings at 24% this quarter.”
Listen at 16:40
Carrie Firestone favors Meta because its valuation and earnings growth appear relatively reliable.
“I think that you can get behind Meta. Because it's trading at— hold on, what's it at? It's at 21 times earnings right now. It's got double-digit earnings growth ahead. And that earnings growth to me is more reliable than other AI trades.”
Listen at 16:50
Carrie Firestone is cautiously favorable toward AMD.
“I think you can get behind AMD probably.”
Listen at 17:08
Carrie Firestone says uncertainty about AI spending suppresses valuations.
“What if that has an impact? There's a lot of what-ifs. So, you know, theoretical, all theoretical. And that's why this moment is hard. And that's why valuations are a little suppressed compared to what they were, because there's skepticism.”
Listen at 17:52
Stephanie Link cautions that the market may not advance rapidly near term.
“don't assume anything's going to sort of zoom ahead. Yeah, I agree. In the near term.”
Listen at 18:19
Steve Weiss says Meta demonstrates AI can increase revenue and cash flow.
“I think to your point that they are showing that AI can increase their revenue, can increase their cash.”
Listen at 19:23
Joe Terranova expects Alphabet to enter a catch-up phase in 2027.
“I think a catch-up phase is in front of us in 2027.”
Listen at 21:26
Joe Terranova recommends avoiding streaming companies because of content and cost challenges.
“I think every one of the streamers, including Disney, I think you avoid all of them because I think they have significant challenges in front of them related to content and related to costs.”
Listen at 23:40
Joe Terranova recommends holding Valero while trailing a stop upward.
“My guidance to the viewers is if you are in this name, stay with this name and gradually trail a stop as it continues to move higher.”
Listen at 26:18
Joe Terranova says $500 could be in play for Valero.
“And I don't think it's unreasonable to expect $500. To be in play for Valero.”
Listen at 26:26
Carrie Firestone says Marriott’s valuation is high and free-cash-flow yield is low.
“it's trading at 31 times earnings right now. And the free cash flow yield, which is a huge hurdle for us is down to 2.5%.”
Listen at 26:51
Carrie Firestone views Northrop as attractively valued with high-single-digit growth ahead.
“this one's trading at 18 times earnings with a nearly 5% free cash flow yield, down 5% on the year. Also not, not double-digit earnings growth, but like high single-digit earnings growth ahead.”
Listen at 27:25
Carrie Firestone says Northrop’s $110 billion pipeline makes earnings highly reliable.
“they have— and they actually just raised it in their earnings call— they have a $110 billion pipeline. So that's one where you can really think when I'm thinking about the earnings for the next 5 years, they're highly reliable.”
Listen at 27:38
Joe Terranova recommends Zoom holders move to the sidelines soon.
“you're going to have to, if you are long Zoom, kind of move to the sidelines.”
Listen at 27:59
Joe Terranova says Zoom’s Anthropic stake is worth billions and will monetize at IPO.
“They put about $50 million into the company. That stake now is into the multiple billions. They're going to realize the profit on that when Anthropic goes public.”
Listen at 28:24
Jeremy Allaire says the GENIUS Act and OCC rules will establish trusted digital dollars.
“with Genius Act going into effect in January and with these new OCC rules, it creates a very clear model for how these can become trusted, safe, useful digital dollars in the global economic system.”
Listen at 30:58
Jeremy Allaire expects GENIUS Act stablecoin legislation to remain in force.
“we don't view that as something that's at risk of being reversed or whatnot. I think this is a bipartisan issue and will carry forward.”
Listen at 31:53
Jeremy Allaire says blockchain-network activity and use cases are growing significantly.
“The amount of transactions and activity that are happening on these networks continues to grow very significantly and more and more use cases that are being brought in.”
Listen at 32:58
Jeremy Allaire says AI and blockchain can improve financial oversight and verification.
“creates a huge opportunity to improve the guardrails. Rails to actually have better observability, better auditability, better verifiability, to build better systems of trust and verification, which is critical in the age of AI.”
Listen at 33:30
Jeremy Allaire expects the agentic economy to create demand for Circle’s infrastructure.
“this transition creates fundamental demand for the infrastructure that we build.”
Listen at 34:22
Oliver Renick views KWEB call buying as hopeful support trading, not a trend reversal.
“To me, this looks more like trading on some hope for support at 1-year lows rather than some reversal in trend.”
Listen at 36:10
Joe Terranova recommends South Korea and the KOSPI for emerging-market exposure.
“if you're looking for exposure internationally in emerging markets, you have to turn to South Korea, the KOSPI.”
Listen at 36:23
Steve Weiss recommends avoiding China because its economy is weak.
“Basically, the Chinese economy is not doing well, hasn't been doing well for a while. So it's difficult to play on that. So it's just better to stay away.”
Listen at 36:48
Stephanie Link recommends limiting investments to amounts one can afford to lose.
“not everybody considers the risks, such as, you know, let's not invest more than we can afford to lose type of thing.”
Listen at 39:27
Stephanie Link recommends investing throughout one’s life cycle.
“at any point in your life cycle you should be investing for your future.”
Listen at 39:44
Carrie Firestone recommends portfolios investors can hold through compounding.
“having a portfolio that you can live with, that you will loan and allow to compound for you and do the work as it sits.”
Listen at 40:39
Steve Weiss expects FTI Aviation to rise substantially within a year.
“They see it doubling in a year. That's pretty impressive. I agree it's going to go up quite a bit.”
Listen at 42:34
Carrie Firestone views Albertsons as cheap with potential near-term upside.
“Albertsons, 5.1% yield, super cheap. A couple of good things happening that could give it a little boost.”
Listen at 42:44
Stephanie Link says a House change restoring sustainability policy would benefit NextEra.
“NextEra. It's a great utility. And if we get a change in the House, bring back the word sustainability, which would help NextEra.”
Listen at 42:50
Joe Terranova expects active trading volumes to return in Q4, benefiting Interactive Brokers.
“what we didn't have in Q3 was active trading volumes. You're going to see that return in Q4. That takes you into Interactive Brokers.”
Listen at 42:59
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.
Books & mentions
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