Core Insights - Google and Yale University scientists have jointly released a large model called Cell2Sentence-Scale 27B (C2S-Scale), which proposes a new hypothesis regarding cancer cell behavior and has been validated through multiple in vitro experiments, showcasing the potential of AI models to generate original scientific hypotheses and open new avenues for cancer treatment [1][10] Model Overview - C2S-Scale is a foundational model with 27 billion parameters designed to understand the "language" of individual cells [3] - The model is built on Google's open-source Gemma model and trained on over 1 billion tokens of transcriptomic data, biological literature, and metadata, enabling it to analyze cell behavior across dimensions [1][4] Research Findings - The research team is advancing AI's role in generating scientific predictions in other immunological contexts, which could accelerate the development of new cancer therapies [1] - C2S-Scale has demonstrated that larger biological models can yield new reasoning capabilities, not just enhance existing abilities, thus revealing unknown patterns [4] Drug Discovery Process - Researchers conducted simulations on over 4,000 drugs in two environments: immune-context-positive and immune-context-neutral, to identify drugs that enhance antigen presentation specifically in immune-active conditions [5][6] - Approximately 10%–30% of the drugs had been previously reported, validating the model's credibility, while the remaining candidates represented novel findings [5][6] Key Discoveries - The model identified the kinase CK2 inhibitor silmitasertib (CX-4945) as having a significant "environmental differentiation effect," enhancing antigen presentation only in immune-active environments [7] - Subsequent experiments confirmed that combining silmitasertib with low-dose interferon significantly increased antigen presentation by approximately 50% [8] Implications for Cancer Treatment - The findings suggest a new potential pathway for making tumors more recognizable to the immune system, providing hope for immunotherapy advancements [10] - The C2S-Scale model's predictions have been validated through computer simulations and multiple in vitro experiments, indicating a reliable basis for new therapeutic approaches [9][10] Future Directions - The research is still in its early stages, but the results provide empirical evidence for developing new combination therapies and signal a new paradigm in biological discovery driven by large models [10] - The C2S-Scale model and its resources are now fully accessible on Hugging Face and GitHub, inviting further exploration and collaboration [10][12][13]

Core Insights - Major mobile payment services PayPal and Venmo, along with YouTube, experienced significant outages within a 24-hour period, affecting tens of thousands of users globally [1][3][7] - PayPal described the outage as a "brief service disruption" that has since been resolved [3] - YouTube reported over 800,000 users faced issues with video playback, which was later resolved [7][9] PayPal and Venmo - The outages for PayPal and Venmo began around 11 a.m. on Thursday, with widespread reports of issues by noon [1] - As of 3 p.m., the service disruption appeared to be resolved [1] - PayPal's stock price was reported at $66.05, reflecting a decrease of 2.84% [4] YouTube - YouTube confirmed users were unable to play videos on Wednesday night, with issues reported by over 800,000 users within an hour [7] - The platform later announced that the issue was fixed, allowing users to access videos again [9] - No explanation was provided for the outages affecting both YouTube and the payment services [5][9]

Fund Performance - The Patient Opportunity Equity Strategy achieved a total return of 14.1% net of fees in Q3 2025, outperforming the S&P 500 Index which returned 8.1% [2] - The portfolio's outperformance was driven by selection and interaction effects, while allocation effects partially offset these gains [3] Portfolio Composition - The strategy was overweight in sectors such as Consumer Discretionary, Communication Services, Financials, Energy, Industrials, and Health Care, while underweight in Real Estate, Utilities, Materials, Consumer Staples, and Information Technology [4] - The portfolio ended the quarter with 36 holdings, with the top 10 stocks representing 51.1% of total assets, indicating a high active share of approximately 92.5% [5] Market Context - The market's upward trend in Q3 was supported by resilient consumer spending, Federal Reserve rate cuts, and ongoing AI investments [6] - Long-held positions in the portfolio broke through multi-year resistance levels, contributing to overall performance [6] Key Contributors - Precigen (PGEN) was the top contributor, benefiting from the FDA approval of Papzimeos, which is expected to launch soon [10][15] - Alphabet Inc. (GOOGL) and Alibaba Group Holdings (BABA) also significantly contributed to performance, with GOOGL gaining regulatory clarity and BABA announcing aggressive AI investment plans [8][16][17] Key Detractors - Dave & Buster's Entertainment (PLAY) was the largest detractor due to disappointing results and leadership changes, although there is optimism for future recovery under new management [18] - QXO Inc. (QXO) faced concerns over weakening construction activity but continues to execute its acquisition strategy [19] - Crocs Inc. (CROX) declined following disappointing guidance and challenges with its HEYDUDE brand [20][21] Strategic Actions - The portfolio eliminated five positions during the quarter, reallocating capital towards higher conviction names [12] - The strategy continues to capitalize on market volatility, increasing positions in Delta Air Lines (DAL) and Norwegian Cruise Line Holdings (NCLH) during market pullbacks [9]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a pressing concern regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of small cities, indicating a significant strain on global power grids [2] Company Profile - The company in focus is not a chipmaker or cloud platform but is positioned as a vital player in the energy sector, particularly in nuclear energy infrastructure [7] - It is capable of executing large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including oil, gas, and renewable fuels [7] Financial Position - The company is noted for being completely debt-free and holding a substantial cash reserve, which is nearly one-third of its market capitalization [8] - It is trading at less than 7 times earnings, making it an attractive investment opportunity compared to other energy and utility firms burdened with debt [10] Market Trends - The company is poised to benefit from the onshoring trend driven by tariffs, as well as the surge in U.S. LNG exports under the current administration's energy policies [5][14] - There is a growing recognition on Wall Street of this company's potential, as it quietly capitalizes on multiple favorable market trends without the inflated valuations seen in other sectors [8][10] Future Outlook - The demand for AI is expected to continue rising, creating a significant opportunity for companies that can provide the necessary energy infrastructure [12][13] - The influx of talent into the AI sector is anticipated to drive rapid advancements, further solidifying the importance of energy providers in this landscape [12]

Core Insights - Alphabet Inc. is facing potential stricter regulations in the UK due to its dominance in the search market, with over 90% of searches in the UK conducted through its platform [1][2] - The Competition and Markets Authority (CMA) is investigating Alphabet's market position, but this does not imply any wrongdoing or immediate changes [3] - The CMA may require changes by June next year, including fairer search rankings and easier access to alternative search engines [3] - Alphabet recently faced a $3.45 billion antitrust fine from the European Union for anti-competitive practices in the AdTech sector [4] - The company argues that regulatory interventions could hinder innovation and growth, especially in the context of AI advancements [4] - While Alphabet is recognized as a strong investment, there are suggestions that certain AI stocks may offer better upside potential with less risk [5]

Core Insights - Alphabet Inc. is recommended as a buy by Ray Dalio's Bridgewater Associates, with a price target of $290 set by Citizens ahead of the earnings report on October 29 [1][2] - A notable decline in YouTube's global time spent, down 1.2% year-over-year, marks the first drop since Citizens began tracking this metric [1][2] - The decline in YouTube engagement is attributed to increased competition from platforms like Instagram and TikTok, which saw an 8.7% year-over-year increase in global time spent [2] Company Overview - Alphabet Inc. operates as a global technology conglomerate through segments including Google Services, Google Cloud, and Other Bets, with core businesses such as Google Search, YouTube, Android, Chrome, and Google Cloud Platform [3]

Core Insights - The technology sector has been a significant growth driver for investors over the past few years, dominating the S&P 500 for over two decades [1][2] - Despite concerns about high valuations, the tech sector is expected to continue delivering growth through innovation, particularly in artificial intelligence and cloud computing [2][3] Technology Sector Overview - The tech sector's growth is fueled by ongoing innovation, especially in AI and cloud computing, which raises concerns about whether current valuations can be sustained [2] - The sector is believed to be in a prime position for dynamic growth due to increasing AI adoption and the demand for AI infrastructure [3] Investment Strategy - A large-cap strategy with a focus on the tech sector may provide a viable investment path, exemplified by the Alger Concentrated Equity ETF (CNEQ) [4] - CNEQ is an actively managed fund that aims for long-term growth by maintaining a disciplined portfolio of 30 holdings or fewer, allowing for targeted investment in high-potential companies [5] Fund Composition - As of September 30, 2025, over 50% of CNEQ's portfolio is allocated to the information technology sector, despite being sector-agnostic [6] - CNEQ includes leading tech companies such as Nvidia, Microsoft, Alphabet, and Meta, which are capitalizing on growth opportunities in AI [7] Performance Metrics - CNEQ has shown strong performance, with a year-to-date NAV increase of 36.26% as of October 7, 2025, indicating its potential as a solution for advisors focusing on long-term tech sector growth [9]

Core Insights - The five largest corporations by market cap—Microsoft, Nvidia, Apple, Amazon, and Alphabet—have a combined market value exceeding $16 trillion and generate billions in annual profits, contributing tens of billions in taxes [2][3] - Over the past five years, these companies have spent more than $1 trillion on stock buybacks and dividends, significantly outpacing their federal tax payments during the same period [3][6] - In 2024, the entire S&P 500 spent nearly $1.6 trillion on stock buybacks and dividends, which is three times the total income of the poorest 27 million U.S. households, estimated at $498 billion [4] Shareholder Payouts - There has been an unprecedented level of shareholder payouts in recent years, which includes both dividends and stock buybacks [4][5] - Oxfam's analysis indicates that funds allocated for shareholder payouts could have been used for internal investments, such as increasing worker wages or enhancing sustainability [6] Corporate Tax Trends - Corporate taxes have declined since the 2017 Tax Cuts and Jobs Act, reducing effective tax rates for large corporations from an average of 22% to 12.8% [7] - If the five largest companies had paid taxes at pre-TCJA rates, they would have contributed an additional $168 billion in taxes over the past five years [7] Economic Inequality - The current trend of shareholder payouts disproportionately benefits the top 1% and wealthy executives, while the bottom half of the U.S. population holds only 1% of the stock market [8][9] - Tax savings from corporations are not being reinvested into workers or consumers but are instead directed towards enriching shareholders and executives [9] Potential for Policy Change - There is an opportunity for policymakers to address these trends through measures such as taxing or banning buybacks, capping dividends, and reforming the corporate tax code [10] - The analysis highlights that corporations can drive inequality, but also indicates the possibility for change through policy interventions [10]

Group 1 - Taiwan Semiconductor Manufacturing Company (TSMC) reported strong earnings, exceeding market expectations, which positively impacted stock prices [1] - Alphabet Inc. (GOOGL) showed a rebound from its 21-day moving average, indicating potential upward momentum in its stock performance [1] - DoorDash's stock surged to new highs following its partnership with Waymo for autonomous food delivery, highlighting the growing trend of automation in the food delivery industry [2] Group 2 - Nvidia's strong performance and demand for its chips are driving interest in AI stocks, suggesting a potential turnaround in this sector [4] - Google is building momentum in its cloud services ahead of its Q3 earnings report, raising questions about whether GOOGL stock is a buy [4] - The competitive landscape is intensifying as tech giants like Apple, Meta, and Google vie for market share, particularly in the AI and cloud sectors [4]

But that doesn't mean that investors aren't getting ahead of themselves when it comes to expectations and valuations.The Pragmatic Investor covers global macro, international equities, commodities, tech and cryptocurrencies and is designed to guide investors of all levels in their journey. Features include a The Pragmatic Investor Portfolio, weekly market update newsletter, actionable trades, technical analysis, and a chat room. Learn moreJames Foord is an economist by trade and has been analyzing global ma ...